Malloy’s austerity budget strategies are hurting Connecticut

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

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

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

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

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

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

CT Voices writes;

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

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

On the revenue side, there are opportunities to invest in Connecticut’s future by modernizing an outdated sales tax system, strengthening taxes on corporations, and reforming wealth and income taxes.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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

Any CT legislator who votes for the proposed State Budget deserves to lose in November

There are times when an elected official is faced with a choice between doing what is right and doing what is politically expedient in an effort to get along to go along.  The vote on the proposed state budget agreement between Governor Dannel Malloy and the Democratic leadership of the General Assembly is just such a vote.

Their proposed budget is a fiscally irresponsible and mean-spirited farce.

It is a budget that relies on record cuts to vital services and public education and unfairly dumps Connecticut’s fiscal programs on the backs of our most vulnerable citizens and our children.

The proposed budget coddles the rich and claims to limit tax increases, yet will force cities and towns across Connecticut to raise local property taxes on the state’s middle class.

And for what it is worth, the proposed budget does not even balance.

After using one-time revenue, diverting public funds from their intended purposes, borrowing to pay operating costs, and laying off thousands of public employees, this sham of a budget will be out of balance by at least $100 million dollars the day it is signed into law.

Not to mention the damage this budget will do our local public schools and to the people who need and deserve the health and human services that allow them to live more productive and fulfilling lives.

Governor Dannel Malloy is wrong when he says it is a good budget and he is lying when he says it is fiscally responsible.

The Democratic leaders of the Connecticut General Assembly who negotiated this terrible “compromise” plan are wrong when they say it is a good budget and they are lying when they say it is fiscally responsible.

And the business executives who are lobbying Connecticut legislators to vote yes on this disastrous plan are throwing the state’s citizens, including our small business owners who generate the vast majority of jobs, under the bus.

Instead of patting themselves on the back, Connecticut’s elected officials should be throwing out  this piece of crap budget and get to work putting together a budget that is fair, honest and fiscally responsible.

Any legislator who votes for the Malloy/Democratic Leadership plan should be defeated in this November’s election and replaced with someone who is capable of standing up and doing the right thing for the people of Connecticut.

Malloy/Democratic budget – Push costs onto local property taxpayers and call it structural change

Although Governor Dannel Malloy, Lt. Governor Nancy Wyman and the Democratic leaders in the legislature have still not released all the details about the “Malloy/Democratic Compromise Budget,” the General Assembly is expected to vote on the spending plan as early as tomorrow – Thursday, May 12, 2016.

Clinging to his inaccurate claim that his budget doesn’t raise taxes, one of the small details associated with Malloy’s irresponsible approach to managing state government became apparent yesterday as the CT Newsjunkie and The Day newspaper of New London reported that the Connecticut Chief Medical Examiner Office will stop, “its longstanding practice of performing toxicology tests for most sudden deaths.

The Malloy/Wyman solution – just have local towns pay the costs.

As The Day reported,

Dr. James Gill told reporters Monday that an impending 5.75 percent cut to the office’s approximately 6.2 million budget, which included two layoffs and is the latest in a series of budget cuts at the state level, means that, beginning June 1, the office will stop its toxicology work in relation to homicides, motor vehicle deaths and most suicides.

The office still will make the corresponding blood samples available to police, Gill said, but it will be up to police to seek out private toxicology testing — something that can cost almost $200 per test.

In addition, the Day explained that the State’s Chief Medical Examiner announced that the office itself could lose its accreditation from the National Association of Medical Examiners this summer due to the budget cuts and layoffs that are part of the Malloy/Democratic compromise budget.

“When an official with the association visited Connecticut last year for the office’s annual review, she noted that the office’s seven autopsy pathologists were on track to perform 325 autopsies each that year — a number that, if exceeded, would cause the office to lose its full accreditation.

In the past almost two years, the office’s autopsy numbers have increased 58 percent — from 1,488 to 2,357 — stretching employees thin and leading to a projected budget shortfall of $456,000 for this fiscal year.

The official recommended adding an eighth medical examiner to the staff, noting that Gill already has taken on a full case load in addition to his administrative duties.

“Loss of accreditation means that an office cannot meet the minimal standards of practice for death investigation,” Gill explained in a March meeting with the state legislative Appropriations Committee. “Mistakes by a medical examiner put people’s lives at risk, can result in the innocent (being) imprisoned and cost millions of dollars in civil claims.”

