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advocacy community education
14
The Honorable Dannel Malloy
Governor, State of Connecticut
State Capitol, Hartford, CT 06106
Dear Governor Malloy:
We are writing on behalf of the 6,000 members of the Connecticut Society of Certified Public Accountants (CSCPA) to
congratulate you on taking what we believe to be giant steps toward honesty and transparency in state budgeting.
At the same time, we wish to express our concerns regarding the future, two years out ... and beyond. The CSCPA has
historically staked our position and presented our opinions apolitically, and will continue to do so, for independence is the
hallmark of the certified public accounting profession. As an organization, we comment not on policy but on procedure
and administrative efficacy, because we realize our 6,000 members may indeed hold different individual opinions on if,
why, where, and how to enhance revenue and/or decrease expenditures.
Yet again, as an organization, we appreciate your approach to fiscal transparency comprising your directives to
Employ Generally Accepted Accounting Principles (GAAP) in budgeting,
Eliminate borrowing to cover operating expenses,
Commit to fully fund our pension obligations, and
End reliance upon "one-time" funds and other gimmickry used in previous years to "balance" the budget.
That said, we believe honest balancing of the biennial budget is but the tip of the proverbial iceberg. As you know,
Connecticut faces a massive shortfall in the funding of state employee other post-employment benefits. We believe these
promises to state retirees are unsustainable and structurally unsound. The problem will become even more daunting as
Connecticut's population ages and decreases, with fewer taxpayers available to fund this growing liability. Accordingly,
we hope your commitment to fully fund our pension benefits also extends to fully fund the other post-employment bene-
fits in a similar manner.
We recognize the statutory requirement for a Budget Reserve Fund. We applaud your recognition of the necessity that
Connecticut eventually has sufficient funds in reserve and your proposal to increase the percentage of the budget
reserved. Long-term fiscal sustainability will exist only when the Reserve Fund truly represents net assets available to
the state.
Further, Connecticut lacks a strategic plan to address its myriad issues, from the post-employment benefits liability just
mentioned to maintaining our aging infrastructure and numerous other challenges. We need a roadmap to the future, and
a proverbial yardstick to measure our progress in enabling the state's long-term health, as measured by the GAAP finan-
cial statements on the full-accrual basis, to improve on a consistent basis. Living out our future in two-year increments
will not rescue Connecticut from its current plight; it will only prolong our fiscal misery.
Such a plan must also transform Connecticut into a destination state for businesses and individuals, rather than a place
where "snowbirds" and other Nutmeggers structure their lives to avoid residency rules and the accompanying "penalties."
We also agree with and fully support the concept that the state should dedicate any unforeseen future revenues to elimi-
nating the deficit. We recognize that identifying the problems is but the first step toward their resolution.
Our members advise countless Connecticut businesses and individuals in how to remain going concerns even in the
toughest of economic times, and how to thrive in robust economies. The CSCPA would be pleased to assist your admin-
istration in addressing these long-term issues with the development of a strategic plan to restore fiscal stability and even
vitality to Connecticut.
We welcome response to our offer and, again, we congratulate you on your realistic perspective on the challenges we
face together. Please let us know how we can help.
Sincerely,
Marcia Marien, CPA
Arthur J. Renner, CPA
Michael Kraten, Ph.D., CPA
President, CSCPA
Executive Director, CSCPA
Chair, Governmental Issues Task Force
The Connecticut Society of Certified Public Accountants
CS CPA
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