Connecticut budget blasted by Senate minority leader John McKinney at MCC
By Christian Mysliwiec - Staff Writer
Manchester - posted Wed., Apr. 3, 2013
Since February, when Gov. Dannel Malloy (D) unveiled his budget for the state of Connecticut for fiscal years 2014 and 2015, it has been the focus of heated debate among legislators. Among the proposed budget's most vocal opponents is state Senate minority leader John McKinney (R-Fairfield), who is touring eight towns throughout the state to share his view. His tour brought him to Manchester Community College on Monday, April 1.
“We need to get our fiscal house in order,” McKinney told the audience of residents and local officials. He began his budget presentation with a “budget 101” segment. In this fiscal year's budget of $20.67 billion, 22 percent goes towards social services programs. Education comes in second, at 21 percent. Regulation, protection, corrections and judicial is 11 percent, pension and healthcare for state employees and retirees is 11 percent, and repayment of debt is 11 percent. McKinney is troubled by this level of spending, and noted that while the state's population has remained relatively flat for a quarter-century, inflation has increased by 98.3 percent and spending has increased by 318.7 percent since 1987. “Any time government, whether it's local, state or federal government, is increasing spending at three or four times the rate of inflation over a long period of time, you're going to end up with a fiscal disaster,” he said.
The repayment of debt at 11 percent of the FY 2013 budget was also a concern to McKinney. “That means that 11 cents of every dollar we spend goes to pay off debt, pay off interest on money we've borrowed,” he said. “As a state, we have the highest per capita debt of the country.”
With a $2.5 billion deficit facing Connecticut over the next two years, Malloy's budget for the next two years (which will spend $20.85 billion in FY 2014 and $22.07 billion in FY 2015) calls for an increase in spending by $1.8 billion, or 9.6 percent.
McKinney is critical of the fact that the budget will break the state spending cap, which was put in place when the state first passed the income tax in 1991. “He is in violation of the spending cap by $465 million in the first year of his budget, and $690 million in the second year,” said McKinney. “Now in his budget speech he said his budget comes under the state spending cap, because what he's offered to do is to change the definition of our constitutional spending cap... He needs to meet the law currently on the books.”
The budget aspect McKinney finds “most egregious” is that it seeks to borrow money to the tune of $750 million in bonds to meet operating expenses. “This extension will cost our children $31 million in interest expenses,” he said.
Then came the point that McKinney said “should scare you the most.”
“We currently have an unfunded pension liability – money that we owe to people in the very near future – of $66 billion,” he said. Even this number, he said, is under-inflated, and realistically is closer to $80 billion. McKinney said the state is limited in its ability to deal with this problem, as contracts with state employees ensure a four-year guarantee of no layoffs, and healthcare and benefit plans were extended to 2022. “Our ability to really dent that $66 billion is limited by that agreement,” he said.
The much-discussed removal of the car tax, which will exempt the first $20,000 (or $28,000 market value) in assessed value of motor vehicles from local taxes, will cost $632.8 million statewide annually, McKinney said. In Manchester, the town stands to lose $11 million. While he agrees that the existing car tax is unfair, as two people in Fairfield or Bridgeport, for example, who own the exact same car model will pay significantly different tax amounts, he believes enacting the exemption will force municipalities to make up the revenue loss by increasing property taxes. “If you look at who wins or loses under his plan, you find that many seniors end up losing,” he said. With many seniors owning older cars that were already minimally taxed, the sudden transfer of the burden onto property taxes will be a significant factor.
McKinney offered his own suggestions in addition to his criticisms. “Instead of a current services budget, I've been arguing for a long time that we do a zero-base budget. Start from zero, [ask] how much revenue you're going to bring in: that's how much you have to spend,” he said.
He also expressed his disapproval of the “dual delivery” nature of Connecticut. “We have state-run group homes, state-run hospitals, and state-run mental facilities and the like. We also support non-profit agencies in our communities that do the same thing,” he said. “Most states don't do both.”
He believes that the state should get out of the social services business and instead fully-fund non-profits. “Non-profits that provide services to the poor, the disabled, the sick, the elderly, provide care to those people for about 50 cents on the dollar for what the state spends on the same group of people,” he said. “Some would argue that it's better care.”
Based on his assessment, he believes citizens must vocalize their complaints about the budget to legislators. He ended with some statistics that he said show the need for change: the state has had negative job growth for more than 25 years according to the Department of Labor, was ranked 45 among the best and worst states in which to do business in a survey by “Chief Executive Magazine,” and the legislature has been voted the least business-friendly in the country by “Expansion Management Magazine.”