Budget Cuts – Round #1, More to Come

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On Thursday, Governor Malloy’s budget director announced a series of significant budget cuts to existing state programs.  The problem is not only the damage the cuts will do but that they solve only a portion of this year’s growing state budget deficit which is now projected at about $100 million.  However, the magnitude of the budget deficit is closer to twice that number, a fact that Malloy can’t keep secret for more than another month or two.

Still Malloy’s initial cuts fly in the face of his repeated promises that Connecticut’s fiscal health is good and that we do not need to cut vital services if the voters of Connecticut granted him a second term in office.

But his actions tell a very different story.

Topping his list of budget cuts was, as expected, Connecticut’s public colleges and universities, along with critically important human services.

CT Mirror has the details at “Malloy’s emergency budget cuts fall on social services, education,” CTNewsJunkie at “Malloy Makes Cuts To DCF, Higher Ed,” and the Courant at “Malloy Makes $47.8M In Budget Cuts To Ease Deficit.”

The most revolting of Malloy’s budget cuts are aimed at Connecticut most vulnerable citizens, children facing severe challenges and those with developmental disabilities.

Malloy cut $9.2 million from the Department of Children and Families and $5.5 million from the Department of Developmental Disabilities.  Since there are only seven months left in the fiscal year, these cuts will hit key programs especially hard.

As reported by CT Mirror and others, Malloy has been limiting access to DCF’s residential treatment programs (group homes for extremely troubled children).   His latest cut will effectively close the door on new placements and lead the closure of even more DCF group homes.

While a Malloy official explained away the problem to the CT Mirror by saying that DCF was, “committed to maintaining youth in their communities in the least restrictive settings that can meet their needs,” the reality of the situation is that there are many parents and children that desperately need residential options.  In far too many cases, the failure to provide a residential placement puts the family and child in danger.

However, in what only can be described as an immoral move, the Malloy administration turns its back on these Connecticut families and children.  If Malloy’s action is not illegal, it should be.

In an equally inappropriate blow, Malloy is cutting the Department of Developmental Services including day services and employment programs for those with developmental disabilities.  Sad and ironic that Malloy reduces residential treatment options and then reduces options for those who need day treatment and employment services.

Malloy’s human service cuts also include $3.2 million cut from the Department of Mental Health and Addiction Services. The cuts to that agency will mean vitally important positions will go unfilled, leaving remaining employees unable to meet the present demand for services.

At the same time the governor is going after human services, he is also cutting an additional $6.5 from Connecticut’s public colleges and universities, this despite the fact that Malloy has already made the deepest cuts in state history to Connecticut’s system of public higher education.

Rather than speak out against these dramatic cuts, the spokespeople for the universities and colleges rolled over in appeasement, thereby assuring that Connecticut students and their parents will be paying even more and getting even less from UConn, CSU and the community colleges.

As Malloy pretends to claim that he is adhering to his “no new taxes” pledge, Connecticut college students and their parents will be paying higher tuition – which is nothing more than a user tax.

But perhaps the most offensive move of all is Malloy’s failure to come clean about the magnitude of the budget problem, even though the election is safely behind him.

While the present budget deficit is officially pegged at about $100 million, Malloy’s budget office is holding back evidence of additional budget problems.  The reality of the situation is that this round of cuts solves less than half of the documented budget deficit and more like 25 percent of the real budget problem facing the state.

Even in victory Malloy remains unable or unwilling to tell the people of Connecticut the truth.

Lesson NOT learned!

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The headline in today’s Hartford Courant – Malloy: No ‘Meaningful’ Cuts In Business Aid.

FACT:   As the CT Mirror’s Keith Phaneuf has consistently explained in his news articles, Connecticut faces a $1.4 billion budget deficit in next year’s state budget and the projected state deficit over the next three years exceeds $4.5 billion.  [Compare that to the $3.7 billion deficit that Malloy “inherited” when he took office in 2011…a deficit that led to a record breaking $1.5 billion tax increase.]

But instead of telling the truth about Connecticut’s growing fiscal crisis during his recent re-election campaign, Malloy claimed that there was no deficit, that he would not propose or accept any tax increases in his second term, that he would actually implement more than $260 million in targeted tax cuts for certain groups, that he would preserve the level of funding to cities and towns, that he would not make cuts to “vital” state programs and that he would not need to talk to the state employee unions about concessions.

And now, after the election, when even his own budget office is finally telling the truth about this year’s $100 budget deficit, Malloy continues to deny the reality of the fiscal crisis that is facing the state and its residents.

As the Hartford Courant is reporting, Malloy went before the MetroHartford Alliance (chamber of commerce) yesterday to proclaim that the “State budget shortfall won’t hit business aid “in any meaningful way.”

When the Courant’s Dan Haar asked Malloy how his massive corporate welfare program could go unscathed in the face of the upcoming budget deficits, Malloy explained that “One reason is that most of the economic development spending is “capital-based,” meaning it is financed with borrowed money. ‘We’ll be in good shape with respect to the business programs,’ Malloy explained.

