Coutu, Urban Talk State Finances in Opinion Pieces

Check out these opinion pieces and their introduction published Nov. 1 in The Day. The newspaper invited state Reps. Christopher Coutu and Diana Urban to contribute their thoughts about the 2009 legislative session, which saw lawmakers tackle the most significant budget deficit in Connecticut history. Facing massive deficit projections, the past General Assembly session was among the most contentious and longest in Connecticut history. We invited freshman Rep. Christopher Coutu, a Republican who voted against the budget that was finally adopted, and House Rep. Diana Urban, a Democrat and five-term incumbent who voted in favor, to reflect on the budget debate and what needs to change going forward. Rep. Coutu serves the 47th District, including Canterbury, Scotland, Sprague and Norwich and sits on the Finance, Revenue and Bonding Committee. Rep. Urban serves the 43rd District of Stonington and North Stonington and is on the Appropriations Committee.

CHRISTOPHER COUTU:
‘Business-as-usual’ mentality won out over real change
A year ago at this time I was knocking on doors in Canterbury, Norwich, Scotland and Sprague telling people I would hold lawmakers in Hartford accountable if they elected me as their state representative. I was prepared to challenge the typical tax-and-spend ideology that’s dominated the Capitol culture for so long. I remember my first day in the House chamber – optimism in the air despite a gloomy budget outlook. Despite being a member of the Republican minority party, I felt I could be part of making fundamental changes in state government. After all, the leaders of the Democrats’ veto-proof majority were assuring everyone that it would not be business as usual. Legislators from both sides of the aisle talked about taking that leap to prioritize the core functions of government and hold state agencies accountable for their decisions.

Unfortunately, it wasn’t long before I realized that much of what my majority colleagues had been saying was little more than lip service. As Connecticut residents struggled to meet their financial obligations and confronted job losses and rising foreclosure rates, the legislature dithered.

Our state budget deficit surpassed $9 billion. And how did Democrats respond? They put out a proposal that carried $3.3 billion in new taxes. Even worse, they proposed saddling the state with an unprecedented amount of debt.

Being a member of the minority party, I was certainly busy, serving on four committees. Republicans hold just 37 of the legislature’s 151 seats in the House of Representatives, so members of the GOP must serve on numerous committees to fill all the slots.

I listened to testimony on hundreds of bills: Decriminalization of marijuana, religious freedom disputes, government-run health care and the right to bear arms. I tried to turn the discussion back to our economy – no easy task with a veto-proof majority pushing what I considered a hyper-liberal agenda.

As businesses slashed jobs, lawmakers talked about the size of chicken coops. As residents sought unemployment benefits, legislators talked frog dissection.
In my view, that was unconscionable, and it wasn’t what I came to Hartford to do.

Watching the legislature procrastinate instead of tackling our state’s financial headaches shocked many constituents, who called and e-mailed with questions about our multibillion-dollar deficit. I have to be honest: I was surprised, too. After all, we were all told that “business-as-usual” was history.

Municipal officials were frequent visitors, asking the legislature to turn its eye toward issues driving property tax increases their constituents couldn’t afford. We listed to selectmen and mayors express their concerns about state mandates and Democrat proposals to decrease state aid to cities and towns. With my Republican colleagues, I amplified their concerns through forums we organized at the Capitol.

Democrats eventually used their veto-proof power and passed a budget that carried $1.3 billion in new taxes. And there was a new extreme measure to gain more revenue: borrowing against $1.4 billion in anticipated lottery revenues.

And there was that tax increase on employers.

This 10 percent tax on corporate profits is an extension of a legislative culture that hurts valuable employers such as Computer Science Corporation, Pfizer and Electric Boat. We can only assume that Connecticut’s anti-business atmosphere pinched Pratt & Whitney, which recently announced it would close operations in Cheshire and East Hartford.

Who’s next?

Throughout the months-long budget debate, my message was relatively simple: Let’s streamline government, prioritize our spending and, above all, protect jobs.

The alternative isn’t working. Democrats said their smash-and-grab approach to generating more revenue would get Connecticut back on track, yet nearly every section of our economy continues to struggle. Revenue projections are off, and we already have deficits pushing $500 million after four weeks under the majority party’s budget.

