Last month Malloy claimed Connecticut would have a surplus, now we have a deficit —- why?

From Connecticut State Comptroller Kevin Lembo;

COMPTROLLER LEMBO REPORTS $393.4-MILLION DEFICIT AFTER CONTINUED INCOME TAX EROSION

Comptroller Kevin Lembo today announced that continued erosion of the state income tax – likely due to a combination of investors relying more on tax-friendly investment funds, an economic trend towards lower-paying jobs and population loss – has increased the current fiscal year deficit to $393.4 million.

The Budget Reserve Fund has a current balance of $235.58 million, which is insufficient to cover the current General Fund deficit.

In a letter to Gov. Dannel P. Malloy, Lembo said his deficit projection is approximately $3.6 million higher than the deficit reported by the Office of Policy and Management (OPM) because Lembo believes the state will spend more than initially planned on ongoing settlement payments related to the SEBAC vs. Rowland case.

“Connecticut’s budget performance is a reflection of our national and state economies,” Lembo said. “Over at least the past two months, I have expressed concern regarding final income tax collections.

“History demonstrates that final April collections typically move in the same direction as the quarterly estimated income tax payments collected earlier in the fiscal year. For the first two quarterly deposits of the fiscal year, estimated payments were running more than 8 percent below last year. This raised significant concerns – now proven true – about final payment collections. It now appears that final payments will be approximately 10 percent below last fiscal year’s level.”

Connecticut joins nearly 20 other states facing eroding income tax revenue – however, Lembo said that Connecticut also faces its own unique structural problems, including unfunded pension liabilities and retiree health costs.

Lembo said the most significant deterioration in the General Fund’s fiscal outlook occurred in the projection for income tax receipts, which are now $450.7 million below last month’s estimate and $532.2 million off from the original budget plan.

Gov. Malloy’s administration had an optimistic view regarding the potential for gains due to a significant run-up in the stock market at the end of 2016, Lembo said.

“Those gains have not materialized,” Lembo said, pointing to increasing popularity of “tax efficient” investments such as Exchange Traded Funds (ETFs). “These funds are designed, in part, to minimize capital gains taxes.”In the United States, ETF assets increased from $157 billion in 2003 to $2.8 trillion by March 2017.

In addition to the drop in estimated and final income tax payments, there has been a significant downturn in the withholding portion of the income tax, which is responsible for over 60 percent of total income tax revenue. 

“A general shift in the composition of employment by sector to lower paying jobs may be a contributing factor,” Lembo said. “In addition to greater use of tax advantaged investments, the state’s population loss may also have played a role in the disappointing final payment results.”

Lembo said U.S. census data shows that Connecticut experienced a decline in population of 8,278 residents between July 1, 2015 and July 1, 2016. Connecticut was one of only eight states to experience a decline in population during this period – and has now posted three consecutive years of population decline.

 

Malloy’s claim that Connecticut enjoys a budget surplus for this fiscal year is a blatant lie…

Late last week the Hartford Courant headline read, State Projects Surplus For Current Fiscal Year.  Governor Dannel Malloy’s administration bragged that they state budget would end up with a $19.7 million surplus this year.

As with previous year, Governor Malloy has falsely claimed the state budget is in much better condition than it really is.

The dark clouds were already evident.

Already last month, the non-partisan Office of Fiscal Analysis projected that the current fiscal year deficit would be at least $45 million and Comptroller Kevin Lembo pegged the shortfall on April 3 at $44.6 million.

But last week, according to the monthly letter sent by Malloy’s administration to Comptroller Kevin Lembo, “Personal income tax collections are currently running within acceptable ranges relative to our target…”

Now, just days later, we learn that Malloy’s claim about income tax receipts are false.

In a stunning report in the CT Mirror;

New reports show dramatically eroding state income tax receipts that could expand the deficit in the next two-year budget by more than $500 million while depleting existing reserves.

Although six more days remain before analysts complete their review of April income tax receipts, the new numbers also raise the prospect state government may have to borrow to balance the current budget — the first time Connecticut has had to do so in eight years.

The CT Mirror adds;

The legislature’s nonpartisan Office of Fiscal Analysis notified the Finance, Revenue and Bonding Committee on Monday that April receipts are running $267 million below the level anticipated in this fiscal year’s adopted budget.

