Kiner's Korner: Legislature and Council Work Together

The lead story in this week's Barron's Magazine is entitled "Good, Bad and Ugly". The emphasis of this story is on the states with the best and the worst credit ratings (from Standard & Poor's). Though Connecticut did not make the top tier (it was actually in the bottom group), there is still much to be said about what Connecticut has accomplished during these times of adversity.

No one would argue the fact that there is good reason for a not so sterling credit rating (AA). Our debt per capita is $4,859, the highest in the nation. Our debt per cent of 2008 personal income is 8.7%, the third highest in the nation. And our debt to state GDP is 7.9%, which is also third in the nation. Ouch!

There are those, like my father, who have offered the following advice: "if you can't afford it, you don't buy it". There are many who would argue that over the years Connecticut has borrowed itself into a fiscal quagmire, "buying" things that we could ill afford.

Well, that's all pretty negative (ugly) stuff. But there is also upbeat information as well. We can take note of a recent overview of the state's debt by Janney Capital Markets. Janney suggests that Connecticut is a "prolific issuer of bonds" and was like most states, hurt by the Great Recession. Connecticut, says Janney, was "impacted by the economic downturn of the financial services industry". The state relies heavily on the income tax, especially from Wall Street's millionaires  who reside in Fairfield County. When they don't make their millions, our revenues decrease. Then in an extremely positive note the overview goes on to say that "the state's ability and willingness to meet debt service obligations are strong". This optimistic assessment augers well for Connecticut. Still, the General Assembly needs to use fiscal restraint in future borrowing.

Now from a purely local perspective, let's look at what the state did accomplish. This General Assembly refused to renege on its responsibilities to our towns and cities. While other states made their budgets look rosier by cutting state funding to cities and towns, our legislature took the high road. The state commitment to education, to seniors, and to public safety did not waiver. The amount of aid sent to Enfield was pretty much as it was the year before-approximately $31,000,000.

Without this state assistance, the Enfield Town Council would have been forced to take draconian steps to balance the budget-meaning either huge tax increases or major cuts in services. The Council had to do neither. This is the fourth year in a row that no tax increases were necessary. The Council worked hard at achieving this goal. On a personal note, I thank the Town Council for looking favorably at the financial problems challenging the Friends of the Enfield Senior Center, an organization that works to improve the Enfield Senior Center and to improve the lives of the thousands who use it each year.

So for those of you who wish to thank the Town Council for no tax increases, go right ahead. But also keep in mind that without state aid, the budgetary outcome would have been quite different.

In spite of the state's indebtedness, let's keep a positive outlook. The state's economy and the national economy will eventually rev up. The state's credit rating will also improve, and towns like Enfield can continue looking for assistance from the state government. But there is still a warning to be heeded - federal, state, and local governments still have to show fiscal restraint. Maybe the advice given to me by my father is not so bad after all.