Translated to English, Malloy was telling the Hartford Courant that since his Corporate Welfare Program is put on the State’s credit card, he has no intention of cutting back on its largess.

Apparently in Malloy’s mind, his ongoing and excessive taxpayer funded program to give successful corporations large financial gifts isn’t made with “real” money.  It is simply borrowed money that only adds to Connecticut’s long-term debt.

But what about the fact that Connecticut’s state debt and obligations already exceed $68.4 billion, an incredible sum of money that Connecticut taxpayers will have to pay back over the next twenty to twenty-five years –  in addition to their regular federal, state and local tax payments?    (See yesterday’s Wait, What? post entitled, “WARNING!  WARNING! The state of Connecticut’s Fiscal Health”)

For Malloy’s answer to that, we need only turn to headline #2: Commission Poised To Exceed Malloy’s Self-Imposed Bonding Cap (CTNewsJunkie)

“The state Bond Commission is expected to borrow $267 million in general obligation bonds Wednesday during its first meeting since July. The amount will exceed Gov. Dannel P. Malloy’s voluntary bonding cap by about $167 million.

The governor, who controls the Bond Commission’s agenda, has set a “soft” annual borrowing limit of $1.8 billion for the last two years. Although he stayed under the soft cap in 2013, he is poised to exceed it after Wednesday’s agenda, which puts state borrowing at about $1.97 billion for 2014.

‘Governor Malloy has prioritized projects that were long overdue because they improve our quality of life and create jobs. The agenda reflects both the readiness of current projects and the importance of making these investments in infrastructure, public education and job creation right now,’ Malloy’s spokesman Andrew Doba said in a statement Tuesday.”

Among the bond items that will be voted on today…

  • $25 million more in borrowing for Connecticut Innovations, Inc. to support more venture capital “investments” in companies
  • And another $19 million for the Manufacturing Assistance Act program, the largest beneficiary being a $10 million gift to Electric Boat/General Dynamics, a multi-billion dollar company that paid its new CEO $18.8 million last year.

As we sit on the deck of this ship with no lifeboats, perhaps the most serious question is whether the Democrats will stand up to Malloy and finally use their authority to turn this ship of state away from the iceberg field that lies ahead?

Sadly the answer to that question is almost definitely a big NO!

Watch the Democratic Constitutional Officers and the Democratic Legislators on the State Bond Commission vote in favor of Malloy’s plan today to speed up rather than turn away from the extreme financial danger that lies straight ahead.

By noon, Connecticut taxpayers will be in debt another $297 million, an amount that includes the $10 million so that Malloy can send that check to Electric Boat/General Dynamics, a company that had $32 billion in revenue last year.

$32 billion in revenue last year —-  Connecticut’s entire annual state budget …. $20 billion.

Lesson NOT learned!

 

Update:  The State Bonding Commission “swiftly and unanimously approved borrowing nearly $267 million to fund dozens of new capital projects.”   So there you go, after criticizing the practice of excessive borrowing, even the Republican members of the Bond Commission voted to borrow more.

WARNING!  WARNING! The state of Connecticut’s Fiscal Health

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WARNING!  WARNING! The state of Connecticut’s Fiscal Health

Last Friday, the Connecticut General Assembly’s Office of Fiscal Analysis issued its annual Fiscal Accountability Report.  The report serves as the definitive independent assessment of the fiscal health of the state of Connecticut.

Unlike the “projections” produced by the Office of Policy and Management, which are designed to protect a sitting governor from criticism, the work done by the Office of Fiscal Analysis is widely respected and noted for its accuracy.

Those truly interested in understanding the Connecticut state budget and the issues surrounding taxes and spending in Connecticut should begin by reading OFA’s Fiscal annual Accountability Report.  The OFA report not only provides a review of the status of this year’s state budget but they also provide a detailed assessment of what will occur over the next three fiscal years.

Unlike the rosy picture painted by Dannel Malloy during the recent gubernatorial campaign, OFA’s report is stark and disturbing.

The Office of Fiscal Analysis reports;

  • This year’s state budget (FY15) is running at least an $89.1 million deficit. (Although Malloy repeatedly claimed, up until Election Day, that there will be NO state deficit, his budget director has finally admitted that this year’s state budget deficit is closing in on $100 million.)
  • The projected state deficit for FY16 (next year) is $1.3 billion.
  • The projected state deficit for FY17 is $1.4 billion.
  • And the projected state deficit for FY18 is $1.7 billion.

The single most important factor to understand when reviewing the OFA projections is that they take into account the expected growth in the economy.

For example, this year the state of Connecticut was expecting an additional $350 million in revenue due to growth in the economy.   However, one of the reasons the state is now facing a deficit is that Connecticut’s economy is not growing as quickly as the experts expected.

According to OFA, the factors driving this year’s growing state deficit is that state revenues are $59.1 million lower than originally budgeted and state spending is $30.4 million higher than originally budgeted.

The increased spending is due, in part, to the Malloy administration’s failure to allocate sufficient funds to pay the healthcare costs for state employees retiring from the Department of Corrections and Malloy’s decision to intentionally underfund Connecticut’s magnet schools.

