On Monday, after a long weekend of negotiations, Connecticut legislators managed to pass a two-year budget of $37.6 billion. While Democratic Governor Dan Malloy says the budget has no new taxes, Republicans are quick to point out that due to the continuation of taxes set to expire and the increase of current taxes, this budget is actually the largest single-year tax increase in state history. Acknowledging the budget is not perfect, Malloy said it is the result of "many tough choices and hard compromises." Even so, he insisted that "this budget shows that we've got our priorities straight," adding, "We are determined to keep Connecticut moving forward". My question is, how far forward?
Although the budget does fully fund the state's pension obligations and meets all but $2 million of of the funding for education reforms, to close the deal legislators relied on a number of short-sighted tactics. These tactics included the addition of various one-time revenue sources, the addition of 600 lottery terminals in bars and restaurants around the state, and shifting of $6 billion in federal Medicaid assistance out of the budget, keeping it under the state spending cap. Even some who support the budget's spending priorities show a concern toward the practices underlying its creation. Wade Gibson, a senior policy fellow at Connecticut Voices for Children, said, "We applaud lawmakers for passing a budget that advances early education and health coverage and preserves supports for low-income families in the state, however, we are concerned about the budget practices employed to make things balance. A heavy reliance on borrowing and a variety of one-shot revenues will leave holes in future budgets. At the same time, multiple fund transfers and accounting changes obscure precisely how revenues and spending were brought in to balance."
Perhaps the most disturbing of these three budget-balancing tactics, was the expansion of lottery terminals and the legalization of the game Keno. Keno is a game in which the player tries to guess the numbers the computer will randomly generate (sounds exhilarating, right?). It is legal in many states across America, including neighboring Massachusetts and New York, though in Connecticut it is currently only available to play in casinos. By expanding the legality of the game and making it available in restaurants, bars, and convenience stores, the government hopes to earn as much as $260 million in additional revenue. Although the revenue sounds great, the disturbing part is that statistics show that most of those who will come to play this game are poorer, and are thus more likely to need the government safety net. In other words, Connecticut is filling gaps in its budget by taking money away from the population who most desperately need the services for which the government requires the funding in the first place. Such sentiment was reflected by Democratic State Senator Donald Williams, who called the game a "shaky proposal" and a "misery tax" on those who can hardly afford to play.
Furthermore, if Governor Malloy and other politicians and lawmakers across the country are serious about long-term fixes for our state budgets, they will have to start to make the tough decisions rather than relying on short-sighted tactics to produce seemingly balanced budgets. Unsound revenue sources such as Keno illustrate that these tactics can only come to undermine the initial aim of the balanced budget. Ultimately, the only way to keep Connecticut or any state moving forward with long-term financial stability, is to cut spending!