BUDGET ADDRESS BY GOVERNOR LOWELL P. WEICKER, JR.
JOINT SESSION OF THE CONNECTICUT GENERAL ASSEMBLY
HALL OF THE HOUSE, STATE CAPITOL
FEBRUARY 13, 1991
Madam President, Mr. Speaker, Ladies and Gentlemen of the General Assembly, Ladies and Gentlemen of Connecticut.
Thank you for extending me the courtesy of this Chamber and your homes this evening. I know these are trying times in many different ways and one more pronouncement from a Governor, Mayor or President does not fall into the category of a good time.
But there are jobs to be done, as another Connecticut National Guard Unit knew when I bade its members farewell in Niantic this afternoon. It is the job of the budget that has me before you this evening.
Tonight is a special moment for our State -- for each of us, elector and elected, who are the State. We have the power, if only the will, to positively and dramatically change our little corner of the world.
And mind you, not having Washington, or the United Nations or economic tides changing it for us, but rather deciding our own destiny in this act called a budget.
Every generation is a part of history -- few in a generation have the chance to make history. Everyone within and without this chamber starts at such a threshold this evening.
I've made my choice and although the path to it was trying, I feel great.
And the reason I feel great is that with this budget -- what was done is done; what is to be, is free to flourish, to be created, to happen.
I'll spend little time with a reprise of harsh facts. The deficit projection, as I walked into this Chamber, is 2.4 billion dollars. It grew $40 million just within the past days as corporations claimed refunds for overpayment of taxes.
These kinds of figures, left untended, control lives, sap confidence, humble visions and make recovery impossible.
Neither you nor I signed on to muck around for two to four years in the mistakes of the past. We're in the future business so let's get on with life in Connecticut, not debt.
Now, as with anything new, there are those who will grimly hang onto the old. I predict the saying "turf battle" will achieve a whole new definition in Connecticut in 1991.
Already, without the totality of the budget before them, wealthy towns, labor unions, correction officers, nursing home operators and boot camp advocates have all said "not me."
Now, with the budget public, they will be joined by many other legitimate elements of our society. But as the lobster sheds its shell to grow and the tree its leaves for beauty, so Connecticut now must turn in the old for new clothes and new functions.
The change begins with the deficit. The themes are fairness and effectiveness.
These less-familiar words of Patrick Henry best describe what should be our process in the days ahead:
"For my part, whatever the anguish of spirit it may cost, I am willing to know the whole truth, to know the worst and to provide for it."
For openers, such "provision" means proposing cuts of $1.2 billion from the budget. Not across-the-board cuts, as is the style of the lazy and philosophical, but line-by-line reductions after review of each service, each need.
We used a scalpel, not a chain saw. Every function, with the exception of economic development and certain health and education programs, was cut.
Would that it were only numbers, only mathematics. But suffering is peculiar to human beings, not statistics. So I confide to you that this was the most difficult task in terms of the heart.
The final upshot, without picking through the remains on the abattoir floor, is general fund expenditures that are 2.8 percent below last year's. If achieved, it would be the first time that minus growth in state spending has occurred in modern memory.
Even with that magnitude of cuts in spending, only one half of the deficit problem is erased. The remainder is dealt with either by more cuts or more revenue.
Incidentally, for any read-my-lips dreamers out there, long-term bonds are not revenues. They are expenditures -- and not so long-term either when it comes to paying interest.
So, on with the second bullet of adding revenues. I am recommending the following revenue system to give us balanced budget in 1991-1992 and beyond:
- Cutting the state sales tax from 8 percent to 4 and one quarter percent on July 1.
- Eliminating the capital gains, dividends and interest taxes on July 1.
- Expanding the sales tax base by eliminating the exemptions on gasoline, newspapers, clothing, haircuts, laundry, movies and amusements, among other goods and services, effective July 1. (Still exempt are utility bills, prescription medicines, food, among a host of other goods and services.)
