Spending cap commission fails to define “general budget expenditures”

The Connecticut Spending Cap Commission concluded its last meeting on Monday unable to reach agreement on a definition of “general budget expenditures,” which would be subject to Connecticut’s constitutional spending cap.

The commission voted 11-12 against a proposal by William Cibes, which recommended gradually phasing in increases to the cost of the unfunded liabilities the following year. The year long delay would continue until 2022, at which point all the unfunded liabilities would be subject to the cap.

“For those folks who are looking for a situation which would gradually place all of the unfunded liability under the cap, this proposal does this in a gradual way,” Cibes said.

However, under Cibes’ proposal another $635 million would be moved outside the cap beginning in 2018, according to estimates by the Office of Fiscal Analysis. That number would shrink in the following years as the increases to the unfunded liability payments were moved under the cap.

Bonds and other “evidences of indebtedness” are already excluded from the spending cap by the state constitution.

While phasing-in unfunded pension payments, Cibes’ proposal also excluded aid to distressed municipalities, federal grants, state funds required for federal grants, expenditures from the “rainy day fund” and dedicated funds set aside by the General Assembly from the cap.

“We’re talking about a great number of exclusions from the cap in order to avoid the cap,” said Sen. Robert Kane, R-Watertown. “That is troubling to me.”

The deciding vote came from Sen. Joan V. Hartley, D-Waterbury, who along with three other Democrat appointees voted against Cibes’ proposal. Hartley complimented Cibes’ attempt to phase in the unfunded pension liabilities but expressed concerns about excluding federal mandates from the cap and lacking a strong definition of what counts as a distressed municipality.

“I sit here deeply concerned about how we define distressed municipalities,” Hartley said. “I obviously represent one but on a more global basis I think we have to pay attention to what that definition includes. It is an old definition and I think it needs to be revisited, redefined and worked into where we are today and where we expect to go forward with respect to the state’s economy.”

Chris Wetzel, principle analyst for the Office of Policy and Management, testified that aid to distressed municipalities totaled $3.1 billion with 60 percent of those grants already excluded from the spending cap.

The state legislature will decide during the next session whether or not to move forward on enacting stronger definition of general budget expenditures which will determine whether or not the spending cap is truly enforceable.

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