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March 14, 2016 Other Voices

State must reform budgeting process

Robert Santy

Gov. Malloy's budget proposal this year begins to get at one of the fundamental problems with Connecticut's budget process. As the system exists today, the budget begins when agency leaders submit their proposals to the governor's office from the perspectives determined by the mission of their particular agency. The process is compartmentalized further when the governor's budget is sent to the legislature and reviewed by equally segmented committees.

The result is a budget compromise built on the desires of a group of constituencies rather than based on what is in the best interest of the state as a whole. With current budget-deficit projections of as much as $2 billion in the next two-year budget cycle, now is the time to re-think how we do things.

The approach that makes the most sense is based on anticipated revenue. Since everyone agrees further tax increases would be bad for the state, we need to begin the budget process by accurately determining how much money the state has to spend. Once we know that number we can begin to set spending priorities. This common-sense approach is not what we have done in the past. Until now, agency leaders and legislatures have put forward separate lists of desired spending, and governors and lawmakers have then tried to determine how to fund that list.

The crisis of the moment requires us to look at things differently, not only for this budget year, but for the years ahead. Limiting spending based on anticipated revenue forces state government to set priorities.

This approach worked in Washington state. Facing a $2.1 billion deficit in 2003, Washington began budgeting based on desired outcomes rather than the old habit of adjusting previous budgets for inflation. Choices were made based on the results voters expected from their state government.

We can do the same. As the legislature struggles to close the current budget gap of as much as $266 million, Connecticut should convene a working group to begin shaping the next two-year budget. This group should be assigned the task of setting the top 10 priorities of state government. Once those priorities are established we should determine how best to apply existing revenues to fund those priorities. Anything outside Connecticut's top 10 government priorities should be funded only on a pay-as-you-go basis.

This work could be the foundation of the next budget, but more importantly it could lay the groundwork for a sustainable budget process in the years ahead.

Robert Santy is president and CEO of the Connecticut Economic Resource Council Inc.

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