In the fall last year, he told the committee, the office proposed reorganizational and hiring plans that “would have saved the office money,” but couldn’t be fully implemented because of the hiring freeze in place at the time.

The Team Malloy solution…

State expenses shifted to local taxpayers

Larger budget deficits due to the required use of more overtime.

Or as Malloy calls it – “structural change.”

Hey Connecticut – Nothing to worry about as the ‘Catastrophic Structural Failure’ crisis grows

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?

Hardly….

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.”

Wait, What?

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.

Malloy and Wyman collect public employee political donations – then stab state employees in the back – go figure.

The wave of state employee layoffs that are taking place in Connecticut is a disturbing reminder about how Governor Dannel Malloy and Lt. Governor Nancy Wyman approach electoral politics.

Having promised their support for public services, public employees and collective bargaining, the two neo-liberal politicians had their hands out during their last campaign to collect literally millions of dollars in donations from public sector employees.

However, once safely ensconced back into office for a second term, the dynamic duo have proposed, promoted and implemented the deepest cuts in state history to public services, a hatchet job that includes a new strategy of laying off significant numbers state employees.

It has been thirteen years since Connecticut has seen a governor laying off large numbers of state employees.  That time, disgraced former Governor John Rowland’s disastrous and illegal 2003 purge of state employees ended up costing Connecticut taxpayers about $100 million in back pay and penalties.

As the Hartford Courant reported in January 2016, State Begins Paying $100M Tab For Rowland Layoffs, Including Estimated $15M to Law Firm,

“State officials will spend most of 2016 paying an estimated $100 million tab for last year’s settlement of a long-running federal lawsuit by unions over Gov. John G. Rowland’s 2003 layoff of more than 2,000 state workers. The taxpayer money has already started flowing.”

David Golub, the attorney representing state employee unions and the state employees impacted by that round of layoffs is collecting a tidy $15 million to 17 million in scarce public funds for winning the case.

Now Golub is the lawyer working to help the Connecticut Democratic Party derail an investigation by the Connecticut State Elections Enforcement Commission into the $6 million plus slush fund that the Democratic Party used to – illegally – (allegedly) – support Malloy and Wyman’s  2014 re-election campaign.

At issue in the Malloy/Democratic Party case is the fact that in addition to collecting their $6.2 million public finance subsidy to pay for their re-election, the Malloy/Wyman political operation knowingly and intentionally coordinated and benefited from the activities of two other political committee accounts, each of which raised millions and millions of dollars.

One entity was created by the Democratic Governors Association (DGA) and other account, the one that appears to have violated Connecticut law, was run through the Connecticut Democratic Party.

Claiming to be “friends” of unions, public employees and public services, Malloy and Wyman played a role (it seems) in helping to raise money from public employee unions into the coffers of the two extra political committees.  Those union funds came directly from the pockets of public employees.

Now, of course, state employees and others who are paid with public funds are learning the true cost of putting their trust in charlatans and deceivers.

Connecticut Forward was the name of the Super-PAC that was set up by the Democratic Governors Association (DGA) to support Malloy’s 2014 campaign.  (Malloy is now Chairman of the Washington D.C. based group.)

As initially reported by Wait, What? in 2014 and then re-examined in an article published less than two months ago and entitled, Democrats Malloy and Wyman stab state employees in the back – again – and again, Malloy’s political operation and that Super-PAC relied heavily on the generosity of the public employee unions.

When they were running for re-election, Governor Dannel Malloy and Lt. Governor Nancy Wyman were all smiles as they accepted the political endorsements from Connecticut’s state employee unions and the Connecticut AFL-CIO.

When Malloy and Wyman wanted the unions to fork over money to help pay for their re-election campaign, union leaders stepped up big time.

Using hard-earned money collected from their members, AFSCME dumped $1.2 million into the Super PAC that was set up to support Malloy and Wyman’s effort to spend four more years in office.  The American Federation of Teachers (AFT) added $600,000 and SEIU donated $550,000 to the same political committee.

