Malloy Defends Jackson Borrowing & Fiscal Decisions
by Christine Stuart | Jan 30, 2012 1:36pm
(9) Comments | Commenting has expired
Posted to: State Budget
The state Bond Commission agreed Monday to borrow $291 million to help Jackson Laboratory construct a research lab on the University of Connecticut Health Center campus in Farmington.
The genomic research laboratory based in Bar Harbor, Maine struck a deal with the state, which the legislature approved in October, to create and retain 300 jobs by its 10th year of operation. It will also receive $99 million in research funding and a lease on 17 acres of land, which it can buy for $1 from the state once it creates 600 jobs in Connecticut.
The Bond Commission voted 8-2 in favor of the proposal. The two Republican members of the commission voted against it.
Sen. Andrew Roraback, R-Goshen, who voted against the bonding, said using basic math he calculates the state will be spending $986,950 per job.
Gov. Dannel P. Malloy told Roraback that this is not about the 300 jobs, just as building a university is not about the people employed by it.
“It’s about the future,” Malloy said. “It’s about the building of a bioscience initiative in Connecticut in response to a very clear warning shot that was fired across our bow when Pfizer moved 400 jobs.”
He said Pfizer left for Cambridge, Massachusetts because Connecticut failed to invest in the infrastructure necessary to support their ongoing efforts. He said it seems to be a common theme he’s heard time and time again, whether it’s bioscience of precision manufacturing.
“I understand the question. I actually understand the political argument,” Malloy told Roraback. “But I don’t accept the question as properly stating the level of investment Connecticut must engage in if we are to be competitive with New York, New Jersey, Massachusetts.”
Roraback said he didn’t intend to engage Malloy in a debate, but he wanted to gauge the state’s investment in a private facility and whether other states had offered anything comparable to what Connecticut offered Jackson Laboratories.
Department of Economic and Community Development Commissioner Catherine Smith told Roraback she’d be happy to provide him with that information. She added that most other states were offering what amounted to grants, while Connecticut is offering a structured package, which includes clawback provisions should Jackson Laboratories fail to meet its job creation goals.
Rep. Sean Williams, R-Watertown, who voted against the deal, said he continues to maintain that reducing regulations, taxes, and energy costs will help create jobs faster than big government investments.
However, Williams also said he does believe the practice of past Bond Commissions has gotten the state into the fiscal mess it’s in today.
Fiscal Decisions of the Past
Following the state Bond Commission meeting during a more than 16 minute press conference, Malloy apologized for celebrating a little bit when asked about the conflicting fiscal information regarding the state’s budget outlook.
News that state employee pension savings would fall about $3.1 billion short Friday night was just the second to two news items last week, which pitted the Malloy’s Office of Policy and Management against the legislature’s nonpartisan Office of Fiscal Analysis.
Malloy offered to put the differences over the state’s fiscal woes in perspective.
“We had Republican governors in this state for 16 years in a row,” Malloy said. “They ran up our debt. They brought us really to a point of downgrading our bonds. They entered into transactions, which required us not to fund our pensions properly.”
Connecticut has one of the worst funded pension fund in the United States, and two years before Malloy became governor, former Gov. M. Jodi Rell struck a deal with the unions to delay a $315 million payment to the state employees pension fund in order to help balance the budget.
“I came into a situation 13 months ago facing the largest per capita deficit in the nation, with one of the worst funded state pension plans in the nation,” Malloy said Monday. “A contract with our employees that had gone unadjusted for the better part of a generation.”
He said it was Republican governor’s who locked the state into a pension system which would have required it to make four times the normal annually required contribution the current $920 million contribution.
“I told you all that I was going to work on that issue, along with education, and jobs to a great extent,” Malloy said.
More than a year later, Malloy said 9,000 have been created, unemployment has declined, and “now the Republicans want to engage in a debate on how many billions of dollars I’ve saved the taxpayers of the state of Connecticut.”
“I’ll have that debate with them until the cows come home,” Malloy said. “Because the reality is we are saving billions of dollars.”
Asked about if Moody’s Investor Services downgrading of Connecticut’s bond rating will impact the millions of dollars the state Bond Commission agreed to borrow Monday, Malloy said “not necessarily.“
He said when United States’ bonds were downgraded the next offering was at a lower percentage interest rate than previous bond sales “because there is a fair amount of flight to safety.”
He said every factor Moody’s commented on in its report “pre-dated my administration.”
“Now I would argue we deserve more credit for the steps that we have taken, and by the way in changing our outlook they gave us credit for that,” Malloy said. “But we are in an environment where rating services are for lack of a better term ‘covering their backside’.”
Tags: Gov. Dannel P. Malloy, Jackson Laboratory, State Bond Commission, Republican
(9) Comments
posted by: one-mans-voice | January 30, 2012 3:14pm
How long is the Press going to let Malloy get away with “My predecessor caused this”? It is getting very old.
posted by: Disgruntled | January 30, 2012 4:04pm
Rell as a banshee,Rowland as…well,he was in fact a demon and a felon… but DAN BLAMING republican predecessors while not mentioning that the democrates controlled the purse strings is disingenuine at best.