The harsh reality is that Connecticut is short about $4.5 billion in revenue from what it will need to maintain “current services” over the next three and a half years and that this number already takes into consideration an on-going improvement in the economy.

While OFA’s Fiscal Accountability Report is immediately relevant because of its projections about revenue and spending over the next three fiscal years, the report also covers Connecticut’s long-term “obligations” or “liabilities,” otherwise known as the money that taxpayers will need to come up with in order to make the state’s debt payments and fund the state’s other obligations, such as pensions.

It is in this area that the news is even more troubling.

The following chart highlights Connecticut’s Unfunded Liabilities.

Liability Amount in Billions
Debt Outstanding $21.3 Billion
State Employee Retirement System (SERS) $12.3
Teachers’ Retirement System $10.8
State Post Employment Health and Life $19.5
Teachers’ Post Employment Health $2.4
Generally Accepted Accounting Principles Deficit $1.1
TOTAL $68.4 Billion

 

The total amount in long-term obligations means that Connecticut taxpayers will need to come up with $68.4 billion over the twenty to thirty years, in addition to their federal, state and local tax payments for existing governmental expenses.

In essence, the state’s long-term debt saddles taxpayers with an annual payment in addition to any payments they have for a home mortgage, student loan debts or consumer debts.

With about 1.2 million taxpayer households in Connecticut, the state’s extraordinary level of debt and long-term obligations means that each taxpayer family or household, on average, will be responsible for paying in about $57,000 in addition to their regular tax payments over the next twenty years or so.

And unlike debt at the Federal level which can be easily pushed off, Connecticut MUST pay these obligations during the next two decades or so.  This means that the burden to make these payments will fall on the state’s existing taxpayers and those that are already born but have yet to become taxpayers.

You can read more about the latest budget news at CT Mirror -Budget chief: Some tax cuts may have to wait; CT colleges likely to face cuts and NewsJunkie Gov’s Budget Office, Nonpartisan Analysts Project Deficit.

The reports include confirmation that Governor Malloy will be announcing budget cuts soon and that those cuts will probably be disproportionately aimed at Connecticut’s public colleges and universities.

The CT Mirror story also reports that the Governor’s operation is already backpedaling on nearly $220 million in tax cuts that Malloy pushed through before the election and another $40 million in tax cuts that he promised to put into law if he were re-elected.

The list of new and proposed tax cuts that Malloy promoted during his campaign are now in  jeopardy include;

  • Restoring the sales tax exemptions on clothing and non-prescription medications.
  • A new income tax credit for retired teachers.
  • Returning the Earned Income Tax Credit for working poor families to its original level.
  • And putting an end to the corporation tax surcharge.
  • Plus new tax cuts, including a special tax break for urban businesses and an income tax credit for those who are paying interest on their student loans.

Breaking News – Watch for Malloy to announce cuts to vital services by end of day!

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[Putting aside myself-imposed break from blogging for a moment]….

The primary refrain from Governor Malloy and his political campaign was that there was no state deficit this year nor would there be one next year or the year after.

Malloy stuck to this false claim despite the fact that the Connecticut Office of Fiscal Analysis, the State of Connecticut’s independent fiscal operation had identified areas where the Malloy administration intentionally underestimated this year’s budget in order to make it appear balanced and went on to project that the state of Connecticut would be facing a $1.4 billion projected budget deficit next year and a budget deficit in the range of $5 million over the next three years.

Throughout the campaign, Malloy and his team mocked the Office of Fiscal Analysis’ projections.

Even in the last gubernatorial candidate debate, forty-eight hours before the polls opened, Malloy continued to claim that there was no deficit, there would be no deficit and that, if re-elected, he promised that he would not cut state services, raise taxes or need to engage in talks with the state employee unions about concessions.

To bolster Malloy’s false claims about the state budget, on October 20th, just days before Election Day, Malloy’s budget director even wrote,

“Revenue and expenditure trends remain consistent with the budget plan, and we continue to project a $0.3 million balance from operations.  [Translated to English that mean that the Malloy administration reported that the state was on track to have a $300,000 surplus for this fiscal year]

Considering that Malloy’s budget director knew his statement was a lie, if Connecticut was a corporation with stocks, the Securities and Exchange Commissioner (SEC) would have had the right to take action against the state for intentionally and fraudulently lying to stockholders.

But the harsh legacy of Malloy’s 2014 campaign is that the governor and his political operatives managed to make it through the campaign without having to tell Connecticut’s voters the truth about the state’s fiscal situation.

The truth then – and now – is that lower than expected revenues and additional spending due to Malloy’s decision to intentionally underfund certain programs meant this year’s Connecticut state budget contained a $100 million deficit.

Sadly, the truth was available to voters but in the blur of the final weeks of the campaign, few voters were aware of Malloy’s underhanded tactic to mislead the electorate about the growing budget deficit.

Now, ten days after the campaign is over, the Malloy administration is scrambling to put together a series of budget cuts.

Since these cuts will fly in the face of Malloy’s campaign statements watch for Malloy’s people to announce the cuts late today.

