And Now, the Campaign

Almost immediately after Governor Dannel Malloy and Democrats in the General Assembly had put their budget to bed, a Hartford paper noted that however much lipstick Democrats put on the budget porker it was in many important respects still a pig.

Another media resource noted that while the governor had indicated he had been faithful to his earlier promise to hold the line on taxes – but not, tellingly, on spending – the new budget, Mr. Malloy’s second, placed new limits on tax credits, extended expiring taxes, boosted the gasoline tax 4 cents per gallon, drained from the transportation fund $120 million collected at the pumps during the last two years, depositing the money targeted for transportation needs into the general fund, resorted to $550 million worth of fund raids to plug holes in the budget, borrowed about two thirds of the $1.2 billion necessary to convert to a GAAP accounting system and shifted a little more than $6 billion of Medicaid spending from a constitutional capped budget so as to draw down an otherwise embarrassing deficit. 

And so the budget session ended -- in magic tricks of a kind once derided by Mr. Malloy and the Malloyalists.

On to the campaign.

The first campaign pitch of the season was delivered by Mr. Malloy at the close of the session. The closing session of the General Assembly usually ends with a love fest among incumbent legislators, both Democrats and Republicans, who fetch from it bragging rights useful to them in upcoming campaigns.

This year was different, frostier some have noted. Those who pay for the legislative bills may want to applaud the last day of the legislative session. Mark Twain, were he alive – and even dead he is livelier than most people in Connecticut who write about politicians – certainly would have reason to rejoice. It was Twain who said “No man's life, liberty, or property are safe while the legislature is in session.”

On the last day of the legislative session, the Bureau of Economic Analysis reported that Connecticut had come in dead last among the 50 states in economic growth, a measure of the combined total of goods, services and salaries, the state’s equivalent of the nation’s Gross Domestic Product (GDP). Connecticut’s Gross State Product (GSP) fell by 1 percent in both 2011 and 2012, the only state in the nation that had experienced such a dip as well as a painful downward revision from last year’s estimate of 2 percent growth.

Democrats pronounced their budget plan a success and loudly patted themselves on the back, brushing aside a report from the state’s non-partisan Office of Fiscal Analysis that had projected, only moments after the General Assembly adjourned, a $712 million gap in the first year of Connecticut’s new budget. Mr. Malloy, whose budgets have consistently been short by hundreds of millions of dollars, pointed out that the economy was not static but dynamic: “They're predicting deficits assuming that all conditions remain the same. I think what we've shown fairly broadly in this administration is that conditions don't remain the same. We're eliminating waste. We have numbers built in the budget that in fact do that."

Ah yes -- the numbers.

Comptroller Kevin Lembo this year submitted to the General Assembly a bill that would throw windows open on the numbers and expose to public view the hundreds of millions of dollars the state spends every year in economic assistance and tax credits putatively designed to promote economic development and job growth. His legislation, the Comptroller said, “would have established key transparency and open government measures related to these dollars.” Although Mr. Lembo’s sunshine bill survived the House, it died from inattention on the floor of the Senate, crushed by the forces of darkness in the General Assembly that prefer a gloaming in which numbers might more efficiently be fudged. Mr. Lembo, it should be mentioned, is the only Democrat in state government whose numbers have been consistently correct.

When legislative gate keepers Senate President Pro Tempore Donald Williams and Majority Leader Martin Looney were asked why they didn't call the bill for a vote, “Williams and Looney,” Jon Lender of the Hartford Courant reported, “mentioned a number of factors, including time, lack of an urgent need, and what they characterized as only lukewarm support by the office of Gov. Dannel P. Malloy.”

When politicians find they cannot control the course of events, they more strenuously seek to control the flow of information, the better to create politically palatable fictional narratives – sometimes called campaigns. In a state in which competing parties have been neutered, fictional campaign talking points are rarely effectively rebutted by a somnolent politically compromised media. Some few reporters in the state stand out as exceptions that prove this rule, but there are far too few of them.   

The state Republican Party enjoyed two brief bright moments of bipartisan conviviality a short time ago when Republican votes were needed to pass a gun restriction law. The two parties came together a second time when Mr. Malloy needed Republican assistance in plugging an ever recurring hole in his first budget during a special session. After this bright dot of bipartisan sunshine, both the governor and Democratic legislative leaders, brought down the now familiar iron curtain when, for the second time, Republicans were shooed out of the room during budget negotiations.

The doleful Bureau of Economic Analysis report is more than a report; it is a marker of the state’s destiny. And the state’s swollen budget is also a directional marker. Budget wise, the state has returned to 1991, the date at which a state income tax was implemented to put Connecticut on a firm and permanent economic footing. Because spending has tripled since that auspicious date, the foundation has given way. The state is progressing backwards. Our destiny points downward, the usual direction of a one party operation. Darkness, secrecy, shady backroom dealings and the politics of the shadows has always followed in the uncontested rut of the one party state.

