Malloy Budget Plan – Coddle the rich while cutting vital state services

On Wednesday, February 3, 2016, Democratic Governor Dannel Malloy, flanked by Lt. Governor Nancy Wyman and the rest of his administration will submit his latest budget plan to a joint session of the Connecticut General Assembly.

Malloy’s approach, one that borrows directly from the disgraced trickle-down economic strategies of the Neo-Conservative/Neo Liberal philosophy, will be to balance Connecticut’s state budget by continuing to coddle Connecticut’s wealthiest citizens while cutting critically important health, human service and education programs for those who are struggling the most in today’s troubled economy.

The sad reality is that Connecticut’s most vulnerable citizens will be those who suffer most from Malloy’s proposals.

Governor “There Is No Budget Deficit – I Will Not Raise Taxes” Malloy will also propose shifting more of the burden for paying for government services onto Connecticut’s local property taxpayers, despite the fact that Connecticut’s property tax system is regressive and unfairly burdens middle-income and working families in Connecticut.

Finally, yet again, as if to reiterate that Malloy has to have it have it his way or no way, Governor Malloy will be proposing a dangerous and unprecedented power grab that would transfer significant budget control and oversight away from the Legislative Branch of government to the Executive Branch, giving him and his budget chief unparalleled authority over how appropriated state funds are actually spent.

Malloy Policy #1 – Coddle the Rich

According to the Institute on Taxation and Economic Policy, a national non-partisan research organization that works on federal, state, and local tax policy issues,

Connecticut’s wealthiest pay 5.3 percent of their income in state and local taxes.  Connecticut’s middle income households pay 10.7 percent and Connecticut’s poorest pay 10.5 percent on state and local taxes.

Connecticut’s tax system is unfair, but rather than address this situation, Malloy has consistently refused to require that Connecticut’s wealthiest pay their fair share in taxes.

As in the past, Malloy is promising “not to raise taxes,” although that pledge does not include his upcoming proposal to raise the gas tax and re-institute tolls to pay for his transportation initiative after having diverted hundreds of millions of dollars from the Transportation Fund, over the past five years, to cover costs in the General Fund.

Malloy Policy #2 – Cut vital programs including those for Connecticut’s most vulnerable residents.

As reported by the CT Mirror’s Keith Phaneuf last Friday, Malloy promises ‘very austere’ state budget next week; Connecticut’s Governor will seek to balance the upcoming state budget on the backs of those who rely the most on state services.

Gov. Dannel P. Malloy warned Friday that the spending plan he will offer state legislators next week will be a “very austere” budget with no tax hikes.

The Democratic governor, who needs to close a deficit projection topping $500 million in the preliminary budget for 2016-17, also all but ruled out use of the state’s modest emergency reserve.

“It’s an austere budget. I think everybody knows that,” the governor told reporters after the State Bond Commission meeting in the Legislative Office Building.

[…]

And while Malloy offered few hints on where he would cut, he did offer one big clue.

When asked whether the emergency cuts he ordered in September to close a shortfall in the current fiscal year might offer a blueprint of where he would look for savings in 2016-17, the governor responded: “It’s a start.”

Those emergency cuts fell most heavily on social services, hospitals, and public colleges and universities, though they touched most discretionary areas of spending, excluding municipal aid.

Malloy Policy #3 – Shift tax burden to the unfair local property tax

While details are scarce about where some of Malloy’s budget cuts will fall, one area that is definitely on the chopping block will be municipal aid.

Despite repeated promises not to cut aid to cities and towns, Malloy has done exactly that in recent years.  While cuts in municipal grants “reduce” the state budget, the costs are simply shifted onto local property taxpayers.  It is a  strategy that is even more unfair to middle and lower-income families in Connecticut.

The Institute on Taxation and Economic Policy’s latest report also reveals that while Connecticut’s tax system is regressive, its property tax system is even more unfair.

Connecticut’s wealthiest pay 1.2 percent of their income in property taxes, the Middle Class 5.0 percent and the poor pay 5.3 percent of their money in local property taxes.

Malloy has already proposed cuts to the state property tax exemption for middle-income homeowners and additional cuts in municipal aid will further shift the overall tax burden onto the backs of working families in Connecticut.

Malloy Policy #4 – Seek greater executive branch control over budget

Finally, in what may be one of his most outrageous and irresponsible proposals yet, the power-hungry Governor is proposing to destroy critically important legislative oversight and control of the state budget.

As Phaneuf reports in today’s CT Mirror entitled, Malloy to seek greater executive branch control over budget

Sources familiar with the governor’s 2016-17 budget proposal say it won’t assign agency funding to many specific programs, moving instead toward the block-grant system used for state colleges and universities.

A block-grant system could tilt the balance of power away from the legislature, since lawmakers often use line items in the budget to shape executive agencies and programs and set priorities.

[…]

But the proposal still is likely to spark a battle between the branches of government over control of line-item appropriations and a debate over whether block grants would mask funding cuts for programs before a new budget is implemented…

[…].…Several sources familiar with that said it would give the Executive Branch broad new discretion to decide how budgeted funds are spent within each agency.

The legislature often directs agencies to operate programs “within available appropriations.” In other words, run the program as well as possible with the funding the legislature assigns.

But what if specific line items for programs don’t exist anymore? If a department is given one large block grant — and the authority to divvy up the funding as it sees fit — then administrators, and not the legislature, would decide which programs must get by with less.

The General Assembly’s modern role in molding state government and its policies through budgeting was shaped by a dramatic confrontation in 1969 with another Democratic governor, John N. Dempsey, and the legendary Democratic state chairman, John M. Bailey.