Traditionally politicians like to announce bad news late on Friday afternoons believing that most reporters have closed up their computers for the week, and that even more importantly, the public won’t be paying attention to state news on the weekend.

The true irony is that Malloy’s cuts are likely to disproportionately hit Connecticut’s state employees and programs that Malloy promised to protect.

During his first term in office, Dan Malloy made the deepest cuts in state history to Connecticut public colleges and universities.  In an attempt to win back the support of college students and their parents, along with faculty and staff at Connecticut’s colleges, Malloy repeated promised to make higher education a top priority.

But Connecticut’s college students will likely be among those who are most hurt by Malloy’s impending budget cuts, as will other state and unionized employees.

This after the union leaders spent millions urging their members to support Malloy’s re-election bid.

Those interested in knowing the truth about Connecticut’s budget situation should take the time to read the news articles written by CT Mirror’s Keith Phaneuf.

Nonpartisan analysts tracking $84M in potential cost overruns in state budget (Oct 31)

CT budget again faces red ink as federal grants, gaming revenues shrink (Nov 10)

Malloy to order emergency cuts, restrict hires to counter impending deficit (Nov 13)

Then watch for coverage tonight and over the weekend about Malloy’s budget plan.

Can we have a little honesty about Connecticut’s state budget problems?

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No, because – That’s not how it works! That’s not how any of this works! 

Rather than honestly confront the projected $1.4 billion budget deficit in next year’s state budget and the shortfall of more than $4.8 billion over the next three years, the two major party candidates for governor have decided to simply lie their way to Election Day in the hopes that voters will not discover the magnitude of the fiscal problems Connecticut will face over the next few years.

At last night’s candidate’s debate, Governor Dannel “Dan” Malloy, knowing that he will actually be forced to cut services and increase taxes, chose to repeat his “read-my-lips” pledge by saying, “Let me be very clear, there will not be a deficit, nor will there be a tax increase.”

Meanwhile, Foley, the Republican nominee who didn’t even bother to show up for the candidate debate, has taken an equally disingenuous approach to the state budget.

The two major party candidates’ — “Budget deficit? What budget deficit?” – strategy was on full display this week as the CTNewsjunkie reported, “Malloy, Foley Both Promise To Hold Towns Harmless.”

So Malloy and Foley are telling voters they will be no tax increases, no significant cuts in state services, no cuts in education or municipal aid and no mass layoffs of state employees.

The incredible truth is that the only candidate being honest about Connecticut’s budget problem is petitioning candidate Joe Visconti who says he’ll slash the state budget until it balances.  It would be a hard, even impossible, strategy to achieve and the impact would be disastrous, but give Visconti an A+ for his honesty.

Readers who want to know the truth about Connecticut’s ongoing fiscal crisis should read the Wait, What? posts of September 3, 2014 (Foley and Malloy are just plain wrong on taxes) and September 16, 2014 (Why Malloy’s (and Foley’s) anti-tax pledge is anti-middle class.)

As noted in the September 3rd post,

Governor Dannel “Dan” Malloy is fond of saying that he inherited a $3.7 billion budget deficit when he was sworn into office in January 2011.  (The number comes from reports produced by the Legislature’s independent Office of Fiscal Analysis).

The candidate who is sworn in as Governor of Connecticut in January 2015 will be facing a combined budget deficit of at least $4.8 billion over the next three years. YES – You read that number correctly.  Even after taking into consideration increased revenue from an “improving” economy, Connecticut state government will be $4.8 billion short of what is needed to maintain the present level of services and meet its present statutory obligations.

On the campaign trail, Malloy claims that there is “no deficit” in the future; these projections come from the same independent Office of Fiscal Analyses, the entity he quotes in his regular campaign stump speech.

The truth is that Connecticut continues to face a budget crisis, but rather than tell the truth about the fiscal house of cards that has been built up over the past two decades, the two major party candidates have made a calculated decision that politics trumps reality and that their best tactic is to mislead the voters in the hope that Connecticut citizens will remain docile, compliant and unaware of the fiscal crisis that will not only swallow up their economic stability but that of their children as well.

Malloy has based his campaign on a promise never to propose or accept any tax increase in a second term, while telling voters that he will not cut vital services and telling state employees that he will not need to discuss further concessions with their union leaders.

Tom Foley, in turn, has made an equally strong commitment to a “no tax” pledge” saying that he will honor the existing state employee agreement and that he will not use state employee layoffs to balance the state budget.

In a recent attempt to prove that Foley’s “no tax” pledge is bigger than Malloy’s “no tax pledge,” the Hartford Courant wrote that Foley and his running mate, Heather Somers have even launched a new online “No New Taxes Petition.”

The “I’m no tax, no I’m no tax” charade make Foley and Malloy the modern day equivalents of  Frick and Frack, the two Swiss skaters who rose to fame as original members of the Ice Follies,  doing ice skating tricks while wearing Lederhosen.

But if the Democrat and Republican candidates for governor succeed in ducking the real tax issue facing the state, the people of Connecticut, especially our middle income taxpayers, will be the true losers.

