Malloy, Pension, State Budget, State Debt, State Deficit Malloy, Pensions, State Budget, State Debt, State Deficit
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, State Budget, State Deficit Malloy, State Budget, State Deficit
Early last summer the Connecticut General Assembly adopted a budget agreement that had been negotiated between Governor Dannel Malloy and the Democratic leaders of the Connecticut State Senate and State House of Representatives.
In truth, the new state budget was out of balance the day it was signed into law and the situation has only gotten worse over the last four months.
Connecticut Income Tax revenues are down.
Connecticut Sales Tax revenues are down
Of the $209 million in “lapse” savings required in the state budget, Malloy has yet to identify $61 million in cuts.
And while the budget plan required about 2,000 layoffs in order to balance, the governor has only implemented about half that number.
Meanwhile, the poorly developed Malloy/Democratic austerity budget will lead to a variety of expenditures above budgeted amounts.
Together, these items translate to a REAL budget deficit in this year’s state budget in the range of $400 million or more.
However, rather than tell the citizens of Connecticut the truth about Connecticut’s continuing fiscal crisis, Governor Dannel Malloy lied to the people of Connecticut in the hope that voters would not take their anger out on the Democratic legislators who voted for the bad budget deal.
As the CT Mirror explained,
Gov. Dannel P. Malloy reported a minuscule state budget deficit [On October 20, 2016] — projecting a $6 million shortfall in state government’s $17.9 billion General Fund.
“We are projecting a minor $5.7 million operating deficit,” Office of Policy and Management Secretary Ben Barnes, Malloy’s budget chief, wrote in his official monthly forecast to Comptroller Kevin P. Lembo.
“Given that our estimates reflect information only through the first quarter of this fiscal year, this projection does not represent a material deviation from the budget plan.”
Still, it comes just six weeks after the administration reported a fiscal hole 23 times larger than this one in a memo to dozens of agency heads.
The CT Mirror’s story added,
“These budget numbers from the governor’s office are at odds with what every other reasonable observer knows and what other independent analysts have stated: Connecticut’s finances are a mess and 20 days before the election this partisan Democratic office wants to confuse and defuse when it comes to the salient facts,” House Minority Leader Themis Klarides, R-Derby, said. “We are in huge trouble and we all know it will come out after Nov. 8, Election Day.
“The governor has downplayed and misstated facts for at least a year,” Senate Minority Leader Len Fasano, R-North Haven, said. “The inability to face the real facts just gets this state deeper and deeper and deeper into trouble, and the enablers are the Democratic majority.”
For those tracking Malloy’s deficit charade, the CT Mirror broke the story that Malloy’s Budget Director wrote to agency heads last month informing them that there was a $133 million revenue shortfall in this year’s budget. However, days later, this same official wrote to State Comptroller Kevin Lembo telling him that there was no budget deficit at all.
Malloy’s latest political tactic is strikingly similar to the one he used when he was running for re-election in 2014. For months he told Connecticut voters that there was no state budget deficit, nor would there be any state budget deficit if he was re-elected to a second term in office.
However, ten days after Election Day 2014, Malloy announced that a major state deficit had suddenly appeared.
While Malloy strains to keep the magnitude of this year’s state budget deficit secret, the truth will become increasingly apparent in the weeks following this year’s November 8th election.
CT MIRROR, Malloy, State Budget, State Deficit CT Mirror, Malloy, State Budget, State Deficit
State law requires that on the 20th of every month, the Governor’s administration MUST inform the State Comptroller about any known budget deficit. The State Comptroller, in turn, uses that information to help guide his mandated monthly report that is issued on the first of each month.
In October, Malloy’s budget division told State Comptroller Kevin Lembo that the budget was in balance, but as it turns out, that was a lie.
As Keith Phaneuf at the CT Mirror is reporting today;
Gov. Dannel P. Malloy’s administration last month warned dozens of state agency heads of a significant shortfall in the current budget — but continues to officially report that finances remain in balance.
The $133 million revenue shortfall disclosed to agency heads on Sept. 6 was excluded 14 days later from the last official monthly budget forecast submitted to Comptroller Kevin P. Lembo.