During the same period, Malloy and Wyman’s political fortunes were further enhanced thanks to more than $160,000 in union donations to the special account that was set up by the Democratic State Central Committee and used to pay for Malloy’s direct mail program.  Those contributions included $10,000 from AFT, $10,000 from NEA, $5,850 from SEIU, $5,000 from AFSCME and $1,800 from CEIU.

Even the Working Families Party got into the act, moving $25,000 in union funds to the Connecticut Forward Super-PAC.

Now, seventeen months later, although Malloy and Wyman knew that difficult times were ahead and chose to remain silent, public services are being destroyed and state employees are being laid off.

And to those who would dismiss the underlying issue by claiming Malloy is simply taking the financial actions that are needed to balance the state budget, one need only remember that another major source of the campaign cash for the Malloy/Wyman re-election effort was the charter school industry and their pro-Common Core, pro-Common Core testing and anti-teacher education reform allies.

In Malloy’s world of “shared sacrifice,” will proposing the deepest cuts in state history to public schools, Malloy has actually proposed adding to the $100 million a year that is already being handed over to the privately owned and operated charter schools, all while he remains committed to forcing Connecticut’s children to suffer under the unfair, inappropriate and discriminatory Common Core SBAC testing scam and then using the results of that flawed testing system to evaluated teachers.

Finally, while Malloy and Wyman make incredible cuts to public services, they remain committed to an agenda of coddling the rich and opposing any reasonable efforts to make the wealthy pay their fair share.

As Malloy and Wyman institute policies that push even more of the tax burden onto local property taxpayers, Connecticut is already in a situation in which the poor pay about 12 percent of their income in state and local taxes, the middle class pay about 10 percent of their income in state and local taxes, yet the state’s wealthiest only pay about 5.5 percent of their income in state and local taxes.

The legacy is becoming very clear.  Cut vital services, layoff public employees, make Connecticut’s regressive tax system even more unfair and continue to make a mockery of the promises and pledges of their  2014 re-election campaign.

Legislators – Make Malloy veto the only fair, honest and effective way to balance the State Budget.

After ordering massive budget cuts to a variety of programs that provide critically needed support for some of Connecticut’s most vulnerable citizens and making record breaking cuts to Connecticut’s public schools and colleges, this year’s Connecticut State Budget is still $220 million in deficit.

Although Governor Dannel Malloy claimed that the State Budget he signed into law last summer was balanced and that he had succeeded in putting Connecticut’s fiscal house in order, in truth, that budget missed the mark by nearly $1 billion dollars.

Over the last few month Malloy and the Connecticut General Assembly have instituted deep and sweeping cuts that undermine some of Connecticut’s most vital social, health and education programs and services.

To make matters worse, Malloy is now withholding funds that Connecticut’s hospitals and non-profit providers of community services need to ensure that hundreds of thousands of Connecticut residents get the essential services they need.

With things getting worse by the day, Democratic leaders in the Connecticut legislature are now saying that they are poised to make even deeper cuts to programs as they flail around in an effort to balance the budget.

See:  Legislative Leaders, Malloy Continue Negotiations Over 2016 Budget Deficit (CT Newsjunkie), Senate Democratic leaders confident deficit-mitigation cuts will pass (CT Mirror), Legislature To Vote Tuesday In Attempt To Close Budget Deficit (Courant)

But there is a simple, honest and effective way for legislators to balance this year’s state budget and it is a solution that will allow them to restore some of the funding for the most important state programs and services.

However, Governor Malloy doesn’t like the idea so Democratic legislators are simply pretending that the best solution for the people of Connecticut doesn’t even exist.

It is time for Connecticut legislators to dismiss Malloy’s bullying.  He is a governor, not a king!  Their duty is to their constituents, not to the power hungry governor.

The best, most honest and most effective solution is for the members of the Connecticut State Senate and State House of Representatives to do the right thing and pass a budget deficit mitigation package that requires the super wealthy to pay their fair share.

If Governor Malloy’s decides that his priority is to coddle the rich while the rest of Connecticut suffers, let him veto the bill and face the political consequences.

The solution is extremely simple.

As the non-partisan research group Connecticut Voices for Children have reported;

  • Connecticut’s poor families pay about 12.5 percent of their income in state and local taxes
  • Connecticut’s middle income families pay about 10 percent of their income in state and local taxes
  • And Connecticut’s wealthiest residents pay about 5.5 percent of their income in state and local taxes.

