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.

Where’s My Surplus?

Below is an excerpt from the Office of Fiscal Analysis’ Overview of Governor Malloy’s Fiscal Year 2013 budget. Spending is increased, taxes are increased, the surplus all but disappears, consolidations produce no real savings, savings decrease and there is some confusing motion in the bottom line of the budget – none of which is good. Here’s hoping the relevant legislative committees read the report.

Highlights of OFA Synopsis of FY 13 Revised Budget Appropriations

Synopsis of Governor s FY 13 Revised Budget Appropriations Committee Hearing

February 9, 2012

1:00 PM

OFFICE OF FISCAL ANALYSIS

The following is intended to provide information on the Governor’s FY 13 Revised Budget for the Appropriations Committee as background for the OPM presentation. Since the budget was released only recently, we have tried to highlight the major areas of interest rather than provide a comprehensive analysis of the budget and revenue plan. Such analysis will be undertaken by the Committee with the assistance of OFA staff in the coming weeks.

I. OVERVIEW

Original FY 13 Budget Balance - The original FY 13 budget contained a $488.5 million General Fund surplus. Assuming the use of $50.0 million in funds for GAAP reserve and a projected decrease in FY 13 revenues (based on the January 17, 2012 consensus), the current balance for FY 13 stands at $299.8 million (assuming no change in bottom-line spending). The growth rate between the original FY 12 and FY 13 budgets is 1.3% (General Fund and all funds).

Governor’s Revised FY 13 Budget Balance - The Governor’s FY 13 Revised Budget increases spending by a net $313.9 million in the General Fund ($329.0 million in all funds). It also increases revenue by a net $15.7 million. When factoring in the loss of $138.7 million in projected revenue as a result of the January 17th consensus, the revised budget achieves a balance of $51.6 million in the General Fund. Assuming the use of $50.0 million in funds for a GAAP reserve, the balance is $1.6 million. The growth rate between the original FY 12 and the revised FY 13 budget is 3.1% (3.2% for all funds).

Lapses (Bottom-Line Reductions) - The original FY 13 budget contains $1.0 billion in various lapses (in all funds). Of this amount, $901.2 million relates to the labor management savings (Revised SEBAC 2011 Agreement).

The Governor’s revised budget: (1) eliminates the $901.2 million in SEBAC lapses (reductions) from the bottom of the budget, (2) moves $647.9 million of these reductions directly into individual agency budgets (see Appendix B for agency list), and (3) increases the existing Legislative branch lapses by $2.0 million, and (4) increases the Judicial branch lapses by $4.8 million.

Agency Consolidations/Program Transfers - The revised budget consolidates 13 state agencies into six agencies (five current and one new agency). This reduces the total number of state agencies from 59 to 52 (a 11.9% reduction). There does not appear to be savings or position reductions attributable to these consolidations. Detail on these consolidations appears within the “Financial Tables” section.

In addition, the revised budget transfers various programs and functions across several state agencies. A table listing the significant transfers of programs and functions between agencies along with the funding and associated positions appears within the “Financial Tables” section.

Office Of Fiscal Analysis To Malloy: Your Budget Doesn’t Compute

The guys and gals who work at the Office of Fiscal Analysis (OFA) are the “go to” people for legislators who do not carry an Encyclopedia Britannica around in their heads. Throw some number on the floor before them and they can tell you if the numbers are accurate or fictional. Even on a bad day, they can tell you how many angels fit on the head of a pin. And in our statistical age, when every “non-partisan” agency is connected at the hip to fiercely partisan politicians, the OFA is genuinely non-partisan -- in the way that math or water is non-partisan.

Having examined the estimated savings in the Governor Dannel Malloy-SEBAC budget, the OFA has found that 60% of the savings claims made therein are UNVERIFIABLE.

The bad news was brought to the attention of the general public by Keith Phaneuf of CTMirror:

“Nonpartisan legislative analysts say they can vouch for less than 40 percent of the $1.6 billion in labor savings figured into the next biennial budget, and are unable to assess the rest--more than $1 billion--because of unanswered questions or insufficient data, according to a memo submitted late Monday to the General Assembly.”

Not to worry, say the epigones of transparency in the Malloy administration and their Democratic chorus in the General Assembly, the savings are real. The Malloy administration paid a good chunk of cash to an actuarial consulting firm outside of state government – perhaps the first and last time the Malloy administration will outsource state business – to produce the figures they needed to show a balanced budget.

Then the massive budget documentation was dumped on the doorstep of the ladies and gents at the OFA for verification. No dice, said the OFA: “Please note that at this time we are unable to determine or verify the levels that are contained in these estimates in many cases," OFA Director Alan Calandro wrote in a memo to Republican House leader Larry Cafero.

No actuarial analysis had been offered to OFA to support a contention that $67 million would be saved by increasing penalties for senior employees who retire earlier than the normal age; OFA could not determine from the figures provided to them how much would be saved by a new hybrid retirement plan for higher education employees; the Malloy administration had not provided to OFA their assumptions in support of a claim that health care provision would save the state $245.9 million in two years; the OFA lacked documentation to support a claim made by the Malloy administration that a new Health Enhancement Program would reduce health care claims by 4 percent in the first year and 10 percent in the second; OFA intimated that the new health care plan, which relies on preventative services, might increase costs, figures not provided in the administration’s savings estimates. The OFA Memo to Cafero goes on and on, piling up doubtful “savings.”.

The OFA’s aspersions are regarded by Office of Policy and Management Secretary Benjamin Barnes as a “delaying tactic” to prevent speedy approval of the Malloy-Williams-Donovan-SEBAC budget. Mr. Barnes has acknowledged that some savings targets amounting to $345 million were of necessity poorly defined. The OFA could not affirm such savings because “information as to how savings were estimated has not been provided."

The OFA’s inability to verify the cost savings in the Malloy budget has not disturbed the  equanimity of Senior Malloy advisor Roy Occhiogrosso, who said, despite the OFA’s misgivings, that the Malloy administration and the unions were “confident in the numbers.” But then Mr. Occhiogrosso’s confidence is unbounded – even when he is told by Mr. Malloy’s OPM Director that $345 million of the reputed savings boosting his confidence is questionable.

The budget itself rests upon $1.6 billion in union givebacks that will not be given back until the budget has been passed by the union dependent Democratic Party cohort in the General Assembly, whose confidence matches that of Mr. Occhiogrosso.

This year’s $40 billion two year budget has a novel twist to it: The budget is pre-approved, which means the General Assembly will pass a bill that rests on unassured, assumed savings: Union have not yet approved contracts that include expected givebacks of $1.6 billion.

Following seven hours of debate, Republican Senator Andrew Roraback, a 17 year veteran of the General Assembly, offered an amendment requiring the Democratic dominated legislature to return in special session to vote on the SEBAC agreement. Addressing Lieutenant governor Nancy Wyman, Mr. Roraback said:

“It doesn't feel right, Madam President. If this bill passes, we will all drive blindly into the night, asking ourselves, 'What was it that we just did?'… I can't ever remember a time in the history of this body when we have pre-approved a contract change. ... Yet, we're ratifying something that is in the ether. ... I have never before seen anything that remotely resembles the process of this bill. ... It is customary for the horse to come first and then the cart.''

Mr. Roraback’s amendment was defeated, and confident majority Democrats in the legislature promptly voted in favor of putting the cart before the horse.