Killing Bi-Partisanship

Connecticut operates on a two year budget and makes adjustments in the budget’s second year. Currently, the General Assembly is addressing itself to the second year of Governor Malloy’s’ second biennial budget. During his years in office, Mr. Malloy and dominant Democrats in the legislature have never produced an appropriation and spending plan that bears Republican fingerprints.

Republicans viewed Mr. Malloy’s budget as a political document because, to say the truth, all budgets are political documents. Prior to passage, senate Republican leader John McKinney, running this year for governor, pointed to a “frightening lack of detail” in the single most important piece of legislation the General Assembly has considered in the new fiscal year. The Malloy budget plan will shape the destiny of the state for the next two years.

Mr. Malloy, it will be recalled, also shooed Republicans out of the room when he was assembling his first budget. Democratic leaders in the General Assembly pre-approved Mr. Malloy’s first budget. Mr. Malloy then negotiated contractual terms favorable to SEBAC, a state union coalition called by some Connecticut’s fourth branch of government, and the final product, altered in protracted negotiations, did not return to the General Assembly for approval before being signed into law by the governor. The Democrat dominated General Assembly, abrogating its constitutional obligation to vote on a substantially altered budget, had invested the first Democratic governor since William O’Neill declined to run for re-election with near plenipotentiary powers, an investiture of powers not uncommon in other one party states.

The back-room budget negotiations, conducted entirely in private, ought to have alerted members of Connecticut’s left of center media that neither public notice nor bi-party participation is necessary in a one party state. The Malloy administration has become the most secretive back-room directed government in living memory. But then, everybody knows that all one party governments do this sort of thing with impunity: The one party state gets away with tucking dead bodies under the rug because there is no political antagonist in the room to report the attempted concealment.

This time around, the best laid plans of Malloy and company were torn asunder by a collapsing private marketplace. Although the national recession ended in 2009, here in Connecticut, following the largest tax increase in state history, the malaise marches on. While the nation has gained back about three quarters of the jobs lost during the last recession, Connecticut has recovered only half. Noting that Connecticut “lost its chief marketing tool” with the imposition of the income tax in 1991, a recent University of Connecticut study, “The Connecticut Economy,” recommends the elimination of the state’s corporate income tax. When a tax is reduced in Connecticut, it is generally supposed by all tax consumers that the hole punched in the budget by tax reductions cannot be backfilled with spending cuts. Ergo: taxes may NEVER be cut.

Connecticut’s collapsing budget is heavily reliant on taxes reaped from financial institutions, and progressives in the state, perpetually on the hunt for new tax resources to plunder so they might fund improvident spending, would like nothing better than to take a larger tax piece out of the hides of precisely those financial firms that have been holding the state’s head above water during President Barack Obama protracted recession. So far, Mr. Malloy has been able to repulse attacks from wild-eyed progressives at the gates while schmoozing with public sector union chiefs. In a post-election Malloy administration, the governor will “have more flexibility” to reconsider his often repeated pledges not to raise taxes. The governor has not pledged to decrease spending, a kiss of death pledge in any pre-election campaign.

At least one newspaper, the New London Day, has warned us that Connecticut’s current spending level is unsustainable.  But Mr. Malloy, media Malloyalists, progressive big spenders, Democratic leaders in the Democratic dominated General Assembly, fourth branch of government union leaders, municipal leaders dependent on state grants – none of these special interests are interested in lopping, say, $1.5 billion from the state budget, a figure that just might catch the eye of in-state businesses looking for the exit signs.

Ergo: Taxes will rise; regulations will increase; business activity will decrease; the population of Connecticut, the only state in the union to have lost population, will decrease; prices, including the price of education in Connecticut, will increase; and the state will continue its downward trajectory until it reaches bottom, at which time it may be possible to hope for a sweeping change in government.

But hope is no surety of success. Progressive one party states such as Venezuela, once known as the Paris of Latin America, reached bottom long ago, and Connecticut, blessed by geographical determinants, a once healthy two party system and a shared understanding that state spending is no guarantee of prosperity, appears to have adopted the Hugo Chavez’s leadership model, along with his sound and fury rhetoric. It used to be said of God – when politicians yet believed in God – that He must love the poor, having made so many of them. The same may be said of most one party progressive states. Connecticut will be no exception.

Jepsen Skirts Statutory Obligations

The office of Attorney General in Connecticut evolved from the King’s Lawyer in the pre-Revolutionary period. It was the English attorney general who, after a hearing with Connecticut Governor John Winthrop, approved a bill for incorporation of the Connecticut Charter.

In Connecticut’s colonial period, the office of state’s attorney represented both the administrative and criminal interests of the crown. The office of Attorney General was established in 1898 to represent the civil interests of the state, the criminal interest to be retained by the chief state’s attorney. The office of Attorney General today retains its initial purpose in colonial law. The Attorney General’s office is statutorily obligated to represent the legal interests of the governor of the state and his administrators. While the nature of the chief executive in Connecticut has changed from king to governor, needs remain constant. Both king and governor operate politically within set legal constructs, and both need an office to advise the chief executive and to represent its interests and those of its agents in civil legal proceedings.

The principal duties and responsibilities of the state’s Attorney General are set forth in Conn. General Statute Section 3-125, which authorizes the Attorney General to “represent the interests of the people of the State of Connecticut in all civil legal matters involving the state to protect the public interest, and to serve as legal counsel to all state agencies.”

People in Connecticut may be forgiven for assuming that the principal duty of the office is to serve as a sort of consumer protection agency on steroids, the chief focus of two assertive and politically minded former Attorneys General, Joe Lieberman and Dick Blumenthal, both of whom used their time in office as springboards to the U.S. Senate. The first duty of the Attorney General, however, is to serve as lawyer representing the interests of the governor and state agencies.

When an Attorney General represents at any hearing a governor who has been sued by a non-governmental agency, he is fulfilling the statutory obligations of his office. When the Attorney General sues or threatens to sue an herb dealer on a complaint from a citizen that the vendor may have violated a questionable term in a contract, he is operating on the outer edge of his statutory authority. When such suits become the primary focus of the office of Attorney General – as was the case under former Attorney General Dick Blumenthal – the legislature should yank on the statutory reins that limit the authority of the Attorney General’s office.

Present Attorney General George Jepsen’s refusal to press a case involving former Governor John Rowland beyond an appellate court decision to the U.S. Supreme Court borders on a dereliction of duty. The most recent appellate court decision, which reversed an earlier decision in favor of Mr. Rowland and against a powerful, politically connected union, the State Employees Bargaining Agent Coalition (SEBAC), should be contested at the highest level, especially since the Attorney General’s office has spent considerable time and expense defending the ex-governor in a suit that claims Rowland abused his gubernatorial power by singling out state union workers for lay-offs.

