Pick up any newspaper and you are bound to see at least one story about the impact of budget cuts and another about how state governments are giving money away to private companies in an attempt to convince them to create or retain jobs.
It is quite a commentary about our times. A lack of adequate funding means people who work for schools, hospitals and nonprofit providers of human services are or will be losing their jobs, while taxpayer continue to provide the money that is being used to try and persuade businesses to pledge that they will create or keep private sector jobs.
True, it may not be the notoriety that we want, but you certainly can’t say that Connecticut hasn’t become the epitome of this paradox.
For example, earlier this week, Wait What? readers were provided an opportunity to read two posts, one entitled Has it come to this…? and another entitled And while cutting essential services, Malloy gives $100,000 to a Stamford Brewery.
The first post reported on a recent Hartford Courant commentary piece by a father lamenting Governor Malloy’s cut to essential programs that help Connecticut’s developmentally disabled residents while the second was about the Governor’s visit to a brew pub in Stamford to celebrate a $100,000 taxpayer-funded grant that the Malloy Administration was giving to help the brew pub expand.
The two stories served to enlighten readers about the reality of our times or the juxtaposition between an era where we are cutting vital services while providing private companies with what some would call economic development incentives and what others would refer to as corporate welfare.
What I failed to report was that, in addition to the brew pub, Governor Malloy and his Commissioner of the Department of Economic and Community Development (DECD), Catherine Smith, were actually visiting three other companies around the state that day. All four of the companies were receiving funds thanks to the State’s Small Business Express Program (EXP).
Over the past eighteen months, the Small Business Express Program has given out more than $80 million. According to state officials, the program has helped “create and retain more than 7,600 jobs.” The Legislature will soon be voting to give the Governor an additional $60 million for this program.
In addition to Stamford’s Half Full Brewery, Malloy was visiting Atlantic Canvas and Awning (a company that received a loan of $50,000 and a matching grant of $10,000); Automotive Core Recycling (a company that recycles and sells catalytic converters and other auto parts and received a $250,000 loan) and Katalina’s (a cup cake bakery that received a loan of $30,000 to add equipment and furnishings to their new retail shop).
According to the Department of Economic and Community Development, the $50,000 loan and $10,000 grant “support the creation of three new jobs and retained four,” the $250,000 loan translated into one new position and retained 8 jobs, while the $30,000 loan to the bakery “created one full time job and retained two full time and two part time jobs.”
The Governor’s press release that day announced that the Small Business Express Program has already created or retained more than 1400 jobs in 2013.
Meanwhile that distraught and frustrated father, along with the others who care for Connecticut’s developmentally disabled, try to cope with Governor Malloy’s $6 million cut to employment and day service programs.
Actually, that $6 million cut was part of a much bigger list of cuts Governor Malloy ordered last November 28, 2012. That day, back in November, Governor Malloy announced $170 million in budget rescissions.
The press release didn’t actually quote Governor Malloy. Instead the task of explaining the cuts was left to Ben Barnes, Malloy’s budget director. Barnes wrote, “Many of these cuts are very difficult to make, especially now when so many residents continue to struggle in a tough economy, But as painful as they are, cuts are necessary to keep this year’s budget in balance. State government needs to live within its means.”
The November list included a wide variety of reductions including a $53,000 cut to the Division of Criminal Justice’s Shooting Task Force; a $200,000 cut to the Jobs First Employment Service Program, a $488,000 cut to the state’s Environmental Quality Program; a $335,000 cut to the Department of Health’s Community Health Services Program and $41,000 cut to their Genetic Diseases Program; a $433,000 cut to the state’s Community Mental Health Centers, a $2.3 million cut to home care services that keep people out of more expensive nursing homes and hospitals and the list goes on and on.
More recently, the state budget plan that Governor Malloy proposed a month ago continued those cuts. In fact, his new budget makes even deeper cuts to a variety of vital and essential services.
So how is it possible that a Governor would be instituting record budget cuts while giving away record amounts of taxpayer funds to private businesses?
Truth be told, it is the difference between how the State operating budget works compared to the way the State Capital or Bond budget functions.
Even in the desperate times, the Capital budget continues to pump out cash.
The State’s operating budget is paid for with tax dollars. The State’s Capital Budget is funded via the state’s credit card.
Because we are borrowing the money and then paying the amount (plus interest) back over twenty years, the argument is that cutting the Capital Budget won’t help to balance this year’s operating budget. This year’s operating budget is still facing a $135 million plus deficit despite the terrible cuts instituted by the Governor and the additional cuts approved by the General Assembly.
Although Connecticut already has the highest per capita debt burden in the nation, since the word “deficit” applies to the operating budget and not the Capital Budget, we end up with a situation in which vital services are cut at the same time money is being handed out.
In fact, if Governor Malloy gets his way, we’ll see more cuts to essential services and more layoffs of hospital and human service workers in the coming months, and at the same time, the General Assembly will be allocating even more money for the Governor to hand out to the private sector.