Malloy’s top budget chief told Malloy’s commissioners that there was a deficit, yet day later, sought to mislead Lembo about the problem. Lembo, in turn, provided the public with a report that wasn’t accurate.
Early last summer Governor Malloy and the Democratic members of the Connecticut General Assembly adopted an austerity budget that cut vital services. Governor Malloy swore the budget was balanced when he signed it. Months later, when they knew there was a budget deficit appearing, they decided to overlook that fact when issuing their required financial report.
Six weeks before this critical election, Team Malloy choose to mislead the public.
As the CT Mirror explains;
Shortly after the budget was approved, analysts noted that summer income, sales and corporation tax receipts were weaker than anticipated. Since then, administration plans to save money from layoffs have progressed much more slowly than anticipated, further raising concerns about whether the new budget was balanced.
Still, the administration has reported no problems with the budget since the fiscal year began on July 1. It’s last monthly budget projection, filed Sept. 20 with Lembo’s office, held that finances were in balance and that revenues for the General Fund — which covers most operating costs in the budget — were coming in as anticipated.
Yet two weeks earlier, in a Sept. 6 memo imploring all agency heads to keep their spending requests lean in the next budget, Barnes estimated that General Fund revenues in the current budget would total $17.75 billion — $133 million less than the amount needed to balance the current budget.
What is the public to think when the governor of the state of Connecticut lies to the public about the size of the budget deficit?
Of course, the sad reality is that this isn’t the first time Malloy and his team have mislead voters about the budget in order to hide the truth for political purposes.
Remember, this is the governor who refused to admit there even was a deficit in 2014 until 10 days after he was re-elected to a second term in office. It was only then that the public was told about the growing fiscal crisis that lead to this year’s disastrous budget deal.
Democratic Legislators, Malloy, State Budget, State Deficit Democratic Legislators, Malloy, State Budget, State Deficit
Despite the political spin that he had put Connecticut’s fiscal house in order, Governor Dannel Malloy has presided over a continuous sea of red ink when it comes to the Connecticut state budget.
As Keith Phaneuf explains in a recent CT Mirror article entitled, CT budget closes in deficit again; little reserves left for this year,
“The governor insisted throughout his 2014 re-election campaign that nonpartisan deficit forecasts were wrong, and that growth projections for Connecticut’s economy — and correspondingly for state revenues — were too conservative.
But state government has had nothing but deficits since the governor’s re-election. Connecticut closed the 2015 fiscal year with the General Fund $113.2 million in the red.
Malloy began to acknowledge in the summer of 2015 that the economic growth he’d predicted was lagging, and by January 2016 he’d begun declaring repeatedly that Connecticut faced a “new economic reality” of modest growth. The Democratic governor’s Republican critics say this economic shift was evident years earlier and that the governor would not admit it until after he had won a second term.”
The actual numbers paint a stark and depressing picture:
Connecticut’s string of budgets in deficit:
Fiscal Year15 $113 Million Deficit
Fiscal Year16 $170 Million Deficit
Fiscal Year17 Present year – Deficit (To Be Admitted)
Fiscal Year18 $1.3 Billion Deficit (Projected)
Fiscal Year19 $1.6 Billion Deficit (Projected)
Despite two record tax increases and unparalleled budget cuts over the last six years, Connecticut is facing a budget shortfall of about $3 Billion in the next budget cycle.
Adding to the fiscal crisis is the fact that Governor Malloy and the Democratic members of the General Assembly have left Connecticut with a “Rainy Day Fund” of only $236 million, or about 1.3 percent of the state’s annual operating costs. Comptroller Kevin Lembo recommends that Connecticut’s “Rainy Day Fund” should be in the range of 15 percent of annual operating expenses, a number which means that Connecticut has a fund that is less than 10 percent of what we should have set aside for difficult economic times.
And yet, in response, Malloy continues to downplay the problem, with his spokesperson telling the CT Mirror
“The year that ended on June 30, 2016, was an extraordinarily difficult one,” Malloy spokesman Chris McClure said. “Income tax receipts were $650 million below budget, and the state was repeatedly compelled to take difficult steps to mitigate a developing deficit. We should be gratified that the hard work of state workers and the commitment of the legislature helped us to preserve more than $200 million of our Rainy Day fund, even in the pouring rain.