The interests of the state do not disappear because the plaintiff at trial is a former governor who had been convicted of depriving the state of honest services, a charge to which Mr. Rowland pleaded guilty and for which he was sentence to a year in prison and four months of house arrest.

Both Mr. Malloy and Mr. Jepsen are union friendly government officials. Mr. Malloy has marched on the picket line with striking unions. His first budget – negotiated by the governor and SEBAC after Republican leaders in the General Assembly had been ejected from the negotiating table – was praised by union-friendly state Senator Edith Prague as too good to be true; she said at the time that union leaders would be crazy to reject a deal arranged by Mr. Malloy and SEBAC bargaining officials. Mr. Jepsen’s first job after graduating from college was as staff counsel for the carpenter’s union of Western Connecticut, UBC Local 210. For nearly ten years before entering the General Assembly, Jepsen negotiated contracts for wages and benefits, represented injured workers, ensured job safety, and advocated for different bidding practices.  Mr. Jepsen served in the General Assembly for 16 years, the last 6 as Senate Majority Leader.

Rather than press the reversal of the appellate court to the U.S. Supreme Court, Mr. Jepsen has decided to negotiate the case with SEBAC, which represents a significant step backward in the train of litigation. It is possible that Mr. Jepsen has traded in his statutory obligation to represent the state’s legal interests for a nostalgic turn at union negotiations? Given Mr. Jepsen's past close ties with unions, the trade is certainly understandable. And given his past close ties to the state Democratic Party and a union friendly governor, the Attorney General’s decision to forego further litigation in favor of a further bout of union negotiation is unsurprising, though some may think it highly political -- in the bad sense.

More Taxes On The Way, Connecticut’s Receding Tide

Now that Republicans have been cut out of the budget loop by Governor Dannel Malloy and progressive leaders in the General Assembly, future budgets will be assembled by Mr. Malloy, tax hungry progressives in the state legislature, SEBAC, a coalition of union leaders authorized to negotiate contracts with the state, and economists at the tax gobbling University of Connecticut (UConn).

According to a story that ran in CTNewsJunkie, “Economists at the University of Connecticut recommended Thursday looking at instituting a statewide property tax to close more than $1 billion funding gap in the state’s education cost sharing formula.”

In the UConn report, contributing economist Stan McMillen notes that Connecticut has underfunded its statutorily required share of educational funding to municipalities for the last 5 years by about $1.09 billion. The UConn report weighs a few gap filling options, including a sales tax increase to 8.3 percent and a boost in the income tax of 13.8 percent, although the report seems to favor the statewide property tax as an “outside the box” solution to the problem.      

When asked whether he anticipated any negative consequences from enacting a new tax, Mr. McMillen said, according to the CTNewJunkie report, “it was a ‘pay me now or pay me later’ issue.

“’We’re underfunding by $1.09 billion. That’s going to have downstream consequences,’ he said.”

Long ago and far away, during the gubernatorial administration of maverick Governor Lowell Weicker, it was generally assumed by the state’s administrative arm – the governor, the Democratic majority in the state legislature, municipal politicians and the state’s media – that, confronted with a budget deficit, the state of Connecticut should increase taxes. Connecticut, it was often said at the time, was suffering from a revenue and not a spending problem. This theory, happily embraced by all whose futures depended on rapidly increasing taxation, could be entertained only in a state in which personal income was consistently rising.

Somewhere along the line, the theory was found wanting. In a recession, the receding tide lowers all the boats – the obverse of President John Kennedy’s sage observation that “a rising tide lifts all the boats.”

In a 1963 speech to the Economic Club of New York, Mr. Kennedy explained in great detail how he proposed to raise the tide and consequently lift all the boats. Mr. Kennedy was intent on increasing revenue by – and here it is necessary for progressives to hang onto their red Phrygian caps – decreasing business taxes. Once the rising tide had flushed money into federal coffers, the federal government would have the resources necessary to inaugurate Great Society programs.

This is what Mr. Kennedy said:

“There are a number of ways by which the federal government can meet its responsibilities to aid economic growth… the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand -- to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency.

 “The final and best means of strengthening demands among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system – and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963…”

Mr. Kennedy was as good as his word. His program was enacted and a cataract of funds poured into the national treasury. Following Mr. Kennedy’s tax cuts, enacted after the president’s death in the Johnson administration, unemployment was reduced from 5.2% in 1964 to 4.5% in 1965 and further fell to 3.8% in 1966.  Though it had been estimated that the cuts would result in a loss of revenue, tax revenue increased in 1964 and 1965. The tide had lifted all the boats. After Mr. Kennedy’s assassination, his successor, President Lyndon Johnson, diverted some of the swelling revenues to finance his Great Society programs.

Would it not be a useful idea for someone in UConn’s economics department to record Mr. Kennedy’s address to the Economic Club of New York and run it on a continuous loop through the ear buds of the professoriate at UConn?

In the meantime, the idiot notion that Connecticut is suffering from revenue rather than a spending problem has been exploded even within the editorial pages of the state’s left of center media -- following the largest tax increase in the state’s history, which followed 22 years after the second largest tax increase in state history. That silly idea ought to be permanently buried in the fever swamps of progressivism.

Republican Prospects

During the last presidential election, Republicans put up against a popular president a candidate, Mitt Romney, who had a deep and admirable political and business history. Republicans were surprised when President Barack Obama, perhaps the most progressive political candidate since progressivism was showcased in a serious way in the 1912 national election, walked back into the Oval Office unruffled and unscathed.

The election was supposed to have pivoted on the economy – stupid. Instead, a majority of voters, overlooking economic indicators that almost certainly would have sunk the prospects of a lesser candidate, were persuaded to give Mr. Obama a second chance.

For Republicans, the “take-away” from the election ought to have been: Social issues trump economic issues – stupid.

During the last election, especially in Connecticut, Republicans had managed to keep a ten foot pole between themselves and social issues, while Democrats joyously embraced the notion of a paternalistic state. Mr. Obama had managed to cobble together a new coalition that gave him a significant margin in the election. He pulled others with him into office, especially within Connecticut and the New England states. Moderate Republicans – left of center on social issues – lost heavily to progressive Democrats disguised, for purposes of the election, as left of center traditional Democrats. After the election, the masks quickly came off.

No one should have been surprised at the magnitude of the losses for moderate Republicans in Connecticut and throughout the Northeast. The moderate Republican has been a species slated for extinction for a couple of decades. When Chris Shays lost his bid for the U.S. House in 2008, he was the last left of center House Republican in all of New England.