As a direct result of Governor Malloy’s ongoing effort to protect the rich, Connecticut’s wealthy pay FAR less than they would if they lived in Massachusetts, New York or New Jersey..

The harsh, but unspoken, reality is that Connecticut’s middle class and working families are subsidizing Connecticut’s wealthy.

It is a policy that is unfair and needs to stop.

Connecticut’s public officials can eliminate the budget deficit by simply making Connecticut’s tax system fairer.

Depending on how it is actually structured, increasing the tax rates on wealthy resident’s capital gains or personal income would result in $250 million to $400 million in additional state revenue this year.

Instead of cutting vital programs and shifting even more of the burden onto local property tax payers, Connecticut elected officials should dismiss Malloy’s rhetoric and adopt a budget solution that is fair, honest and effective.

The question is, will elected officials do the right thing for their constituents or join Malloy by aligning themselves with the state’s wealthy.

 

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.”

Thankfully, in an epic response, world renowned astrophysicist, Neil deGrasse Tyson, went on the Nightly Show to set things straight.  The best portion of which can be seen in this video clipThe Washington Post’s Valerie Strauss also has a great write-up in article entitled, Why in the world would rapper B.o.B think the Earth is flat? A quick science lesson.

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.

A far deeper analysis of Malloy’s budget proposal will come in the days and weeks ahead, but readers can learn more about some of the specific aspects of Malloy’s proposal via the following links.  Malloy targets municipal aid, agency budgets, perhaps ‘thousands’ of jobs (CT Mirror), Malloy Budget Plan Hammers State Workers, (CT Newsjunkie), Gov. Malloy Will Cut State Workforce By Thousands (Hartford Courant) and from many other Connecticut news outlets.

That said, the details of this farce of a budget where overshadowed by Malloy’s even more bizarre effort to portray himself as some sort of fiscal guardian and truth teller.

As the Hartford Courant wrote;

“In a sternly-worded speech, Gov. Dannel P. Malloy told state legislators Wednesday that they must accept “a new economic reality” of smaller government, scaled-back programs and greater compromise.”

This from the politician who relied on budget gimmicks to produce a series of state budgets that did not balance and then based his re-election campaign on the message that there was no deficit and that he would neither propose nor sign any tax increases if given a second term in office.

Of course, literally days after the election, Malloy’s budget chief admitted that there was a state deficit and Malloy went on to sign a budget that included the second massive tax hike of his tenure as governor.

And as every observer of Connecticut government and politics recognizes, the words “Malloy” and “compromise” cannot be used in the same sentence.

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.

In the end, Malloy’s new budget plan relies heavily on reducing services for those with developmental disabilities, those who suffer with mental illness and addiction, and other vulnerable residents who rely on help from Connecticut’s nonprofit providers for community services.

Of course, Malloy has now returned to his claim that he will not support any new taxes, overlooking his own effort to dramatically cut municipal aid, which will force cities and towns across Connecticut to raise local property taxes.

Then, as if to remind us, once again, of Malloy’s true priorities, the governor, who refuses to require that Connecticut’s wealthiest citizens pay their fair share in taxes, adds a new provision in his budget plan that would provide a tax break for millionaires when it comes to paying their probate fees.

As Connecticut citizens work to understand Malloy’s latest budget proposal, they would do well to remember that just because a politician or a musician says it’s so —- doesn’t actually mean that it is so…

Readers who want to understand Malloy’s perspective can start by taking a step back from today’s budget madness and read the recent Wait, What? post entitled; Malloy Budget Plan – Coddle the rich while cutting vital state services.

Malloy Budget Plan – Coddle the rich while cutting vital state services

On Wednesday, February 3, 2016, Democratic Governor Dannel Malloy, flanked by Lt. Governor Nancy Wyman and the rest of his administration will submit his latest budget plan to a joint session of the Connecticut General Assembly.

Malloy’s approach, one that borrows directly from the disgraced trickle-down economic strategies of the Neo-Conservative/Neo Liberal philosophy, will be to balance Connecticut’s state budget by continuing to coddle Connecticut’s wealthiest citizens while cutting critically important health, human service and education programs for those who are struggling the most in today’s troubled economy.

The sad reality is that Connecticut’s most vulnerable citizens will be those who suffer most from Malloy’s proposals.

