No one is talking about abolishing the state income tax, but there are rumblings coming from members of the General Assembly’s Democrat majority talking about weakening the statutory spending cap – or even abolishing it.

We (the Senate Republicans) made a promise to the Connecticut citizens that we would fight efforts to pass a state budget this year that calls for breaking the spending cap.

One needs to understand the history behind Connecticut’s state income tax and spending cap, and how the state ultimately got to that point. Spending had gotten out of control in the years leading up to the General Assembly’s 1991 adoption of the state income tax. In 1987, the fiscal condition of the state showed an approximate $388 million surplus. The budget passed for Fiscal Year 1987 represented an 11 % increase over the year before and used most of the surplus to expand ongoing state programs and/or create new programs. The budget for Fiscal Year 1988 had a 14.3 % growth in spending; Fiscal Year 1989 had a 13.7 % increase; Fiscal Year 1990 had a 9.9 % increase; and Fiscal Year 1991 had a 9 % increase. During this same period of time spending continued to increase, but revenues did not, and after using the rainy day fund for ongoing budget items, the state was facing billion dollar deficit.

This deficit led to a nasty battle in the legislature, which ultimately resolved the problems by creating the state income tax. The only way Governor Weicker could get enough support for that tax was to incorporate in the language an opportunity for the people of the state to vote for a constitutional amendment, limiting spending and moving to a biennial budget.

I think it fair to say that Connecticut’s spending cap is more popular with the voters than the state income tax. You may remember that enacting a spending cap was the General Assembly’s way of soothing the fears of taxpayers who worried that adopting a state income tax was tantamount to giving legislators permission to just go ahead and spend as much of their money as they wanted to. As a matter of fact, more than 80 percent of Connecticut’s voters cast their ballots in 1992 in favor of amending the state constitution to require balanced budgets, including a constitutional spending cap.

Personally, I believe that the General Assembly should go back to the voters and get their permission before passing a state budget that breaks the spending cap that you told us back in 1992 that you wanted.

By the time the General Assembly passed the budget for Fiscal Year 1992, Connecticut had both a state income tax and a statutory spending cap. Spending for that year grew by only 3.3 percent. Year by year, this is how the state budget has grown since: Fiscal Year 1993 – 9.2%; Fiscal Year 1994 – 7%; Fiscal Year 1995 – 5.3 %; Fiscal Year 1996 – 2.4 %; Fiscal Year 1997 – 3.8 %; Fiscal Year 1998 – 4.2 %; Fiscal Year 1999 – 5.3 %; Fiscal Year 2000 – 8.7 %; Fiscal Year 2001 – 4.3 % ; Fiscal Year 2002 – 2.6 %; Fiscal Year 2003 – 2.3 %; Fiscal Year 2004 – 2.7%; Fiscal Year 2005 – 3.5%; Fiscal Year 2006 – 7.8 %;and Fiscal Year 2007 – 3.1%.

In actual dollars the General Fund budget has grown from $4,385,838,868 in Fiscal Year 1987 to $14,837,200,000 in Fiscal Year 2007.

The General Assembly is obligated both legally and ethically to obey the statutory spending cap. Each year, the spending cap is calculated from the total appropriated funds, or the base, of the previous year. Under the cap, spending growth is restricted to either the base times the five-year average growth in income or the prior year’s inflation rate, whichever is higher. Excluded from the cap are debt payments, grants to distressed municipalities, and the first year of meeting federal mandates and court orders.

Of course, sometimes there is a compelling reason to exceed the spending cap – and existing law allows for those situations. The Governor can issue a declaration of extraordinary circumstances or emergency, thus permitting the legislature to vote by a three-fifths majority to break the spending cap. This has been done on occasion.

But there is a world of difference in deciding to exceed the spending cap for a specific reason – and deciding to weaken it, or outright abolish it, because legislators have decided their desire to spend outweighs their obligation to control taxes.

The majority party, the Democrats now control both the Senate and the House by veto-proof margins, and they are starting to hint they may try to dismantle the spending the cap. Regardless of the reason, Connecticut taxpayers ought to react with trepidation and outrage. Keep in mind the spending cap exists to protect taxpayers from legislators who might be tempted to treat revenues generated by the state income tax like a bottomless pot of money. Remember, you told us loud and clear back in 1992 that you wanted the General Assembly to exercise restraint when it comes to spending your money.

Republican legislators listened then. We are listening now. We are well aware that, even with the spending cap, state spending has more than doubled over the past 15 years. We know that, without the cap, it is likely that annual spending would have exploded to as much as $44 billion by now. We want to assure the voters that we will keep our promise to fight any and all efforts to break the spending cap this year. Republican Senators will insist the General Assembly refrain from passing a state budget this year that exceeds the spending cap – just as you asked us to in 1992. We owe you that. It is your money.

I am interested in hearing your views about this issue, and any others, important to our state. I can be reached at my legislative office by calling 1-800-842-1421, or via e-mail at Judith.G.Freedman@cga.ct.gov. I look forward to hearing from you.