- Eliminating the 20 percent corporate surcharge effective with the income year that begins January 1, 1992.
- Cutting nearly in half the sales tax on utility bills of non-manufacturing companies on July 1.
- Adoption of a personal income tax of 6 percent of adjusted gross income in excess of 25,000 dollars for joint filers and 12,500 dollars for single filers on July 1.
With such a system in place, two other entities contribute to Connecticut's revenue stream:
- The federal government -- with an estimated pick-up of one third or $300 million plus of the aggregate net new taxes.
- Non-residents -- who earn income here now will help pay for the services Connecticut provides them.
To close the circle and pay for the $707.4 million deficit from 1990-91, I recommend setting up an Economic Recovery Fund with one third of the debt being retired each year for the next three years -- accomplished with dedicated funds from general revenues. 272.1 million dollars is included in the 1991-92 budget for that purpose.
In other words, we're generating the payback internally and with short-term notes, not long-term bonds.
Now, my friends, if indeed I still have any -- let me walk you through the process used to arrive at my conclusions of this evening:
I went into budget deliberations seeking to avoid an income tax, thinking to expand the sales tax -- even to food and prescription medicines -- and planning a one-shot surcharge on an individual's federal tax liability.
On another tack were those of my administration who marshaled facts on behalf of an income tax.
No rank was pulled in the debate. Both sides had spirited and conscientious advocates. Facts had to carry the day -- facts linked not only to a past but to a future.
And what finally pulled me over the line was this:
One option -- my wish -- took care of the past, with nothing to show for the present or the future -- except the need for another economic disaster speech next year; another multi-million budget cut exercise and certainly more nickle-and-dime taxes.
The other option -- this plan -- takes care of the past and starts tomorrow today. Hope was the difference, with it, all was possible. Without it, our Connecticut, as we envision it, would slip away.
The average difference in taxes as a percent of income to avoid that, would range from 2 percent less taxes in the zero to $10,000 range to 1 percent more taxes for the $200,000-plus range.
The good news is what this course promises for the business climate of Connecticut -- allowing it to compete again with all other states and the world; encouraging small business, offering new and expanding jobs and thus generating revenue.
And remember. As follows the night the day, without jobs there are no revenues and no services.
Not so coincidentally, jobs in good times and certainly in bad, are the number one priority of this administration.
The impact of this budget on business includes:
* Three hundred million dollars less each year in business taxes which can be invested in expansion and the work force.
* With the reduction in the sales tax, business -- which pays 40 percent of the state sales tax -- will have more money to invest in jobs.
* Exemptions will be maintained for business-associated services such as legal and accounting; architect, land surveying and engineering services will be transferred back to exempt status -- all to encourage business expansion, growth and jobs for Connecticut-based professional services.
* A vital link between higher education and the business community through the establishment of new Advanced Technology Centers at Yale and the University of Connecticut to promote research in the areas of precision manufacturing science and neuroscience and biotechnology.
* Increased support for the Department of Economic Development, increasing the funding for programs nurturing entrepreneurial ventures and ventures selling Connecticut products abroad.
I want business to get a very clear signal from Connecticut's tax policies: We want you here. We need you here. You are no longer the limitless well to which everybody turned when new revenue was needed.
In this no-punches-pulled budgeting process we have preserved -- even enhanced -- our commitment to children, the real future of Connecticut.
The top priorities in this budget include:
* Initiatives to promote voluntary integration in education, continuing Project Concern and encouraging initiatives promoting racial, ethnic and economic integration within and across school districts.
* Birth to Three early intervention programs and services for handicapped infants and toddlers with an initial new commitment of 1.2 million dollars.
* Improving access to community health care centers for uninsured and underserved clients, particularly children, born and unborn.
* Implementing the federal mandate expanding Medicaid to children.
* Expand services of the Department of Children and Youth Services that will protect children from abuse, neglect and abandonment.
