In evaluating the budget for the upcoming biennium, close attention must be paid to these areas of concern. Each issue is discussed in greater detail in The Comptroller's Budget Watch List for the 1997-99 Biennium section of this report.
Although Connecticut's economy is improving, the state's fiscal footing is not as sound as it should be. A conversion to GAAP reporting and budgeting will present a more accurate picture of the state's finances and will help enforce the fiscal discipline necessary to save state tax dollars in the long run. The state that "thinks like a business" should keep its books like a business. We should convert to GAAP now.
The state has committed to $383.9 million in tax cuts that are already on the books for the next biennium. These cuts date back as far as the 1992 legislative session and do not include the $300 million in various tax reductions that took effect in the current fiscal year. We should reassess tax reduction obligations for the biennium as well as assess any new proposals to ensure that they are funded responsibly and reflect the priorities of our state's citizens.
As new laws change the way the federal government distributes welfare funding to states, Connecticut needs to exercise caution and plan for the future. The new block grants of federal dollars will provide Connecticut with more money -- at least initially -- but more responsibilities as well. We should use this excellent opportunity to establish a welfare "rainy day fund" to help diminish the effects of future economic downturns.
By introducing reasonable, targeted changes to our health care delivery system, we can preserve access and effect savings in the long run. Two such examples of responsible reform are expanding Medicaid eligibility to Connecticut's 80,000 uninsured children, and encouraging the purchase of long term health care insurance by our citizens. We should support these initiatives and look for similar ways to improve our health care environment.