The truth is that most of the expenses related to the $4.8 billion projected budget deficit over the next three years must be paid.  Neither Malloy nor Foley can wish or lie the problem away.

For example, Governor Malloy’s irresponsible borrowing policies mean that the state MUST increase its debt service payments by at least $672 million dollars over the next three years and mandatory payments to the state employee and teacher pension and healthcare funds will account for an additional $620 million.

Putting aside critically important issues like the increased costs for education, healthcare, transportation, support and services for citizens with developmental chalengees, our public colleges and universities and all the other areas of state expenditures, Malloy and Foley can pledge that they will not raise any taxes all they want, but the winner of the gubernatorial election will need to come up with $1.3 billion over the next three years just to pay the additional debt service on the state credit card and the minimum payments into the state pension and healthcare funds.

On top of which, while the “no tax” pledges sound good in a television ad, the major party candidates owe the voters a detailed list of where they are going to cut billions from the state budget and how they are going to sidestep having to sit down and talk with state employee unions about the financial crisis.

This isn’t a magic show.  It is an extremely serious decision about who will lead the state and how they will deal with the very real issue of increased taxes.

As taxpayers across Connecticut are aware…

When Malloy introduced his record-breaking tax increase in 2011, he increased the income tax rate for everyone except those making over $1 million a year.  He told a joint session of the Connecticut General Assembly that he wasn’t increasing the income tax rate on the wealthy because he didn’t want to “punish success.”

As if Connecticut’s middle class and working families weren’t the ones who really deserved to be called successful.

Furthermore, a growing number of people are aware that in Connecticut, middle income families pay about 10% of their income in state and local taxes, the poor about 12% and the wealthy about 5-6%.

When Malloy and Foley say they will not support any increase in state taxes, what they ARE saying is that the full burden for maintaining our schools and other important local services will fall on Connecticut’s already overburdened local property taxpayers.

In fact, every time a Connecticut voter hears a gubernatorial candidate say they he will not support additional taxes, they should understand that he is saying that he will continue Malloy’s strategy of coddling the rich and dumping the burden on homeowners, car owners and those who pay property taxes through increased rent.

When it comes to the 2014 gubernatorial campaign, one truth stands out.

Foley and Malloy will use their television ads to claim that they won’t raise taxes.

But there should be a huge disclaimer on those ads that should read:

If this candidate wins, vital state services will be cut and Connecticut’s middle class will be facing massive local property tax increases or face unparalleled cuts to their local public schools.

And no voter, liberal, moderate or conservative, should cast their vote for either Malloy or Foley until each is willing to explain how they will actually deal with the fiscal realities that are facing Connecticut.

Forgive them, for they know not what they do – Not!

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Read my lips…No New Taxes!

“Both Democratic Gov. Dannel P. Malloy and his Republican challenger Tom Foley said they will not increase taxes… (CT NewsJunkie)

When Governor Dannel “Dan” Malloy took office he faced a $3.6 billion dollar deficit.

As result of budget gimmicks, the use of one-time revenue and his failure to require the wealthy to pay their fair share in income taxes, the candidate for governor that is elected next month will have to manage a $4.8 billion dollar deficit over the next three fiscal years, including at least a $1.4 billion shortfall in next year’s state budget.

But rather than tell voters the truth about Connecticut’s fiscal situation at last night’s WFSB candidate debate, both Malloy and Foley reiterated their promise not to raise taxes over the next four years.  Their pledges come despite the fact that both of these politicians know that there is absolutely no way to balance the state budget without additional revenue.

Both Malloy and Foley say that, if elected, they will not raise taxes, not cut vital services, not reduce the state workforce and will not need to negotiate contract changes with state employees.

The notion that such campaign promises could be met is not only laughable but it is a sad commentary on how far from the truth Connecticut’s gubernatorial candidates will stray in their ongoing efforts to get elected.

Malloy and Foley’s claim that they will “flat fund” the state budget purposely overlooks the fact that the state budget will grow by at least half a billion dollars next year including an additional $330 million for debt service as a result of Malloy’s excessive state borrowing and $170 million in increased payments to the pension and healthcare funds.

If Malloy and Foley were being honest with voters they’d be saying that if they win, they will need to raise taxes, cut services, transfer costs to the cities and towns and negotiate contract changes with state employees.

However, as appalling as the candidate’s performances were in last night’s debate, the award for “anti-democracy” goes to WFSB for excluding or agreeing to exclude Joe Visconti, the petitioning candidate for governor, from the event.

According to the CT Newsjunkie article, “WFSB officials didn’t include him because he didn’t receive 10 percent support in the last public poll.”

A candidate needs to get 10% in the polls to attend a debate?

Wait, What?

WFSB, in conjunction with the two major party candidates, banned Visconti from the stage despite the fact that he collected the requisite 7,500 signatures and will be listed as a gubernatorial candidate on this year’s ballot.  Although it should irrelevant at this point, Visconti also received 7 percent of the projected vote in the last public opinion poll.  That translates to over 70,000 Connecticut voters saying they will vote for the 3rd party candidate.