Governor “There Is No Budget Deficit – I Will Not Raise Taxes” Malloy will also propose shifting more of the burden for paying for government services onto Connecticut’s local property taxpayers, despite the fact that Connecticut’s property tax system is regressive and unfairly burdens middle-income and working families in Connecticut.

Finally, yet again, as if to reiterate that Malloy has to have it have it his way or no way, Governor Malloy will be proposing a dangerous and unprecedented power grab that would transfer significant budget control and oversight away from the Legislative Branch of government to the Executive Branch, giving him and his budget chief unparalleled authority over how appropriated state funds are actually spent.

Malloy Policy #1 – Coddle the Rich

According to the Institute on Taxation and Economic Policy, a national non-partisan research organization that works on federal, state, and local tax policy issues,

Connecticut’s wealthiest pay 5.3 percent of their income in state and local taxes.  Connecticut’s middle income households pay 10.7 percent and Connecticut’s poorest pay 10.5 percent on state and local taxes.

Connecticut’s tax system is unfair, but rather than address this situation, Malloy has consistently refused to require that Connecticut’s wealthiest pay their fair share in taxes.

As in the past, Malloy is promising “not to raise taxes,” although that pledge does not include his upcoming proposal to raise the gas tax and re-institute tolls to pay for his transportation initiative after having diverted hundreds of millions of dollars from the Transportation Fund, over the past five years, to cover costs in the General Fund.

Malloy Policy #2 – Cut vital programs including those for Connecticut’s most vulnerable residents.

As reported by the CT Mirror’s Keith Phaneuf last Friday, Malloy promises ‘very austere’ state budget next week; Connecticut’s Governor will seek to balance the upcoming state budget on the backs of those who rely the most on state services.

Gov. Dannel P. Malloy warned Friday that the spending plan he will offer state legislators next week will be a “very austere” budget with no tax hikes.

The Democratic governor, who needs to close a deficit projection topping $500 million in the preliminary budget for 2016-17, also all but ruled out use of the state’s modest emergency reserve.

“It’s an austere budget. I think everybody knows that,” the governor told reporters after the State Bond Commission meeting in the Legislative Office Building.

[…]

And while Malloy offered few hints on where he would cut, he did offer one big clue.

When asked whether the emergency cuts he ordered in September to close a shortfall in the current fiscal year might offer a blueprint of where he would look for savings in 2016-17, the governor responded: “It’s a start.”

Those emergency cuts fell most heavily on social services, hospitals, and public colleges and universities, though they touched most discretionary areas of spending, excluding municipal aid.

Malloy Policy #3 – Shift tax burden to the unfair local property tax

While details are scarce about where some of Malloy’s budget cuts will fall, one area that is definitely on the chopping block will be municipal aid.

Despite repeated promises not to cut aid to cities and towns, Malloy has done exactly that in recent years.  While cuts in municipal grants “reduce” the state budget, the costs are simply shifted onto local property taxpayers.  It is a  strategy that is even more unfair to middle and lower-income families in Connecticut.

The Institute on Taxation and Economic Policy’s latest report also reveals that while Connecticut’s tax system is regressive, its property tax system is even more unfair.

Connecticut’s wealthiest pay 1.2 percent of their income in property taxes, the Middle Class 5.0 percent and the poor pay 5.3 percent of their money in local property taxes.

Malloy has already proposed cuts to the state property tax exemption for middle-income homeowners and additional cuts in municipal aid will further shift the overall tax burden onto the backs of working families in Connecticut.

Malloy Policy #4 – Seek greater executive branch control over budget

Finally, in what may be one of his most outrageous and irresponsible proposals yet, the power-hungry Governor is proposing to destroy critically important legislative oversight and control of the state budget.

As Phaneuf reports in today’s CT Mirror entitled, Malloy to seek greater executive branch control over budget

Sources familiar with the governor’s 2016-17 budget proposal say it won’t assign agency funding to many specific programs, moving instead toward the block-grant system used for state colleges and universities.

A block-grant system could tilt the balance of power away from the legislature, since lawmakers often use line items in the budget to shape executive agencies and programs and set priorities.

[…]

But the proposal still is likely to spark a battle between the branches of government over control of line-item appropriations and a debate over whether block grants would mask funding cuts for programs before a new budget is implemented…

[…].…Several sources familiar with that said it would give the Executive Branch broad new discretion to decide how budgeted funds are spent within each agency.