Barry Goldwater used to joke that if you lopped off California and New England, “You’ve got a pretty good country.” Connecticut, for all practical purposes now a one party state, has been effectively lopped off and added to the Democratic basket as an economic basket case.  All the state’s Constitutional offices are held by Democrats; the Democrats have controlled the state Senate since 1996 and the state House since 1986; and with the ascendancy of Dannel Malloy to the governor’s office in 2011, the Democrats were able to breech the so called Republican gubernatorial “fire wall’ for the first time since Governor William O’Neill had occupied the office. The clean sweep has made it possible for Mr. Malloy effectively to marginalize Republicans in the General Assembly. Republican leaders in the legislature were not permitted to put their fingerprints on either of the two budgets cobbled together by Mr. Malloy, progressive Democrats in the General Assembly with knives in their brains and SEBAC, the coalition of Connecticut unions authorized to negotiate contracts with the state.

The media in Connecticut -- for ideological and business reasons warmly attached to the Democratic Party – only lately has begun to notice that the state is slipping beneath an economic receding tide. The news that Connecticut had come in dead last among the 50 states in economic growth, according to a Bureau of Economic Analysis report made public on the day following the close of the budget session, was greeted by the state’s astonished left of center media with a gasp of astonishment. Business reporter for the Hartford Courant Dan Haar wrote, “In 18 years of following economic reports daily, this is the most shocking piece of news I've seen, period. As a bombshell, it rivals the $2.2 billion loss posted in January 1989 by Bank of New England — heralding the region's worst recession since World War II.”

Considering the nearly universal left of center bias of the state’s media, Republicans – if they ever should successfully raise a barricade against improvident spending – will not find the media on the right side of the fortification.  Connecticut’s media is uniformly convinced that hard times necessitates a strong central government to spur the economy by diverting tax dollars gathered from businesses already flagellated by burdensome regulations and high taxes to other promising companies the directing state regards as fruitful “investments.” The unitary state and high taxation invariably leads to a self-defeating crony capitalism in which taxpayers, rather than company investors, are forced to bear the burden of failure while one percenters enjoy infrequent successes.

Democrats this year have increased spending about 10 percent, when economic indicators show a flat-lining economy. They have imposed on the state the largest tax increase in its history. They have abolished the death penalty following a horrific multiple murder in Cheshire, which was followed by an even more horrific mass murder at Sandy Hook Elementary School. (The shooter in that instance committed suicide; but, had he survived, Connecticut would have been forced to incarcerate the 20 year-old Adam Lanza for life. The death penalty abolition was passed by a cowardly, election conscious General Assembly that left in place the punishment for 11 prisoners on death row in clear violation of a principle underlying all jurisprudence pithily stated in Latin: Nulla poena sine lege – “Where there is no law, there is no transgression.”  Reporting on debates in the House of Commons, Samuel Johnson drew the proper corollary from the centuries old legal doctrine: “That where there is no law there is no transgression, is a maxim not only established by universal consent, but in itself evident and undeniable; and it is, Sir, surely no less certain that where there is no transgression, there can be no punishment.”)

Somewhere in this mush of progressivism an effective Republican counter campaign awaits birth. Whether Connecticut Republicans can tease from it a message that will spark a cleansing rebellion in Connecticut’s cities and towns depends ultimately upon the indispensable three M’s of any successful campaign: message, money and media.

Malloy, The Budget And The Pinocchio Test

On budget matters, the governor proposes and the legislature disposes. Connecticut’s General Assembly has in the past been disposed to tinker with budgets presented by the state’s chief executive.  No one knows precisely what the Democratic dominated General Assembly will do to a budget that has been etch a sketched by Governor Dannel Malloy and Democratic leaders in the General Assembly.

Once again this fiscal year, Mr. Malloy and Democratic legislative leaders have stiffed Republicans on budget matters. During Mr. Malloy’s first budget negotiations, Republican leaders were shooed out of the room so they might not interfere with delicate negotiations then underway between Mr. Malloy’s agents and union leaders representing SEBAC, the state union conglomerate authorized to negotiate contracts with the governor. On that occasion, Democratic leaders in the General Assembly pre-approved a budget submitted to them by Mr. Malloy and invested him with plenipotentiary powers to make whatever adjustments SEBAC, Connecticut’s fourth branch of government, and the governor thought advisable.

The budget was batted around between Mr. Malloy’s Malloyalists and union leaders. After a few bloody rounds, a budget sprang forth about which Edith Prague, a union friendly state senator, said that union leaders would be crazy to reject it. It was rejected by the union crazies, more negotiations ensued, and finally a budget was produced that, Mr. Malloy said, was balanced , contained no gimmicks, was GAAP compliant and “fair share” observant.

Mr. Malloy’s first budget, heavily freighted with the largest tax increase in state history, tilted several times since it had been extruded, sausage-like, from the Democratic dominated General Assembly. There are some number crunchers – though none among the Malloyalist crew, save Comptroller Kevin Lembo, who sometimes demurrers – who doubt that Mr. Malloy’s first budget ever was in balance.

Now comes Mr. Malloy’s second budget – and how fares it?

So far, the second budget appears to be a deja vu all over again repeat of the first.

Republicans – called upon by the governor to iron out in a special session a few deficit wrinkles, a love fest praised by both Mr. Malloy and Republican leaders as a show of non-partisanship the national government would do well to copy – once again have been shown the door.

A one party state like Connecticut does not need the budget input of a bystander party. And never mind that the Connecticut Supreme Court recently ruled that Republicans should command the top line on the ballot in future elections because Mr. Malloy’s party garnered fewer votes than the Republican Party in the gubernatorial election; it was THAT close, Mr. Malloy winning the election because of votes cast by the putatively independent  Working Families Party.

Every time Mr. Malloy failed to include Republicans in his budget negotiations he disenfranchised the majority of Republican and Democratic Party voters who cast their ballots in his gubernatorial election. This budget year, Mr. Malloy – who twice refused to include Republicans in his budget deliberations – cited Republicans in the General Assembly for failing to offer a shadow budget. Chutzpah, thy name is Malloy.

Mr. Malloy’s budget outline will be presented to the General Assembly, which likely will tinker with the product in an attempt to satisfy union dependent Democratic members in the legislature.

Mr. Malloy recommended his budget to the Democratic dominated General Assembly -- and to the general public -- with his chest expanding to incoming Republican rhetorical bullets: “The bottom line is we will not increase taxes or create any new taxes. The budget will be in balance and will be GAAP-compliant.”

A story in CTMirror added a few cautious “buts” to Mr. Malloy’s brag.