“We will continue to hold the line on the budget to ensure we fulfill our solemn obligation to balance the budget for FY17,” McClure said. “Our most current budget estimate, issued September 20th, is that the state is on track to meet its budget targets for FY17.”
However, the fiscal reality is that Connecticut’s budget is not on target.
Malloy and public relations team are intentionally overlooking the news that revenues are falling short and expenses are actually going to be significantly higher than authorized.
It would not be at all surprising if this year’s shortfall exceeds $200 million, eating up the remaining $236 million in the “Rainy Day Fund.”
But with Election Day a month away, look for Malloy to duck any mention of this year’s budget deficit until after November 8, 2016.
Then, and only then, will the people of Connecticut be told about Connecticut’s continuing budget deficits.
Malloy, State Budget, State Deficit, Susan Herbst, UConn Malloy, State Budget, State Deficit, UConn, UConn President Susan Herbst
The truth is that UConn needs a lot more than transparency – its needs a new President, new top administrators, a new Board of Trustees and a new Governor.
In a CT Newsjunkie column last week, education advocate Sarah Darer Littman highlighted the UConn management’s fiscally irresponsible, tone-deaf and elitist leadership style, an approach in which the President receives raises and bonuses and hands out large pay raises to her top staff, all while the state’s “flagship” university faces one record budget cut after another.
Perhaps more than any other area of state government, Governor Dannel Malloy’s disdain for doing the right thing has been on full display at Connecticut’s public institutions of higher education.
Claiming to be concerned about Connecticut’s economy, Malloy’s state budget policies have undercut college and career educational opportunities by dramatically reducing state support, which in turn, has led to much higher tuition and fees, all while reducing the level of programing at UConn and the state’s other colleges and universities.
Yet at the very same time, with Malloy serving as the statutory President of the University of Connecticut Board of Trustees, the Board and UConn President have increased the already outrageously high salaries of top administrators at the University.
It is, as Sarah Darer Littman wrote, a “let them eat cake” moment.
As Littman explains in her Let Them Eat Cake’ Moment Shows Need for Transparency at UConn commentary piece,
Connecticut’s political parties might be increasingly polarized, but there’s one issue upon which they finally reached unanimous agreement: UConn President Susan Herbst has had a “let them eat cake” moment and her Board of Trustees is utterly tone deaf.
Jump into the DeLorean, fire up the Flux Capacitor and set the date for February 24, 2015, when President Herbst testified about how cuts to the university’s block grant would have dire impacts on the quality of education at the university:
“A reduction to the appropriation in that amount would without question have a devastating impact on every aspect of university operations, faculty teaching and research, and student success . . . The greatest consequences of this would be the effect it would have on our students, our academic programs, and the role UConn must play in the state’s future, economic and otherwise. It would be a giant step backward. To address the gap this would create, our cost savings and revenue options will include: strategic workforce reductions and, to the extent permitted by collective bargaining obligations, unpaid furlough days for all employees including management and unionized workers, reductions to student financial aid, closing academic departments and programs including in Storrs and the regional campuses and ending certain degree programs.”
As of February, 30 faculty members had been laid off, according to Michael Bailey, Executive Director of the UConn chapter of AAUP (American Association of University Professors). It’s happening across the country — tenured professor positions are being filled by less expensive adjuncts for whom the university isn’t required to pay benefits.
“Approximately 50 percent of the faculty is off the tenure track with adjuncts accounting for 25 percent of those. There has been about a 10 percent increase in adjunct faculty use in the Fall semesters since 2010,” according to Bailey.
Yet despite this, at a time of massive state budget deficits and statewide layoffs, President Herbst and the Board of Trustees have chosen — because let’s be clear, it’s a choice — to go forward with massive pay increases to a few non-union administrators on the basis that “everyone else is doing it.” One can’t help but think of that oft-heard parental reprimand, “If all your friends were jumping off a cliff, would you do that, too?”
“The university does not run itself,” President Herbst reminded Senate Majority Leader Martin Looney and state Sen. Dante Bartolomeo, Senate Chair of the Higher Education Committee, in a letter responding to their questions. “We strongly believe in hiring high quality employees in order to fulfill UConn’s potential and ensure that we are as good as we can be as an institution. There are undeniably costs to that including the pay for the four people that prompted your letter, out of a workforce of more than 9,000.”
