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.

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

All is well in the Land of Oz

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The scene in which Governor Dannel “Dan” Malloy says, “CT budget and economy both poised to take off” In the last of a series of articles written by the CT Mirror’s Keith Phaneuf on how the candidates for governor would deal with Connecticut’s $1.4 billion projected state budget for the year following the November election, Governor Malloy has said,

“We really don’t have a deficit…I know that’s hard to believe.”

Malloy tells the CT Mirror;

  • Connecticut doesn’t have a deficit
  • There will be no cuts to key services
  • There is no need to discuss concessions with state employees
  • He will not propose or accept any tax increase during his four years as governor – even to shift the tax burden by making the wealthy pay their fair share so Connecticut can reduce the disproportionate pressure on the middle class.

And how is Malloy going to achieve this incredible feat of having more services, no additional taxes and no deficits? As the CT Mirror explains,

“The governor said he’s confident that both the nation’s and Connecticut’s economy are on the cusp of a major surge.”

But wait, there is more! Not only do we get all that, but after talking with Malloy, the CT Mirror adds that Malloy says we’ll get even more if we just re-elect him.

“Swelling tax receipts not only will close whatever part of the deficit he can’t close with efficiencies, he says, but will also create opportunities for future tax cuts.”

In response to Malloy’s beyond belief explanation of the crisis facing Connecticut and its state government, the CT Mirror quotes me saying,

“What a sad commentary,” said petitioning candidate Jonathan Pelto, a Mansfield Democrat and former state representative. “He’s not functioning in the same economic world that the rest of us live in.”

The truth is that Connecticut faces a $5 billion revenue shortage over the next five years and Malloy’s reliance on inappropriate borrowing has further undermined the fiscal health of our state. While Malloy claims the problems will all disappear, the CT Mirror correctly notes that,

Pelto is at the other end of the spectrum, insisting that a major tax hike on the wealthy is needed to safeguard public services, public employees’ pensions, and municipal aid.

If you are going to read one article about Governor Malloy’s approach to the problems facing the state, this is the one to read. You can find the whole article at: http://ctmirror.org/malloy-ct-budget-and-economy-both-poised-to-take-off/

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

Look there goes a flying pig!

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The truth is that Connecticut is facing a projected state budget deficit of at least $1.3 billion dollars for the fiscal year that begins after this year’s gubernatorial election.

But today Governor Dannel “Dan” Malloy boldly announced… “We don’t face a deficit.”

In a late afternoon CT Newsjunkie story entitled, Malloy Dismisses Deficit Projections, Won’t Ask for More Concessions, the Governor not only explained that the deficit was going to disappear but he took the opportunity to repeat his iron-clad pledge that he will not propose or accept any new taxes in a second term.

As Malloy explained, “There will not be a tax increase.”

And to top things off, Malloy said that he was ruling out asking state workers for more concessions should he be re-elected as Connecticut’s Chief Executive Officer.

While the Governor’s hyperbole is impressive, there is not a state employee, retirees, public school teacher or retired teacher, let alone a public official or taxpayer who believes that Malloy’s portrayal of reality is accurate.

Hearing about Malloy’s remarks, one can’t help but dwell on that classic idiom about pigs flying or the one about Hell freezing over.

Or for that matter that one we used as kids that always got a good laugh and referred to the possibility of monkeys flying out our butts.

For the latest on Malloy’s economic theories check out the CT Newsjunkie story at: http://www.ctnewsjunkie.com/archives/entry/malloy_dismisses_deficit_projections_wont_ask_for_more_concessions/ and the Hartford Courant story at: http://courantblogs.com/capitol-watch/malloy-promises-no-new-deficit-rejects-new-state-worker-givebacks/

Define fiscal irresponsibility….

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While most Connecticut residents feel a growing unease about the Malloy administration’s irresponsible and underhanded approach to state budgeting, I’m often asked to give specific examples of how Governor Dannel “Dan” Malloy has handled the Connecticut budget during his term in office.

Long-time readers may remember this one, but here is a prime example for readers who are newer to Wait, What?

In January 2010 there was a tragic school bus accident on Route 84 in Hartford that killed a young Rocky Hill student who was attending one of the CREC magnet schools.

