CT’s guardrails have large gaps and don’t do much good

There is a major gap in Connecticut’s “fiscal guardrails,” rules adopted in 2017 that require the state government to save a large portion of any budget surplus and apply it to its unfunded pension liabilities. The loophole was recently mentioned in an essay in the Hartford Courant by Connecticut Conference of Municipalities Executive Director Joe Delong.

While the “guardrails” have slowed the growth of state spending, the governor and General Assembly have recently crafted budgets that favor the state government’s own agencies and programs at the expense of the funding the state government provides for local schools. This means that since the “guardrails” came into force, the state government has made disproportionate savings with its share of the costs of municipal education.

In order to keep school spending high, municipalities have increased their property taxes, most of which go to schools.

Delong writes: “The national average of spending on public education is 44%. In Connecticut, the state has slipped into the bottom quartile since the introduction of the “guardrails” with a share of 36%. This is not a sound budget spending control plan. This is a calculated expense layer from the state budget and into the regressive and already overtaxed property tax.” The burden of this tax falls heaviest on low- and middle-income households.

This tax shift is not a direct result of the “guardrails” themselves, but rather a result of the decision of the Governor and the Legislature. They can claim political credit for keeping government spending under control and avoiding state tax increases, while local officials increase local spending and property taxes and risk being held responsible.

To some extent the governor and the legislature They might assume that they can allow school aid for wealthier cities to be eroded by inflation because those cities can afford higher property taxes and education aid should go primarily to poorer cities.

However, as measured by student achievement, public education in Connecticut has been declining for years, regardless of spending. Shifting school aid from wealthier towns to poorer towns may well be justifiable to taxpayers, but Connecticut has been on the receiving end since the state Supreme Court’s decision in Horton v. Because even if elected officials don’t want to admit it, educational success is almost entirely a question of upbringing. Without good education for their students, schools can’t do much, regardless of how much they spend.

Municipal spending and property tax increases could be avoided without increasing state aid if the state government implemented controls on municipal spending, particularly by eliminating mandatory arbitration of municipal workers’ union contracts or allowing municipalities to elect their contract arbitrators. But that would strip teachers unions of their power over municipal coffers, and unions are far more powerful pure taxpayers.

There is another big gap in the “fiscal guardrails” one identified by political commentator Red Jahncke. He points out that the additional billions of dollars that the “guardrails” have devoted to the state government’s large, unfunded pension obligations for state employees and teachers do not significantly reduce those obligations at all. That’s because these obligations are simultaneously increased by the large salary increases paid to state employees every year.

Pension obligations are based on salary, so the costs of increasing salaries through pensions continue to rise. Without much more restraint in payroll accounting, for example through a long wage freeze, the unfunded pension obligations cannot be significantly reduced.

“Connecticut residents,” Delong notes, “deserve an open and honest debate about how we can experience the benefits of fiscal restraint without the ongoing hidden regressive tax increases hidden within it.”

Furthermore, Connecticut needs a debate about what it really gets for its taxes – effective public services or a well-compensated political army protecting an immutable and unaccountable regime. Greater tax progression is of little use if government costs are already rising without a corresponding increase in public services; It just makes elected officials feel better about their ineffectiveness.

Chris Powell has been writing about Connecticut government and politics for many years. ([email protected])