OP-ED | New Deficit a Political Disaster for Malloy
So I guess I’m not going to get my fifty-five bucks from the state after all.
That rebate, which was a poorly-thought-out idea to start with, is dead in the face of a tidal wave of bad budget news and red ink. The surplus for this year has shrunk to a fraction of what analysts thought it would be in January, and next year’s budget is nearly $300 million short. The reasons boil down to far less money coming in than the administration predicted.
Options for fixing it are not great. We could end up with quick revenue fixes like keno (although the Democrats now appear to be nixing that particular item), budget cuts, the elimination of new and proposed spending, a raid of the Rainy Day Fund, and all kinds of budget gimmicks. The chances of getting out of this budget season without pain of some kind are slight. This does nothing, of course, about the massive projected deficits starting in 2016. Those can be measured in the billions.
It’s become clear that the fiscal crisis of 2011 was not actually solved so much as it was temporarily patched.
The politics of this are not going to be pleasant for the Malloy administration. Not only is the legislature, after a rather quiet election year session, stuck scrambling to deal with this with only a week left before the final bell, but convention season is right around the corner. The gubernatorial race is set to finally heat up after a dull winter.
First, Malloy loses the chance to give everybody a fistful of cash right before an election. Rebates are a nice sign of a state on the upswing, and having to withdraw that idea makes it look, correctly, like the state is suddenly sinking back into fiscal crisis.
Second, the Malloy campaign can’t make the claim that they turned a Rell deficit into a Malloy surplus anymore. “We turned a huge deficit into a smaller deficit” just doesn’t have the same kick. The 2015 deficit isn’t entirely the fault of bad policy, certainly some rotten luck plays into it. But the deficits for following years don’t have that excuse.
Republicans are already having a field day. “The bottom line is the state of Connecticut better off — the age old question — today than it was four years ago? The resounding answer by every fiscal indicator is ‘No’,” House Minority Leader Larry Cafero said.
So where do we go from here? There are two very painful truths that make for toxic politics, if you happen to be an incumbent.
The first painful truth is that the legislature and administration are abysmal at handling the state’s finances, and have been for decades. It doesn’t matter who’s running the show, there will always be a crisis at some point. The major problem remains the most intractable, namely that the state promised pensions, benefits, and salaries to state employees that it simply can’t deliver without raising taxes or slashing programs. Republican gubernatorial candidates are already calling for state employee givebacks.
If this seems familiar, it’s because it is: we faced this same problem in 2011, 2009, 2003 and many other years all the way back through the 1980s. A starting point may be 1986, when Gov. William A. O’Neill, the last Democrat to hold the governor’s office before Malloy, signed a bill passed by the Republican-controlled legislature giving teachers a massive, much-needed raise. Unfortunately, this bill was signed when Connecticut was riding a wave of economic prosperity. Once that prosperity ebbed in the late 1980s and early 1990s, the state faced both an economic disaster and a fiscal crunch from which we never really recovered.
The other painful truth is that we demand an awful lot from our government, but we don’t necessarily want to pay for it. It’s fine to cut state workers’ pensions — as long as we aren’t state workers! School cuts are great — just not in our towns. Cuts to services are fine — as long as the DMV nearest us doesn’t close. And cutting back transportation funding is good — as long as those potholes on Main Street get fixed. We want to downsize our government, but we want to feel no pain from doing so.
A permanent fix to all of this is going to be hard to come by. Unions are in no mood for concessions after a bitter fight in 2011, and residents won’t be happy about a tax hike. Whoever wins the election this November is going to have some very tough decisions to make.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.