Malloy Budget Passes Senate

Alleging that the budget that passed through the Connecticut state senate would lead to job creation, the ultimate goal of Democrats in the General Assembly, Gov. Dannel Malloy, seemingly pleased that his budget sailed through the senate without serious revision, thanked Senate President Don Williams, Majority Leader Marty Looney, Appropriations Chairman Toni Harp and Finance Chairman Eileen Daily in particular. “They took the budget I proposed, they made it better, and they passed it,” said Mr. Malloy in the following press release:

“The Senators who voted for this budget early this morning should be commended for making the tough decisions necessary to begin the process of getting Connecticut’s fiscal house in order. That was a tough vote to make, but it was the right vote to make. It was a vote for an honest budget, one that’s balanced with no gimmicks, and one that will stabilize the state’s finances and lead to our ultimate goal: job creation. I’d like to thank Senate President Don Williams, Majority Leader Marty Looney, Appropriations Chairman Toni Harp and Finance Chairman Eileen Daily in particular. They took the budget I proposed, they made it better, and they passed it.”

The budget, which includes the largest tax increase in state history, passed the senate by a narrow margin of 19 to 17, three Democrats -- senators Joan Hartley of Waterbury, Gayle Slossberg of Milford, and Edward Meyer of Guilford -- voting against the measure. The marathon debate on the budget ended at 3:00 in the morning. The $40.2 billion two year budget increases spending by 2.14 percent in the first year and 2.32 percent in the second year.

Republicans, who had no hand in shaping the budget hammered out by Democrats behind closed doors, said the tax increases were too high and would produce a surplus of $1 billion in the span of two years. Democrats answered that the surplus is needed to pay off debt and replenish the “rainy day fund" depleted by former Governor Jodi Rell and the Democrats, who have habitually voted for a tax increases they knew were too high. Ever since the income tax had been written into law, Connecticut’s Democratic dominated legislature and its three previous governors have used frequent billion dollar surpluses to boost an ever increasing level of spending.

One need only imagine a drunken sailor in a bar staring with steely determination at a pretty woman to have perfect picture of the effect surpluses generally have on high spenders in and outside the state legislature.

Mr. Malloy was roundly denounced by Republican leaders for having cut them out of the budget decision making process.

Noting that Mr. Malloy had dangled before them a promise of bi-partisan cooperation on the budget, Republican leader Larry Cafero concluded that the governor was “unwilling to compromise, unwilling to listen, headstrong, and not willing to be flexible. It's his way or the highway.”

Sen. Steward McKinney asked pointedly during debate on the budget, “How can you be open for business when you have a 100 percent increase on the corporate surcharge? You cannot preach and talk and scream and say we're open for business and increase the corporate surcharge. At some point, the talk is hollow and meaningless.''

Mr. Malloy’s aversion to dealing with minority Republicans in the General Assembly is reminiscent of the strategy employed by President Barack Obama in pushing through a veto proof congress contested measures that much of the country disapproved of. In a subsequent election, many of the congresspersons who hanged together with Mr. Obama later were hanged separately in the mid-term elections.

Prior to the passage of his budget in the senate, Mr. Malloy, seeking to distinguish himself from his Republican contemporary in New Jersey, Governor Chris Christie, presented his tax increases as fair and equitable. Amid measures designed to attack spending, Mr. Malloy had deployed “a new way.” Mr. Christie and, surprisingly, Democratic Governor of New York Mario Cuomo both had submitted budgets that contained no tax increases. Mr. Malloy’s budget has a massive doughnut hole in it. Although the Democratic dominated senate passed Mr. Malloy’s plan, the budget was not in balance at passage because state unions, called upon by Mr. Malloy to give back $2 billion in order to balance the budget, are still negotiating the give backs with the governor’s office.

Over in Massachusetts, once derided by nutmeggers as Taxachussetts and now called Wisconsin East, the Democratic denominated House overwhelmingly pushed through a measure that considerably reduces the political heft of unions by eliminating collective bargaining.

“It’s pretty stunning,” the president of the Massachusetts AFL-CIO said. “These are the same Democrats that all these labor unions elected.”

The most accurate way to describe Mr. Malloy’s budget is – not stunning: It raises taxes, does not touch the wellsprings of public debt, provides the usual billion dollar surplus and is has not produced fevered objections from the free spending left, with the possible exception of uber-liberal Jonathan Pelto.