[…]

In other words, if the early returns hold, and if April receipts are down 20 percent or $267 million, that probably would prompt analysts to reduce expected revenues for each of the next two fiscal years by a similar amount, or more than $500 million for the upcoming biennium.

In a rare commentary included with Monday’s report, nonpartisan analysts said it appears that a “pessimistic scenario” that is related to the last state budget is playing out.

Finances, unless adjusted, are on pace to run $1.7 billion in deficit in 2017-18, and $1.9 billion in the red in 2018-19, according to Malloy’s administration, for a combined biennial shortfall of $3.6 billion.

[…]

If the April income tax estimates hold, the worst-case deficit forecast from the Malloy administration would approach $2 billion in 2017-18 and $2.2 billion in 2018-19.

To restate the seriousness of the situation, while the Malloy administration is claiming that April tax receipts are within “acceptable ranges,” they are actually far off what was projected in the budget.

If the actual situation holds true, Connecticut will be facing a major budget deficit this year and a biannual budget shortfall that could reach or even exceed $4.4 billion over the next two years.

The reality is that tax increases will be necessary.

The question is whether Connecticut’s elected officials will continue to overtax middle and lower income Connecticut residents or whether state government will finally start to require that the state’s wealthy pay their fair share in taxes.

News Flash – Malloy moves to undermine teachers, public schools and property taxpayers yet again!

In a brazen move that will undermine local public education and increase taxes at the local level, Governor Dannel Malloy announced today that his new proposed budget will dump a major portion of the state’s obligation to fund the teacher’s retirement system onto the back of local towns and taxpayers, all while cutting the most important middle income relief program.

Malloy’s tactics would require Connecticut’s cities and towns to make drastic cuts to local education and increase local property taxes in order to make up the cost shift of $407.6 million in FY 2019 and $420.9 million in FY 2019.  His plan would also end the property tax credit designed to help middle income families who are already facing high local tax burdens.

In an article entitled, Malloy would bill towns for teachers’ pensions, cut middle-class tax credit, Keith Phaneuf of the Connecticut Mirror explains;

Gov. Dannel P. Malloy said Friday his proposed budget would shift $407.6 million, nearly one-third of the cost of municipal school teachers’ pensions, onto cities and towns next fiscal year…

[…]

Malloy also said the two-year budget he will present Wednesday to the General Assembly would propose eliminating the $200 property tax credit within the income-tax system, costing nearly 875,000 middle-class households as much as $105 million per year based on nonpartisan analysts’ estimates.

More on this breaking story can be found at – http://ctmirror.org/2017/02/03/malloy-would-bill-towns-for-teachers-pensions-hints-at-cut-to-middle-class-income-tax-credit/

and at CT Newsjunkie – http://www.ctnewsjunkie.com/archives/entry/malloy_proposes_shifting_one_third_of_teacher_retirement_costs_to_towns/

Time to explore a new property tax system for Connecticut

In an important step forward, CT Voices for Children, a Connecticut based non-profit research institute, recently proposed a plan to reform Connecticut’s outdated property tax system and replace it with one that will reduce the tax burden on middle-income and working families while ensuring all cities and towns have the resources they need to adequately fund Connecticut’s public schools.

Wait, What? readers will recall that Connecticut’s middle-income families pay about 10 percent of their income in state and local taxes, the poor about 12 percent and because the Connecticut tax structure coddles the rich, the state’s wealthiest residents only pay about 5.5 percent of their income in state and local taxes.

The new Connecticut Voices proposal would correct those inequities and provide real property tax relief for 2.7 million residents living in 117 of Connecticut’s 169 communities.  At the same time the program would require wealthier residents to start paying their fair share in state and local taxes.

The underlying problem is that Connecticut underfunds its schools by close to $2 billion a year leaving the state’s public schools without the resources they need to provide every child with their constitutionally guaranteed access to a quality education.

The existing system also unfairly burdens the vast majority of local taxpayers.

In an historic effort to address this problem, Connecticut Voices for Children’s proposal would reform Connecticut’s property tax system as follows;

Thriving communities are made possible by good schools, roads, and other public systems. To support these building blocks of local economies, Connecticut’s cities and towns need a stable revenue source that generates needed resources without placing an unfair load onto taxpayers.

