OP-ED | Budget Deal Winners and Losers
by Susan Bigelow | Apr 22, 2011 12:29pm
(14) Comments | Commenting has expired
Posted to: Opinion
In a burst of efficiency, the Finance and Appropriations Committees both approved a tax and spending package that Democrats and Gov. Dannel P. Malloy agreed to this week. The plan raises income, gas, real estate, hotel and other taxes, while cutting spending a bit less than the governor originally wanted. It looks like the state is on track to avoid a protracted budget showdown. Of course, there are still plenty of unanswered questions, like what will happen to the $2 billion in union concessions the budget deal relies on.
But, for now at least, there is progress on the budget. Who are the potential winners and losers?
Winners
Gov. Malloy – Connecticut’s rookie governor looks poised to win a major victory. The budget deal isn’t all that different from his original proposal, and the basic principles underpinning it are the same. When was the last time that a Connecticut governor proposed a budget and had it enacted relatively intact? For this state, that’s a big deal. Malloy is going to remain unpopular with voters for the foreseeable future, because the budget does raise taxes. This makes him an easy political target. But he should be able to take some pride in setting out a vision for the state, and following through. The big question mark for Malloy is what happens with state employee unions, though. Union concessions would probably be a victory for Malloy; mass layoffs or a restart to the budget process would not.
Democrats – Given the dismal track record of the Democrat-controlled General Assembly during the last two years of the Rell Administration, the fact that a budget deal is not only possible but early is refreshing. Democrats also seem remarkably united on this. There are certainly dissenters, and there will likely be plenty of Democrats who will vote against the final budget, but for a party that has had precious little unity this is a step forward.
Losers
Republicans - “When one party gets everything it wants that’s not the best outcome for the state,” said Sen. Andrew Roraback (R-Goshen) on the passage of the tax and spending plans. Roraback has to be incredibly frustrated. Voters punished both incumbents and Democrats during the last election cycle, but Republicans barely gained ground in the General Assembly, and couldn’t win a single statewide race or congressional seat for the first time in decades. Worse, in special elections held just after Malloy announced his budget, Republicans won only two of nine contested special election seats; an area in which they have previously done very well. Their budget, released as an afterthought earlier this week, has been roundly ignored. They’re right to complain that no one is listening to them in Hartford, because no one is. The big question for the party remains how to return to some kind of electoral relevance despite a registration disadvantage and a national party that is deeply unpopular in Connecticut. After Nixon resigned, one Republican Town Committee proposed renaming the party in order to get more votes. Maybe they should look into that.
Unions – So, say you’re a state employee union negotiating with the governor over his proposed $2 billion in concessions over two years, and then this happens. Now what? The options are suddenly a lot worse. They could either give in and let the governor extract the concessions, which labor leaders are understandably not thrilled about, or they could accept a smaller concession or nothing at all, which could lead to massive layoffs. Sure, anything could happen and union action might force the budget to fail, but then unions would get the blame from all sides. It’s hard to see how the budget deal doesn’t make the negotiations a lot more difficult for union leaders.
Unknown
Connecticut’s Economy – There’s been a lot of talk about how the budget will either a) utterly destroy or b) not do too much damage to Connecticut’s already fragile economy. Republicans are convinced that the state is even more doomed than it already was, while Democrats think their budget helps protect the middle class. There are plenty of theories about what will happen. If and when the budget passes, we’ll finally get to find out… maybe.
Tags: government, Democrats, Republicans, Rell, Malloy
(14) Comments
posted by: Roger Sherman | April 22, 2011 5:32pm
Looks like towns and cities were the big winners. Aid was level-funded plus over $40 million in new grants going out!
posted by: CitizenCT | April 22, 2011 9:15pm
Add to the losers list:
1. CT residents who pay taxes.
2. People hoping to find a job in CT.
3. Property owners who will have their property taxes hiked after Malloy fails to extract $2B from unions
posted by: ... | April 22, 2011 9:39pm
While Republicans certainly lost out on the majority of their budget proposal, I don’t think they are total losers.
When they released their Common Sense for CT campaign in the depths of winter, they were fighting for consolidating agencies. Malloy gave them a 30%. It has minimal short term (2yr) cuts to the budget, but has long-term taken a strong step towards curbing agency spending.
Then there are the union concessions. Obviously the recent union bashing is mostly conservative, with moderate liberals at play as well. The fact that Malloy is pushing for that 2 billion and plans to see it one way or another is something they are definitely cheering about, but behind the corners.
Why? Because it wasn’t their idea, or if it was Malloy has taken it. And so now the Republican caucus have little to promote as saying “this is our impact on the budget”. They won’t vote for it unless they can say “this provision is ours and what makes this budget bill great”. Some moderate/liberal conservatives may vote for it in the end, but very few at least projecting the sentiments of this exact time to the expected vote date.
This hurts incumbents who may be challenged by more lively upstarts, and it emboldens freshmen to stick to the party line even harder than before.
So really if political divisiveness is a result of this budget in the long-term, legislative compromise (ironically) could be a loser of this budget.
posted by: wmwallace | April 23, 2011 2:45am
The real losers are the taxpayers of Connecticut. No matter how you spin it.
posted by: hawkeye | April 23, 2011 11:46am
Roger Sherman: There are no big winners with Gov. Malloys’ budget. And taxpayers, all took a severe hit—as Malloy was too weak, as Governor—to put a hold on new taxes!
