Bond Rating Downgrade From Stable Should Not Be Ignored

Moody’s Investor Services report in which they downgraded the rating for Connecticut’s General Obligation bonds from stable to negative is Wall Street’s way of telling Connecticut what many of us have been saying for years: we cannot continue borrowing and spending like there’s no tomorrow. I’m extremely concerned over this bond rating downgrade, and it should not be ignored. As the report indicated, “the negative outlook reflects the choices made to address the state’s biennial 2010-2011 budget gaps as well as the shortfall for fiscal 2009, including a majority of non-recurring solutions and deficit financing, combined with a credit profile that includes significant long-term liabilities.” If we were a family and had a credit rating like this we’d be working at that Renaissance Fair like in those television commercials for FreeCreditReport.com. Unfortunately, those commercials are funny, but our new bond rating is not.

Last week the Office of Policy and Management projected a $388.5 million deficit for the current fiscal year, a number likely to grow in the months ahead. No one wants to be the bad guy. Spending cuts are painful and unpopular, but the sooner we act the better off we’ll be. We can’t ignore reality. This line from the Moody’s report should be a warning: “Connecticut also compares unfavorably on measures such as debt ratios that are among the highest in the nation, pension funding levels that were among the lowest in the country in 2008 even before the market turmoil is factored, and other post employment benefit (OPEB) liabilities that are larger than the size of the state’s annual operating budget.”

While the Moody report was bad news for Connecticut, I am hopeful it will finally compel the majority party to take this financial crisis seriously when we meet in the coming months to work out a deficit mitigation plan.

Fee Increases Hit Working Families the Hardest

According to Merriam-Webster’s Dictionary tax is defined as “a charge usually of money imposed by authority on persons or property for public purposes.” When the General Assembly passed a new two-year budget in September, supporters of the $37.6 billion plan claimed that taxes were raised primarily on the wealthy and large corporations. However, on October 2nd when the legislature reconvened to take up a number of bills that implement the budget for the next two fiscal years, HB 6802 increased nearly every professional license fee, and in some cases these fees were even doubled.

I have received inquiries from people asking if they will be required to pay more for their professional license. Some of the professions affected by the fee increases are teachers, accountants, farmers, retailers, realtors, bankers, architects, engineers and surveyors, electricians and plumbers, pharmacists, landscapers, interior designers, home improvement contractors, insurers, apprentices, bedding dealers and manufacturers, group home providers, barbers and hairdressers, pest control specialists and funeral home operators. Don’t see your profession? Well the bill also incorporates dozens of fee increases for other “miscellaneous” professions and doubles the fees for most corporate filings. If we are serious about attracting businesses and retaining skilled workers in Connecticut, we should not be placing any greater financial burden on them, regardless of their profession.

Unfortunately it doesn’t end there. Recreational fees for hunting and fishing are all being doubled. If you need a marriage or death certificate from your local town hall, those fees are going up as well. Want to visit a state park? You’ll being paying twice as much as last year, which goes against the efforts the state has have made over the past couple of years to make Connecticut a more attractive place to visit, enjoy and most importantly, live in.

No matter how you look at it, these fee increases are simply another tax with a different name. They have the same effect on individuals and businesses as any tax increase and they hit working families the hardest.

New Budget... Same Problems

The consensus revenue estimates confirm what legislative Republicans have been saying for weeks: The Democrat budget was in deficit upon passage.

When Comptoller Wyman reported a potential $500 million - $1 billion deficit on October 1st, Democrats ignored her warnings. Now that the most recent OPM estimate predicted a $388.5 million budget deficit for FY 2010, Democrats can’t ignore reality any longer. The people of Connecticut need their elected officials to finally lead by making the difficult decisions necessary to reduce the size and cost of state government.

Senate Republicans stand ready to work on a mitigation plan that brings the state budget back into balance by reducing the cost and size of state government. Less than one month after passing a budget that we all knew was unsustainable, Governor Rell will once again have to make the difficult decisions the Democrats have repeatedly failed to make.

In the past year we met four times to vote on deficit mitigation plans. The Democrats failure to act with any sense of urgency or responsibility during those negotiations and their creation of an unaffordable budget have put us where we are today. We can only hope they will finally start getting serious. The people of the state of Connecticut deserve better.

An Irresponsible Budget

Last week I voted against several bills to implement the $37.6 billion biennial state budget. While there were a few portions of the legislation that I supported, such as delaying in-school suspension, I could not put my vote of approval on any part of the irresponsible budget that was passed several weeks ago. To date, the legislature has acted on four deficit mitigation packages and the recently adopted budget drains the Rainy Day Fund, raises taxes by $1 billion and borrows another $2 billion. Just this week Democratic Comptroller Nancy Wyman warned the General Assembly that the state may be facing a $500 million shortfall in the near future.

I voted against the budget last month and its implementers last week because Connecticut families and businesses cannot afford the new taxes, the increased fees, or the continued level of government spending it requires. Important programs all over the state are now facing serious cuts because the majority party could not figure out a way to prioritize and make difficult decisions for the greater good of our state. Among the many negative aspects of this budget is the possibility of fare increase for Metro North commuters. If we were to cut as little as $20 million each year out of this biennial budget, we could avoid increasing train fares which make living in Connecticut a viable option for many employees in the state of New York.

One bright spot in an otherwise disappointing session was the language contained in the education implementer to delay in-school suspension until 2010. I routinely speak with local elected officials in my district who have pleaded with me to repeal, or at the very least delay the requirement for in-school suspension. State mandates burden towns by forcing on them policies that cost money out of their town education budgets. The in-school suspension issue is a very clear example of a policy decision that should be made locally – or towns should receive full funding from the state to implement it.

Republican legislators offered several alternatives to the biennial state budget adopted last month that would have helped to make our state more competitive and save jobs. Unfortunately, none of our suggestions were taken up with the exception of delaying in-school suspension. The decision to raise taxes and fees rather than to make our state government smaller and more cost efficient, made it impossible for me to support both the budget and the implementing legislation last week.