Currently, the property tax does the opposite. Connecticut’s property tax system makes residents in poor communities pay more, stifles economic development, and exacerbates racial inequalities. At the same time, because local school funding is so dependent on local property taxes, disparities in property wealth lead to disparities in opportunities for children.

We explore a partial solution to this problem: a system in which communities that tax themselves equally for education receive equal per-pupil funding for education. Our model would cut taxes for 2.7 million residents in 117 cities and towns while maintaining local control and education funding levels.

The report is based on Vermont´s adjusted statewide property tax system, with the following key features:

Gives 2.7 million residents an average tax break of about $400 per person.

Fully funds the Payment in Lieu of Taxes (PILOT) program, alleviating inequities in communities where concentrations of government, university, and hospital property have eroded the tax base.

Reduces disparities in property tax rates and thus reduce incentives for business to relocate from communities with the highest property tax rates to nearby communities with lower ones.

Consistent with tradition of local control, communities willing to tax themselves more to spend more on education are allowed to do so.

Consistent with tradition of taxing property to fund education.

To read the full report and for more background go to: Equal Funding for Equal Effort: A Proposal to Reform Property Tax Funding for Local Education in Connecticut

Malloy’s austerity budget strategies are hurting Connecticut

  • Record cuts to Connecticut’s public schools and institutions of higher education.
  • Drastic and devastating cuts to vital human services
  • Continuation of corporate welfare programs and efforts to coddle the rich.

Governor Dannel Malloy, with the help of the Connecticut General Assembly, is destroying core government programs and undermining Connecticut’s economic path.

This legislative session, the Democrats in the Connecticut legislature will be faced with a choice – continue Malloy’s disastrous policies – or stand up to the bully and pass a fair and honest state budget.

In order to adopt a better budget solution legislators will need to identify new sources of revenue to pay for vital state services and programs.

To that end, Connecticut Voices for Children has released a major report – today – on Revenue Options to deal with Connecticut’s Fiscal Crisis

Providing a light for Connecticut legislators should they decided to do their job and resolve Connecticut’s massive budget crisis, Connecticut Voices for Children released a report today entitled, Revenue Options are Key to Tackling Budget Shortfalls and Supporting Thriving Communities

CT Voices writes;

In confronting budget deficits of more than $3 billion in the upcoming biennial budget, the commonsense choice for Connecticut should be a balanced approach that includes revenue, rather than a cuts-only approach that threatens an already fragile recovery. Last year, lawmakers chose an “austerity” approach, balancing the budget with $850 million in spending cuts. As a result, the Children’s Budget—a measure of the state’s investments in children and families—fell to a record low 29.5 percent of total General Fund spending.

While such cuts may offer a short-term solution, they do so at a significant cost to the long-term economic structure of the state. 

On the revenue side, there are opportunities to invest in Connecticut’s future by modernizing an outdated sales tax system, strengthening taxes on corporations, and reforming wealth and income taxes. This brief highlights revenue options discussed and/or recommended by the State Tax Panel– –a body of experts who met over the course of two years to evaluate Connecticut’s state and local taxes. While the Panel’s final recommendations were required to be revenue neutral, the policies themselves can be adapted to yield new revenue to support essential investments in our future.

 By combining increased revenue, new strategic investments, and smaller budget cuts, the Governor and the Legislature can both balance the budget and position the state for a more prosperous future. 

 

One of the key elements of the report is an effort to explore a variety of options to ensure that the state’s wealthiest residents start paying their fair share.

Looking to reform wealth and income taxes in Connecticut, CT Voices observes;

A recent report from the Center on Budget and Policy Priorities finds that Connecticut’s income distribution is the third most unequal state in the nation.7 The report cites upside down total state and local tax systems (which impose a higher effective rate on lower income taxpayers) and the growth in the share of investment income (from dividends, capital gains, and interest) to total income that goes primarily to high-income households, as contributing factors 

Indeed, Connecticut’s overall tax system (including income, property, and sales and excise taxes, minus federal deductions) allows the most powerful among us to pay a much lower percentage of their income in taxes. For example, a family making less than $25,000 a year pays an estimated 11 percent in state and local taxes while a family making over $1,331,000––the top 1 percent––pays 5.5 percent.8 If the top 5 percent of Connecticut households paid the same effective tax rate as the remaining 95 percent of households, the state could raise more than $2 billion in state revenue annually.  