As politicians are wont to do, state legislators kicked into action, and on May 1, 2010 the Connecticut General Assembly passed Public Act 10-83.  The new law created a special protected trust account called the Connecticut School Bus Seat Belt Account and required the Department of Motor Vehicles to administer a program to use the funds to help Connecticut 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 and directed that $50 of each license restoration payment be deposited into the Connecticut School Bus Seat Belt Account.  The Office of Fiscal Analysis estimated the higher fee would raise about $2.1 million a year.

Now fast forward two and a half years…

Governor Malloy had been in office for two years and none of the $4.7 million collected for school seat belts had been spent.

And then, rather than using the money for its intended purpose…

We witnessed the following;

As part of the December 2012 “deficit mitigation bill” Governor Malloy and the legislature included language that overrode the existing law and quietly transferred $4,700,000 from the School Bus Seat Belt Account into the General Fund to help eliminate the projected FY 2013 $415 million deficit.

Gone was the money for school seat belts.

That tragedy was yesterday’s news and no one even spoke out against the inappropriate raid on the School Bus Seat Belt Account.

Just a year later, adding insult to injury, Governor Malloy and his administration were crowing about a projected FY 2014 budget surplus.

But instead of using a portion of that surplus to pay back the $4.7 million taken from the School Bus Seat Belt Account, Malloy used the surplus funds to pad this year’s budget and even promised a series of election-year tax rebates and tax cuts before the fiscal reality facing Connecticut set in and he had to “postpone” those tax cut promises.

The fact is that over and over again, Governor Malloy has claimed that the state and its state budget have benefited from his good management skills.

But if a governor was truly dedicated to good management he or she would never have raided the School Bus Seat Belt Account or, at the very least, would have returned the money when it was clear that the state had the resources to do so.

Oh, and as an aside, when you hear the Republicans claim that they are the party of “fiscal responsibility,” remember that Malloy’s Deficit Reduction Plan passed the State Senate 31-3 and passed the State House of Representatives 140-3.

It was Democrats and Republicans, working together, who stole the money from the School Bus Seat Belt Account and then refused to pay it back when they had the chance.

Out here in the real world, when we talk about the need for leaders who are truly committed to fiscal responsibility, it has become painfully clear that we will have go outside the “incumbency” party to find them.

Malloy’s “NO TAX” pledge will send Connecticut into the abyss

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As a result of Governor Malloy’s gimmick ridden state budget, the candidate who wins the 2014 gubernatorial election will take office facing a projected state budget deficit of $1.3 billion or more.

By using one-time revenues for on-going expenses, purposefully under-funding various government programs and utilizing a series of budget gimmicks, the new 2014-2015 state budget is just about as irresponsible as they come.

The moment Malloy signs it into law he will be creating a budget deficit for this year and a catastrophe in the budget that will follow.

But as irresponsible as Malloy’s latest budget is, nothing compares to the damage that will come with his recent “NO TAX” pledge should he be elected to a second term.  Malloy sealed his fate when he recently told reporters that he would, “neither seek nor accept any further tax increases” in a second term.

Pandering to phantom voters, Malloy has engaged in a George Bush “read my lips” moment.

By making an “ironclad” NO TAX increase pledge, Malloy joins the Republican candidates in assuring that the people of Connecticut must live with a tax system that crushes the middle class while coddling the rich.

As Malloy knows, Connecticut’s middle income families pay about 10 percent of their income in state and local taxes, the poor pay about 12 percent and the rich pay about 6 percent of their income in state and local taxes.

Instead of pledging to be fiscally responsible or even pledging not to increase taxes on middle-income families, Malloy has made it clear that he will continue to protect the rich, even if it comes at everyone else’s expense.

Perhaps the Governor wants Connecticut taxpayers to forget that his 2011 $1.5 billion tax increase raised the income tax rate for middle-income families while those making more than $1 million saw no increase in their income tax rate at all.

Malloy’s pledge will to protect Connecticut’s wealthy will have devastating consequences should he win in November.

The harsh reality is that as result of Governor Malloy’s failure to properly fund public education, the one thing we know about a NO TAX pledge at the state level is that it will lead to higher local property taxes and that will create a tax structure that is even more regressive.

