As Connecticut’s Spending Cap Commission closes in on it’s December 1st deadline to deliver recommendations to the state legislature, committee co-chair, William Cibes, asked that the term “death-spiral” cease to be used when discussing the state’s fiscal health.
Cibes also said that he no longer wanted to hear that state spending was out of control.
Cibes’ statement drew a rebuke from Rep. Melissa Ziobron, R-East Haddam, who said such comments were “backing us in into corners” and “not productive.”
“I want to work in a collaborative way to reach an agreement,” Ziobron said, “but I can’t do that if I’m always on the defense because of comments from our chairman.”
The comments came as members of the 24 person commission debated two proposals that defined what expenses would be included under the constitutional spending cap. The commission is charged with defining general budget expenditures, which will determine how much of Connecticut’s spending is subject to the cap.
The most contentious issue on the table is whether or not to include unfunded pension liability payments under the spending cap.
Senator L. Scott Frantz, R-Greenwich, said “we need to do something and need to do it yesterday.” Frantz went on to say the state is “hemorrhaging money.”
Senator Rob Kane, R-Watertown, proposed moving the current pension spending outside of the spending cap while keeping all future pension liability spending under the cap’s limit.
Commission member, Bart Shuldman, president and CEO of TransAct Technologies, argued that moving “long-time liabilities outside the cap” would be a “double whammy” for Connecticut taxpayers. “I really don’t understand how this helps the state,” Shuldman said.
Ziobron, on the other hand, proposed that only “evidences of indebtedness” be outside the spending cap. Evidences of indebtedness are bonds or other forms of debt that are “authorized for public or private sale” according to Cornell University Law School
Bonds and federal mandates are excluded from the spending cap, according to state statute. Ziobron’s proposal would keep pension liability payments within the cap forcing the state to balance the budget while accounting for its long-term liabilities.
“I just want to keep it as simple as possible,” Ziobron said.
In addition to the pension liability payments, the commission also debated pension fund discount rates, relief to distressed municipalities and whether or not state matching funds for federal programs should also be excluded from the spending cap.