The decision by WFSB and the Democratic and Republican candidates to hold a debate without Visconti is nothing short of an insult to every voter in Connecticut.  Connecticut has been traditionally known as the Constitution State but to refuse to allow a certified 3rd party candidate to participate in the televised debate violates the most basic tenets of our democracy.

Rather than exclude 3rd party candidates, WFSB and other broadcasters have an obligation to open up access for their viewers.  As WFSB knows,

“Broadcasters have an obligation to serve the public’s interests, not just their own commercial interests. The government provides broadcasters free and exclusive access to a portion of the public airwaves – “spectrum” – for broadcasting. These profitable licenses come in exchange for broadcasters’ commitment to serve the “public interest, convenience, or necessity.”

Preventing a certified candidate for governor from participating in the televised debate should be viewed as a violation of WFSB’s broadcasting license.

The question IS NOT whether UConn has a major impact on Connecticut’s economy

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The question IS NOT whether UConn has a major impact on Connecticut’s economy.

An additional issue is whether voters fully understand how UConn spends its public funds.  For example, UConn uses student and public funds to subsidize the school’s big-time athletic programs to the tune of about $19 million a year.

Yesterday, Governor Dannel “Dan” Malloy and UConn President Susan Herbst released a $50,000 study, produced by an out-of-state company that reported that that the University of Connecticut “had a $3.4 billion impact on the state’s economy in 2013.”

The University of Connecticut is a public institution of higher education that is dedicated to research, teaching and public service.  UConn’s total budget is in excess of $1 billion a year, about 27% of which comes from state funds.  It wasn’t that long ago that the state funded almost half of UConn’s budget.  UConn is part of the nation’s network of land-grant universities.   The concept of land-grant universities originated in the 1860s as a way to target public funds to promote “agricultural and technical educational institutions.”

Putting aside the obvious issue that this publicly-funded study was timed to showcase Malloy during the 2014 gubernatorial election, the bigger question is the governor’s double-standard when it comes to UConn and Connecticut’s other public colleges and universities.

At yesterday’s press conference, Malloy proclaimed,

“It’s important for the people of Connecticut to understand just how vital the University of Connecticut is to economic activity.”

Of course, this statement comes from the very same governor who pushed through the deepest budget cuts in state history to Connecticut’s public institutions of higher education.

Since becoming governor, Malloy has reduced state support for the University of Connecticut by well over $100 million.  (The same pattern of budget cuts has taken place at the Connecticut State Universities and Community Colleges).

As a direct result of Malloy’s budget cuts to UConn and the other public colleges and universities, the schools have been forced to shift the costs onto the backs of Connecticut’s students and their parents.

Since Malloy took office, the cost of going to UConn has skyrocketed by 20% for students living on campus.  As a result of Malloy’s budget cuts, students who commute to UConn or can’t afford to live on campus have seen their tuition and mandatory fees jump by an incredible 28%.

Compounding the problem is the lack of transparency and honesty coming from the Malloy administration and UConn’s Board of Trustees.

The public subsidy of UConn’s athletic programs is just such an example.

When the State of Connecticut built a new stadium in East Hartford and UConn moved to 1-A football, state officials claimed that the move would be lucrative and that within a few years UConn football would be paying for the entire cost of UConn’s athletic programs.

However, according to a 2013 financial report provided to the NCAA, the State of Connecticut and UConn students continue to provide a massive subsidy to UConn’s big-time athletic programs.

Last year, UConn’s athletics program cost in excess of $63.3 million.  Incredibly, 29.7% of that money comes from UConn’s Operating Fund which is primarily made up of tax dollars, as well as, UConn student tuition and fees.

While “big time” athletics are certainly part of almost every major university, Connecticut taxpayers, students and parents deserve to know that they are subsiding UConn athletics to the tune of about $19 million a year.

And while having top tier coaches is a vital part of any successful major athletic program, most Connecticut taxpayers, students and parents probably don’t know that UConn’s top four coaches collected in excess of $7.1 million in compensation in 2013 and that nearly a third of that money came directly from students, parents and taxpayers.

The truth is that Connecticut should be proud of the University of Connecticut and the impact UConn has on the state.

And Governor Malloy certainly has the right to highlight the fact that he has put nearly $2 billion on the state’s credit card to build even more new buildings for the University.

But for Governor Malloy to hold a press conference about UConn, without explaining that he implemented historic cuts to UConn’s operating fund, is extremely inappropriate and misleading.

As a direct result of Malloy’s policies, UConn has become more expensive for Connecticut families.

That is certainly something he shouldn’t be proud about.

You can read more about the new study and Malloy’s press conference at:

CTNewsJunkieNew Report Touts UConn’s Impact On State Economy

CT Mirror: UConn touts its economic contribution but touches off a political dustup

Why Malloy’s (and Foley’s) anti-tax pledge is anti-middle class

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In a September 3, 2014 Wait, What? post entitled, Foley and Malloy are just plain wrong on taxes, the blog explained that Malloy and Foley are being fiscally irresponsible with their pledge not to propose raising taxes if they are elected. The article begins with the following;

Although Governor Dannel “Dan” Malloy is fond of saying that he inherited a $3.7 billion budget deficit when he was sworn into office in January 2011…The candidate who is sworn in as Governor of Connecticut in January 2015 will be facing a combined budget deficit of at least $4.8 billion over the next three years!   YES – You read that number correctly.  Even after taking into consideration increased revenue from an “improving” economy, Connecticut state government will be $4.8 billion SHORT of what it is needed to maintain the present level of services and meet its present statutory obligations.

