Posted on 26 October 2008.
There’s a problem when candidates who are running for office don’t get the issue they are being asked about. That’s quickly apparent after reading the Advocate article on the State Senate race in the 26th District. That would be the Westport, and northern lands who don’t support Super 7 territory. Er, Wilton, Weston, Ridgefield, Bethel etc. for those keeping track.
So I once again state that the only numbers that are believable coming out of Hartford and Comptroller Nancy Wyman’s numbers, which have stated unequivocally that Connecticut has been running with a defecit for years. What, you say, what about that surplus we had at the beginning of the year? That would be the fantasy numbers that Governor Rell and the legislature announce because the state, unbleivable in 2008, does not follow generally accepted accounting principles which would require, like every municipality, to book revenues recieved, not revenues anticipated.
So the legislature spends money based on budgets created based on fantasy revenues and adds to that mix the idea of keeping expenditures off the books. Like pension funding obligations. And it all balances out so that more spending can happily go on in Hartford despite the mild budget bikcering we’ve grown accustomed to.
Hartwell though, takes the whole misunderestimation thing to a new level.
Hartwell wants to dip into the state’s $1.4 billion Rainy Day Fund.
“This is certainly serious, but it is not something we should panic about. I certainly don’t believe in slashing spending, because that will put people out of work,” Hartwell said.
“If the budget deficit is $300, $500 or $600 billion we can easily cover it. We have $1.4 billion in the bank. In bad times we should spend it,” Hartwell said.
Chris Powell, over at the Journal Inquirer, had it about right a couple of weeks ago:
Meeting with the General Assembly’s Banks Committee last Monday, state Treasurer Denise L. Nappier said the state pension fund had lost more than 10 percent of its value in recent months. But, she added, the people covered by the fund — state employees, municipal teachers, and retired state employees and teachers — shouldn’t worry about it. For state government’s obligations to them are set by law and contract, and so the beneficiaries are not on the hook — only Connecticut’s taxpayers are.
Over the rest of the week the stock market fell more than another 10 percent.
Nappier didn’t quite say it, but taxpayers should be more than worried; they should be freaking out. For even before the market crash the state pension fund did not have enough investment to meet its commitments, pension underfunding being a chronic scandal in Connecticut, most other states, and the federal government. And should the pension fund not cover those commitments, they would have to be met from the state’s general fund, which would mean more taxes.
If Hartwell had paid attention to what Nancy Wyman actually said he’d have been closer to what the issue actually is. Wyman released this statement:
State Comptroller Nancy Wyman today said the state should consider using a portion of the $1.4 billion Rainy Day Fund as part of a plan to address a budget imbalance that could exceed $800 million by the end of the 2009 fiscal year.
The estimated $806.5 million imbalance is composed of a current-year deficit of $302.4 million, plus a $504.1 million “structural” deficit caused by repeated use of past years’ surplus funds to pay for current expenses.
With no surplus funds remaining, Wyman said it would be appropriate to use the Rainy Day Fund to reduce about half of the $806.5 million shortfall. The other half would be addressed by measures created by the Governor and the General Assembly.
“The Rainy Day Fund was established to ensure that in periods of economic hardship the state is not forced to increase taxes or implement other policies that would delay economic recovery,” Wyman said. “Using a portion of the fund will allow the state to avoid major changes in its long-term policy objectives due to short-term economic conditions.”
So between Wyman and Napier we should have a pretty good idea that spending needs to be cut backup in Hartford. At least from the standpoint of assessing wants versus needs, and figuring out a way to reign in the high growth industry state programs have become. Which is what Toni Boucher essentially said on the issue:
“What happens if this (period of bad economics) lasts longer, and we have a $1 billion deficit, this year, the next year and the year after that?” Boucher said.
She said the state has to trim its budget, and she supported Gov. M. Jodi Rell’s cost-cutting measures to fight the deficit.
Hartwell is missing the boat by a mile on this one. I don’t think we need another legislator abdicating fiscal responsibility in Hartford.
source: Advocate, Candidates Boucher, Hartwell offer clear differences in District 26, By Frank MacEachern, 10/26/2008
source: Journal Inquirer, Rainy-day fund no good for the hurricane ahead, By Chris Powell, October 11, 2008
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