The Malloy budget would not “increase taxes or create any new taxes” in keeping with a previous Malloy pledge that followed the imposition of the largest tax increase in Connecticut history. But “…it also would extend some controversial taxes on businesses and power plants that had been set to expire next year." And but... "It also implements one of the largest tax hikes on gasoline and other fuels in state history on July 1 -- an increase approved in 2005 -- while diverting all of the proceeds to non-transportation programs.” And but “…it also employs a controversial new interpretation of Medicaid budgeting that effectively would remove more than $1 billion from under the constitutional spending cap over the next two fiscal years. The affected Medicaid programs are paid for up-front with state dollars, but all costs are reimbursed with federal aid.”

Mr. Malloy’s budget raises spending, raises taxes and is over reliant on federal reimbursements from an Obamacare that has in it more mirrors and trapdoors than a funhouse. Obamacare recently has met a stiff resistance from union chiefs who fear that union membership will be reduced after the very expensive Obamacare proposition compromises union offered health plans. No word yet from SEBAC as to whether they will join their brothers on the union line who fear that Obamacare will reduce both union membership and dues.

Bottom line: Spending in Connecticut will increase under its present union reliant one party state. And since taxation follows in the rut of spending, taxes in the future will also increase. Neutered legislative Republicans are simply too cowardly to place exorbitant spending rather than tax increases at the center of their assault against a runaway progressivism -- because they too reap the political fruits of heedless spending.

Walker In Connecticut

Republicans this year asked Governor Scott Walker of Wisconsin, much maligned by union folk, to give the keynote address at the Prescott Bush Awards dinner in Stamford.

Mr. Walker is a grown-up, so his address was low key, interspersed with amusing vignettes. There was very little coverage of Mr. Walker’s remarks in Connecticut’s media. Most of the media accounts went for the color and passed over the discomforting  substance.

Unions were protesting outside the building, and someone was thoughtful enough to bring along the usual protest props. A photograph of one protesting group shows several union workers wearing cardboard cutout faces of the Koch brothers pulling puppet strings attached to another union worker wearing a Walker face. There are pictures galore in the Greenwich Times report: of Republican Senate leader John McKinney, who was given the Prescott Bush award this year; of Mr. Walker; of prominent Republicans in the state and of Linda McMahon, always good for a line or two in a lede story.

But one searches in vain for comprehensive coverage of Mr. Walker’s address and finds just a few scattered references here and there, studding the stories like glittering political sequins.

When readers of newspapers in the Lincoln era wanted to know what two major politicians debating each other for a Senate seat in Illinois actually said during their debates, they had only to turn to their newspapers to find there the transcribed speeches of Abe Lincoln and Steven Douglas. Republican papers polished the Lincoln oratory, and Democratic papers polished the apple for Douglas. Those days are gone, and with them a good amount of newspaper credibility – not to mention readers.

What precisely did Mr. Walker say to Republicans at the Prescott Bush Dinner?

Ameriborn News TV put up the speech here.  And so while Mr. Walker’s address is accessible, the substance of the address has not been sufficiently reported in Connecticut’s print media.

Republicans, Mr. Walker said to the sea of Republican faces in his audience, have reason to be optimistic. Republicans now control governor’s offices in 30 states. This was not always the case: “A lot of those states in 2010 were pretty blue. In fact, in my case, four years ago when I thought about running for governor and announced in April of 2009, everything in our state was controlled by Democrats: both Houses of the legislature, the governor, the lieutenant governor, both U.S. Senator’s and the majority members of the House of representatives.”

Surely Republicans in the audience, if not union members in the streets outside, could well appreciate the parallel circumstances. Connecticut has been drifting in the direction of a one party state for years, a fait accompli celebrated by Democrats four years ago when then Mayor of Stamford Dan Malloy -- Dannel Malloy, since becoming governor -- won his contest against Republican contender Tom Foley, who lost to Mr. Malloy by the thinnest of margins. Currently there are 52 Republicans and 99 Democrats in the State House and 14 Republicans and 22 Democrats in the State Senate. Democrats have controlled the Senate since 1996 and the House since 1986. Following Mr. Malloy’s victory, Democrats captured all the political marbles. As a practical political matter, this meant that Democrats in the state no longer needed to involve Republicans in their deliberations.

Upon assuming office, Mr. Malloy felt confident enough to shoo Republican leaders in the General Assembly out of the room when he and Majority Democrats were cobbling together a budget satisfactory to SEBAC, a coalition of unions authorized to negotiate contracts with the governor. Marching under the banner of “shared sacrifice,” Mr. Malloy imposed on the state the largest tax increase in its history. This increase followed the second largest tax increase in state history, the Lowell Weicker income tax of 1991. After having given a leg up to Mr. Malloy during a special session of the General Assembly called to address the state’s deepening spending problems, Republicans once again, unsurprisingly, find themselves in Coventry on current budget discussions. One party states do not need bystander parties to govern.

The Malloy-SEBAC budget was never in balance. Even worse, negotiated incremental raises in salaries and benefits for union worker amounting to about 9 percent far into the future tied the governor’s hands behind his back in future budget negotiations. His school initiatives were opposed by teacher unions that benefited from his largess, and red ink, like some impish devil, kept popping out of the budget woodwork every time Comptroller Kevin Lembo screwed the jewelers loop into his eye.

Wisconsin and Connecticut are trains passing each other in the night in different directions. Mr. Walker thought Connecticut Republicans could learn important lessons from his own bruising but ultimately successful campaign and political strategy.

“Today,” Mr. Walker continued, “everything’s flipped. Both my legislative houses are Republican. The governor, one of the U.S. Senate seats and the majority seats in the House of Representatives are Republican.”

This political miracle was received with exuberant applause from Republicans in the audience. Wisconsin showcased a breathtaking change of events. The union members prowling and scowling outside the building for the benefit of news photographers hungry for color have not yet recovered from the whiplash. John Olsten, the President of the Connecticut AFL-CIO, groused, "He [Mr. Walker] surely is not what you would call a fit in the state of Connecticut.” Nor, come to think of it, are any of few Walker-like Republicans in the General Assembly; such would seem to be the message from both leading Democrats and the governor, who have successfully rendered politically impotent any Republican presumptuous enough to unfurl Mr. Malloy’s “fair share” flag by cutting spending.

Such was the case in Wisconsin before the advent of Mr. Walker. Almost in the twinkling of an eye, the stage set, the actors and the political narrative all changed.

Republicans Shown The Door Again

A newspaper reports that Republican leaders John McKinney and Larry Cafero, both of whom have professed interest in running for governor, are once again being shut out of budget negotiations by Governor Dannel Malloy.

This is getting to be a habit.

During Mr. Malloy’s first budget -- By the way, has Mr. Malloy’s budget EVER been in balance? – the governor unceremoniously showed the door to Republicans.