Why Taxes Will Be Raised

A business reporter for a Hartford newspaper writes in an above the fold, front page story,“In An Era of Fiscal Crisis, Malloy Has Few Places To Run,” that “Malloy's budget chief issued a firm statement in writing: ‘The Governor will NOT propose tax increases as a solution to these challenges.’"

The “challenges” are a budget deficit in Governor Dannel Malloy’s first budget of $362 million, a figure that will escalate in coming weeks, and a future projected deficit of $960 million per year in each of the next three years. Connecticut’s total state debt – including pension fund debt of $60 billion and $20 billion in bonded debt –is the third highest debt per capita in the United States and represents about 40 percent of the state’s Gross Domestic Product (GDP).

The business reporter – and, indeed, most reporters in the state – was much impressed that Mr. Malloy’s budget hawk, Office of Policy Management chief Ben Barnes, had put the governor’s pledge in writing. And of course that imposing“NOT” in such visible caps strongly suggests Mr. Malloy’s strenuous aversion to tax increases. And yet, though reporters in the state now have in hand a WRITTEN pledge that the governor will NOT propose tax increases, many political watchers are riven with doubts.

If taxes are not increased, they reason, how will Mr. Malloy discharge such a large and imposing deficit?

None of the conditions to which Mr. Malloy has attributed the state’s metastasizing deficit – larger Medicaid payments, the continuing evisceration of the nation’s economy, the near certainty that all of Europe, with the possible exception of Germany, has entered a double dip recession – will change substantially within the next fiscal year. It took Connecticut a full ten years to recover the jobs lost in the preceding soft recession beginning in the early 1990’s; and the current recession – marked by increased government spending, higher taxes levied on entrepreneurial investment and the Dodd-Frank regulatory Octopussy – is certain to last longer.

In addition, Mr. Malloy seriously hobbled himself when he made in his first budget an offer to state union workers they could not refuse. In return for dubious saving, Mr. Malloy offered SEBAC, a union coalition authorized to negotiate contracts with the governor, salary raises of three percent each year nine years out, a dealcharacterized by retiring State Senator Edith Prague as one that unions would be nuts to reject. When the unions accepted the deal, they removed an important tool from the governor’s tool box. At this point, Mr. Malloy can only realize significant cost savings from state workers by abrogating contracts – not likely.

Such a move would require co-operation from a General Assembly dominated by progressive Democrats.

Indeed, discharging the bulk of the state’s continuing budget deficits, not to mention Connecticut’s alarming pension liability deficit, requires an internal assent from majority Democrats -- ideological prisoners of a progressive ideology that has failed most conspicuously in Europe --that likely will remain stillborn.

Would the “firm statement” issued by Mr. Barnes on Mr. Malloy’s behalf have presented a less firm commitment to spending reductions had Mr. Barnes chosen to emphasize a different word in Mr. Malloy’s categorical imperative: “The Governor will not PROPOSE tax increases as a solution to these challenges."

This rendering leaves open the possibility that progressive Democrats in the General Assembly, having rejected Mr. Malloy’s no-tax-increase intention for the upcoming special session called to liquidate the last fiscal year’s budget deficit, will then PROPOSE at some point tax increases designed to discharge an accumulative deficit of some $3 billion, give or take a few hundred millions, in the new fiscal year.

It has been said that Mr. Malloy will need Republican cooperation in the special session to enact savings that accomplish his intention –to discharge last fiscal year’s deficit without raising taxes. The governor’s intention with respect to the new fiscal year’s budget, which carries a much larger deficit, is usefully ambiguous.

Republicans in the General Assembly no doubt will recall they were unceremoniously stiffed in the earlier session that now has given birth to a $362 million deficit. Mr. Malloy did not need Republican good will to arrange his deficit producing first budget, which included the largest tax increase in Connecticut history, and Democrats were on the whole delighted to see Republicans playing the fool. Nor will the governor need Republican support in the creation of his second fiscal year budget, which may entail similar Potemkin Village savings and yet another massive tax increase. Republican leaders in the General Assembly should prepare now for the possible stiffing – before they negotiate with the governor to liquidate in special session the Democrat’s first imbalanced deficit ridden budget.

To do otherwise would be to play the fool most progressives in the dominant Democratic Party believe Republicans to be: Fool me once, shame on you; fool me twice, shame on me. There are some happy signs that voters, already stung by massive tax increases, will not during the next elections be inclined to suffer fools gladly.