From the Crow's Nest / Ed Chrostowski
Sink or swim: It's time for the state to decide
Awash in a sea of red ink, Connecticut is flailing about in search of direction and in dire need of a full-scale rescue mission.
Instead, the Republican governor, M. Jodi Rell, and the Democratic-controlled legislature are tossing out rickety life-rafts, offering wishful thinking more than buoyancy, and the State budget is sinking into deeper water rather than staying afloat.
Last year, with the tacit approval of Gov. Rell, the Democratic majority adopted a two-year $37.5 billion budget that relied on $950 million in new borrowing, $1.15 billion in federal stimulus money and the full $1.4 billion drained from the Rainy Day Fund. That's a lot of money that won't be available next time around and consequently the outlook for the end of this fiscal period in 2011 is a deficit of $5 billion.
To cope with the rising tide, the State Office of Policy and Management seems to be keeping its fingers crossed and hoping for the best in a plan to borrow against anticipated increased revenue streams. Gov. Rell also is proposing another state-sponsored lottery-type "game" called Keno, which she says would raise $20 million in its first year and $60 million annually thereafter, optimistic estimates at that.
That's some more "instant fix" that shrugs off reality. First, Keno would be competing with the state's other lotto games as well as with the Keno already offered at the Indian casinos. The pile of gambling dollars is finite. Would Keno be just a substitute for "scratch-offs" or would it generate supplementary revenues?
A state Keno may require amending the agreement the state has now with the casinos, granting them a gambling monopoly in return for 25 percent of the slot-machine revenue. Is Keno gambling or just another "game?" The jury is still out on that one.
This year, even with a dip in receipts reflecting the recession in the economy, that deal will send about $370 million into Connecticut's treasury. It might be best not to tinker with that agreement, lest we jeopardize that revenue stream.
Then, too, how solid and stable can any state's fiscal capability be if it relies so heavily on gambling, a "pastime" that is sometimes just a caprice and sometimes an addiction? There also is a moral question. In some quarters, legalized gambling is regarded as akin to a tax on the poor. These, after all, are the people so much in need of cash that they risk their dollars in hoping to beat the odds.
No, another gambling game is not the answer. Nor should the state anticipate a new revenue steam from Sunday openings for liquor stores. Except for stores in towns along state borders, it's doubtful that liquor sales would climb appreciably just because it's available on Sundays. Yet, the stores should be allowed to open.
Everything else from real estate to hardware is sold on Sundays. So should alcoholic beverages. It wouldn't be a bonanza in badly needed tax revenue, but it would in all fairness give liquor dealers the same options enjoyed by purveyors of other legalized merchandise who do business on Sundays.
Gov. Rell's plan to create still another task force to survey all state operations and agencies to identify potential savings is a disappointment. She has been governor for six years and was lieutenant governor and a legislator for a few years before that. She must know what Connecticut needs and it's not another mammoth study to gather dust on an office shelf.
That's why there's real promise in other Rell proposals. She is calling for "job creation tax credits" for small firms, a public-private pool of capital for loans to businesses and tuition loan forgiveness to college graduates trained in skills needed by Connecticut industries. In short, these are efforts to put 94,000 unemployed people back to work so the State can recoup at least some revenue.
Connecticut needs the political will and courage to face fiscal realities, rather than defer them to another committee study. The State needs to discard gimmicks and it needs to stop pointing accusatory fingers and tolerating partisan bickering. Only when full attention is focused on job-building programs can the legislature deliver the rescue Connecticut needs, something substantial that will allow the state to do more than just barely keep its head above water.