That’s depressing news for residents of this state, who will soon learn the extra money from fees and taxes Democrats demanded won’t fix the state’s problems as promised.

Now, more than ever, it’s time to keep campaign promises – namely, extinguishing the business-as-usual approach in Hartford. Though I was on the losing side of the budget vote, I’m proud to be an independent voice in the legislature pushing the common sense principle you use in your household: If you don’t have the money, tighten your belt.

But I also learned that there are limits on what one individual can accomplish in Hartford, no matter how hard he or she works. Unless voters elect other lawmakers who are willing to end business as usual, and not just talk about it, the legislature may never bring state government spending under control.

DIANA URBAN:
State’s divided government blocked meaningful dialog

As state lawmakers we have to recognize the state faces a long-term budget problem, not a one-time fiscal emergency. Dealing with the budget crisis this year exposed the real problem in Connecticut – our continually growing structural deficit.

When the cost of providing services is consistently greater than the on-going revenue stream, something is very wrong. Up to now we have been able to paper it over with one-time revenues, accounting tricks, and some cutting and borrowing. The truth is we could have muddled through this down turn much as we did in 2002 if this recession wasn’t the biggest in 75 years.

We have come to this point in part because, in the early 1990s, the state abandoned Generally Accepted Accounting Principles (GAAP) and embraced modified accrual accounting. That is accounting talk for fudging the books. Modified accrual accounting is a nifty way to count income before the state receives it, but not count debts until they are paid.

Complicating this structural problem was disagreement over the size of the budget deficit. Setting the stage was Republican Gov. M. Jodi Rell’s February budget proposal that, according to the non-partisan Office of Fiscal Analysis, was $2 billion out of balance. Clearly, if we are not all starting with the same number, negotiation and compromise are impossible. Using the governor’s figures, the public concluded the state could get out of this crisis without significantly raising fees or taxes. The result? Unnecessary delays, public charges and counter charges and game playing. This was government dysfunction at its worst.

Resolving the budget impasse did not move forward until the General Assembly passed, over the governor’s veto, a new law that mandates consensus agreement on the size of the budget deficit. With this agreement in place and a deficit number agreed upon, negotiations went forward. But there were still some hurdles to get over.
In Connecticut we have divided government – one party controls the executive and one party controls the General Assembly. Divided government can work well in good times, as both sides seek a positive sum game by balancing taxes and spending. However in bad times, when tax revenues are falling, we enter the negative sum game and both sides turn to blame games, blindly cutting or blindly preserving programs as their constituent bases dictate.

So, as the months of inaction dragged on, the deficit continued to grow, unemployment continued to rise and tax revenues continued to lag. Worst of all there was no guide available to help legislators determine how they could do the least harm when making necessary cuts to balance the budget, no data to determine which programs were worth preserving and which lawmakers could cut because they were ineffective.

We know that the biggest savings come from trimming the larger programs, but the effects on our economy of cutting those programs also can deepen the recession. Less municipal aid and school aid can mean layoffs, service cuts and tax increases on the local level. Cutting Medicaid can have dire effects on nursing home care and basic medical services for the neediest. We tend to forget the myriad of services the state provides on a daily basis, making it a major player in our economy.
We all want to get more and pay less and pity the politician who tells us the truth. Any economist worth their salt will tell you that when times are good we should accumulate surpluses and pay down the debt and not give tax cuts so that when times are bad we have some wiggle room to build the economy. Unfortunately, this stance will not win you a lot of friends or votes.

The General Assembly found its hands tied by the structural deficit, lack of planning, and the worst recession in 75 years. We ended up not with a bang but with a whimper and a budget that didn’t make anyone happy. We cut across the board, siphoned off dedicated funds, and borrowed lots of money, but we did manage to preserve essential services.

And there is good news.

I believe this crisis has led us to a sea level change. We passed a bill that further institutionalizes Results Based Accountability. This provides a process to evaluate performance results for state programs.

These state agency report cards will be available to the public and answer three fundamental questions: “How much did we do? How well did we do it? And is anyone better off?”

This will give the General Assembly the tools to make better choices in the future. Only then can we as lawmakers address the persistent structural deficits and prevent the state from lurching from one budget crisis to the next.