Business leaders worry about state's fiscal instability - WFSB 3 Connecticut

Business leaders worry about state's fiscal instability

Posted: Updated:
(WFSB file photo) (WFSB file photo)

Despite two large tax increases, Connecticut continues to be faced with huge budget deficits.

Gov. Dannel Malloy says his next state budget will be lean, and services will have to be cut in order to pay rising costs for pensions and health benefits.

Pensions are a big concern, and right now the state doesn't have the money to fund all of them.

Malloy made it clear on Wednesday that the state has every intention of fulfilling its obligations, but will have to find that money from other places.

"The state of Connecticut, years ago, backed itself into corner and my job is to get us out of the corner,” Malloy said.

The state could be headed for a fiscal crisis, and it doesn't have enough money to fully fund the pension system and it will only get worse.

The state's fixed costs have increased dramatically, which are things like pensions, health care obligations and other benefits.

According to the Office of Fiscal Analysis, in 12 years, those costs will jump from 37 to 53 percent.

Previous governors shortchanged pensions for state workers and teachers. Malloy has proposed changes to refinance the pension system.

"We have to get to a higher level of contribution and maintain a higher level for a long period of time. What we have to do is avoid a spike $1.5 billion to $6 billion down to $300 million; we can't do that,” Malloy said.

Republicans said they recognize the governor is trying to fulfill obligations that were previously ignored, but worry about where all the money is going to come from.

"I think we need to get to work on it now, we can't let it wait any longer. If we continue to kick that can down the road, the democrats are going to look for another tax increase yet again,” said State Senator Rob Kane (R-18).

Malloy has been blamed for raising taxes twice; taxes which are hurting the middle class and the businesses community.  

He said there will be no major tax increase in his next budget, but taxpayers said they’re already struggling.

He says he’s considering tax changes to benefit businesses, in hopes of creating more jobs.

Copyright 2016 WFSB (Meredith Corporation). All rights reserved.