Mr. Malloy brought Republicans back to the table on two occasions: during a special session, when Mr. Malloy needed some help balancing his chronically out of balance budget, and during negotiations on a gun restriction bill following the mass murders in Sandy Hook.
 

On both occasions, Mr. Malloy and accommodating Republicans were praised by left of center commentators in the media for their show of bipartisanship. Here in Connecticut, it was said, bipartisanship was much in the air, and it was hinted that the U.S. Congress, deep in the mire of partisan deadlock, certainly could take a lesson from a state in which both parties came together to settle a budget deficit and pass the most restrictive gun regulations in the nation.

Republican players both times were happy to play. Now, as the General Assembly begins to tinker with Mr. Malloy’s second budget, Republicans once again find themselves sent to Coventry.

The exile of Republicans to Coventry, where they will be expected to bide their time in prayer and holy silence, does not bode well for the state. It means that Mr. Malloy and his confederates – most importantly state unions, who made out like proverbial bandits the last time Republicans were frozen out of budget negotiations – will be unobstructed in shaping their second biennial budget.

The shape of Mr. Malloy’s second budget may be deduced from his first. On that occasion, it should be recalled, Democratic leaders in the General Assembly pre-approved Mr. Malloy’s budget prior to his negotiations with SEBAC, an organization of unions authorized to negotiate contracts with the state. One commentator wrote that leaders in the Democratic dominated General Assembly conferred upon the governor plenipotentiary powers to negotiate contracts that would impact the budget nine years out.

The negotiations were messy but profitable in the end for unions. The “savings” in Mr. Malloy’s first budget were amorphous, the tax increases painful. Progressive Democrats were tolerably satisfied with Mr. Malloy’s first budget. The tax increases, job investment money removed from the private sector and delivered to government coffers, gave crony capitalist progressives enough funds to “invest” in enterprises that in the future would pay out dividends, in the form of votes and political contributions, to Democrats.  Frozen out of the process, Republicans were free to assail a budget that had no Republican fingerprints on it.

A fairly comprehensive review of Mr. Malloy’s second budget by CTMirror is riven with doubts and fears. One always snaps to when one happens upon a budget review entitled “Promises, Gimmicks and a Historic Shortfall.”

After imposing on the state the largest tax increase in its history, Mr. Malloy made a firm vow to forego further tax increases.

“With a gap of $1.2 billion projected for the fiscal year that starts in July,” CTMirror advises, “Malloy not only is seeking more sacrifices, but he's also turning to taxes and some of the gimmicks he swore off of two years ago.”

The gimmicks include an extension of expiring tax increases on businesses and power plants, a reduction of tax credits for working poor families, funding cuts to colleges and universities at a time when higher education continues to increase tuition and fees, deep cuts both to hospitals and health coverage for thousands of low-income adults, a raid on the transportation fund and, that old standby, borrowing hundreds of millions of dollars to pay ongoing bills -- all this from an administration that boosted taxes considerably while it publically scorned prior administrations for resorting to discreditable methods in balancing budgets.

It does not help at all that the national economy continues to founder under the ministrations of Barack Obama, the most progressive president in modern history. Had Mr. Obama concentrated during his first term in office on rebuilding the shattered mortgage market, the American economy would have surged forward. But instead, Mr. Obama grasped for a national health care brass ring first proposed in the 1912 national election by the father of the modern progressive movement, Teddy Roosevelt. Obamacare, payment for which has now come due, is but a baby step on the road to nationalized health care. Should anyone care to preview the final product, a Veteran Administration hospital is on view in Rocky Hill, Connecticut.  

In a high tax, over regulated, foundering economy, tax receipts simply dry up. Investments in the private economy also dry up as investors, hampered by excessive regulation and punishing taxes, hoard their dollars waiting for relief from a redistributionist minded government.

The late Maggie Thatcher, Prime Minister of Britain, use to say that “the problem with socialism is that, sooner or later, you run out of other people’s money.” The government of Connecticut – yet a far cry from the socialist utopia envisioned by Eugene Debs, the Socialist candidate for president in 1912– is running out of the money its governor hopes to be able to “invest” in crony capitalist enterprises that mollify the state’s clamorous left of center interests.

It’s a problem.

How You Know When an Election Is Over

You know when an election in Connecticut is over when virtually all incumbent Democrats are re-elected to office, after having been fulsomely endorsed by much of the state’s left of center media, and when, several days after the election, bad news headlines begin to appear in Connecticut’s only state-wide newspaper:“State’s Medicaid Costs Soar, Projected Budget Deficit Attributed In Part to Expanded Coverage.” That headline appeared in a Hartford paper as a front page above the fold story a little less than two weeks after the election.

According to the story, we discover that the state’s $365 million budget deficit “dates, in part, to two years ago when Connecticut became the first state to expand medical coverage to low-income adults as an early adopter of federal health care reform.” The federal health care reform program is Obamacare. The architects of Obamacare were careful to front load the program with alluring benefits; payments for the alluring benefits were deferred until after the election.

That would be – now.

Two years ago, Connecticut was plowing the field in preparation for Obamacare. In 2010, we discover from the story: “Connecticut had the largest percentage increase of any state in Medicaid enrollment among low-income adults — a 32 percent jump, not an insignificant bump on the spending Richter scale.

Governor Dannel Malloy’s budget hawk Ben Barnes, secretary of the state's Office of Policy and Management, must have felt the tremors long ago. Asked to account for the Malloy $365 million budget deficit – the governor prefers to think of it as an easily backfilled “shortfall” – Mr. Barnes said, “The number of people enrolled in that program has shot up.” He also notes, “One, the economy has been poor. More people have been impoverished as a result of high unemployment, things of that nature."

How long ago did Mr. Barnes sense the economy was underperforming? Long, long ago. The economy was underperforming, President Barack Obama never tires of reminding us, since the Bush recession; that would be more than four years ago.

Under the enlightened leadership of Mr. Malloy, Connecticut had been stuffing the state’s revenue sock since the governor presented his first SEBAC inspired budget, which included a massive boost in taxes – the largest increase, in fact, in the state’s history. And a new healthcare exchange was inaugurated in the state long ago to prepare for Obamacare, promoted by Democrats during their campaigns as a more prudent less expensive health care instrument.

Tilling the field for Obamacare, Connecticut shelved its old heath care system, State Administered General Assistance (SAGA), and instituted a new Medicaid Low Income Adult program (HUSKY Part D) in 2010. Under the old system, SAGA serviced people from ages 21 to 64; under the new Medicaid Low Income Adult program the eligibility age was lowered two years to19, thus increasing the number of health care consumers. Under SAGA, benefits were extended only to people who held less than $1,000 in assets, though beneficiaries were permitted to own a home and a car worth $4,500 or less. As Mr. Barnes put it, “You could essentially have one crummy, old car and no money in the bank, or a couple hundred dollars in the bank, and still qualify. But if you had any assets at all [apart from the crummy old car and a house] then you didn't qualify. You had to spend down those assets on medical services before you were eligible. So, that ruled some people out of eligibility."