The legislature often directs agencies to operate programs “within available appropriations.” In other words, run the program as well as possible with the funding the legislature assigns.

But what if specific line items for programs don’t exist anymore? If a department is given one large block grant — and the authority to divvy up the funding as it sees fit — then administrators, and not the legislature, would decide which programs must get by with less.

The General Assembly’s modern role in molding state government and its policies through budgeting was shaped by a dramatic confrontation in 1969 with another Democratic governor, John N. Dempsey, and the legendary Democratic state chairman, John M. Bailey.

The Democrat-controlled General Assembly voted unanimously to defy Bailey, who then played a major role in setting the legislative agenda, and override Dempsey’s veto of the Legislative Management Act, a reform measure reflecting a desire by lawmakers to be, if not a truly equal branch of government, then at least a more assertive partner.

It led to the hiring of non-partisan professional researchers and financial analysts, who allowed legislators for the first time to make budget and policy decisions independent of the executive branch.  In 1970, a constitutional amendment further strengthened the General Assembly by authorizing it to meet annually, beginning in 1971.

Malloy’s budget plan will be made public on Wednesday.  At that point, the only thing that will stand in the way of more fiscal and political disaster will be the members of the Connecticut General Assembly…meaning that Connecticut citizens have good reason to be concerned.

The Decline of the Great American Middle Class

Whether driven by benign-neglect or outright disdain, the “advanced capitalist system,” along with the nation’s two-party, “incumbency” form of government continues to undermine the country’s Middle Class and hold down those without the resources to live full and fulfilling lives.

As Nobel Laureate Joseph Stiglitz, a professor of Economics at Columbia, recently noted,

“The world’s quintessential middle class society is on the way to becoming its first former middle class society.”

According to a new Pew Research Center report,

“In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined…marking the first time in the center’s four decades of tracking this data that the size of the latter groups has transcended that of the first.

[…]

Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.

[…]

And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.

[…]

Meanwhile, the far edges of the income spectrum have shown the most growth. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971.

[…]

The hollowing of the American middle class has proceeded steadily for more than four decades. Since 1971, each decade has ended with a smaller share of adults living in middle-income households than at the beginning of the decade.

Previous observations about the decline of the middle class and growing chasm between the super wealthy and everyone else, on this blog and elsewhere, has generated complaints about the inappropriateness of discussing what they claim to be a call for “class warfare.”

But it is long past time for the nation to drop that defense and for our elected officials to recognize that if we continue to refuse to discuss inequality, equity and fairness, we most certainly will be talking about class warfare, but we will be talking about it in the context of the very real frustration, anger and violence that will continue to grow and spill into the streets of the cities and towns across the United States.

Call it class warfare or use some other euphemism, but talk about it we must.

And that discussion needs to begin with the prompt adoption of a tax system that is fairer and more just, in which the wealthy are required to pay their fair share.

As Wait, What? readers know, in Connecticut the wealthiest pay about 5-6% of their income in state and local taxes, the middle class about 10-11% and the poor in excess of 12%.

Connecticut’s legislators could make a profound impact by ending the budget games and empty political rhetoric and actually changing the tax structure to reduce the burden on the Middle Class and all of those who are striving to make ends meet.

Making Sh*t Up – the New Normal in American and Connecticut Politics

If there is one overarching message coming out of the Republican Presidential Debates it is the realization that candidates for the highest office in the nation have absolutely no problem with simply making sh*t up.

But the buffoons seeking the Republican nomination for President of the United States certainly aren’t alone.

Unfortunately for Americans and American Democracy, making sh*t up has become the new normal across the political spectrum, even (or especially) right here in Connecticut.

Take for instance the case study of Democrat Governor Dannel Malloy and Connecticut’s Fiscal Crisis

As Dannel Malloy is fond of saying, thanks to Republican Governor Jodi Rell and a Democratic General Assembly, he “inherited” a $3 billion budget problem when he took office in January 2011.

In order to put Connecticut’s fiscal house in order Malloy instituted a massive tax increase, significant budget cuts and a large concession package with Connecticut’s State Employees, although he did manage to protect and coddle Connecticut’s wealthiest taxpayers in the process.