“I believe a contract is a contract and people should abide by contracts,” Board of Trustees chair Larry McHugh told the Hartford Courant.
What’s interesting — and revealing — is Gov. Dannel P. Malloy’s position. He was stridently adamant that labor unions reduce their contractual benefits in light of the new fiscal situation
Those who care about the state’s fiscal survival, let alone the future of the University of Connecticut, would do well to read Littman’s piece which can be found at:
The logical conclusion after reading it is that Connecticut AND UConn are in need of new leadership….
For more on UConn and its problems, read;
Malloy’s blindness and lack of leadership leads to chaos at UConn
Was UConn President channeling Donald Trump in interview with student reporter? (Part I)
ALERT: Malloy’s Budget Cuts lead to another 23% Tuition Increase at UConn plus 7%
Malloy Administration ushering in a “Wisconsin Moment” at UConn and CSU
UConn hires Gov. Chris Christie connected law firm to negotiate contract with faculty union
Democratic Legislators, Malloy, State Budget, State Deficit Democratic Legislators, Malloy, State Budget, State Deficit
When Governor Dannel Malloy signed THIS YEAR’S state budget he said it was balanced…but he wasn’t telling the truth.
In fact, it was off by nearly a billion dollars. Budget cuts and layoffs have reduced some of the gap, but when the year ends in ten days – on June 30, 2016 – the state will need to grab much of Connecticut’s “rainy day” fund to balance the books.
As CT Newjunkie reports;
Connecticut’s budget deficit has grown to $315.8 million and the state will have to use more of the Rainy Day Fund than expected to cover the shortfall in this year’s budget.
Office of Policy and Management Secretary Ben Barnes said Monday that the deficit has increased by about $56.7 million from last month’s estimates. It means the state will only have about $90.2 million left in its Rainy Day Fund because it will have to use $315.8 million of the $406 million Rainy Day Fund to close the deficit.
In his monthly letter to state Comptroller Kevin Lembo, Barnes said that revenues continue to decline. The personal income tax is down about $75 million and the sales tax is down about $28.2 million.
But the even more serious problem is with the budget that begins on July 1, 2016 and runs through June 30, 2017 (FY17 budget).
Again, Malloy and the Democrats have done Connecticut an extraordinary disservice by not setting up a revenue and expenditure plan that balances.
The establishment will try to keep the magnitude of the problem secret until after the November legislative elections, but despite massive layoffs and record cuts to public schools, human services and healthcare, the austerity budget that Malloy and the Democrats passed this spring – and claimed produced a balanced budget – is at least a quarter of a million ($250m) dollars out of balance.
With only $90 million left in the raining day fund, Malloy and his team has created a situation in which they have allowed him to drain the state’s reserves and burden Connecticut’s taxpayers with a massive deficit in the coming fiscal year.
Keith Phaneuf adds more in his article entitled, Outgoing CT budget deficit swells, hints at more red ink to come
The fact is that fiscal irresponsibility is major barrier to economic activity.
The state, its business community and especially its taxpayers would have been better off if Malloy had dealt honestly with the need for appropriate revenue to ensure vital services were maintained and the budget was balanced.
Corporate Welfare, Democratic Legislators, Kevin Lembo, Malloy, State Budget, State Deficit, Wyman Corporate Welfare, Kevin Lembo, Malloy, State Budget, State Deficit, Wyman
Yesterday – June 9, 2016 – Governor Dannel Malloy, who once pledged to run the most transparent administration in history, vetoed an extremely important piece of legislation that would have ensured that there was proper oversight over Malloy’s outrageous corporate welfare and economic development programs.
As the CT Mirror Reported,
“State Comptroller Kevin P. Lembo called the veto “deeply troubling” and a blow against transparency. “
According to the news story;
“Malloy also wrote that transferring the analysis of tax credits from DECD to Program Review was “unnecessary and unwarranted.”
That drew a rebuke from Lembo, a fellow Democrat who testified at a public hearing in March favor of giving the job to Program Review, a bipartisan committee with a staff of non-partisan researchers and analysts.
