Connecticuts State Budget Process: The What, Why and HowAnd Why You Should Care - PowerPoint PPT Presentation

Loading...

PPT – Connecticuts State Budget Process: The What, Why and HowAnd Why You Should Care PowerPoint presentation | free to view - id: 15b8b8-ZDc1Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Connecticuts State Budget Process: The What, Why and HowAnd Why You Should Care

Description:

Does a given credit benefit in-state or multi-state or multi-national corporations? ... Connecticut's bonding and loans jumped 74 ... 'Not all borrowing is bad. ... – PowerPoint PPT presentation

Number of Views:65
Avg rating:3.0/5.0
Slides: 51
Provided by: ellensc
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Connecticuts State Budget Process: The What, Why and HowAnd Why You Should Care


1
Connecticuts State Budget Process The What,
Why and HowAnd Why You Should Care
  • A Presentation by
  • Connecticut Voices for Children
  • For
  • Stone Soup The Power of Collaboration and
    Discovery
  • October 26, 2004

2
I. Budget Process ABCsII. Balancing
the BudgetIII. Monitoring Debt
AccumulationIV. Making Some Tough Choices
3
I.Popular Conceptions of the Budget What do
we often hear when we begin to talk about
Connecticuts budget?
4
Essential Yet Overwhelming The state
budget is essential to our communities as it
funds programs like education, Medicare, and
transportation. Still, the process is too
complex to try and understand.

5
How can citizens better understand the budget and
the budget process?
6
Know The Budget Process ABCs
  • Biennial Budget
  • Role of Agencies, OPM, Governor
  • Role of General Assembly-Committees
    Leadership
  • Budget Bills, Implementers, Final Budget

7
Think of it as a Family Budget
  • A budget is essential to all of Connecticuts
    households and families
  • Like a family, the state must
  • Balance income and expenses
  • Monitor the accumulation of debt
  • Make some tough choices

8
I. Budget ABCsII. Balancing the BudgetIII.
Monitoring Debt AccumulationIV. Making Some
Tough Choices
9
II. Balancing the Budget
  • Some essentials
  • Appropriations
  • Revenues
  • Tax Expenditures
  • Statutory and Constitutional Limitations

10
Appropriations Spending the States Money
  • Appropriations Committee (considers proposals
    on how to spend)
  • Public Hearings to gather input from
    government officials and the public

11
Where Does the Money Go?
  • In descending percentage order, the 2005 budget
    funds are going to
  • Human Services (27.1)
  • Education (20.1)
  • Debt Service (12)
  • Other Non-Functional (11.9)
  • Health and Hospitals (8.8)
  • Corrections (8.3)

12
Where Does the Money Go?
  • General Government (3.1)
  • Judicial (2.8)
  • Regulation and Protection (2.3)
  • Transportation (2.6)
  • Conservation and Development (0.6)
  • Legislative (0.5)

13
(No Transcript)
14
How Does Connecticuts Spending Compare to Other
States?
  • 2nd most frugal state in the nation
  • 50th (lowest) in total state and local spending
    on education as a share of total personal
    income
  • 48th (3rd lowest) in spending on housing and
    the environment

15
Revenues Raising the States Money
  • Finance, Revenue and Bonding Committee
    (review collection of taxes, other revenues and
    bond requests)
  • Public Hearings to gather input from
    government officials and the public
  • Contrast Appropriations Hearings

16
Where Does the Money Come from?
  • Estimated Sources of 2004 Revenue
  • Personal Income Tax (48)
  • Sales and Use Tax (34)
  • Other Revenues (12)
  • (including Federal Funds)
  • Business Taxes (6)

17
(No Transcript)
18
Shifting Revenue Burdens
19
(No Transcript)
20
Tax Expenditures A Form of Hidden Spending
  • Tax Expenditures provide preferential
    financial benefits to one or more taxpayers
    through the tax code.
  • Tax Expenditures (preferential tax credits,
    exemptions, exclusions and deductions) are
    exceptions to taxes that the state otherwise
    collects.

21
Tax Expenditures A Form of Hidden Spending
  • Unlike appropriated expenditures, tax
    expenditures
  • are rarely revisited
  • become permanent revenue losses,
    regardless of changed economic conditions or
    evolving public policy, and without an
    assessment of their continued value to the
    state.

22
Tax Expenditures - Reducing Government
Accountability
  • Information about corporate tax expenditures is
    often unavailable to lawmakers and to the public
  • Which companies are claiming credits?
  • In what amounts?
  • Does a given credit benefit large or small
    corporations?
  • Does a given credit benefit in-state or
    multi-state or multi-national corporations?
  • What return on investment is the state
    receiving?

23
Tax Expenditures Growing Cost
  • In Fiscal Year 05, Connecticut will forego 4.4
    billion through tax expenditures while
    collecting 12 billion in tax revenues.

24
Tax Expenditures Can Grow Unchecked
25
What would Connecticuts spending look like if
tax expenditures were included in the
appropriations pie?
26
(No Transcript)
27
Limitations on Connecticuts Budget
  • Constitutional Amendment Requires a Balanced
    Budget (28th Amendment of CT Constitution,
  • adopted in 1992)
  • Spending by the Appropriations Committee must
    be reconciled with anticipated revenues

28
Limitations on Connecticuts Budget
  • Connecticuts statutory spending cap limits
    growth in general budget expenditures to the
    greater of
  • 5 year average growth of CTs personal
    income or
  • annual growth of CPI (inflation)
  • Can only exceed with Governors emergency
    declaration and 3/5 of both chambers

29
Spending Cap Good News. . .
  • Annual state spending growth was much slower over
    the last 9 years than the year before.

