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OP-ED | New Deficit a Political Disaster for Malloy

by Susan Bigelow | May 2, 2014 9:10am
(14) Comments | Commenting has expired
Posted to: Opinion, State Budget

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.

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(14) Comments

posted by: Greg | May 2, 2014  2:35pm

There is no possible way to go from:
“The 2015 deficit isn’t entirely the fault of bad policy”

Then say:
“The first painful truth is that the legislature and administration are abysmal at handling the state’s finances, and have been for decades”

If “absymal” handling of the state’s finances isn’t “bad public policy”, then I’m not entirely sure what it is.

And nobody in this state should complain about the roads until they concurrently complain about the legislature and Malloy raiding the transportation fund to plug holes in the general fund.  Our 3rd highest gas tax in the nation doesn’t get us very far, and that is one prime example of poor public policy. 

If you voted for Malloy or any democrat in the legislature you have zero basis to complain about deficits.  Republicans certainly don’t have the answers either, but this one party rule hasn’t gone very well with the same familiar faces occupying the golden dome.

Democrats own the past four years and a good chunk of the decades prior with their lock on the legislature which was veto-proof at times.  The voters own it as well.

posted by: GBear423 | May 2, 2014  3:05pm

GBear423

Great column, tellin it like it is!
Honestly think this should be passed along to civics & economics students/classes to break open some discussion on the factors that lead to this.
Demonstrates clearly both sides of the aisle can and have lost sight of their stewardship of the Public Trust.

posted by: Dave391973 | May 2, 2014  4:29pm

The largest Tax increase in CT history didn’t work. Maybe it should have been larger? Maybe the Stimulus package should have been bigger too? Maybe if we taxed the richest 1% it would have covered the deficit better? Where are the adults in the room? Why do I follow a budget in my house at all? I should just borrow more money. *sigh*

posted by: Bluecoat | May 2, 2014  4:54pm

Has anyone opened that Suggestion Box Yet?
Wage Freeze?
Hiring Freeze?
Pension Reform?
Bi-Annual Longevity bonuses?
NO layoffs?
Credit Cards, Cell phones, Trips? State Cars?
Are all these things on the table?

posted by: Fisherman | May 2, 2014  5:25pm

...YA THINK?

posted by: StillRevolting | May 2, 2014  8:57pm

At this point, we are past Rowland, Rell, and Bush. Connecticut Democrats are completely responsible for this mess. Re-elect Malloy and watch him break his own record for the largest tax increase Nutmeggers have ever had to endure when the next budget crisis needs to be fixed two years from now. I’ll thank Greg for the reminder that the electorate will bring this upon itself if that proves to be our will in November. Don’t belittle the contributions made by state employees. Ask why their total compensation exceeds those having similar responsibilities in the private sector instead. Don’t just trash CT FastTrack. Ask if the ROI of putting that same money into pothole repair would be higher. Remove the association between state aid and personal initiative. Then, remove the need for a large percentage of those receiving aid to continue receiving it by creating a thriving economy. It would be the best if we could all just dig ourselves out of our corners and actually have the honest conversations that are required to achieve these aims. Meanwhile, here’s the simple math in terms of one-party rule for the fall election: One-party rule has dragged our state economy to the bottom of the barrel in most national comparatives and will leave it there if sustained without an effective dissenting voice in Hartford. We do not currently have an effective dissenting voice in Hartford. Democrats will, without question maintain control of the legislature after we fill in our bubbles. This combination turns out to be a very stark equation telling every registered voter in our great state that we simply can’t afford to choose Malloy again.

posted by: art vandelay | May 3, 2014  1:17pm

art vandelay

@Bluecoat,
I’ve presented several suggestion box prototypes to Malloy’s & Union Official’s offices where I was quickly shown the door.

posted by: art vandelay | May 3, 2014  1:21pm

art vandelay

@Susan,
I believe the last time Republicans had control of the House was either the late 50’s or early 60’s.  The last time Republicans held a majority in the Senate was during the Rowland administration.  There is not much a Republican Governor can do when the Democrats have veto proof majorities in both chambers.

posted by: Susan Bigelow | May 3, 2014  6:57pm

Art,

Republicans controlled both the House and Senate from 1985-87, as a result of Reagan’s landslide. This is when the teacher raise was voted in.

And while Democrats have often held large majorities in both houses, they have only recently—and rarely—been veto-proof. Also, the legislature only overrode a handful of Gov. Rell’s vetoes when they held a supermajority.

posted by: art vandelay | May 3, 2014  7:08pm

art vandelay

@Susan,
Thanks.

posted by: justsayin | May 5, 2014  3:16pm

New? Where have you been, nothing new here.

posted by: UConnHoop | May 6, 2014  7:36am

StillRevolting, well said.

posted by: ASTANVET | May 6, 2014  5:55pm

I can’t believe Susan wrote an article that i agree with… it’s official, that’s the seventh seal…we’re done! hahahaha.  Just a little joke.  Seriously, we can’t fix any with tricks or Keno - we have to fix it with hard work, and belt tightening.  No one likes to hear it when you have to cut back, because it sucks. it’s hard. it’s not fun, and you can’t bribe constituents (both sides) when you have no money.  We’re broke, as soon as we realize it, we’ll start fixing it.

posted by: Stan Muzyk | May 8, 2014  10:42am

You can fool some of the people SOMETIME—but Gov. Malloy is not fooling all of the people—ALL THE TIME.  It’s definately for a change of our state leadership. Enough is enough already. Voters must be focused for the future of our state on Election Day.