* For our older youngsters, I am recommending block grants to higher education institutions.
I have long believed that our universities and colleges have realized nowhere near their potential. I also have to tell you that the best decisions are made in the university, in the health center and the colleges, not the governor's office or the legislature.
Where there is freedom of decision, excellence flourishes. There will be accountability -- the taxpayer has every right to expect money is being spent correctly.
But I believe in the excellence achieved by those on the front lines delivering the best possible education to the children of Connecticut.
In this budget message I have chosen to dwell on crucial priorities for our future and on present programs of proven worth.
But being tough, this budget is likely to bring out those who would point fingers, seek blame. Time just doesn't permit for that. If anyone is going to argue in the huddle, go talk to the water boy.
We can't stand a moment of self pity over what deficits and recessions have done to us. Our competitors don't care.
We must be ready to take the field with 49 other states and the world. Like or not, ready or not, that is the game now being played.
And to those -- watching at home -- who say the political system is responsible for our present predicament, I say BUSHWA (no pun intended). The political system is all of us in the State of Connecticut.
We all had the means to give direction to our revenue and spending habits -- and we didn't choose to do so. It wasn't only the fact that the legislature didn't. The people chose not to.
To my friends at home, no system can be devised, either by constitutional amendment or statutory authority, that is as effective as the individual citizen participating in the process, voting the fiscally-responsible into office, the deadbeats out.
You can't expect a governmental automatic pilot to do the job you refuse to do once a year in the voting booth.
It takes involved men and women, and once we get this State straightened away -- and we will -- participation in our one-of-a-kind constitutional process must be expanded and maintained.
To my friends here in this Chamber, I know we can do this together. Not me, not you, not Democrat, not Republican, not Connecticut Party -- but us. If we are fair and set forth those values that relate to others and not ourselves, than we will have done what we were elected to do.
I do not think any one of us is going to benefit, short-term, from this exercise. Nobody is going to come out ahead -- except those we were elected to serve.
I think they want this budget as the first order of business, not the monkey-business concluded in the last wee hours of every legislature, from mine in 1963 to ones of more recent vintage.
As for the courage I ask for here, its meaning can be found everywhere, from the simple words of Nathan Hale of Coventry to the faces of our young men and women, seen so closely and clearly from that strange war on the desert and gulf of the Middle East.
Nobody asked or is asking those men and women of different color and backgrounds, to go slow, to give anything less than their best, even their lives.
I think the best we can do in honoring them is to make sure, so far as their opportunities are concerned -- and those of their children -- that we give no less in preparing a healthy, thriving Connecticut for their home-coming.
Now, how to close a message of sacrifice and hope?
Well, far better than the words of a governor or a speech writer are the words of a citizen.
Phyllis Zlotnik, disabled, in a wheelchair, and an advocate, wrote me the following words on January 21, 1991:
"There's no doubt we're in difficult times, painful ones in every direction. Why anyone would want to be Governor now is unfathomable to me, however, I'm glad you do. As concerned as you are about people with disabilities, I know you'll have to make cuts in those services as well. Who ever would be Governor would have to make similar cuts and I'd rather that person be a friend such as you rather than someone who didn't care.
We may not always agree, and may have other ideas about the ways to make services more cost effective, but those of us who understand will be behind you. We hope you'll seek our advice but will accept if you cannot do so.
I wish you luck and success in your endeavors for all our sakes, including yours. Despite the fact I've been present in an area with you on numerous occasions, circumstances have prevented me from saying 'congratulations' and good luck.
I'm taking this opportunity to do that now. If there is anything I can do to be of assistance in any way, please call on me. I've lost alot of my faith in politics over the last few years; but you have not let me down since Watergate, and I know you will continue to be my last bastion of believability. And if you feel alone with your decisions, remember those of us -- and there are many out there -- who are silently with you."
To Phyllis and all of you, my thanks -- and Godspeed.