“If objectivity really matters, we always want an independent third party to evaluate our work,” Lembo said Thursday in an emailed statement. “This is why teachers grade tests and students don’t just assign their own grades. Furthermore, this is a terrible loss of transparency where we need it most.”
Lembo said the veto, following a decision to provide $22 million in state bond funds to a rich hedge fund over his objection, is “deeply troubling.”
“The state owes it to businesses and all taxpayers to fully analyze the return on investment that these sizable and important programs actually deliver in order to assess whether such resources are fulfilling their intended purpose or, if not, whether state funds would be better deployed to other economic development or infrastructure investment,” Lembo said.
Malloy’s latest effort to keep Connecticut’s citizens in the dark about how badly government is managed comes on the heels of an incredible move by Malloy (and the Democrats in the legislature) to literally prohibit the “Independent” Office of Fiscal Analysis from warning elected officials and the public about upcoming budget deficits.
As a May 12, 2016 Wait, What? article reported;
Meanwhile, the same outrageous implementation budget bill includes unprecedented language that allows cities and towns to simply cut their local public school budgets by the amount of any reduction in state aid to those schools.
This means that while a number of cities and towns will be getting a major pot of cash dumped on the non-education side of the budget, they won’t even have to maintain their efforts to fund their schools.
And if those two sections weren’t telling enough, any member of the Connecticut State Senate and State House of Representatives who votes in favor of this bill will be taking the truly unprecedented step of adopting a law that would literally PROHIBIT the non-partisan office of Fiscal Analysis from reporting on future budget expenditures and possible deficits that are the result of the annual increases that go with maintaining current services.
THIS IS EXTREMELY IMPORTANT!
With no public hearing, no public input and no public notice, Malloy and the Democratic leaders of the General Assembly have included language in this year’s budget implementation bill that intentionally prevents the media and the public from knowing the true ongoing costs of state government.
The CT Mirror’s Keith Phaneuf explains this incredible development in his latest article;
Future state deficit forecasts are likely to shrink significantly under a method imposed in the new state budget plan that disregards billions of dollars in annual expenditures not fixed by contract or federal mandate.
The language, proposed by Gov. Dannel P. Malloy, is included in an omnibus policy bill to help implement the proposed $19.76 billion budget for the fiscal year beginning July 1.
House Minority Leader Themis Klarides, R-Derby, blasted the measure — which was released only a few hours before the Senate was expected to debate it Wednesday morning — as a means to hide Connecticut’s fiscal woes from the public.
Malloy and his budget director, Benjamin Barnes, have been critical for several years of the deficit-forecasting methodology used by the legislature’s nonpartisan Office of Fiscal Analysis.
OFA generally tries to assess both the current and future costs of all programs, staffing, grants and other expenditures, whether fixed by contract or federal requirement, or simply set by state law.
The new methodology would disregard cost increases in most state programs, excepting debt service, retirement benefits and federal entitlement programs.
“Moving away from ‘current services’ will help us ensure that government does not continue to increase spending on autopilot,” the governor said Wednesday. “As part the budget agreement, the state will change how it does business, and give residents and businesses the predictability they seek as government works to live within its means.”
The language is nothing but a blatant effort by Malloy and the Democratic legislature to hide the true costs of maintaining state services and preventing voters from understanding the ramifications of taxes and spending.
Dismissing the most fundamental notions of open government and democracy, Malloy and the Democratic leaders are engaged in a new political strategy based on keeping the citizens ignorant about how their government functions and how it spends their money.
No real Democrat would vote for such a measure.
But Democrat Malloy and Democratic legislators voted for Malloy’s maneuver and now Malloy has added salt to the wound by making sure no one outside of his own administration reviews the corporate give-away-program that is costing Connecticut taxpayers hundreds of millions of dollars.
Connecticut General Assembly, Democratic Legislators, Malloy, School Safety, State Budget, State Deficit Connecticut General Assembly, Democratic Legislators, Malloy, School Safety, State Budget, State Deficit
Hidden deep inside the new state budget bill negotiated by Governor Dannel Malloy and Democratic legislative leaders, and approved last month by the Democrats in the General Assembly, was a provision that, once again, transferred the money that had been set aside to help school districts retrofit school buses with seat belts into the general fund.