Combined, the listed changes could raise more than $1 billion while also creating a fairer tax system and reducing wealth inequality: 

Increase Top Tax Rate for Top Two Tax Groups ($238 million):     A half percentage point increase on the top two personal income tax brackets would result in an estimated $283.1 million in new state revenue—more than 82 percent of which would fall on the top 1 percent of taxpayers. Over a third of this tax increase would be offset by larger federal income tax deductions typically available to high-income earners, meaning that of the $238 million in new revenue, the state would raise $150.4 million from taxpayers, while the other $87.6 million would be picked up by the federal government.   

Increase Capital Gains and Dividends Taxes for Top Three Tax Groups ($134.6 million):     Carried interest is the share of earnings that investment managers receive from a profitable return of their client’s investment. The federal government treats carried interest as investment income, or capital gains, rather than as wages or commissions. This preferential treatment results in a federal tax liability that is 50 percent less than it would be for ordinary income. This is known as the carried interest loophole. Despite bipartisan support, little hope exists that Congress will take action. By increasing the tax on capital gains and dividends at the state level, Connecticut could redress the large preferences these two types of income enjoy in the federal tax code and raise $134.6 million.

Taxing capital gains and dividends would represent a return to historical treatment of unearned income. When Connecticut’s income tax was enacted in 1991, taxes were also cut for higher-income earners by eliminating a 7 percent tax on capital gains and a 14 percent tax on dividends and interest. Thereafter, investment incomes were subjected to the state income tax at a much lower rate of 4.5 percent. While the top income tax rate has increased to 6.99 percent, it is still below pre-1991 levels for unearned income. Moreover, any increased taxes on unearned income, like any increase on earned income, would be offset in part by larger federal income tax deductions. 

Millionaires Thrive in Connecticut Thanks to Public Investments Anti-tax advocates have been inaccurately citing Internal Revenue Service (IRS) data in an effort to convince their audience that higher taxes have resulted in a “mass exodus” of residents seeking low tax states.9 They assert that the income of residents who moved out of the state is income lost to another state, therefore depleting Connecticut’s finances. It is a claim that former Tax Foundation economist Lyman Stone has written rests “on an egregiously wrong use of the data” by analysts who “have either failed to perform the most basic due diligence…or else actively mislead their readers.” In other words, the vast majority of people who leave a state hold jobs that will be filled by people joining the labor force from within the state or moving in, resulting in no “loss of income” at all.   

Indeed, a 2016 study found that millionaires were much less likely to move than the rest of the population and that there was only a very small influence of income tax rates on the probability of moving. This study, based on 13 years of IRS tax data from all millionaires in the U.S., found that millionaire mobility and the low levels of responsiveness of millionaires to taxes meant that top tax rates would only start to decrease revenue if they were significantly higher than the single digit rates of Connecticut. A half percent, one percent, or two percent increase in the top tax bracket would not have a negative impact on revenue due to migration.  

Join Regional Compact to Close Carried Interest Loophole ($535 million):  Another way in which states could act to close the carried interest loophole in light of inaction in Washington D.C. would be to form a regional compact. Already raised by the New York and New Jersey legislatures, the proposed legislation calls for Northeastern states to impose a tax rate on carried interest sufficient to capture each state’s share of the increased federal income tax liability that would be incurred if the loophole were closed at the federal level. Both states’ proposals call for a 19 percent “carried interest fairness fee” until the loophole is closed at the federal level. By definition, the compact would not go into effect until all states (New York, New Jersey, Massachusetts, and Connecticut) enacted the same provisions. It is estimated that Connecticut could raise $535 million by doing so.

And the Connecticut Voices report outlined a number of other steps that Governor Malloy and the Connecticut General Assembly could take to deal with Connecticut’s fiscal crisis.  The full report can be found at:  http://www.ctvoices.org/sites/default/files/Revenue%20Options%202017_0.pdf

Breaking News – In unprecedented maneuver, Malloy cuts $20 million in school aid in the middle of the fiscal year

As if it wasn’t bad enough that Connecticut already underfunds its public schools, under the effective darkness of the holiday week, Governor Dannel Malloy’s administration announced today that he is slashing $20 million from Connecticut’s Education Funding (ECS) Formula.

