Faced with increasingly difficult decisions in crafting the Fiscal Year (FY) 2018-19 biennial budget, the Connecticut General Assembly found itself at an impasse. In order to break the log jam, the legislature included drastic measures in the final budget deal. It is increasingly clear that the long-term effects of these measures will be damaging to the well-being of Connecticut’s children and families and to our state’s economic prosperity. Five fiscal restrictions were included in the budget — a spending cap, volatility cap, appropriations cap, bond cap, and “Bond Lock.”
While these fiscal rules were intended to stabilize our state budget and address the uncertainty caused by annual deficits, legislative stalemates, and lack of long-term budget planning, the result will be damaging to our state’s economic growth and competitiveness. The Bond Lock, and the fiscal rules it freezes in place, is in practice an austerity lock, ensuring that Connecticut remains in a permanent state of fiscal deprivation, starving our schools, health systems and infrastructure of crucial investments.
To ensure that all Connecticut families and their children have an equitable opportunity to reach their potential and participate fully in a growing and thriving economy, the following actions are necessary:
- Repeal the Bond Lock,
- Use legal strategies to free the state from the Bond Lock in bonds that have already been sold, and
- Amend the volatility cap to reflect the best practices volatility policy enacted in 2015.