As Wait, What? readers know, this is not the first time Governor Malloy and the Democrats have stolen the School Bus Seatbelt Account in order to make the state budget balance.
Since taking office, Malloy has reached into the special school seat belt fund four times, grabbing close to $10 million dollars.
Rather than use the funds for their intended use – to protect our children – Malloy and the Democrats simply grabbed the money to plug holes in the state budget.
This time, rather than adopt a fair and honest budget, the Democrats added Section 28 to Senate Bill 501 which “transferred” $2 million from the School Bus Seatbelt Account to the General Fund. The legislature also swept $2 million from the Seat Belt fund to address a small part of the $250 million Fiscal Year 2016 budget deficit.
Previous Wait, What articles on this issue can be found via the following links:
The Train Wreck of the Democrats’ State Budget. [Or for long-time Wait, What? readers file under – Not the Fricking School Bus Seat Belts again!] (6/3/2015)
School Bus Seat Belt Fund: A prime example of Connecticut’s budget gimmickry (1/14/2014)
Remember when school bus seatbelts were a big priority? (12/20/2012)
The School Bus Seat Belt Account was created following the tragic January 2010 school bus accident on Route 84 in Hartford that killed a Rocky Hill student who was attending one of the CREC magnet schools. Following the accident, the Connecticut legislature kicked into action, passing Public Act 10-83.
The law created the Connecticut School Bus Seat Belt Account, “a separate non-lapsing account in the General Fund” and required that the funds be used to help school districts pay for the cost of equipping school buses with lap/shoulder (3-point) seat belts.
To pay for the program, the Legislature increased the cost associated with restoring a suspended driver’s license from $125 to $ 175, using the extra $50 per person to create a funding stream for the important program.
Now six years later, no school bus seat belts have been installed, thanks to the fact that Connecticut’s governor and legislature have stolen nearly $10 million from the fund.
When these elected officials come looking for support, ask them why they didn’t do more to stop this outrage.
Democratic Legislators, Malloy, State Budget, State Deficit Democratic Legislators, Malloy, State Budget, State Deficit
As Keith Phaneuf of the CT Mirror is reporting in a new investigative piece entitled, Pace of state layoffs slower than planned as one deadline nears, Governor Dannel Malloy’s inability to successfully manage the state budget problems will mean that the budget deficit that is hidden in the coming fiscal year’s spending plan will be significantly larger than previously reported.
The new state budget that begins on July 1, 2016, a plan that was adopted by the Democrats in the Connecticut General Assembly and signed into law by the Governor, not only makes record cuts to public education and a variety of critically important health and human services for Connecticut’s most vulnerable citizens, it is a budget that is actually out of balance by at least $250 million.
Just a few weeks ago, having pronounced the new state budget, Malloy and the Democrats pronounced it balanced, padded themselves on the back for a job well done, and left Hartford behind to focus their attention on this fall’s legislative elections.
However, the harsh reality is that the new state budget not only fails to adequately fund the programs and services that Connecticut citizens need and deserve, but the deficit hidden inside the new budget is so large that Malloy will need to implement record budget reductions on top of the record budget cuts that he and his allies have already adopted, or they will need to return to the Capitol to raise taxes, before or after the November election.
Although the most immediate question is whether Malloy and legislative leaders will even admit that their spending plan is a failure or whether they will try to hide the magnitude of the new budget deficit until after the November elections
As Phaneuf explains;
Gov. Dannel P. Malloy’s efforts to reduce the state’s workforce are progressing more slowly than originally planned — an issue that could worsen a likely deficit this fiscal year and pose a bigger threat to finances after July 1.
As of June 1, 693 Executive Branch workers and 239 in the Judicial Branch have received layoff notices, a total of 932. That’s only about half of the 1,900-to-2,000 layoffs the governor said two months ago that he anticipated being ordered by June 10.
Budget counts on big labor savings
But the fiscal implications of reducing the state workforce — and of not doing so — are huge.
According to the legislature’s nonpartisan Office of Fiscal Analysis, just under 2,000 layoffs would save $133 million per year.