As testimony in the CCJEF v. Rell school funding lawsuit made clear earlier this year, Connecticut’s utter failure to properly fund its public schools is hurting Connecticut’s students, parents, teachers and schools.  The lack of appropriate state aid for education also unfairly shifts the tax burden onto Connecticut’s local property taxpayers … a move that disproportionately hurts Connecticut’s middle income families.

But now Malloy is making the situation even worse by cutting state aid for education to Connecticut’s cities and towns right in the middle of the school year, a tactic that will leave communities on the hook for making emergency cuts to programs or trying to come up with alternative revenue to maintain existing programs that are designed to benefit Connecticut’s public school students.

It was only a few weeks ago that Malloy and his operatives were intentionally misleading Connecticut voters by claiming that the state budget was balanced when a growing deficit was actually taking shape.

Now, rather than target wasteful spending, Malloy is aiming his budget ax directly at some of the state’s most important and vulnerable citizens.

By dumping his fiscal problems on local property taxpayers, Malloy continues his warped approach of coddling the rich at the expense of everyone else.

In addition, Malloy’s state department of education announced earlier this week that it is seeking proposals to fund even more charter schools, a strategy that will divert even more scarce funds away from public schools and to the private sector.

Check back for more on this breaking story in the days ahead.

NEWS FLASH – Malloy, State Employee Unions DROP KICK $13 billion plus onto the backs of our children

Governor Dannel Malloy, in concert with Connecticut’s State Employee Unions, have joined forces to shift a major portion of Connecticut’s massive unfunded pension liability onto the backs of Connecticut’s children and those yet to come.

Call it an outrageous effort to kick the can so far down the road that no one will be around to remember what today’s elected officials have done to the economic well-being of those who aren’t yet voters and those who haven’t even shown up on this earth.

Worse yet, the action will probably be taken without a vote of the Connecticut General Assembly.

Warning that such a disastrous deal would be forthcoming, Wait, What? published two recent commentary pieces on the topic.

Don’t shift Connecticut’s unfunded liability problem onto our children.   (Via CT Mirror 12-8-16)

And

Warning – Malloy likely to propose shifting State’s massive unfunded liability problem onto our children  (12-1-16)

But the warnings fell on deaf ears as Connecticut’s governor now seeks to duck significant responsibility for paying down Connecticut’s unfunded state employee pension fund.

As CT Mirror explains in a breaking story entitle, Malloy, unions strike deal to stretch out spiking CT pension costs;

Gov. Dannel P. Malloy announced a deal Friday with state employee unions that would allow Connecticut to dodge a fiscal iceberg by holding down annual pension costs otherwise set to spike over the next 16 years.

But to get that relief, Connecticut would shift at least $13.8 billion in estimated pension expenses owed before 2032 onto a future generation.

[…]

For now, though, the agreement shifts a heavy burden to a future generation on the argument that this one simply cannot afford to pay the full burden it faces.

The CT Mirror adds;

Under the new agreement, this year’s $1.6 billion annual cost essentially would remain flat next fiscal year. It originally was supposed to increase by about $84 million. But after that it would rise steadily until it reaches $2.2 billion in 2022.

It could remain there — depending on how pension investments fare — until 2032.

It would drop below $1.8 billion in 2033 and, from there, it would remain close to $1.7 billion through at least 2046.

[…]

The Malloy administration did not release an estimate Thursday of that lost investment opportunity. But a spokesman said the cost could be calculated in the coming weeks after an actuarial analysis of the new pension funding plan is completed.

This plan could be approved, under current legislative rules, without a vote from lawmakers, provided neither the House nor Senate vote to reject it within 30 days after the 2017 session begins on Jan. 4.

For more on this developing story go to: http://ctmirror.org/2016/12/09/malloy-unions-strike-deal-to-stretch-out-spiking-ct-pension-costs/

Don’t shift Connecticut’s unfunded liability problem onto our children (via CT Mirror)

A special thanks to the CT Mirror for posting Don’t shift Connecticut’s unfunded liability problem onto our children.  You can read and comment on this important issue at: http://ctviewpoints.org/2016/12/08/dont-shift-connecticuts-unfunded-liability-problem-onto-our-children/

Don’t shift Connecticut’s unfunded liability problem onto our children

Eroding revenues, red ink and poor fiscal management continue to undermine Connecticut’s state budget.  Unaltered, the present approach will make it increasingly difficult, even impossible, for our children and future generations to have a state government that fulfills its fundamental and constitutional duty to provide for a healthier, safer and more equitable society.