Under the Obama-Malloy-Barnes new health care system, limits on assets were eliminated – would Linda McMahon qualify? – benefits are more“robust” (translation: more expensive) and the program kicks in at an earlier age. These “improvements” necessarily increase the cost of the program. Connecticut has not yet received from Washington a waiver filed last summer that would impose a $10,000 asset eligibility test for the Medicaid program for low-income adults, and the federal government, currently reimbursing Connecticut for 50 percent of the program, will not reimburse the state fully under the Affordable Care Act until 2014.

Why then, should anyone be surprised that the new Medicaid Low Income Adult program has kicked a hole in Connecticut’s budget bucket?

The post-election story in the Hartford paper helpfully provided the relevant statistics: “In two years, Medicaid enrollment by low-income adults has grown from fewer than 50,000 to more than 83,000, greatly outpacing the state's expectations, according to state figures. Total Medicaid enrollment was 588,488 at the end of the last fiscal year in June, up 13,676 in a year.”

Surely the state figures were available to both Mr. Malloy and Mr. Barnes. Two years is 730 days, a little less than 105 weeks, 8,760 hours in which to ponder projected costs, Mr. Barnes’ specialty.

Here is the truth: Everybody knew, much before the elections, that Obamacare would cost the states millions of dollars. Mr. Obama knew, Mr. Malloy knew, Mr. Barnes knew, all the Democrats in both national and state legislatures knew, publishers of newspapers knew, newspaper editors who endorsed here in Connecticut every single incumbent Democrat in the state’s congressional delegation knew. Everyone but voters -- prior to the election -- knew that Connecticut was marching lemming-like towards the edge of a fiscal cliff, piped in that direction by sweet talking politicians with more curves in their courses than a slinky.

And now -- after all Connecticut incumbent Democrats have been tucked into their comfortable sinecures -- the rest of us are, at long last, permitted to know.

Should a media that allows itself to be so misused any longer be permitted to call itself free – or even useful?

Malloy, a Utopian Twinkie?

To a certain degree, all utopianists are eternal optimists –Panglossian optimists. The world may be crumbling about them, but their lively imaginations lift them above the debris.

Realists will agree that the future does not seem sparkling for Europe just now. The latest news is that ALL of Europe, with the possible exception of stout Germany, has entered a second, double dip recession.

In Greece, Spain and perhaps Italy a depression has sunk its teeth into Europe’s soft underbelly. Greece, the home of democracy, bid democracy goodbye as it tumbled into a depression, overloaded with accumulative debt and unsustainable social programs. Euro-technocrats now direct its future. In Italy, Spain and perhaps France, the same stern number crunchers are waiting in the wings for the inevitable collapse of European Social Democracy.

Here in the United States, voters from sea to shining sea have just reelected as president the most progressive, European oriented chief executive in the country’s history. Mr. Obama has been steering the political ship of state in the direction of the European model for the past four years, at a time when Europe -- weighted down with, to mention only two straws breaking democracy’s back, an expensive universal health care system and unsustainable pensions -- appears ready to pitch over the cliff.

Not to worry. Forward!

Panglossian Connecticut marches forward with a ragged future at its elbow. Another day has been tucked into bed, and the state has received yet another “F” from yet another rating service; this one, Conning Inc., a Hartford-based asset manager that does financial research for insurers and institutional investors. Among all 50 states, the Conning report advises, Connecticut is dead last in credit quality.

The managing director of the company, Paul Mansour, writes that while Connecticut does not make most listings of states in fiscal stress,“… the reality is quite alarming. The state is among the worst in job creation, tax revenue growth, and has not yet seen a recovery in home prices. It has very high debt and retirement obligations, little budget flexibility and no rainy day fund balance.”

Job creation has been stagnant in Connecticut even since former Governor Lowell Weicker instituted his income tax to discharge a $2 billion deficit. In the blink of an eye, Connecticut’s government went on a spending spree, which ought to have convinced members of the General Assembly that the spending thigh bone is connected to the revenue shin bone in such a way that when revenues increase spending also increases. Connecticut’s current budget is about three times as large as the last pre-income tax budget presented to the legislature by former Governor Bill O’Neill. Larger state revenues, we now know from painful experience, do not translate into deficitless budgets. The current deficit – the size of which depends upon which political shyster one asks – has also kept pace with increasing revenues. After the Weicker income tax and the Malloy tax increase, the largest in state history, the state budget has reverted to the status quo ante in the pre-income tax days of O’Neill. This is the opposite of progress.
 

Once a magnet for business growth owing to its low taxes, budget hawking business-friendly General Assembly and modest regulatory environment, Connecticut has become an entrepreneurial pariah. The governor now bribes companies to remain in the state by offering to a preferred few a raft of crony capitalist inducements-- tax credits, low interest loans and free buildings -- on condition that the captive companies produce a set number of jobs within a predetermined time frame. 

Eyes outside the state are watching and taking note of Connecticut’s regression. Graduates from Connecticut’s very expensive institutions of higher learning are carrying their diplomas to more prosperous states. On holidays, our sons, nephews, nieces, brothers and sisters arrive “home” from the Carolinas, Texas or Florida. Made in Connecticut companies are fleeing high business costs for more profitable states, and even our plunderable millionaires are beginning to look over their shoulders at better prospects elsewhere. Since 1991, the state has not been negotiating with prospective businesses from a position of strength.

The utopianist, imprisoned in his own walnut shell and counting himself the king of infinite space, usually identifies “the state”with state government. They are entirely different entities. Having identified the state with the ruling satrapy he is pleased to serve, he takes the matter a step further and identifies the state with himself in the manner of the Sun King, Louis XlV, who famously said, “L’etate, c’est moi” (I AM the state).

Thus the governor’s acerbic mouthpiece and Malloyalist-in-chief Roy Occhiogrosso persists in arguing that “the state” is better off than it was before Malloy extracted from hard pressed Connecticut taxpayers the largest tax increase in state history.

Really? If a thief were to extract the gold from Mr. Occhiogrosso’s teeth, the thief might well argue that HE was better off after the tooth pulling. But it takes a special sort of preening arrogance for the thief to argue plausibly that Mr. Occhiogrosso had benefited from the extraction; and only a utopian robber far gone in conceit would argue that he is his robbery victim. Occhiogrosso to Malloy:“L’etate, c’est vous.”