As a result of Governor Malloy’s irresponsible borrowing policies, the state MUST increase its debt service payments by at least $672 million dollars over the next three years.  The additional mandatory payments for the state employee and teacher pension and healthcare funds will require an additional $620 million.

And that doesn’t even count the minimum increases needed to maintain the most vital state services.

There is absolutely no way to balance Connecticut’s state budget without additional taxes.  The question is not whether we will have tax increases, but who will be providing that additional state revenue.

Furthermore, by pledging not to “raise” taxes at the state level, there will be no meaningful state increase in state aid to municipalities and that will translate into massive increases in local property taxes, as towns face the growing costs of education, public safety and other local services.

While Malloy and Foley can try and claim they won’t raise taxes, by forcing higher local property taxes, the two major party candidates will – in fact – be raising taxes that disproportionately hit middle-income families and small business that are particularly hurt by the way in which Connecticut raises revenue at the local level.

But Malloy and Foley’s “no-tax” pledge is even more unfair than it seems because they are promising to maintain the existing tax system that coddles the rich.

As the non-partisan CT Voices for Children has reported;

  • In Connecticut, wealthy residents pay a smaller share of their income in state and local taxes than the rest of us, while families raising children are uniquely hurt by Connecticut’s present tax system.
  • After federal income tax deductions, Connecticut’s wealthiest families pay an average of 5.5% of their income in state and local taxes, while the middle class pay 10.5%, and the poor pay 11% of their income in state and local taxes.
  • In addition, Connecticut is one of only two states that make no adjustment in their income taxes for the cost of raising children.  A family with $60,000 of income with three kids owes the same as the family with $60,000 of income and no kids.  It is a tax policy that is hardly pro-child.

The candidates for governor who have made a “no tax pledge” is not only being fiscally irresponsible, but is sending a loud and clear message to Connecticut’s middle class.   What Malloy and Foley are saying is that not only are they refusing to take responsibility for properly running the state of Connecticut, but they are admitting that they will be leaving Connecticut’s unfair tax structure in place while increasing the burden on local property taxpayers.

As of now, the Democrat and Republican candidates for governor have made a strong case for why they SHOULD NOT BE ELECTED.  Only 3rd Party candidates Joe Visconti (and I) have had the courage and wisdom to admit that the next governor needs to keep all the tools of governance on the table.

It is time for Malloy and Foley to admit their no-tax pledge is bad fiscal policy.

Or worse, while they know that additional taxes will be needed to balance the state budget and reduce the burden on the middle class, they’ve decided to lie rather than tell the truth in an attempt to get elected.

Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto

Foley and Malloy are just plain wrong on taxes

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[A special note of thanks to all of you who have posted comments and sent emails of support urging me to continue writing posts Wait, What?  While I will continue to mull over the various issues and opportunities, the following is an attempt to gingerly re-enter the fray by using this blog to raise what I feel are important issues as we collectively seek to educate, persuade and mobilize the citizens of Connecticut to take back control of their state government.]

With that as the backdrop, this blog is entitled, Foley and Malloy are just plain wrong on taxes.

Governor Dannel “Dan” Malloy is fond of saying that he inherited a $3.7 billion budget deficit when he was sworn into office in January 2011.  (The number comes from reports produced by the Legislature’s independent Office of Fiscal Analysis).

The candidate who is sworn in as Governor of Connecticut in January 2015 will be facing a combined budget deficit of at least $4.8 billion over the next three years. YES – You read that number correctly.  Even after taking into consideration increased revenue from an “improving” economy, Connecticut state government will be $4.8 billion short of what is needed to maintain the present level of services and meet its present statutory obligations.

On the campaign trail, Malloy claims that there is “no deficit” in the future; these projections come from the same independent Office of Fiscal Analyses, the entity he quotes in his regular campaign stump speech.

The truth is that Connecticut continues to face a budget crisis, but rather than tell the truth about the fiscal house of cards that has been built up over the past two decades, the two major party candidates have made a calculated decision that politics trumps reality and that their best tactic is to mislead the voters in the hope that Connecticut citizens will remain docile, compliant and unaware of the fiscal crisis that will not only swallow up their economic stability but that of their children as well.

Malloy has based his campaign on a promise never to propose or accept any tax increase in a second term, while telling voters that he will not cut vital services and telling state employees that he will not need to discuss further concessions with their union leaders.

Tom Foley, in turn, has made an equally strong commitment to a “no tax” pledge” saying that he will honor the existing state employee agreement and that he will not use state employee layoffs to balance the state budget.

In a recent attempt to prove that Foley’s “no tax” pledge is bigger than Malloy’s “no tax pledge,” the Hartford Courant wrote that Foley and his running mate, Heather Somers have even launched a new online “No New Taxes Petition.”