But the problem is about to get far worse.

The fiscal crisis facing Connecticut is severe, but rather than step up and truly address the crisis, Gov. Dannel Malloy and many state legislators continue to turn a blind eye to their responsibility, especially when it comes to addressing the failures of the past.

Since he took office in January 2011, Malloy’s fiscal policies have been based on a reckless strategy of coddling the rich, outrageous acts of corporate welfare, record cuts to Connecticut’s public colleges and universities, reducing the availability of vital public services and undermining public education … all while shifting more and more of the burden to pay for public services onto Connecticut’s regressive and anti-middle income property tax system.

Denying the very real fiscal problems that are facing the state, Malloy and his political operatives have bounced back and forth between denying the very existence of state deficits and lamenting the arrival of a new economic reality.

Many will remember that upon his arrival in the governor’s office, Malloy whined about the fact that he had “inherited” a $3.7 billion budget shortfall following the fiscally irresponsible policies of Gov. M. Jodi Rell and the Democratic-controlled Connecticut General Assembly.

However, rather than use his time in office put the state back on track, Malloy’s irresponsible budget tactics have further exacerbated Connecticut’s fiscal problems.

Proof of this growing disaster can be found in the reality that as the Malloy administration prepares to propose Connecticut’s next state budget, the state is faced with a projected biennial budget shortfall in excess of $3.3 billion and growing.

And by failing to resolve Connecticut’s year-to-year budget problems, the situation facing the state’s pension and retiree healthcare obligations has become particularly severe.

Now, having squandered the opportunity to institute a special income tax surcharge on Connecticut’s wealthiest taxpayers to pay down some of the massive debt and unfunded liabilities, the options are fewer and the problems are bigger.

If history is any lesson, Malloy’s “solution” to Connecticut’s fiscal crisis will be to propose another state budget plan full of gimmicks, but this time the issue will be compounded by a plan to dump even more of the responsibility for dealing with the state’s catastrophically high debt and unfunded liabilities onto our children and future generations.

It is certainly no secret that behind closed doors Malloy and his team are developing a proposed FY18-FY19 state budget built on more cuts to vital services, shifting even more of the burden for a college education onto the backs of Connecticut’s students and their families and significantly reducing the amount of municipal aid, thereby further increasing property tax rates on Connecticut’s middle income families.

What is less understood is that Malloy will likely propose walking away from Connecticut’s near term obligation to confront the state’s $74 billion debt and unfunded liabilities.

The truth is that for decades Connecticut state government has refused to properly fund its state employee and teacher pension and benefit plans.

Making matters even worse, Malloy and the legislature have been using the state’s credit card in inappropriate ways, including his decision to use borrowed funds to pay for his failed, but much heralded, corporate welfare program designed to pick winners and losers and reward companies he favors.

Now, all of these “chickens are coming home to roost.”  Yet rather than step up and take action to reduce state debt and adequately fund Connecticut’s pension and benefits funds, Malloy may propose “kicking the can down the road” by shifting even more of the burden onto Connecticut’s children and future generations, a maneuver that will dramatically increase the cost to taxpayers over time.

The harsh reality is that when faced with the critically important obligation to do what is right, Connecticut’s elected officials – Democrat and Republican – have remained committed to a motto that reads, “Don’t do today what you can put off until tomorrow.”

The result of such a tactic is not only exacerbating Connecticut’s fiscal problems, but condemning our children and future generations.

If Connecticut voters are not outraged, they aren’t paying enough attention.

Once again, weigh in on this important issue at: http://ctviewpoints.org/2016/12/08/dont-shift-connecticuts-unfunded-liability-problem-onto-our-children/

Warning – Malloy likely to propose shifting State’s massive unfunded liability problem onto our children

Since taking office in January 2011, Governor Dannel Malloy’s fiscal policies have been based on a reckless strategy of coddling the rich, record cuts to Connecticut’s public colleges and universities, reducing the availability of vital public services and undermining public education … all while shifting more and more of the burden to pay for public services onto Connecticut’s regressive and anti-Middle Class property tax system.

Some will remember that upon his arrival in the Governor’s Office, Dannel Malloy whined about the fact that he had “inherited” a $3.7 billion budget shortfall following the fiscally irresponsible policies of Governor Jodi Rell and the Democratic-controlled Connecticut General Assembly.

