"Austerity Versus Reinvestment" Report Highlights Need For Stronger Investment In Public Services

On March 15th, a report was released that outlines the need for more investment in our public services and examines the economic and historical data that point a way out of the devastating effects of COVID-19 and the concurrent economic downturn towards a better Connecticut for everyone.

The report was authored by In The Public Interest’s Shahrzad Habibi, Research and Policy Director, and Yale University’s Jennifer Klien, Professor of History. Local 269 member Mayra Cruz, who works in reemployment services for the Connecticut Department of Labor, was one of the workers profiled in the report. She gave a first person account of the struggle to make a difference with the resources and staffing currently available and what more could be achieved if if our state truly invested in progress for everyone. 

“When the pandemic struck last year, it was like a tsunami hit the DOL and due to the previous round of austerity cuts, no one was prepared to handle the amount of claims coming in,” Mayra pointed out. With greater investment in public programs, Mayra and her co-workers can improve access to unemployment and reemployment services. They can also close the digital, language, and transportation barriers faced by many DOL clients. 

Main findings of the report include:

  • Connecticut has continued to reduce its public investment in services people need and the structures such as education, healthcare, housing, and transportation upon which our communities depend, cutting at least 21% of staff and payroll costs in the last decade.
  • This reduction has held down economic growth, exacerbated income and wealth inequality by race and class, and produced a self-perpetuating cycle of movement further away from livable cities, safer communities and equal opportunity;
  • This trend has been aggravated by Connecticut’s revenue structure, in which the wealthiest pay far lower effective rates in state and local taxes than other Connecticut families;
  • States that took the opposite approach, increasing investments in public services and structures, have done far better in addressing economic challenges than states like Connecticut that relied primarily on cuts;

This report not only justifies the need for renewed investment so Connecitcut does not repeat the same mistakes from the Great Recession, but it also serves as an antidote to the $2 million awarded Boston Consulting Group's report focused on recommendations to "mondernize" the state workforce amid a "tsunami" of expected retirements. Those recommendations largely preseve the broken status quo and fail to meet the moment of creating a system of true equal opportunity for all of Connecticut’s families, regardless of race or background.

The State Employee Bargaining Agent Coalition (SEBAC) responded to the release of the consultant's report by stating,

"At a time when the voices of frontline workers should be elevated and recognized as the assets they are, they were pushed aside and silenced. The possible loss of thousands of the state workforce’s most senior and experienced employees is frequently termed “an opportunity” in this report. That opens the door to more austerity and further deep cuts to services, instead of acknowledging the very real challenges facing the state."