The Democrat-controlled General Assembly voted unanimously to defy Bailey, who then played a major role in setting the legislative agenda, and override Dempsey’s veto of the Legislative Management Act, a reform measure reflecting a desire by lawmakers to be, if not a truly equal branch of government, then at least a more assertive partner.

It led to the hiring of non-partisan professional researchers and financial analysts, who allowed legislators for the first time to make budget and policy decisions independent of the executive branch.  In 1970, a constitutional amendment further strengthened the General Assembly by authorizing it to meet annually, beginning in 1971.

Malloy’s budget plan will be made public on Wednesday.  At that point, the only thing that will stand in the way of more fiscal and political disaster will be the members of the Connecticut General Assembly…meaning that Connecticut citizens have good reason to be concerned.

  • buygoldandprosper

    Danny Malloy does not know how to tell the truth.
    He is an absolute control freak but is oblivious to
    the damage that he has done and continues to do with
    his failed policies and his lack of ability. He still blames the economy and past administrations for his failures as governor. Public service means the public serves and the Malloy clan benefits.
    Whether it is Ron Malloy making $50K as a “registrar of voters” or Cathy making almost $200K in her no-show job for GHAC (she was not qualified by any stretch of the imagination) the Malloy’s are lampreys sucking the life out of this state.
    Dan Malloy is a very, very dangerous politician.

    • jhs

      If Clinton wins, look to him to move to DC and bring his mismanagement to some agency in the government.

      • buygoldandprosper

        Whatever he does…guaranteed fuck-up.
        He has ZERO skills, except for lying. Actually, he would fit in down in DC.

  • jhs

    he is the process that has been pulled before. Malloy makes the cuts. The people and advocates scream. The Democrat controlled legislature will say we didn’t know the impact, and will reverse the cuts. Malloy and the Democrats will either borrow or raise taxes or both because of course they can’t cut the poor. They’ll never say they’ll reduce the size of govt, or they’ll go back to the unions for give backs, or even have a hiring freeze. So the taxpayers will take the hit again. Malloy is all talk. This has been done before and Malloy for 6 years he hasn’t come up with a balanced budget. Barnes blames it on the economy but it gross mismanagement that is the reason. GE is just the first company to leave. Aetna and Humana are merging, and they have decided Louisville will be their headquarters. The only way out is to get rid of Democrat control. Yes Republicans will cut but a balanced legislature will prevent drastic cuts.

  • buygoldandprosper

    Danny say’s no taxes but he is OK with fees. Increased state sales tax. A LOCAL sales tax, kicked back to Hartford. Fees on paint. Fees on mattresses. Fees on car washes. Fees on yoga. Fees on vets. Fees on landscapers. Fees on cars.
    Danny Malloy is a FEE-LOADER.

  • buygoldandprosper
  • buygoldandprosper

    “UConn President Susan Herbst said expanding CTfastrak to UConn would benefit students and university workers and also help attract more potential workers, guests, and other visitors.”
    Dorms in Stamford. More empty buses to nowhere. The madness continues, promoted by Big Danny Malloy.
    Danny does not drive himself, so he does not pay insurance, car taxes, tolls, gas, property tax on the vehicle.
    Danny no longer owns a house so no insurance, no property tax, no heating bills…
    The Malloy’s are free spending with state money and have deep pockets, but VERY short arms.

  • buygoldandprosper

    Danny is cooking the books! Typical Malloy math…

    “State auditors are taking aim at “inadequate” financial reporting by state departments and agencies, zeroing in on nine errors by officials that together amounted to more than $430 million.

    In their latest review of internal operations at the state comptroller’s office, the auditors focused on “adjustment” forms used to report various account balances, accruals, liabilities, contingencies, and other information.

    The forms are required to be submitted by certain deadlines, with accurate information.

    But the auditors said their review of forms prepared by various agencies found “significant errors and omissions” in the paperwork.

    The mistakes included:

    • $83.8 million in overstated investment income by the Teacher’s Retirement Board, which also overstated retirement fund contributions by $50.2 million as well as $2.9 million in understated benefit payments and $1.7 million in overstated reviews at its health care fund.

    • $84.1 million in understated contractual obligations by the Department of Correction.

    • $49.7 million in understated infrastructure assets and $26.1 million in overstated construction in progress by the Department of Transportation.

    • $36.1 million in an overstated balance of construction in progress by the Department of Administrative Services Bureau of Construction Services as well as $1.8 million in overstated contractual “retainages.”

    • $30.4 million in contractual obligations to one entity that were not reported by the Administrative Services Department, which overstated other obligations by $12.1 million.

    • $12.5 million in overstated pollution remediation obligations and liabilities for landfill “post closures” by the Department of Energy and Environmental Protection, as well as $7.4 million in understated contractual obligations.

    • $13.2 million in understated liability for the SEBAC vs. Rowland settlement — which resulted from the lay off of thousands of state employees — by the state comptroller’s office.

    • $7.8 million in tax refunds for the research and development credit exchange erroneously included in a report of tax refunds paid by the Department of Revenue Services, which also overstated $2.6 million in tax refunds in a separate error.

    • $8 million in bank balances associated with “fiscal intermediaries” that the Department of Developmental Services failed to report.

    “The audit and correction of these errors results in the delay of the preparation and issuance of the state’s comprehensive annual financial report and adds to the risk for error,” the auditors wrote.

    “The calculation of contractual obligations is not done using an automated method, which appears to cause the most difficulties,” they added.

    The comptroller’s office told the auditors it agreed with the finding and would work with the auditors to correct all reporting issues.”