Lee Elci: All right welcome! Every Wednesday, we bring on Red Jahncke.
You ready to rock and roll today.
Red Jahncke: I'm ready to rock and roll.
Lee Elci: All right. So, Governor Lamont once called Connecticut's Fiscal Guardrail “sacrosanct.” How significant is his decision to modify the Volatility Cap! And do you think this sets a dangerous precedent.
Red Jahncke: Yes, I do. There are a couple of income tax revenue streams that are capped at a certain level, above which all revenue is redirected into the state employee pension fund. He has raised the cap. So, $300 million less is going to go into the pensions. That's the 1st violation of the fiscal guardrails.
The budget normally takes the surplus from the prior year and transfers it into the next year's budget. That's about $300 million. If he let the $300 million into the budget, plus the $300M extra from raising the level of Volatility Cap, that $600M would send spending over the Spending Cap.
So what's he doing with that year-end surplus from last year that should go into this year’s [budget]. He's intercepting it and creating an off-budget spending program. That's violation number 2.
That's just a violation of good budget practice. If you're going to have a budget, you should have everything in it. What's the point of having discipline within the budget, if every time you want to spend more money, you just go off-budget?
