ED Reflection: CT’s Budget

By Melissa Spear
Executive Director

With the season’s first snow this past weekend, our site is covered in a cold blanket of white. Temperatures are frigid, and the sun is setting behind West Rock ridge by 3 pm. We are all venturing home in the dark. Winter is clearly upon us and the New Year is just weeks away. While winter has its own stark beauty, during the darkest week of the year I think many of us wish we could just stay home wrapped in a warm blanket reading a good book. Thankfully the days will soon begin to lengthen and the light will return.

While it might seem premature, now is the time I begin thinking about next year’s budget. By February the budget process is in full swing with Project Directors and Managers thinking about strategic goals for the next fiscal year, and the resources they might need to achieve them. The process of establishing a budget is never without anxiety as priorities are weighed and funding levels projected. There is never enough to accomplish everything we would wish to. Last year was particularly difficult as the uncertainty of the State Budget was not resolved until just last month…and unfortunately that resolution was only temporary as a projected $203 million deficit for this fiscal year has become a reality that must be dealt with. Connecticut’s budget manager Ben Barnes statement in 2014 seems to be holding true: “We have entered into a state of permanent fiscal crisis.”

While the projected deficit is certainly discouraging, just as worrisome the $880 million in “savings” that Governor Malloy has been directed to find in order to balance the most recent budget adopted by the legislature. $880 million in looming cuts perpetuates the fiscal uncertainty that non-profits providing services in Connecticut have lived with for far too long. We may not know exactly where these cuts will fall, but we know that they will cause pain. Unfortunately, the impacts of these cuts will undoubtedly hit our most under-resourced communities the hardest. These are the communities that often rely on affordable services and opportunities provided by both state agencies and the non-profit community that would otherwise be inaccessible to them.

Common Ground has done all that it can to respond appropriately to the looming budget crisis over the past several years. The primary budget threat we face in light of the crisis is to funding for Common Ground High School. Like all charter schools in Connecticut we have had to educate our students with significantly less in state funding than other public schools, as well as mitigate the impact of flat per pupil funding for the past four years even as the cost of doing business has increased significantly. Recognizing that Connecticut’s budget crisis poses a threat to state funding for our school, Common Ground has already worked hard to reduce costs and diversify our revenue base. So far we have been able to both achieve savings and find or generate additional sources of revenue to cover the deficits caused by flat funding. While state per pupil funding makes up 66% of Common Ground’s high school budget, which is significant, we rely relatively little on other sources of state funding for our programs which puts us in a better position than many non-profits. Needless to say, the challenge of adequately funding Common Ground High School becomes more difficult with each passing year as costs continue to increase and the level of state funding remains uncertain.

In response to the current fiscal crisis, funders and grant makers have also indicated they are looking for new ways to support a non-profit community confronting looming budget cuts. A recent survey by the Connecticut Council of Philanthropy (CCP) found that a significant proportion of funders are responding directly to the crisis by increasing their grant support, supporting conversations about non-profit mergers, and advocating and lobbying. As the President of the CCP said: “We think that the time is now to bring the philanthropic community together – to deepen our collective understanding of the current fiscal crisis, projections for out-years, and what roles philanthropy can play to mitigate short-term pain, to support evolution in the state’s non-profit landscape, and to start developing longer-term strategies”.

The fact that funders are re-evaluating their grant making priorities and approach, while necessary, creates additional uncertainty among the non-profit community. Given that philanthropic funds are limited, there will inevitably be winners and losers as priorities shift. Demonstrated effectiveness, efficiency and impact will undoubtedly become paramount as funders make difficult decisions on where to invest their philanthropic dollars, and look for opportunities for non-profits to join forces to become more financially sustainable.

I have been monitoring the state’s budget crisis closely from the first rumblings of trouble coming down the pike. I have heard our legislator’s and the governor proclaim over and over that we need to adopt a budget that addresses the “structural” issues that are at the heart of our budget woes. But I have never heard a loud and clear articulation of what those “structural” issues are, nor do I think the current budget is addressing structural issues in any significant way. I understand that one significant issue has been the underfunding of the state’s pension system for many years forcing us to now divert a significant portion of state revenues into the system in order to meet up-coming pension obligations.

But what are other “structural” issues we might be able to address? The first thing that comes to mind for me is the inefficiency that is inherent in operating 169 separate and autonomous municipalities each with its own administration, emergency services, and public works departments, and 200 discrete school districts each with its own superintendent and administration. This is the sacred cow of our state that has so far been untouchable. We have been unable to engage in a serious and productive initiative on how we might regionalize services in order to obtain efficiencies that would lower costs and reduce government spending. Towns have objected vehemently to what they see as giving up their sovereignty. Regionalizing services will undoubtedly mean sharing control over some important services, but this must be realistically weighed against the benefits that would accrue.

This may sound sacrilegious to some, but a second sacred cow worth taking a look at is the effectiveness and efficiency of government and the regulatory landscape. My experience working within a number of highly regulated arenas, including education, has demonstrated to me that while for the most part well intentioned, government policy is often implemented in ways that create significant cost and are not effectively addressing the problem they were intended to mitigate. This in no way implies that government oversight and regulation is bad. I am a staunch supporter of a strong government role in protecting and promoting public health and safety and ensuring that the public interest, not special interests, is a primary concern when making policy decisions or developing regulatory frameworks.

We need to find a way, however, to warrant that the government is doing it’s important work both efficiently and effectively, and that adjustments are made promptly when unintended consequences or a misalignment between intent and impact are identified. Looking back and modifying or eliminating bad policies and regulations, or policies and regulations that while well intentioned are not providing a net benefit, has been an intractable problem. In light of the cost of many of these policies both to institutions who are required to implement them and the regulators tasked with enforcing them, and in the face of the current fiscal crisis, it is important that we find the political will and do the work necessary to address this issue.

I know you are wondering what all of this has to do with Common Ground. As I sit and write this I am looking out my window at our wetland, and watching winter birds flitting around in the butterfly bushes across the driveway. I see our ducks venturing out into the morning snow. I am watching students walking up the hill as they arrive for the school day, and our Nature Year kids bundled up for the cold excited to get up into West Rock State Park for their daily adventure. Common Ground brings people together to learn and play and build community in the process. We are doing our best to provide respite from the anxiety that many of us are experiencing in the face of the ongoing fiscal and political crises. At the same time I think it is important for all of us to understand the context within which we are operating, and to participate in the search for solutions. I am sure many of you have thoughts and ideas regarding how we might tackle the fiscal challenges we are all facing. I would be interested in hearing your thoughts.


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