30
. . . Bad News
  • The spending cap also creates
  • An incentive to borrow
  • Increased use of tax expenditures
  • Inability to maximize federal funds due to
    Connecticut

31
I. Popular Conceptions of the BudgetII.
Balancing the BudgetIII. Monitoring Debt
AccumulationIV. Making Some Tough Choices
32
Connecticuts Debt Where We Rank
  • Connecticuts has one of the highest per
    capita bonded debts in the country (12.4 billion
    in July 2004)
  • If Connecticuts debt burden was divided
    equally amongst all residents, we would each owe
    3,600
  • The Associated Press, State Debt Among Nations
    Highest. July 19, 2004.

33
Connecticuts Bonding Has Increased
  • From 1992-2002 Connecticuts bonding and loans
    jumped 74
  • Connecticuts borrowing is comparable to larger
    states like Texas or New York
  • The Associated Press, State Debt Among Nations
    Highest. July 19, 2004.

34
The pattern has been to borrow and spend
instead of tax and spend.
  • -- Stanley McMillen, Economist,
  • UCONN

35
Not all borrowing is bad. If you borrow 1
million to build a school, and turn out students
who are more productive members of society over
30 to 40 years, you more than pay off that debt.
  • -- Stanley McMillen, Economist,
  • UCONN

36
Connecticut Has Borrowed Money for Small Projects
and Operating Expenses
  • To avoid spending cap restrictions, CT has used
    borrowed money not only for large capital
    projects, but also to pay some current operating
    expenses.

Bond funds have been used for 24-speed bicycles
37
The State Comptroller reported that of the
1.33B in bonded debt that occurred in FY 01
  • 61 (816 million) was for infrastructure or
    other assets benefiting future generations
  • 39 (511 million) was used to fund on-going
    state operating expenses, deferring much of the
    cost to future generations.

38
I. Popular Conceptions of the BudgetII.
Balancing the BudgetIII. Monitoring Debt
AccumulationIV. Making Some Tough ( Smart)
Choices
39
The Choice to Create a Sound Economy
  • Make proven investments in children
    families Education (pre-K, K-12, Higher Ed,
    Lifelong Learning)
  • Make proven investments in families the Earned
    Income Tax Credit

40
The Choice to Create a Sound Economy
  • Modernize CTs Revenue System
  • Review Tax Expenditures and Work with Other
    States to End the Race to the Bottom
  • Review the State Spending Cap so It Works For
    Us, Not Against Us

41
The Choice to Spend Our Money Smarter
  • From FY 02 05, the fastest growing areas of
    state spending were
  • Debt Service 42 increase (389
    million)
  • Department of Correction 12.0 increase
    (61 million)
  • Dept. of Children Families 9.5 increase
    (103 million)

42
Cant We Spend It Smarter?
  • 516M/year on 19,000 inmates (27,000/year/per
    inmate), not including debt service on the
    prisons
  • 494,000/year for a single DCF placement at
    Riverview Hospital (1348/day/child)
  • BUT WE ONLY SPEND
  • 31M/year for all higher
  • education need based
  • scholarships

43
The Failure to Fix CTs Fiscal Boat Is Resulting
in Penny Wise Pound Foolish Budget Choices
  • EX
  • Continued cuts to K-12 and higher education will
    result in a less well-educated workforce and
    higher property taxes, making CT less desirable
    to businesses.
  • Continued cuts to mental health and substance
    abuse services will result in DOC and DCF
    populations continuing to soar at a cost to CT
    of 35,000/year to more than 325,000/year per
    person, and incalculable cost to families.
  • Continued failure to invest in CT
    transportation system and housing stock will
    deter businesses from growing in CT and families
    from moving and staying in CT.

44
Connecticut Has Choices
  • Connecticut
  • has the nations highest per capita income.
  • has one of the nations best educated workforces
  • ranks 1 in millionaires per capita.
  • If ranked as a country, CT would be the
    wealthiest nation in the world.
  • Even without Fairfield County, CT has the
    nations 3rd highest per capita income.

45
The Choice to Spend It Smarter
  • Repair the state spending cap
  • Require greater transparency and accountability
    for tax expenditures
  • Invest in more programs with proven returns

46
The Choice to Invest in Programs with Proven
Returns
  • Mental health services
  • Early care and education
  • K-12 education and higher education
  • Health services
  • Job training
  • Housing

47
The Choice to Avoid Negative Consequences such as
. . .
  • Less educated, productive and skilled workers
  • Less healthy children, adults, workers
  • More costly types of care
  • Diminished capacity to remain economically
    competitive in a global economy
  • Reduction in quality of life

48
Make the Choice to Invest in Connecticuts
Children and Families
  • Connecticut residents strongly oppose cutting
    programs that support children and youth as a
    means of balancing the state budget.
  • A 2004 UCONN poll found
  • 83 opposed cuts in funding to towns for public
    education
  • 82 opposed cutting programs for the poor
  • 82 opposed cutting public health programs
  • 76 opposed cuts to CTs state universities and
    colleges

49
If we want to invest in the prosperity of our
nation, we must invest in our children so that
their talents may be fully employed."
  • --President William J. Clinton

50
For more information contact Ellen Scalettar,
JD (escalettar_at_ctkidslink.org)Shelley Geballe,
JD, MPH (yalie4567_at_aol.com)at CT Voices for
Children33 Whitney Ave. New Haven, CT
06510203-498-4240 (Phone) 203-498-4242
(Fax)www.ctkidslink.org
About PowerShow.com