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Letter: What to Look for in the 2012 Session

WILTON, Conn. - The 2012 legislative session is coming, and the General Assembly has a lot on its agenda. At the top of the priorities list are:

  • Jobs – continuing the bipartisan work done in the October special session
  • Education – taking serious steps to close Connecticut’s achievement gap, the country’s largest
  • Infrastructure and emergency preparedness – ensuring that the state is better equipped to provide essential services in the wake of weather-related and other disruptive events.

In all of these areas, I’m looking forward to working with colleagues on both sides of the aisle to explore new ideas and find solutions. While only a start, the October jobs bill did begin to address the concerns of businesses, and I hope that we will make greater progress during this session.

Significant work has been done recently by a number of task forces and others on issues affecting both education and infrastructure, and we should begin reviewing legislative proposals in both areas shortly. I expect to see much constructive collaboration and debate on all of these fronts, as well as others.

With such important issues before us, it is unfortunate that we are entering the 2012 session on shaky financial ground.

Last August, after lengthy union negotiations and the largest tax increase in Connecticut’s history (which I did not support), we were told by the administration that the state budget was balanced, and that we could finally get on with the business of government. Despite a budget increase of about half a billion dollars, we were assured that $1.8 billion in new taxes, along with savings achieved through last summer’s agreement with the state employee unions, would be sufficient to close the coming year’s impending $3.5 billion deficit.

Unfortunately, however, Connecticut is not out of the woods. There are many reasons for concern:

  • Debt rating downgrade. On Jan. 20, Moody’s Investor Services downgraded its rating of Connecticut’s debt from Aa2 to Aa3. Among its reasons, Moody’s cited cost of debt and post-employment benefits relative to the budget, unfunded pension liabilities and depleted reserves.
  • Uncertainty about promised savings. Last summer’s union agreement included $1.6 billion in savings. At the time, the legislature’s nonpartisan Office of Fiscal Analysis (OFA) said it could not verify about half the anticipated savings. In November, during its joint update to the legislature with the executive branch’s budget office (OPM), OFA repeated that assessment, and has not changed it.
  • Inadequate cash flow. In December, despite the anticipated influx of new revenues, the state ran out of cash and had to use bonded funds – borrowed money – to cover employee salaries and pay its operating bills.
  • Revenue shortfalls. An $88 million surplus was initially built into the budget. Earlier this month, however, the consensus revenue estimates produced by OFA and OPM showed that this surplus had disappeared, due to lower than expected tax revenues. Last Wednesday, OFA released a report estimating the current year’s deficit at $145 million, resulting from both increased spending and revenue shortfalls. While the executive branch immediately announced it would use its rescissionary authority to make about $79 million in cuts, the executive branch’s budget office stated that half of those cuts were already counted in the budget.

If a record-setting tax increase cannot cover Connecticut’s spending, it’s not because people and businesses aren’t being taxed enough. The General Assembly cannot afford to ignore the state’s level of spending any longer.

Numerous articles have appeared in the last few months citing Connecticut as the worst place to retire, one of the least friendly places to do business, and the home of the highest debt per capita ratio in the country. We can’t hope to change any of this unless we set the state on firm financial ground, and provide our citizens with an effective government they can afford.

I would like to see the General Assembly use the upcoming session as an opportunity to work together to make our state government smaller, more efficient and more accountable to taxpayers. Jobs, education, infrastructure: we have a lot to do and we need a state in sound financial health to get it done.

- State Rep. Gail Lavielle, R-Wilton

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