Deficit Reduction

The next governor and legislature will inherit an enormous deficit. This is a challenge and a topic that holds no room for standard political rhetoric. No one person, including me, has all the answers. Many of my other position papers contain components of my deficit reduction plan. The following provides a summary of my positions on key issues. These positions will form the basis of an open dialogue among the many engaged individuals and organizations that, under my leadership, will bring Connecticut back to prosperity.

Given the scope of authority possessed by the governor’s office, I will implement or advocate the following:

Foremost, set a “tone at the top” that demands value, quality, and service in every function of governance.

Restructure state employment using attrition and negotiated position reclassification within a strategic framework that establishes a clear state governance mission, complete with performance measures.

Move more governance to the local level, providing additional local funding by sharing a portion of the state sales and income tax with municipalities. I will not support regional taxation. (See TAXES.)

Freeze state employee wages, and encourage municipal governments and school districts to do the same.

Move new state employees from defined benefit plans to defined contribution plans, and negotiate with current employees for transition to defined contribution.

Renovate and simplify our tax structure, increasing some taxes, eliminating others, and always using taxes and fees that were instituted for a specific purpose, such as transportation, for that purpose. Put more emphasis on revenue generation and less emphasis on social engineering through taxation.

Establish the cost of government first, and then reduce or eliminate funding to those organizations that do not provide commensurate levels of service and value.

Increase efficiencies in services provided through Medicaid.

Increase efficiency and reduce overreaching regulation by setting clear objectives for Commissioners and specific targets and measures of success.

Make Connecticut an employment destination. (See JOBS.)

Provide for a small business advocate office reporting directly to the governor to assist small business in navigating the regulations of state government.

As governor, I will personally and actively market the assets of Connecticut to national and world markets, highlighting the benefits of its location, educational institutions, and quality of life.

I will work diligently to move new state employees to employee contribution plans as opposed to the current defined benefit plans. I will also advocate “buying out” those employees in the first 5 to 10 years of state employment and moving them to employee contribution plans as well. Those near retirement must be guaranteed what they have been promised. Those in their mid-years of employment should be offered flexible plans that will help the state fund pensions appropriately and insure solvency at the time of their retirement. I will also advocate to cap “highest three year” calculations to avoid outrageous pension amounts created by late career overtime.

I will advocate that the state gradually move to operate under generally accepted accounting principles. To do so too quickly would result in financial instability or uncertainty, but to set a long-term goal of compliance will force the legislature and governor to abandon their practice of underfunding the pension system.

I will advocate for a freezing of all state employee salaries for duration necessary to right our financial ship. Freezing salaries while much of the taxpaying public faces stagnant or declining incomes is a fair mechanism to share the burden and avoid the draconian layoffs suggested by many Republicans to cut costs or the unrealistic taxation schemes advocated by many Democrats to increase revenue. Wage freezes also should be encouraged for municipalities and school districts until the crisis is over.

I will identify the priorities of state government, determining what the state can do best and what local governments can do best. Once the responsibilities are defined, I will advocate for a hard cost cap, provide for independent review of state government agencies, as well as public and private organizations that provide services germane to each specific responsibility, and fund those providing the highest value and level of service. I expect that this will result in many organizations that operate with a noble purpose but provide services similar to many other organizations having their funding either reduced or completely eliminated.

We can reduce costs while improving services provided under Medicaid with programs like “aging in place” which allows our seniors to stay in familiar surroundings at a cost far less than institutionalization.

The SEBAC agreement expires in 2017. Now is the time to address the transition from that plan to a new, more cost-effective service-oriented plan. Otherwise, we will be at the edge of a cliff as the plan expires, resulting in an environment in which negotiations will be very difficult. In Chester, where I serve as First Selectman, we have 100% participation in an HRA (Health Reimbursement Account) by all union and non-union employees. It provides better coverage than the state plan and saves more than 30% on premium costs. We can find common ground at the state level as well.

We must renovate our tax structure, focusing more on revenue production and less on social engineering through taxation. I believe we can eliminate many taxes and fees; the business entity fee specifically comes to mind, along with dozens of other high-nuisance taxes that yield low net revenues. Our current income tax system is too leveraged. While there are many who would in the name of “fairness” like to place more tax burden on the “rich,” this philosophy is too narrow and short-sighted. By doing so, we place too many eggs in one basket. We are living through the volatility our current highly leveraged tax structure brings. It may be hard to feel sorry for someone who now only makes $100 million when they used to make $300 million, but the fact of the matter is the state loses the tax revenue on that $200 million in lost income. I will advocate for a “flat” tax structure requiring everyone to pay at least a little, and requiring those with more to pay more.

From a systemic point of view, I believe it is important for everyone to contribute to the workings of the state. When one pays a price, no matter how small, their concern for the service they pay for is increased.