From the Capitol / State Sen. Toni Boucher
The 'Three Furies' of State's fiscal crisis
Published 5:56 pm, Wednesday, December 1, 2010
The Three Furies are leading Connecticut toward a fiscal crisis that can no longer be ignored. The first of these "furies" are deficits of more than $3 billion through 2014; the second is underfunded pension liabilities predicted to go bankrupt by 2019; and third, an insolvent unemployment fund that could lead to new taxes on employers by 2012.
As in Greek mythology, these "furies" threaten to wreak havoc on the state if they are not taken seriously.
The General Assembly's two budge committees -- Finance and Appropriations -- met to discuss the Fiscal Accountability Reports recently completed by the Governor's Office of Policy and Management (OPM) and the legislature's nonpartisan Office of Fiscal Analysis.
Briefly, OFA predicts that Connecticut will wrap-up our current fiscal year with an $83 million deficit, while OPM is projecting a slight surplus of $300,000. While the numbers are slightly different, both agencies are projecting that Connecticut will experience serious deficits over the next couple of years.
Under the scenario presented by OFA, the state will have a budget deficit of $3.67 billion for Fiscal Year 2012; a budget deficit of $3.57 billion for Fiscal Year 2013; and a budget deficit of $3.50 billion for Fiscal Year 2014.
Under the scenario presented by OPM, the state will have a budget deficit of $3.37 billion for Fiscal Year 2012; a budget deficit of $3.23 billion for Fiscal Year 2013; and a budget deficit of $3.13 billion for Fiscal Year 2014.
The conflict between the two fiscal accountability reports are due to the different methodologies used by OFA and OPM, along with a difference of opinion in the rate of growth of cost for various programs such as Medicaid and state employee fringe benefits.
Regardless of which report one finds most compelling, the bottom line is that Connecticut's fiscal situation is dire. It will be critically important for the Governor-elect and the General Assembly to work together make the tough, but necessary, decisions that directly affect the taxpayers.
Our most important job during the upcoming 2011 Legislative Session must be to craft and adopt a responsible state budget that meets Connecticut's needs at an affordable cost to our taxpayers. Such a budget must be balanced, under the mandatory spending cap, and help the state avoid the devastating deficits projected by our government fiscal agencies.
When I asked the presenters explaining the two fiscal accountability reports what would happen to the deficit if the state reduced spending to 2008 levels, the answer was that our deficit could be cut by over $2 billion. I believe we must seriously look into cutting state spending -- and avoid the public fury.
I look forward to the opportunity to work with our new governor and my fellow legislators to do what is best for Connecticut. As always, I encourage you to contact me with your questions, your concerns and your ideas. I can be reached at my legislative office at 1-800-842-1421, or via e-mail to Toni.Boucher@