However, rather than use his time in office to put the state back on track, Malloy’s irresponsible budget tactics have further exacerbated Connecticut’s fiscal problems.

Proof of this growing disaster can be found in the reality that as the Malloy administration prepares to propose Connecticut’s next state budget, the governor and his staff are facing a projected biennial budget shortfall in excess of $3.3 billion and growing.

Will this be the year that Governor Dannel Malloy finally takes the steps necessary to confront the budget problems challenging the state?

The answer is almost certainly a resounding NO!.

Sources close to Malloy are reporting that the neo-liberal politician’s “solution” to Connecticut’s fiscal crisis will be to propose a budget full of gimmicks, all the while dumping the responsibility for dealing with the state’s catastrophically high debt and unfunded liabilities onto our children and future generations.

Behind closed doors, Malloy and his team have begun the task of putting together the state’s FY18-FY19 proposed budget.  Knowledgeable sources suggest that this new budget will be built on more cuts to vital services, shifting even more of the burden for a college education onto the backs of Connecticut’s students and their families and significantly reducing the amount of municipal aid, thereby further increasing the property tax rates on Connecticut’s middle income families.

Equally appalling is the growing probability that Malloy, with the support of the legislature, will simply walk away from the state’s obligation to confront its $74 billion in debt and unfunded liabilities.

For decades Connecticut state government has refused to properly fund its state employee and teacher pension and benefit plans.

Making matters even worse, Malloy and the legislature have been using the state’s credit card in inappropriate ways, including Malloy’s much heralded corporate welfare program designed to reward companies he favors.

Now all of those “chickens are coming home to roost,” but rather then step up and take action to reduce state debt and adequately fund pension and benefits, it now appears that Malloy will simply propose dumping the burden onto Connecticut’s children and future generations.

While facing the fundamental obligation to do what is right, their operating motto seems to remain – Don’t do today what you can put off until tomorrow – no matter how devastating that delay will be for our children and those yet to come.

If Connecticut voters are not outraged, they aren’t paying enough attention.

Malloy gives Climate Change Denier $35 million in taxpayer funded corporate welfare

Despite Connecticut’s massive and growing fiscal crisis, Governor Dannel Malloy’s corporate welfare program continues to spin out of control.  This time the recipient of the Malloy administration’s taxpayer funded give-a-way program is another massive, extraordinarily profitable hedge fund, a company headed by a multi-millionaire corporate executive who is a climate change denier.

Last Wednesday, as the nation and its citizens reeled from the results of Election Day, Governor Dannel Malloy announced his decision to give Greenwich-based AQR Capital Management $35 million dollars in Connecticut taxpayer funds.

AQR Capital Management is one of the nation’s largest hedge funds, with assets of over $159 billion. The company’s CEO, Cliff Asness, is known for his Republican, Libertarian and right-wing politics, including his consistent denial that climate change is a problem facing the world.

As the Hartford Business Journal reported in, Greenwich firm to expand with $35M in state loans, grants,

Gov. Dannel P. Malloy on Wednesday announced the company’s participation in the Department of Economic and Community Development’s First Five program, providing up to $28 million in loans and up to $7 million in grants to support the firm’s $72 million expansion project. AQR Capital will retain 540 jobs as it creates new ones, Malloy said.

Since the Malloy administration’s corporate welfare program is funded through state borrowing, the $35 million gift to AQR Capital Management will cost taxpayers well in excess of $40 million.

Making the corporate subsidy all the more outrageous, AQR’s top executive has been an extremely controversial figure in the business world.

Addressing Cliff Asness’ statements, a Fortune Magazine article published on March 11, 2015 and entitled, Top hedge fund manager: Global warming isn’t a danger, reported;

One of Wall Street’s most successful hedge fund managers is once again wading into the climate change debate. His conclusion: It’s not as big of a problem as some suggest.

The hedge fund executive went on to suggest that, “based on the current pace of global warming, it will take another 500 years before the changes become a real problem.”

Connecticut crippling state debt is already making it impossible to maintain vital services and will leave future generations with impossibly high debt payments.

In fact, Governor Malloy’s unprecedented use of corporate welfare will cost Connecticut taxpayers well in excess of $1 billion and his fiscally irresponsible policies have already undermined Connecticut state government’s ability to meet its obligations in the years and decades to come.