By Oz Griebel
We continue to face two daunting and related challenges at the federal and state levels: growing deficits and damaging unemployment.
Connecticut is fortunate to have a strong base of employers in numerous key sectors, along with a highly educated and productive workforce. Gov. Dannel P. Malloy has taken many steps over the past two years, including the bipartisan passage of a jobs bill in 2011, to encourage the private sector to retain and expand jobs in the state.
The willingness of the private sector to hire employees, however, is tied to its confidence that we can control state spending, maintain tax policies that support job creation and address our unfunded liabilities.
We clearly recognize that current economic conditions pose significant impediments to achieving those goals and that there will be efforts over the coming months of hearings and negotiations to protect specific programs and priorities. We nonetheless urge the governor and the legislature to work together and with private sector and other leaders to pass a budget for the next two fiscal years, starting July 1, that adheres to the constitutional spending cap and strengthens a tax structure that drives full employment and delivers the accompanying revenues.
Oz Griebel is president and CEO of MetroHartford Alliance.
STATE EMPLOYEES AVOID SACRIFICE
By Red Jahncke
Gov. Dannel P. Malloy made no mention in his budget address of the sweetheart deal he gave state employees two years ago: absolute job security for four years (two down, two to go), combined with two years of complete salary protection (aka wage freeze) and, now, beginning with his new budget, three years of 3 percent annual pay raises.
The "deal" belies the governor's claim of "shared sacrifice." It constitutes extraordinarily privileged treatment for the state's 45,000 full-time and roughly 30,000 part-time workers, especially when compared with the state's struggling private sector. Since state employees have been absolutely protected, and our roughly 160,000 local government workers reasonably well protected, so far, the logical conclusion is that our 160,000 currently unemployed citizens come mostly from the private sector. If our unemployment rate were calculated as a percentage of the private workforce, as logic suggests, it would be more than 11 percent.
Nevertheless, last year, the governor sweetened the "deal" even more, agreeing to huge increases in current contributions to state employee retirement funds — for benefits that have largely disappeared in the private sector.
Here's the question. How much of Malloy's big spending increase is going to higher state employee compensation and how much to fund the programs those employees are supposed to deliver?
Red Jahncke is president of The Townsend Group International, a business consulting firm in Greenwich. He can be reached at RTJahncke@gmail.com.
BUDGET TRADEOFFS HURT FAMILIES
By Sharon Langer
If Connecticut is to position itself well for economic recovery, we must keep our focus on the future and our children in state budget planning.
The governor's budget proposal demonstrates the consequences of current constraints on state budgeting: a stagnant economy, a self-imposed no-new-taxes pledge and fast-rising public employee benefit costs leave him few options. Without a stronger economy or additional state revenues, the only way we can afford to maintain and enhance existing investments for our children is to resort to sacrificing other supports for families, one-time revenues and borrowing.
Gov. Dannel P. Malloy should be commended for his vision in expanding Connecticut's commitment to high-quality preschool and K-12 education, both vital to our future. However, to afford these investments, the governor has turned to Medicaid cuts that will likely cause tens of thousands of low-income parents to become uninsured, one-shot revenues that will leave holes in future budgets and substantial borrowing that will burden our children tomorrow.
Rather than continue making such tradeoffs on our future, we must take a more balanced approach that includes new revenues, maintains our current investments in families and passes on a promise of prosperity and security to our children.
Sharon Langer is interim executive director at Connecticut Voices for Children (www.ctvoices.org).
SPENDING CAP ADJUSTMENTS NEEDED
By Bill Cibes
For the first time since voters adopted it in 1992, a governor is "proposing to implement the constitutional spending cap by adjusting the Connecticut spending cap statute," according to Office of Policy and Management Secretary Ben Barnes.
The two adjustments make eminent sense. The constitution exempts "expenditures for the payment of bonds, notes or other evidences of indebtedness" from the spending cap. Because credit rating agencies and the Governmental Accounting Standards Board treat the unfunded past service liabilities of the Teachers Retirement System and the State Employees Retirement System as obligations that the state must pay, the statute should exempt them from the cap.
Second, because the U.S. Supreme Court ruled that the Medicaid expansion under the Affordable Care Act is an option, not a mandate, Connecticut could not accept the 100 percent federal funding of this program to which all states are entitled. The statutory definition of "general budget expenditures" exempts from the cap only spending to implement "federal mandates." Even hard-core Republican governors elsewhere recognize it makes no sense to reject a program that extends health care to a newly eligible group of low- and middle-income families at no cost to the state. So this definition should also be changed.
Bill Cibes served as secretary of the state Office of Policy and Management under Gov. Lowell P. Weicker Jr.