Dan reminds me of a liberal version of Ronald Reagan or Richard Nixon. Borderline crazy and tending towards absolutism in his approach to just about everything.
Shouldn’t he be someplace important today and NOT in Hartford?
Know this—Dan will declare budget victory no matter what the numbers tell us.
posted by: Matt W. | January 30, 2012 5:04pm
So in summary: (1)Its not Dan’s fault. Someone else created the problem. This is partially correct. (2) The soulution is to borrow and spend more money on non-critical infrastructure projects without regard to jobs. Not sure that’s gonna work.
Unfortunately, because it was partially correct, this is probably the smartest thing Dan has said as governor. That’s 2 points! Good Boy!
posted by: ... | January 30, 2012 5:25pm
You use basic math for basic situations, not when indirect employment (from construction services, building maintenance services, to secondary jobs from 300 high income earners spending on other goods/services within the state) are substantial in the totality of a project such as the Jackson Laboratory and Bioscience Center.
I’m certain Roraback doesn’t want this to fail, and he vocally stated he didn’t want to come off as pessimistic, but his voting record does promote an almost ridiculously high thresh-hold for success to gain his approval. I just hope the projects he has without debate voted on in past bond commission meetings (which easily aup to, if not exceed the total of this singular piece) were given the same standards.
posted by: perturbed | January 30, 2012 8:48pm
Just one more example of transferring state tax money from public coffers to the private sector. It’s a direct, mainline transfusion. Nothing complicated about it.
I’m truly baffled how we can possibly allow this sort of corruption to continue.
Either free enterprise works or it doesn’t. The notion that the costs of running a business should be shared with the public, but the profits must be kept private is ludicrous. (Don’t let the “non-profit” designation fool you—there are surely people at the top profiting greatly.)
Any way you slice this deal, the state is taking on enormous risk with this outlay of cash.
Where’s the part of the deal where it says the taxpayers of Connecticut have the potential to directly share in the profit for agreeing to take this enormous risk?
Public costs, private profit. Not a good combination for state residents. But Malloy is making this sort of direct transfer of wealth—upward—the hallmark of his administration.
—perturbed
posted by: Reasonable | January 30, 2012 8:56pm
Gov. Malloy continues to “spend the state blind!”
Like we needed more deficits, and more taxes. Sen. Roraback says the state will be paying $986,950 per job.
Thus is fiscal insanity! Unfortunately, Malloy and his Democratic legislators—are doing anything they like—and it’s not good—for the people, business, and the State of Connecticut.
We are getting buried by the politicians we elected.
posted by: UConnJim | January 31, 2012 10:05am
Malloy is certifiable. I guess this is what we should expect from a Fascist who stole the election. Whenever the heat of questions are put to him, he addresses them (like our president & his role model) with the childish demeanor of “I didn’t do it, Johnny Rowland did it, whaaaaa!” Grow up Malloy. You are the one who is involved in the crony-capitalism. You are using our hard-earned tax dollars to buy union labor votes. Your budgets are a complete failure despite your petulant use of deflection. You feel impervious to ridicule because the main stream media does not do its job since they’re aligned with you or in your back pocket.
Meanwhile, the unemployment rate is only decreasing because people have exhausted their 99 weeks and fallen off the roles. Small businesses are shuttering their doors forever or moving out: My-Car in New London, Grote & Weigel in Bloomfield, Park Electromechanical in Waterbury. I guess these businesses don’t count except for the taxes you and you Democrat looters steal from them. How much more are you planning to abscond with from our pockets?
posted by: Noteworthy | January 31, 2012 10:43am
The reason why Jackson Lab is coming here is because it’s Christmas and no other state including their home state of Maine, would give them what they wanted. But our free spending Dan the Tax Man Malloy using his twisted and less than truthful logic rides in to save the day. Pfizer left for lots of reasons and one of the biggest, is the high cost of doing business here.
Malloy likes to blame republic governors while the legislature spent the money; fought cutbacks; fought bringing fiscal sanity. Hells bells, the legislature couldn’t even whack employees of members who lost reelection. Some day, perhaps Dan Malloy will learn to just stick to the truth and the facts.
posted by: ... | January 31, 2012 12:09pm
Too bad there seems to be a huge misunderstanding of state debt v. deficit here. The bonding commission is exactly that, ‘bonding’ monies that are payed off over a period of time. It is why both Roraback and Williams, without any opposition, voted for bonding on every other item on Monday’s agenda but this project. Therefore a bonded project is generally considered investment, not this rhetoric-backed ‘free spending’.
But then again, constricting an slowly recovering economy with no spending and enacting high cuts is a perfect way to re-employ the thousands still without work in CT, adding onto the unemployment payment rolls. Even Tom Foley (the other candidate of 2010) released white papers through his Policy institute recently that largely reflected many of Malloy’s strategies taken as Gov. thus far. Here you can read the report: http://www.ctpolicyinstitute.org/content/CPI_Jobs_Creation.pdf So it is really tough for me to see whining about ‘stolen elections’, when the best viewed strategies of a Republican candidate’s policy group are being taken by Democrat Governor.