Malloy’s irresponsible promise on taxes not only means Connecticut’s wealthy will get richer while failing to pay their fair share, but it will force our state government to further abdicate its responsibilities.

Even the  most rosy revenue estimates or dreams of a renewed economy will not provide the revenue necessary to maintain vital state services during a 2nd Malloy term.

As noted, four more years of inadequate state funding for education will mean higher property taxes and reduced resources to provide Connecticut’s children with the knowledge and skills needed to succeed.

Four more years of inadequate funding for Connecticut public colleges and universities will shift even more of the costs on to students and parents and will prevent many from even getting the college education they need to lead fuller lives, be self-sufficient and help build our economy.

Four more years of inadequate funding will undermine Connecticut health and human service programs, pushing some of the state’s hospital out of business and leaving many Connecticut citizens without the vital services they need.

Four more years of inadequate funding will devastate state agencies that are already understaffed and will, yet again, unfairly target state employees.

And perhaps most importantly, four more years of inadequate funding will prevent the state of Connecticut from confronting and reducing the overwhelming debt that Malloy and previous governors have built up – that being a maxed out state credit card, insufficient funding of the state and teacher pension funds and insufficient reserves to pay for the state health care retiree accounts.

While many in Connecticut were already questioning Dannel Malloy’s priorities and legacy, his “no tax” pledge ensures that his place in history will be that of just another politician who put his own political aspirations ahead off what was best for the state of Connecticut and its citizens.

One more gimmick laden State Budget before the 2014 election for governor

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When Dan Malloy was running for governor in 2010 he wrote,

We have to be committed to getting our fiscal house in order…the current budgeting is a perfect example of irresponsible budgeting…Why?  Because this administration, once again, took the easy way out…the current budget was balanced on phantom cuts and one-time revenues that will not be available for the next budget round…As a result, the people of Connecticut have been sold a lemon.”

Yesterday, May 3, 2014 the Governor, with support from of the Democrats in the General Assembly adopted in irresponsible budget that relies on “phantom cuts and one-time revenues that will not be around for the next budget round.”

Connecticut’s new budget leaves taxpayers with a $1.3 billion dollar deficit for the state budget following this fall’s gubernatorial election.

As the media wrote,

Legislature adopts new CT budget built on risky assumptions (CT Mirror)

Lawmakers Approve Budget That Increases Spending, Gambles On Future Revenue (CT New junkie)

CT Mirror wrote,

The General Assembly adopted a $19 billion budget early Sunday that relies on about $200 million in fund sweeps and risky savings and revenues assumptions to stay in balance – including the last-minute discovery of $75 million in “miscellaneous” tax receipts.

[…]

They noted that nonpartisan fiscal analysts are projecting a $1.33 billion deficit in the first state budget after the election, a gap of nearly 8 percent.

And as for the promised tax break for retired teachers, CT News junkie notes,

The budget scales back the tax relief Malloy planned to offer retired teachers by phasing it in over a period of three years. Under the budget adopted Saturday, 10 percent of the retirement income would be exempt. That exemption increases to 25 percent in 2016 and 50 percent in 2017.

And to balance the new budget, the Governor and General Assembly utilized two particularly extraordinary gimmicks.

  • A new $75 million in revenue that will appear from various miscellaneous taxes
  • And a decision not to pay $51 million into the state employee health care fund to cover the impending retirement of correctional officers.

Last fall and again this spring, State Comptroller Kevin Lembo informed Governor Malloy and his budget office that an additional $51 million would be needed to cover the health benefits of correctional officers that would soon be retiring.  Malloy failed to put the money in this proposed budget.  The General Assembly’s Appropriations Committee initially proposed using one-time revenues to cover the costs but those funds disappeared in the final version of the budget that was approved yesterday.  Instead of making the payment, legislative leadership is relying on what they claim is a, “level of comfort that the Office of Policy and Management will be able to meet their obligations to retiree health care.”

At this point, it is also unclear how or if the new budget actually solves the under-funding of Connecticut’s magnet schools.

The bottom line – One more fiscally irresponsible state budget for the Governor who ran on the platform of “responsible budgeting.”

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