Malloy’s Pig In A Poke Tax Plan

Moments after Governor Dannel Malloy and majority Democrats in the General Assembly had more or less signed off on the governor’s tax plan, a half-budget that includes doubtful savings from state unions, minority Republicans asserted that the so called budget could not be passed in its present form by the legislature because the state constitution requires a balanced budget.

The Democrat’s tax plan might be in balance if the $2 billion the governor hopes to recover from state unions were assured. But negotiations between the governor’s office and Connecticut’s fourth branch of government -- Larry Dorman, the chief spokesman for SEBAC, the union coalition in negotiations with the governor -- have not been concluded, and no one in the Democratic dominated legislature may know at the point at which they will be asked to vote on the Democratic tax plan whether the anticipated savings have been secured.

Statements made by Mr. Dorman and Mr. Malloy suggest that a quick resolution is not in the offing. The state, said Mr. Dorman, hasn’t sufficiently squeezed millionaires and the CEOs of major corporations in Connecticut that have not yet sent jobs out of state in an attempt to lower business costs.

"We are pleased,” Mr. Dorman said, “to see that the budget has seen some improvements, such as asking the very rich to pay more of their share, as opposed to other ideas, like eliminating the property tax credit, that further hurt struggling working and middle-class families. We would still like to see much more asked from big multi-state businesses and the very rich who have so far been the only ones to share in our state's so-called economic recovery.''

Concerning negotiations with Mr. Dorman, Mr. Malloy resorted to a papal metaphor: “There’s no white smoke coming out of the chimney now, but there is no black smoke, either.'”

Meaning: Mr. Dorman has not yet capitulated to the governor’s demand that the union members he represents cough up 4$ billion in savings. It is very much an open question whether the Democrat dominated General Assembly will vote favorably on Mr. Malloy’s tax plan if the concession is not in place when the matter comes up for consideration.

The so called budget voted out of two important tax writing committees ASSUMES cost savings from union concessions in advance of the concessions; the savings have yet to be realized. Without a finalized, signed on the dotted line agreement between the governor and the heads of state unions, legislators who vote affirmative on Mr. Malloy’s tax plan will be voting for the proverbial a pig in a poke.

Though there are important differences between Mr. Malloy and Mr. Dorman, the negotiator for SEBAC has not yet pulled out of the talks. Mr. Dorman believes that the governor and “those struggling middle-class families who happen to work for the state” ultimately will find common ground – presumably after Mr. Malloy’s tax plan, which now contains a very iffy placeholder savings from union concessions, has been written into law.

On the other hand, the cost savings negotiations with unions will be much easier for Mr. Dorman after the so called budget – in the absence of the $2 billion in concessions from unions, it’s really a tax plan – has been etched in stone, because in that case the governor will have surrendered to Mr. Dorman his most valuable bargaining chip: the possibility that, absent a union agreement, the governor may either pass on the pain involved in cost savings to municipal union workers to recover savings lost through failed negotiations with Mr. Dorman or simply remove tax increases from the bargaining table until such time as Mr. Dorman is more amenable to pain sharing.

Mr. Malloy’s tax plan has been sent to the floor by two obliging committees, one of which, the tax-writing finance committee, showed Sen. Edward Meyer the door when the upstart protested that he would like to see the pig in a poke before voting upon it. Mr. Meyer, a fiscal conservative Democrat, told his colleagues on the committee that he opposed the package because legislators were “virtually ignorant” of the details concerning union concessions. And then, approaching heresy, Mr. Meyer said, “This budget history now requires our focus on responsible spending before we entertain an historical package of tax increases, particularly when we see that those tax increases are not sunsetted.”

Sunsetted tax increases? Be thou anathema Meyer!

Mr. Meyer was quickly exiled from the finance committee’s Democratic caucus by co-chairwoman Sen. Eileen Daily of Westbrook. Having asked the committee’s other chairwoman, Rep. Patricia Widlitz of Guilford – his own state representative – to intervene on his behalf, Mr. Meyer was unceremoniously booted from the caucus. Winking at the pig in the poke, the ladies and gentlemen on the referring committees, having received their marching orders from pope Malloy, were in no mood to hear fiscal conservative dissenters talk truth to power.