Lawyers call improbable defenses of the kind urged by Occhiogrosso – “You’re better off” -- twinkie defenses. Speaking of Twinkies, the latest Connecticut company to throw in the white flag – after a dead-end negotiation with a greedy union – is Hostess of Wonder Bread and Twinkie fame. After the union induced shutdown, twinkies will be available only in the Malloy administration; when budget time rolls around, one may hope Mr. Malloy will have better luck with SEBAC than Hostess did with its unions.

Malloy Reforms Whipped

“After Governor Dannel Malloy is put through the political grinder by status quo opposition forces that tend to resist his educational reform, he just might begin to feel, perhaps for the first time in his political life, what some Republican governors before him may have felt when faced with an intractable opposition” –Connecticut Commentary, March 8

It was a bit like watching a baby seal being clubbed to death by hunters.

When the leaders of the Education Committee had finished stripping from Governor Dannel Malloy’s education proposals the principle elements of reform, the remaining limp carcass looked very much like a clubbed and skinned Harp Seal.

All the important legislative decisions that shaped the final product concerning the governor’s reforms were made, according to one news report, behind closed doors in a “marathon meeting [that] included the Education Committee co-chairs — Rep. Andrew Fleischmann, D-West Hartford, and Sen. Andrea Stillman, D-Waterford — along with Ojakian and representatives from the two teachers unions.” Mark Ojakian is the governor’s Chief of Staff and, along with Office of Policy and Management (OPM) Secretary Ben Barnes, a chief representative of the Malloy administration in its frequent negotiations with state unions.

The Education Committee refused to sign off on the governor’s measures to couple teacher salaries and tenure with student performance, choosing instead to study the measures further, thus packaging the Malloy reforms in dry ice. And later the budget writing committee paired back spending Mr. Malloy had proposed to turn around the state’s 12 poorest performing schools, gutting in half the $22.9 million he had assigned to do the job.

Following the evisceration of Mr. Malloy’s education reforms by the Education Committee, the governor sent a message to his Democratic comrades in the General Assembly expressing his displeasure.

President of the Connecticut American Federation of Teachers Sharon Palmer said the closed door meeting was held at an undisclosed Hartford office building to assure privacy from the prying eyes of Connecticut’s media, among others.

Among the “others” were Republican leaders not invited to the discussions, a sequestration that is becoming a hallmark of the Malloy administration. Republican leaders were also excluded, it will be recalled, from budget shaping negotiations involving leading progressive Democrats in the General Assembly -- which pre-approved an unfinished state budget before deliberations were concluded – gubernatorial factotums and union leaders representing SEBAC, a coalition of unions appointed to negotiate contracts with the Malloy administration.

Since the secret meeting was closed to objective scrutiny, the details later released by interested parties are subject to future verification and perhaps should be taken, as Mark Twain used to say, “with a ton of salt.”

According to information tendered by interested parties, the secret meeting on Saturday began at noon and continued until Sunday at 1:30. Those attending the private session disbursed when it became impossible to achieve agreement on “several particular concerns of teachers, including collective bargaining and labor management,” according to a news report, after which matters were referred to the Education Committee, which “re-worked” the bill, apparently to the satisfaction of teacher union representatives present at the undisclosed meeting.

Communications director for AFT Connecticut Eric Bailey said "Obviously, we think the bill was a lot better than it was when it started. The committee’s work of destruction yet incomplete, Mr. Bailey added, “but there is still room for improvement."

Other groups backing Mr. Malloy’s reforms -- ConnCAN, a pro-education reform group, the Connecticut Association of Boards of Education, the Connecticut Association of Schools and the Connecticut Business and Industry Association – were understandably dashed.

"It's really hard to say this is reform and this is what's best when most of the voices were excluded," said, chief executive officer of ConnCAN Patrick Riccards. “The vast majority of stakeholders weren't part of the discussion."

As Mayor of Stamford, Mr. Malloy perhaps had grown use to issuing directives that were in short order applied by his administrative troops, some of whom he took into his administration when he became governor. But he ain’t in Kansas anymore. The General Assembly has for a long while been crowded with union dependent legislative leaders of committees who can easily frustrate gubernatorial designs that disappoint powerful unions.

Managing Editor of the Journal Inquirer Chris Powell points to a lapse in political acumen as the cause of the collapse of Mr. Malloy’s educational reforms. If the governor had linked his education reforms to “the biggest tax increase in state history, making the new money for the government class and government's many dependents conditional on serious reform -- no reform, no money,” his reforms might have survived committee clubbing.

But in budget deliberations with SEBAC, Mr. Malloy gave away the store. His factotums arranged a deal with state unions that was, according to union committed legislators such as Edith Prague, an offer unions would have been insane to refuse. When you have given up your principle bargaining chips to the house, further negotiations on other matters will leave you destitute.

One lives and learns.

New And Improved Budget Smoke And Mirrors

Unhappily for Malloyalists everywhere, at least one reporter was not sound asleep when Governor Dannel Malloy’s administration unveiled a PowerPoint presentation at a recent budget briefing showing that the budget will be in balance in 2012-13 and thereafter reap surpluses in 2013-14 of $226 million and $942 in the final year of Mr. Malloy’s gubernatorial term.

“In actuality,” the reporter wrote, “if the administration's estimates for expenditures -- including the conversion to Generally Accepted Accounting Principles -- and revenues are compared, the budget is balanced only in its first year. There's a $424 million shortfall in 2013-14 and a $180 million hole in 2014-15 -- the same year Malloy's budget office projects a nearly $1 billion surplus.” Absent the smoke and mirrors employed by previous Republican governors and Democratic dominated legislatures, future Malloy budgets are not in balance.

The budgetary magic that transforms real deficits into imaginary surpluses rests upon a skill employed by most governors that “takes advantage of the legislature’s and media's optimistic tendencies when it comes to state finances”, according to retired lawmaker William Dyson, formerly the Democratic co-chairman of the state’s Appropriations Committee for 16 years. The more often bad news can be presented as good news, the better, said Mr. Dyson: “The environment there [in the General Assembly] has always been to turn your head and look away from anything bad. There's always been this notion that next year might be better and not something we need to worry about today."

The Malloy administration’s Panglossian outlook rests on the following assumption: Mr. Malloy’s new budget will exceed Connecticut’s in name only “spending cap” by $650 million one year after enactment and by $1.1 billion two years out; however, if it is supposed that the Malloy administration will at some unspecified date in the future abide by the spending cap and actually cut spending below it – then the administration would have realized its PowerPoint predictions.

And if pigs had wings…

The mental gymnastics involved in this mode of thought – if it may be called that – has astounded North Branford Republican Rep. Vincent J. Candelora, who asked the BINGO! question: "How can you say your plan is sustainable if you count ‘cuts’ you haven't made and aren't going to find for another year?"

