A Budget We Can Afford

By Governor M. Jodi Rell

            The Connecticut General Assembly is just days away from its deadline for finishing its work. Yet we still do not have a state budget for the next two years.

            In February, I proposed a two-year budget that would cut state spending, consolidate or merge dozens of state agencies, maintain state aid to cities and towns so burdens would not fall on property taxpayers and give those municipalities much-needed relief from costly state mandates – all without raising taxes.

            Tax increases, I said, would be the worst thing we could do in the middle of a national recession.

            And Connecticut’s economy has been terribly battered by this national recession. Thousands of families – thousands of lives – have been disrupted by job losses, foreclosures, Wall Street turmoil and lingering uncertainty. Employers, many of them mainstays of Connecticut’s economy, have been forced to lay off dedicated workers.

            Since I released my recommended budget in February, the economic picture has only gotten darker. Our state has lost 18,100 jobs. We have seen more than 4,000 businesses shut their doors forever. More than 7,500 families have lost their home to foreclosure.

            And still – four months later – we have no budget. The Legislature has not even held a vote on a budget in the Senate or the House.

            Because of the recession, we face enormous deficits for the next two fiscal years, as well as a persistent deficit in the current budget year that ends June 30. I have been working with lawmakers on a new budget for several weeks – but it has become increasingly clear that some simply do not have the will to make the spending cuts we need if we are going to close those budget gaps without raising taxes.

            So this week I took the unusual step of offering another budget – a second budget – that, once again, contains no tax increases.

            Like my budget in February, this new budget makes deep and painful spending cuts. They are not cuts I relish making. But the families of Connecticut are counting on their elected leaders to make those cuts and to finish their business on time.

            Like my February budget, this proposal preserves municipal aid so that tax increases are not passed on to local property taxpayers. It merges and consolidates agencies to make Connecticut’s government smaller and more efficient – just like my budget in February did.

            And most importantly, this budget is in line with what the people of our state can afford – just like my budget in February. That means it contains no tax increases and actually reduces spending from current levels in Fiscal 2010.

            I did this because the bloat of bureaucracy is no more affordable now than when I first spoke of it in February. Because families have not stopped struggling since February. And because the underlying truths of our economy have not changed since I laid out my original budget: Connecticut residents cannot afford massive tax increases. Connecticut businesses cannot afford massive tax increases.

            Consider that nearby states like New York and New Jersey are raising their income taxes while Massachusetts is raising its sales tax. The top income tax rates in New York and New Jersey are now 8.97 percent (in New York City it’s an astonishing 12.62 percent!), while the top bracket in Rhode Island is 9.9 percent.

            Connecticut’s top rate is currently 5 percent.

            By holding the line on taxes and making the tough decisions now, we will are making Connecticut a beacon of opportunity – our state becomes infinitely more affordable for business and infinitely more appealing for investment.

            Job creation will climb as more and more companies move to – or grow in – a business-friendly Connecticut. We can reverse the “brain drain,” keeping our young college graduates in good-paying jobs that they find here. Our housing market will rebound as those graduates and people attracted to our state seek new places to live.

            This is not economic theory – it’s economic fact.

            Frankly, tax increases are the easy choice. But all they do is “feed the beast” – and two years later the beast is back, hungry again, and always a little bit larger. Now is the time to make the difficult decisions.

            I am not looking for a battle. But I am willing to fight one – because it’s a battle worth fighting. The families and people of Connecticut are always worth fighting for. Please join me in the remaining days of this legislative session by urging your lawmaker to join me in making the difficult – but necessary – choices and to pass a budget that contains no tax increases.