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Special Session Needed to Avert Fiscal Crisis
By State Rep. Richard F. Ferrari, R-62nd District
In my view, special sessions of the Connecticut General Assembly should be few and far between. They should be called only in cases of dire emergency or looming fiscal crisis. Unfortunately, the latter scenario is almost upon us. For that reason, I believe we need to hold a special session as soon as possible before a fiscal problem metastasizes into a crisis.
The budget adopted earlier this year appropriated $608.1 million of the projected surplus for items such as transportation, school construction and revenue sharing. Because revenues flowing into state coffers were less than expected, the surplus dropped by $31.9 million between the time the legislature adjourned and the state comptroller certified the surplus for the 2001 fiscal year, reducing it to $576.2 million. Most of the surplus appropriations were reduced based on a formula in the budget language that had been approved by the General Assembly.
However, on September 18, Governor Rowland alerted state department heads of a projected deficit of $83 million in the current fiscal year—a deficit that could grow to as much as $300 million. The Governor has proposed spending reductions totaling $86.5 million to close the projected deficit. He also has proposed further reducing the expenditures that were to come from last year’s surplus by $57.3 million, or nearly 10% of the $576.2 million revised surplus appropriations. In addition, he is requesting another $20.3 million in reductions to General Fund appropriations. Given the fact that the budget we approved for the 2001-02 Fiscal Year totals $12.9 billion, the governor's proposed reductions could hardly be termed draconian.
Irresponsible deficit spending and the enormous state debt it helped create were key factors in bringing on Connecticut's protracted recession and record unemployment in the early 1990s. The tax reductions and spending restraints that were put in place under Governor Rowland's leadership helped pull us out of the recession and put us back on the road to prosperity and full employment.
Economic growth in Connecticut began to slow down several months ago. We warned the majority Democrats at the time that putting expensive new spending programs in place during an economic downturn could very easily bring on a recession. Fortunately, Governor Rowland and state House and Senate leaders were able to work out a compromise package that (although higher than I would have preferred) respected the state's spending cap and did not raise taxes.
However, things have changed considerably since then. As economic growth in Connecticut continued to slow down, Osama Bin Laden's terrorists attacked the United States, aggravating and worsening the downturn in our state's economy. Although our economy is more diversified and stronger than it was 10 years ago, no economy can be totally recession-proof. If we act now to reduce state spending and close the projected deficit, we should be able to ride out the downturn and head off a recession.
If the spending reductions we approve target mainly the new spending programs enacted during the 2001 legislative session, fewer people will be adversely affected and the cuts will be relatively painless. If we hold a three- to four-day special session in November, shortly after the elections, we will not be distracted by other legislative matters and can find sections of the budget that we can cut without hurting the most vulnerable of our citizens.
However, the bottom line is that we must act soon. We are already four months into the 2001-02 fiscal year. If we wait until the regular legislative session gets underway in February, we will be eight months into the fiscal year and many new programs will be up and running. By then, it will be politically difficult to make the spending cuts needed to get the economy back on track, and the economic downturn could get even worse.
Winning the war against terrorism will be difficult. But if we make the hard choices now, we won't have to fight it while we're mired hip deep in a full-blown recession.
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