Although his comprehensive financial “fix” didn’t actually solve Connecticut’s budget problems, Governor Malloy set that truth aside and spent the entire 2014 gubernatorial campaign claiming that Connecticut’s state budget was balanced, that there was no state budget deficit, and that if re-elected, he would not propose or accept any tax increase in a second term as governor

According to Malloy, the road ahead was filled with the “green lights” of fiscal stability and that upon entering a second term he would steer the ship of state without having to make cuts to vital services, seek additional concessions from Connecticut’s State Employees or raise taxes.

It was Dannel Malloy’s “Read my Lips” moment and despite the very real warning signs about Connecticut’s growing fiscal problems, Dannel Malloy would not budge from his 2014 political talking points.

We won’t have deficits. We don’t have deficits.” – Malloy – CT Mirror – Feb 4, 2014

We really don’t have a deficit.” – Malloy – CT Mirror – August 4, 2014

“There won’t be a deficit. And there won’t be tax increases, because I’m taking that pledge when I couldn’t take it before, because this is a budget I own.” Malloy – NBC Connecticut – Sep. 30, 2014

“I don’t believe there will be a budget deficit and I pledge that there won’t be one. I also pledge that there will not be a tax increase.”  Malloy. – FOX CT – Sep. 30, 2014

Although Connecticut law requires the Governor and his administration to provide a truthful assessment of the state’s fiscal situation, the Malloy administration refused to even admit there was a growing budget deficit until after he won re-election in November 2014.

Malloy finally admitted what was already known, that Connecticut’s state budget wasn’t balanced but he and his appointees insisted that they would simply cut spending sufficiently to balance the 2014-15 state budget.

“State government will live within its means, and we will not raise taxes.” – Malloy – CT Mirror – November 24, 2014

But when Connecticut’s state fiscal year came to a close eight months later, State Comptroller Kevin Lembo certified that State Government ended the year with a $118.4 million budget deficit.

No amount of reality would stand in the way of Malloy’s political rhetoric, prior to or even after the 2014 Election.

On February 3, 2015, just weeks before Malloy presented his new proposed state budget for Fiscal years 2015-2016 and 2016-2017, his budget chief briefed the media.

When asked whether Malloy would be able to keep his campaign “no-tax-increase pledge?”

“YES” was how Ben Barnes, Malloy’s Secretary of the Office of Policy and Management responded

Four months later, when Governor Malloy signed the new state budget into law, the “no-tax-increase pledge” was replaced with about $1.8 billion in additional taxes, over the biennium, including the elimination or postponement of $480 million in tax cuts that, during the campaign, Malloy had promised voters would take effect following his re-election.

In addition to shattering his “read my lips” promise on taxes, Malloy’s budget also made significant and drastic cuts to a range of vital services and programs.  The hardest hit included Connecticut’s hospitals, services for those challenged by developmental and other disabilities and Connecticut’s public universities and colleges.

And was that new budget actually balanced as Malloy claimed?

Not a chance.

As we are now learning, just four months into the fiscal year, Connecticut’s “balanced budget” is becoming unhinged.

More cuts to vital services and still Connecticut is facing a combined $600 million budget deficit in this fiscal year and next…and the hole is getting bigger.

In addition, as a result of failing to properly balance this year’s budget, Connecticut will be facing a $1.6 billion shortfall in the state budget immediately following the 2016 state elections for members of the Connecticut General Assembly.

As the CT Mirror reported this week,

“That means the financial problems facing the Capitol over the next few years are roughly five times the size of Connecticut’s modest $406 million emergency reserve.”

Since Connecticut law requires the Legislature to adopt a 2 year biannual budget, when newly elected legislators are sworn into office in January 2017, they will be faced with a projected budget crisis of well over $3 billion and growing … A problem similar in size and scope to the budget crisis that Malloy “inherited” when he took office in January 2011.

The truth is that after two gigantic tax increases, major cuts to vital programs and a significant State Employee concession package, Malloy is captaining a ship that will face as big a problem as the one he started with five years ago.

To see politicians making sh*t up, you can tune into the Republican Presidential Debates, or you can simply look to see what is being said by Connecticut’s Chief Elected Official.

Republicans and Democrats, Liberals and Conservatives, voters of all philosophies, now would be a good time to demand better at the national level and right here in Connecticut.