The “I’m no tax, no I’m no tax” charade make Foley and Malloy the modern day equivalents of  Frick and Frack, the two Swiss skaters who their fame as original members of the Ice Follies,  doing ice skating tricks while wearing Lederhosen.

But if the Democrat and Republican candidates for Governor succeed in ducking the real tax issue facing the state, the people of Connecticut, especially our middle income taxpayers, will be the true losers.

The truth is that most of the expenses related to the $4.8 billion projected budget deficit over the next three years must be paid.  Neither Malloy nor Foley can wish or lie the problem away.

For example, Governor Malloy’s irresponsible borrowing policies mean that the state MUST increase its debt service payments by at least $672 million dollars over the next three years and mandatory payments to the state employee and teacher pension and healthcare funds will account for an additional $620 million.

Putting aside critically important issues like the increased costs for education, healthcare, transportation, support and services for citizens with developmental chalengees, our public colleges and universities and all the other areas of state expenditures, Malloy and Foley can pledge that they will not raise any taxes all they want, but the winner of the gubernatorial election will need to come up with $1.3 billion over the next three years just to pay the additional debt service on the state credit card and the minimum payments into the state pension and healthcare funds.

On top of which, while the “no tax” pledges sound good in a television ad, the major party candidates owe the voters a detailed list of where they are going to cut billions from the state budget and how they are going to sidestep having to sit down and talk with state employee unions about the financial crisis.

This isn’t a magic show.  It is an extremely serious decision about who will lead the state and how they will deal with the very real issue of increased taxes.

As taxpayers across Connecticut are aware…

When Malloy introduced his record-breaking tax increase in 2011, he increased the income tax rate for everyone except those making over $1 million a year.  He told a joint session of the Connecticut General Assembly that he wasn’t increasing the income tax rate on the wealthy because he didn’t want to “punish success.”

As if Connecticut’s middle class and working families weren’t the ones who really deserved to be called successful.

Furthermore, a growing number of people are aware that in Connecticut, middle income families pay about 10% of their income in state and local taxes, the poor about 12% and the wealthy about 5-6%.

When Malloy and Foley say their will not support any increase in state taxes, what they ARE saying is that the full burden for maintaining our schools and other important local services will fall on Connecticut’s already overburdened local property taxpayers.

In fact, every time a Connecticut voter hears a gubernatorial candidate say they he will not support additional taxes, they should understand that he is saying that he will continue Malloy’s strategy of coddling the rich and dumping the burden on homeowners, car owners and those who pay property taxes through increased rent.

When it comes to the 2014 gubernatorial campaign, one truth stands out.

Foley and Malloy will use their television ads to claim that they won’t raise taxes.

But there should be a huge disclaimer on those ads that should read:

If this candidate wins, vital state services will be cut and Connecticut’s middle class will be facing massive local property tax increases or face unparalleled cuts to their local public schools.

And no voter, liberal, moderate  or conservative, should cast their vote for either Malloy or Foley until each is willing to explain how they will actually deal with the fiscal realities that are facing Connecticut.

State Deficit?  What State Deficit?”

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In a recent interview with the CT Mirror, Governor Dannel “Dan” Malloy said,

“We really don’t have a deficit.”

However, if the truth be told, according to the non-partisan Office of Fiscal Analysis, the State of Connecticut continues to face a monumental fiscal crisis.  In fact, here are the projections from the experts for the fiscal years following this November’s election;

Fiscal Year 2016:  A $1.4 billion Connecticut state budget deficit

Fiscal Year 2017:  A $1.6 billion Connecticut state budget deficit

Fiscal Year 2018:  A $1.8 billion Connecticut state budget deficit

Malloy says the Office of Fiscal Analysis is wrong, although he uses their numbers when he complains that he inherited a $3.7 billion state budget deficit from former Governor Rell.

The most recent campaign pitch from Malloy is that he wants to be judged on his record.

And the fact is his record is extremely clear.

As a result of Malloy’s unfair tax package that coddled the rich and disproportionately hit the middle class, along with his constant use of budget gimmicks, the candidate who wins this year’s gubernatorial election will have to deal with a situation in which Connecticut will be at least $4.8 billion short of what would be needed to balance the state budget over the next three years.

Meanwhile, the cornerstone of Malloy’s campaign is his claim that he won’t propose or accept any tax increases during the next four years, he won’t need to renege on his deal with the state employee unions nor will he have to ask for further concessions from state employees and he won’t cut vital services here in Connecticut.

Is Malloy intentionally misleading voters?

Is he straight out lying?

According to that same CT Mirror article, Malloy says he will be able to achieve the un-achievable because, as he puts it, “he’s confident that both the nation’s and Connecticut’s economy are on the cusp of a major surge. 

As Connecticut heads into the last three months of the 2014 gubernatorial election, Governor Malloy may want to remember the famous phrase attributed to President Abraham Lincoln who said, 

“You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”

 If there is one thing that the 2014 campaign for governor should be about – it is tell the people of Connecticut the truth.

Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto

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