Malloy Looks To Commission To Help Preserve His Legacy, Jump Start Legislature
Posted to: Economic Development, The Economy, State Budget, Pensions, Taxes, State Capitol, Transportation
HARTFORD, CT — Gov. Dannel P. Malloy is hoping a 14-member group of business leaders can help him convince the legislature to make some tough, but necessary progress in his final year in office.
“The goal is to help expand and attract new businesses that create high skilled jobs, good wages, and benefits to grow the state’s economy and help us compete globally,” Malloy said. “Everywhere I go I hear from business leaders worried about the states transportation infrastructure and the tremendous cost it is imposing on travelers, as well as the businesses on our state.”
He said the states future depends on making its transportation system a top priority.
“The special transportation fund is going broke due to an over reliance on outdated revenue streams and years of inaction,” Malloy said. “We need new revenue sources that will be there to fund the next round of transportation infrastructure.”
He suggested the group look at the Transportation Finance Panel’s final recommendation from March 2016 as a good starting point to frame an approach to transportation.
He said the gas tax would have to increase 28 cents in order to keep up with the debt service costs of the I-84 Hartford viaduct replacement and other related projects. Another option would be to put tolls on I-84 to help offset the debt service associated with fixing it.
He said businesses in New York City, where prices are going up, are hesitant to move to Connecticut because “they don’t believe we’re going to execute a transportation plan.” He said the state is cutting off its normal flow of replacement jobs as a result of underinvestment.
The reluctance of Connecticut to invest in itself on an ongoing basis because it makes people uncomfortable “is really at the heart of our slow growth economy,” Malloy said.
As for Connecticut’s high pension costs and unfunded pension liability, Malloy said there’s “no silver bullet” to resolving that.
“Much of the challenges are fixed costs and most fall within the Tier I pension program,” Malloy said. “This was a program developed before 1984 and paying this down is a legal obligation the state must honor.”
“We must pay for the mistakes of the past and there is no easy way around it,” he added.
Malloy’s administration renegotiated state employee benefits twice creating new tiers of employees each time and increasing the amount employees contribute to their benefits while lowering the state contribution in each of the tiers.
Robert Patricelli, a serial entrepreneur who is co-chairing the Commission on Fiscal Stability and Economic Growth, asked Malloy what the group should focus on besides transportation.
Malloy pointed to what’s been a myth surrounding his administration.
“Most people don’t realize the executive branch of government is over 12 percent smaller today than the day I was sworn in,” Malloy said. “In fact, if you ask most business leaders, and most people living in the state and you mentioned that I was a Democrat they would assume government is substantially larger today than when I took office.”
Malloy suggested maybe one of the goals the group should have is “breaking through the knowledge block.”
He said the commission needs to put things in context and it needs an understanding of what has been accomplished.
“They don’t want to understand it, or they want to look at the state as the glass that’s half empty,” Malloy added.
Cindi Bigelow, president and CEO of Bigelow Tea, said this commission has to get the legislature to make some pretty tough decisions.
She said if they don’t look at these so-called “fixed costs” then she doesn’t know how they can come up with a game plan that is “economically feasible for our state to be safe again.”
Office of Policy and Management Secretary Ben Barnes said he doesn’t think anything should be off the table, but they have to be careful about what’s driving Connecticut’s costs.
He said he doesn’t see how they change the pension promises the state made to employees hired before 1984. He said they’ve already reduce future state employee benefits twice in the past seven years.
At the same time, Barnes didn’t tell the commission not to look at eliminating collective bargaining. Republicans proposed getting rid of collective bargaining earlier this year as part of their budget proposal.
Former Rep. Patricia Widlitz, another member of the commission, warned members that developing a state budget isn’t like running a business.
“A business doesn’t have to worry about people who are homeless or children who don’t have access to educational opportunities,” Widlitz said.
The commission has until March 1, 2018 to make its recommendations to Malloy and the legislature.