Connecticut’s declining state budget surplus is just one indicator of the deterioration in the state’s fiscal situation. Key expenses are growing, including debt service, health care expenses, and unfunded obligations to pension funds and other post-retirement benefits. The current FY 08 “surplus” results in part from the use of a variety of budget gimmicks to achieve a “balanced” FY 08 budget (e.g., using past years’ surplus funds to pay some of this year’s bills, not meeting all current obligations, and shifting costs to towns and to the next generation).
To put Connecticut’s fiscal house in better order before the Baby Boomers begin to retire, the revised FY 09 budget should raise additional revenues while the Boomers are still in the labor market — in a manner that improves the equity of our state and local tax codes — to: a) fulfill current state obligations rather than transferring them to the next generation or to our cities and towns; b) reduce state debt and pay down pension and other unfunded obligations; c) fully fund the Budget Reserve Fund, and d) increase the level of state investment to assure equal opportunity for children and families, an adequate infrastructure, and a healthy economy.
