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Final Report of the Connecticut Commission on Fiscal Stability and Economic Growth

State Budget

Final report from the 14-member Commission on Fiscal Stability and Economic Growth, which was created as part of the biennial budget for fiscal years 2018-19 (Conn. Acts 17-2 (June Special Session)).

The Commission's charge was to "develop and recommend policies to achieve state government fiscal stability and promote economic growth and competitiveness within the state." The Commission was also charged with studying and making recommendations "regarding state revenues, tax structures, spending, debt, administrative and organizational actions and related activities, including relevant municipal activities, to (1) achieve consistently balanced and timely budgets that are supportive of the interests of families and businesses and the revitalization of major cities within the state, and (2) materially improve the attractiveness of the state for existing and future businesses and residents."

The Commission, which was required to disband by March 1 according to the biennial budget, made the following 10 recommendations in its final report, which was unanimously adopted on March 1 and sent to the governor and the General Assembly.

  1. Enact a revenue neutral rebalancing of state taxes (which becomes revenue positive when coupled with economic growth) that reduces income taxes in every bracket, selectively raises taxes on business, raises the sales tax rate by less than 1%, cuts exemptions and exclusions from all taxes by 14%, and eliminates the dwindling estate and gift taxes.
  2. Raise the gas tax to fund transportation projects and produce a plan for eventual implementation of electronic tolls.
  3. Create a Joint Budget Committee of the legislature with the power to set limits on revenues and expenses.
  4. Have the legislature assume the responsibility to define state employee fringe benefits by removing them from collective bargaining for new contracts.
  5. Amend binding arbitration laws to permit award of compromise outcomes.
  6. Develop and implement a plan to cut $1 billion out of annual operating expenses.
  7. Reform the Teachers’ Retirement System to lower costs and to make it sustainable by paying down unfunded liabilities.
  8. Reinvest in transportation and cities, and build a major new STEM campus in one city in partnership with a major research university.
  9. Undertake a series of growth initiatives, led by the executive branch, with the funding and support from the legislature to (1) develop and retain the workforce Connecticut needs, (2) support the growth of Connecticut’s highest-potential economic sectors and (3) transform the business environment for entrepreneurship and innovation.
  10. Diversify municipal revenue streams beyond the regressive property tax and stimulate regional service delivery.
Citation for Final Report

Patricelli, R., & Smith, J. (2018). Final Report, March 2018. Hartford, CT: Connecticut General Assembly, Commission on Fiscal Stability and Economic Growth. Retrieved from https://www.cga.ct.gov/fin/tfs/20171205_Commission%20on%20Fiscal%20Stability%20and%20Economic%20Growth/20180301/Final%20Report%20with%20Appendix.pdf.

Citation for Final Report Presentation

Connecticut General Assembly, Commission on Fiscal Stability and Economic Growth. (2018). Commission Meeting, March 1, 2018 [PowerPoint slides]. Hartford, CT: Author. Retrieved from  https://www.cga.ct.gov/fin/tfs/20171205_Commission%20on%20Fiscal%20Stability%20and%20Economic%20Growth/20180301/Presentation%20.pdf.

Citation for OLR Research Report on Commission's Recommendations

Pinho, R. (2018). Commission on Fiscal Stability and Economic Growth's Recommendations (2018-R-0097). Hartford, CT: Connecticut General Assembly, Office of Legislative Research. Retrieved from  https://www.cga.ct.gov/2018/rpt/pdf/2018-R-0097.pdf.