The new $19.76 billion budget Malloy and legislators crafted for 2016-17 cut $255 million from departmental salary accounts and also assumes the administration will find another $69 million in “general employee” savings.
Several legislators, including Sen. Beth Bye, D-West Hartford, co-chair of the Appropriations Committee, conceded this budget assumes more in labor savings than the administration’s layoff plan would provide — even if all layoffs are achieved.
If the labor savings are not in place, the new budget could be out of balance significantly before the fiscal year even begins.
“The new budget could be out of balance significantly before the fiscal year even begins.”
And out of balance it will be…
The effort by Malloy and the legislature’s Democratic leaders to claim that they would reduce the state budget by $324 thanks to state employee layoffs and concessions ($255 million from salary accounts and $69 million from “general employee” savings) was irresponsible and nothing short of a gimmick.
The plan was just another example of how their rhetoric and political spin has been designed to withhold and cover up the truth.
And the truth is that Governor Dannel Malloy has been consistently unable or unwilling to provide Connecticut with a balanced state budget.
In the months leading up to the 2014 gubernatorial election, Malloy famously said – and reiterated on a daily basis – that there was no state budget deficit, nor would there be one if the voters gave him a second term in office.
During his re-election campaign, Malloy also promised that he would never, ever raise taxes again – a true “Read My Lips” moment considering there are even “revenue enhancements” in this year’s failed budget, not to mention the massive shift of costs onto the backs of local property taxpayers that will be required to make up some of the cuts to public schools.
It was only days after the November 2014 election that Malloy and his political operatives finally begin to admit that they were sitting on a sea of red ink.
When the state’s books were actually closed on that year’s budget, the final state budget deficit exceeded $110 million.
This year, even after Malloy and the legislature implemented massive cuts to state services and approved unprecedented numbers of state employee layoffs, the state budget will end up more than $260 million in deficit.
As Phaneuf explains in his CT Mirror story, Connecticut’s Rainy Day fund stood at about $520 million on Election Day 2014 – the day Malloy was given his second term in office by claiming there was no budget deficit, nor would there be one if he was re-elected.
But after the Connecticut Rainy Day Fund was used to cover last year’s deficit and will be used, again, to cover this year’s deficit, the total amount left in the state’s savings account will be in the range of $145 million, far less than the $250 plus million deficit that is already built into this coming year’s budget plan.
It sounds a bit complex, but it isn’t.
The decision to coddle the rich, reduce funding for public schools, undermine the state’s most vital programs, and layoff state employees, while knowingly saddling taxpayers with yet another large budget deficit is unconscionable.
Unfortunately, the question is not whether Connecticut will need to address this continuing fiscal crisis. The only issue is whether Malloy will, once again, try to hide the deficit from the public until after this year’s elections are over.
I suppose the other question is whether the voters will fall for this ploy yet again
There is a reason the phrase, “enough is enough” came into being….
For additional background read the CT Mirror story at: http://ctmirror.org/2016/06/02/pace-of-state-layoffs-slower-than-planned-as-one-deadline-nears/
General Assembly, Malloy, State Budget, State Deficit, Taxes, Wyman Malloy, State Budget, State Deficit, Taxes, Wyman
Today’s CT Newsjunkie headline reads – 2016 Budget Is Back In The Red – $141.1M
In his monthly letter to state Comptroller Kevin Lembo, [Malloy’s budget chief Ben] Barnes said the state’s revenues have slipped again and the budget is experiencing a $141.1 million shortfall. That’s just three weeks after the General Assembly closed a $220 million budget gap.
The additional $141 million deficit that the Malloy administration is now admitting to comes on top of the $220 million deficit that was announced a couple of months ago, which came on top of the approximately $600 million in deficits that had been previously announced since July 1, 2015.
The appalling truth is that with about 70 days left in the fiscal year, the state budget approved by the Connecticut General and signed into law by Governor Dannel Malloy, last spring, was out of balance by over $1 billion.
Should it come as a surprise that the state budget that Malloy signed and deemed to be balanced was actually underfunded?
Last June, on the day the Connecticut General Assembly adopted this year’s state budget, the Wait, What? post read The Train Wreck of the Democrats’ State Budget and a few weeks later came an update entitled, CT’s Legislative Democrats set to make a bad budget worse.
