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Outsourcing services, Medicaid reform, regionalism key to restoring CT’s competitiveness

Apr 14, 2015
Oz GriebelOz Griebel

Connecticut's modest recovery from the Great Recession has been marked by slow job growth, stagnant personal income, and a "groundhog day" cycle of state budgets in which revenues consistently fail to meet increasing expenditures while underfunding mental health, transportation, and other critical initiatives and programs.

Indeed, we face a deficit in the current budget and billion-dollar-plus deficits in both FY '16 and '17. This steadily deteriorating situation requires a serious discussion not about defending specific expenditure cuts or revenue increases but about significant structural changes that put the budget on a stable and sustainable footing that will support employment growth and private sector investment.

In his February budget address, Gov. Malloy called for a budget that is balanced and within the spending cap. His proposed budget aimed to achieve this through approximately $900 million in revenue increases and $590 million in cuts. As importantly, he invited constructive ideas to improve the budget. We responded to that invitation with a March 19 letter that contains six specific structural changes summarized below.

We submitted these proposals to establish a fiscal framework that supports private sector employment and investment that in turn generates the revenues needed to fund the education, health care, infrastructure, and social service needs of Connecticut's residents. We also urge a genuine private-public effort to adopt these structural reforms to achieve three vital goals by Dec. 31, 2017:

 - Restore all jobs lost since 2008;
 - Exceed that number by 25,000 jobs;
 - Reignite growth in the state's personal income to an annual average of 5 percent.

To underscore our commitment to these goals we are eager to participate in discussions to mitigate the revenue shortfall in the FY '16 and '17 budget in exchange for the implementation of the proposed reforms and similar structural changes.

- Contracting state services with private providers: Expand contracting with private providers where such providers can deliver services more cost-effectively.

 - Incentivizing regional cooperation: Incent regional cooperation with 90 percent of funding municipalities received in FY '15 guaranteed and the remaining 10 percent made available to support regional collaboration led by Councils of Governments.

 - Transportation infrastructure strategy: Secure transportation funding and expenditures by a constitutional amendment that also creates an independent governing authority with private sector representation.

 - Medicaid reform: Introduce competition, innovation and risk mitigation via partnerships with private health plan entities; and eliminate the unsustainable cost-shifting to private sector providers that deliver vital care and jobs in our communities.

 - Strengthen the spending cap: Ensure through a constitutional amendment that all budget surpluses be used only to repay debt or address any underfunded obligations.

 - Restructure state employee benefit plans: Replace current defined benefit plans with a defined contribution retirement plan and a high deductible health insurance plan with health savings accounts for all who serve in any elected or appointed office.

By working constructively with Gov. Malloy and the legislature, we can adopt these structural reforms that will send an unmistakable signal to Connecticut's residents and its private sector that we have the political will to move the state to more stable and sustainable fiscal cycles that will be the basis for a prosperous economic future for all.

Oz Griebel is the president and CEO of the MetroHartford Alliance.

This piece was also published in the Hartford Business Journal.

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