Reports from Commission on Fiscal Stability and Economic Growth

This resource includes reports from the 14-member Commission on Fiscal Stability and Economic Growth, which was initially created as part of the biennial budget for fiscal years 2018-19 (Conn. Acts 17-2 (June Special Session)). After issuing its first report with recommendations in March 2018, the Commission members (acting as a private group) released a second report with revised recommendations on November 28, 2018. Both of these reports are contained in this resource.

The Commission's original 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 March 2018 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.

After no action was taken by the General Assembly during the 2018 legislative session, the Commission members — acting as a private group — issued a second report with "fewer and more focused recommendations" and "six primary initiatives," which are listed below.

1. Reduce expenses and eliminate deficits on a sustained basis.
2. Through a combination of executive and legislative action, bring state employee and teacher compensation and benefit programs into alignment with our fiscal capacity and with comparable states, and get on a path to reduce unfunded employee benefit liabilities to acceptable levels.
3. Enact a pro-growth and revenue neutral tax reform plan.
4. Break the logjam on long term transportation funding and start action on key economic development-related projects.
5. Make a major new investment in STEM education to close our state’s skills gap.
6. Take initial steps on diversifying municipal revenues and controlling local spending.

Citation for Second Report
Commission on Fiscal Stability and Economic Growth. (2018). Commission on Fiscal Stability and Economic Growth: Report 2.0. Hartford, CT: Author. Retrieved from https://www.cga.ct.gov/fin/tfs/20171205
_Commission%20on%20Fiscal%20Stability%20and%20Economic%20Growth/20181128/Report%202.0%2011.26.18.pdf.

Citation for Second Report Presentation
Commission on Fiscal Stability and Economic Growth. (2018). Commission on Fiscal Stability and Economic Growth: Report 2.0 [PowerPoint slides]. Hartford, CT: Author. Retrieved from https://www.cga.ct.gov/fin/tfs/20171205
_Commission%20on%20Fiscal%20Stability%20and%20Economic%20Growth/20181128/2.0PowerPoint_112718.pdf.

Citation for First Report
Connecticut General Assembly, Commission on Fiscal Stability and Economic Growth. (2018). Final Report, March 2018. Hartford, CT: Author. 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 First 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 from First Report
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.