And the $40 million in new grants, only adds to our leading—over $19. billion in bonding indebtedness.
You appear to have voted for Malloy—and are trying to console youaelf —for doing so?
posted by: Terry D. Cowgill | April 23, 2011 5:45pm
Susan, I essentially agree with most of your analysis. I might quibble, however, with your assertion that in the 2010 elections “the Republicans barely gained ground in the General Assembly.”
When I interviewed Sen. Roraback on my TV show in December, he lamented that the GOP had not done as well as he had hoped, but he did say his party had made sufficient gains in both houses to wipe out the Democrats’ veto-proof majority. Did they lose that ground in the special elections you cited, or did Dems already hold the seven seats they won?
posted by: ... | April 23, 2011 8:54pm
If you thought for a moment hawkeye that Malloy’s budget wasn’t going to have new sources of revenue (taxes), you were completely oblivious to the campaign he ran last year.
It was pretty much a guarantee (and a reason why the race was so close) that he was going to use every method available (including new or progressive taxes) to eliminate the deficit. Its is hard for anyone to call someone who is finally taking responsibility for our fiscal mess and using a diverse response weak.
posted by: hawkeye | April 25, 2011 2:03pm
JonessAC12: I knew that that the then “Dan Malloy” was going to push sources of revenue (taxes) when he ran for the Governors’ office. This is why I did not vote for Malloy.
However you, apparently voted for Malloy, as you were impressed by the prospect of his promised taxes!
You, and all of us—are now subject to Gov. Malloys’ progressive taxes.
You seem to reflect—that you are a dubious winner in this charade.
Personally, I was more impressed with the Governors’ of New York and New Jersey—who did not give their constituents - new progressive taxes to pay!
posted by: Noteworthy | April 25, 2011 2:53pm
There are plenty of losers in Malloy’s budget, especially the middle class who are getting slammed. There is a single winner. The welfare crowd. They now get more money, money that is coming from the rest of us who are worried about hanging on to our homes and our businesses. How very progressive.
posted by: ... | April 25, 2011 7:48pm
Yea no worries hawkeye for those residents (of NY/NJ). I’m sure you will ignore it as always, but they are getting their new taxes in the mail in a year or so in the form of raised property taxes (as a result of cut aid to their towns/cities). When towns loose aid, they have to find ways to pay or cut themselves, and many are going to choose taxes over cuts.
I’m not happy about new taxes and am in no way a winner here. It is hard to find a winner here except for the steps responsible budgeting. And a big loser is out overwhelming debt which we can begin to fight in the coming years.
What I’m happy about is that someone is solving this issue. And yes I did vote for Malloy (sound dramatic music).
I didn’t vote for someone who tried to gimmick his campaign by saying he would not raise a single tax, when he would have done the same as Cuomo or Christie. I’d Rather have bitter medicine that speaks the truth and heals our state than Foley’s dose, which would have most likely backtracked and needed taxes, as well as bring gridlock to our Capitol.
posted by: wmwallace | April 26, 2011 1:35am
@JonesAC12 Again you miss the main point. The government is not living within their means and is going to tax us more. The upcoming budget will be larger by at least $300 million dollars from this past budget. My budget for my business has been flat lined for the past two years. Yet our government just continues to grow and grow.
posted by: ... | April 26, 2011 5:21am
Actually I disagree with some of the new spending, but much of it is adjusted cost increases that are difficult to touch. Others are not (as I have explained my less than satisfied opinion of the EIC at this time).
When you look at a 3.5 billion dollar budget deficit, and 2 billion in union concessions or layoffs is down the road (and I will mention here Malloy has said several times recently to the media if the 2 billion isn’t met in negotiations layoffs will occur), atop already roughly 800 million sought in cuts and consolidations from the rest of the government.
That makes 2.8 billion out of 3.5 in deficit reduction for this budget of roughly 19-20 billion dollars. If you take the numbers just from the deficit being solved, 80% of the wiping the current deficit these next two years is the result of cuts.
Well our deficit has been growing for the past 10 years with the budget.
Although actually wmwallace if you look at state spending overall, the most considerable spending did not occur until the two budget cycles right before the recession. It is a spending problem, but a majority of it found itself in the wrong place at the wrong time.
I do respect your opinion/argument wmwallace, but I do sincerely get the point at hand. And I understand aspects of government should be sent off to private industry to lessen our role on parts of society(BDL is a critical example). But I do get it. And I think you also get as a business owner the aspect of cutting so far you shut down aspects of the government would equate to in the private industry shutting down one of your production lines or cutting staff so low productivity barely breaks the ceiling.
Government can be run with business ideals, but not like your small 100 or less ones. 45,000+ workers (though expect reductions these next 2 years) is comparable to the largest corporations in our state.
posted by: hawkeye | April 26, 2011 6:27am
JonessAC12: You wanted and voted for Dan (The Tax Man)—and now—we are all stuck with the taxes you expected from him.
Enjoy your victory—and the taxes that go with it.
Many people, however, are not enjoying it!
posted by: wmwallace | April 26, 2011 2:57pm
If there is no growth in revenue then you cannot grow the government. Tax hikes that are coming will not help the the residents of Connecticut. It will hurt small business by added tax burdens and will lead to cutting back of benefits and or employees. Governor Malloy was suppose to help business in Connecticut and yet this will drive business elsewhere.