Yet, speaking about the glory of the newly adopted state budget, the President of the Connecticut State Senate called it, “one of the best in his 35 years in the general assembly.”
And from Dannel “No New Taxes” Malloy came what may have been the quote of the year as Malloy exclaimed,
“A brighter tomorrow will start with this budget today. This agreement will help Connecticut now and in the long-run — it helps transform our transportation infrastructure as we aim for a best-in-class system. It supports our schools, supports the middle class, and supports vital programs for those who need it most. Most importantly, it helps us build a Connecticut for the long-term, making our state an even greater place to live, work, and raise a family.”
Yet despite those bizarre pronouncements, Malloy and his political operatives continue to pretend that it is Malloy, himself, who is the voice of fiscal responsibility.
Note that along with today’s announcement about the growing deficit, Malloy issued a statement saying;
“The question is no longer whether we’re in a new economic reality, it’s what we’re going to do about it.”
Malloy is actually claiming that he is the one prepared to deal with the “new economic reality” in a responsible manner?
It was only 11 weeks ago when the February 3, 2016 Wait, What? headline reported, Malloy presents a state budget plan that would make hip hop artist B.o.B. proud.
Flanked by Lt. Governor Nancy Wyman, his “policy-partner,” Democratic Governor Dannel Malloy lectured a joint session of the Connecticut General Assembly today about the importance of being fiscally responsible.
It was a grand theatrical performance that would make hip hop artist B.o.B. proud.
Less than two weeks ago, singer and music producer B.o.B informed the world that despite what we have been told, the World is Flat!
Like Governor Dannel Malloy, the “all-knowing” musician laid down the “truth” about the flatness of the Earth explaining;
“No matter how high in elevation you are… the horizon is always eye level … sorry cadets… I didn’t wanna believe it either.”
“A lot of people are turned off by the phrase ‘flat earth’ … but there’s no way u can see all the evidence and not know… grow up.”
“I question the international laws that prevent you from exploring Antarctica and the North Pole… what’s there to hide? …I’m going up against the greatest liars in history … you’ve been tremendously deceived.”
Earlier today, doing his best to channel B.o.B. into the historic chamber of the Connecticut House of Representatives, Governor Malloy took off on a fantastic ride of revisionist history in which he blamed everyone but himself for the fiscal disaster that is dragging Connecticut into the muck.
Malloy’s rhetoric about honest budgeting was only eclipsed in today’s speech by his comments regarding his record when it comes to Connecticut’s long term debt obligations.
Unconstrained by the truth or his own record in dealing with Connecticut’s failure to properly fund its pension and post-employment benefit programs, Malloy pontificated;
“Now, it has fallen upon us to fix it. After decades of neglect, we are finally paying our pension obligations every year. I think we all know that must continue.”
This from a guy who just a few months ago proposed kicking the can so far down the road that we’d shift more than $8 billion in pension liabilities onto the backs of Connecticut’s children and grandchildren.
And lest we forget, it is Malloy who has gone crazy with the state’s credit card, borrowing money to pay for various pet projects including his massive corporate welfare program.
As for his immediate commitment to making even deeper cuts to state programs, Malloy’s approach is probably best reflected by his proposal to cut funding for dental care for poor children and his plan to save $1 million by “reducing the burial benefit for indigent people from$1,400 to $1.000.” That last one was actually something Malloy proposed last year, but legislators reviewed the issue and trashed the plan.
Here is the reality.
What we are witnessing is a “Catastrophic Structural Failure” of leadership and as Connecticut’s fiscal house burns to the ground, Malloy, Wyman and their team continue to function as if the whole situation is nothing more than a political game in which the contest is to see who can come up with the best sounding rhetoric and political soundbites.
To them it may all be a game – a joke – but the damage from their actions is raining down on the people of Connecticut who are suffering and will continue to suffer under state leaders who have completely lost their ability to decipher reality, let alone act on it.
If Malloy’s determination to coddle the rich and deny the fact that additional tax revenue will be needed to ensure a fair, balanced and appropriate state budget, is not challenged and reversed, Connecticut will continue its parachute-less plunge toward destruction.