Can efficiency save state government $1 billion per year?

By Keith Phaneuf

Could state officials cut nearly $1 billion from the annual budget — without harming the grants and services most people care about?

Does that sound too good to be true?

More importantly, should Connecticut spend hundreds of thousands of dollars hiring a consultant to find out?

The answer to that last question rests with Gov.-elect Ned Lamont.

And while he hasn’t said directly whether or not he will commission the study, the incoming governor has not closed the door on new ideas – even those that might seem pie-in-the-sky — about how best to control the growth of state spending.

“Gov-elect Lamont and his transition team are engaging experts from around Connecticut and across the country to develop a budget that addresses our structural deficits without gimmicks or short-term fixes,” a spokeswoman for the Lamont transition said Thursday. “The governor-elect will bring fresh eyes to the decades-old problems in Hartford and will put forward a long-term vision for making state and local government more efficient.”

At issue are the proposals of the Commission on Fiscal Stability and Economic Competitiveness, a 14-member panel of business leaders and others that spent the first two months of 2018 crafting a blueprint to end state government’s worsening cycle of deep budget deficits.

The commission, which reported its findings on March 1 and delivered a slightly modified plan this week, centered both of its plans on a few, central pillars:

  • Cut income taxes and eliminate the estate tax, which would benefit all classes, but help Connecticut’s wealthy the most.

  • Raise the minimum wage to $15 per hour while ending collective bargaining for state employee benefits.

  • Restructure annual contributions into cash-starved pension funds. The yearly contribution to the teachers’ pension fund in particular is projected to spike dramatically over the next decade-and-a-half.

  • Establish tolls and rebuild the state’s aging, overcrowded transportation infrastructure.

  • And, finally, cut $1 billion out of state finances “through operating efficiencies.” In other words, keep current programs, but run them with less money.

If that number seems too steep — $1 billion is 5 percent of the entire General Fund, after all  — the commission also said the state could increase revenue without raising taxes, such as through stronger tax collection efforts.

But commission members have acknowledged the bulk of that $1 billion target likely would have to be met by reducing spending rather than optimizing revenue.