Infrastructure asset lifetimes are predictable within a margin of error. The smaller the margin of error, the better an owner can predict cash flows and needs.
Many of Connecticut’s infrastructure assets are nearing or are at the end of their productive lives, with some now representing liabilities. Those assets need replacement during a period when tax receipts are in decline, bond costs are increasing due to the state’s declining credit rating, and the state is in deficit only three months into the fiscal year.
Raising taxes and cutting services are not the only tools available to remedy our financial problems. Among other potential solutions to long-term structural deficiencies are:
- Stop borrowing for government operating expenses and “pet projects”;
- Eliminate fraud in welfare benefit programs;
- Increase compliance with Medicaid and Earned Income Tax Credit requirements;
- Roll back recent sales, income and business tax hikes;
- Eliminate the Estate and Gift Tax.
Rolling back or eliminating taxes to reduce government debt seems counter-intuitive. But government generates costs, not revenues. When the tax code favors investment and attracts jobs, tax receipts grow. It’s not a simple concept, but it’s proven effective. Connecticut’s tax burden is no longer competitive with other states. Employers and our youth seek opportunities in other states. Demonstrating fiscal responsibility and employing best financial practices will attract the jobs and tax receipts Connecticut needs to fund responsible, sustainable future budgets.