The magic figures presented during Mr. Malloy’s PowerPoint presentation cast a spell over some reporters who, Mr. Candelora noted, left the room whispering that Mr. Malloy’s budget proposal would result in a “bipartisan love-fest” during the upcoming legislative roustabout. "I've never been optimistic about the media taking the time to pick it apart and understand it," said Mr. Candelora. "I think they do a good job at taking things and getting them at a 30,000-foot level, but I'm not sure that kind of analytical media exists anymore."

And veteran Democratic legislative leader Dyson agrees that the legislature is easily distracted and unaccountably trusting: "I don't think the rank-and-file will pay a lot of attention to the deficit as long as the people with their finger on the pulse aren't worried. They trust all of the heavy hitters, and they will go along with what they suggest."

In the last budget session, Mr. Malloy bravely took some hits from union leaders and perennial critics in the General Assembly during his negotiations with SEBAC. The Democratic dominated General Assembly pre-approved Mr. Malloy’s prospective budget as Dannel struggled alone with the union leaders in the lion’s den. By investing the governor with near plenipotentiary powers, Democratic legislators up for re-election were not forced to leave telltale fingerprints on the final negotiated budget package, a division of labor useful both to the governor and General Assembly Democrats. SEBAC, the coalition of state unions authorized to negotiate contracts with the governor, emerged with a deal in hand so favorable to union interests that Senator Edith Prague, a union well-wisher of long standing, declared somewhat volubly that the union rank and file would be insane to reject the proposal.

“We would receive four years of job security,” union negotiators boasted in a memo to rank and file members, “an extension of our health care and pension plans to 2022, an irrevocable trust fund to insure there will always be retiree health care, three years of wage increases, a reaffirmation of the independence of the state employee health plan, and contract protection lasting through 2016. Additionally, all of the layoffs, anti-union legislation, and faculty/office closures would be reversed.” All in all, the deal was a gold brick for union leaders.

But Gold bricks are expensive, and the expenses will show below the veil once the state abandons its present system of smoke and mirrors accounting and inaugurates Mr. Malloy’s preferred Generally Accepted Accounting Principles (GAAP). At that point, Mr. Dyson said, "You may hear some suggestions from [legislative] leaders that maybe we ought to be reducing some of the growth in this new budget to remove some of the risk. It has to be done carefully, without looking like there is going to be a fight. But it can be done and it could even solidify the caucus more."

A one party state is so much more efficient when the legislative caucus and the governor are reading from the same script.

Malloy And His Critics

Kevin Rennie, a political columnist who writes for the Hartford Courant, very likely can expect a sling or an arrow to be coming his way sometime soon. Malloyalites do not react with equanimity to sharp criticism, and in a recent column Mr. Rennie notes that Mr. Malloy, short on cash he needs to plug a reappearing budget deficit, is “squeezing the Mohegans,” owners of one of Connecticut’s two Indian casinos, “for political contributions at the same time he is wielding the power of his office.”


Mr. Rennie notes that the Clean Election Fund, which gave Mr. Malloy more than $8 million to level the playing field between candidate for governor Malloy and his Republican rival, has tapped itself on the shoulder in its annual report for having made it possible for Connecticut citizens to reclaim “their government with the already dramatically reduced role of special interest influence in Connecticut elections."

But they haven’t, Rennie writes:

“No, it hasn't. On Feb. 3, the head of the Mohegans will hold a funding luncheon for Prosperity for Connecticut, Malloy's political action committee, at a casino hotel. The price per ticket is $750, the maximum the law allows. The pressure is on to sell a lot of tickets. The Mohegan PAC slipped a maximum contribution to Malloy's committee on Dec. 28, so it's allowed to give again in the new year.”

The Mohegans have little choice but to play the usual political game: “Competition is increasing. The recession and stagnant aftermath damaged their business. The tribe is trying to refinance more than a $1 billion in bonds. It faces February and April deadlines to pay investors. It needs a piece of online gaming.”

Mr. Rennie may be mistaken in part. While Mr. Malloy is raising money for Prosperity for Connecticut, it is not his PAC. Mr. Malloy’s PAC, DanPAC, was discontinued earlier last month.

The chairperson of Prosperity For Connecticut is James Wade, one of the Grand Poobahs of the Democratic Party and for twenty years its outside counsel. Mr. Poobah, associated with Robinson and Cole, drafted the procedural and substantive rules of the party and occasionally represented it before the United States Supreme Court. Many of the contributions to Prosperity For Connecticut come from lobbyists or dependents of lobbyists.

Mr. Malloy’s real problem, however, is what it always has been: funny budget numbers.

Connecticut once again is in the red, according to a below the fold story in the CTNow section of the Hartford Courant written by Christopher Keating .

And the lede, which probably should have run on the front page: “Gov. Dannel Malloy's estimate of pension savings over 20 years was wrong by $3.1 billion, the legislature's nonpartisan fiscal office said Friday.”

The non-partisan Office of Fiscal Analysis was NEVER able to verify the savings figures claimed by the governor and his Malloyalites when, weeks before a much publicized set-to between Mr. Malloy and SEBAC, Connecticut’s fourth branch of government, the state budget was presented to the Democratic dominated legislature for approval. The legislature approved the budget with its penciled in figures before negotiation between Mr. Malloy and SEBAC were complete, an astounding dereliction of constitution responsibility on the part of a General Assembly that did not want to leave its fingerprints on a budget close to the coming elections. The legislature simply took a hike when the governor was negotiating with unions for putative givebacks, pre-approving the budget before negotiations were complete and by default investing Mr. Malloy what amounted to plenipotentiary power to finalize the budget.

As an amusing sidelight, a group of budget conscious rebels associated with The Roger Sherman Institute last June took the state to court a few weeks after the Malloy-SEBAC document, full of fanciful figures, had been approved by the General Assembly, arguing that it was not in balance. They implored Superior Court Judge James Graham to order the legislature to produce a constitutionally required balanced budget.

Fat chance there. The judge decided that a balanced budget was more or less a term of legislative art. Now, months after the suit, we discover that the state budget is off by $3.1 billon, which ought to bring a blush to the cheeks of derelict Democratic legislators in the House and Senate.

Fat chance there. The Democrats in the General Assembly who surrendered their constitutional prerogatives to Malloyalists and SEBAC have no sense of shame.

One of them, Speaker of the House Chris Dovovan, is asking the people of the 5th District to send him to the U.S. House, so that he can represent the interests of all the people in the state that he, the governor, SEBAC, the Malloyalists and the constitutionally flaccid House he runs have so successfully hoodwinked.

ADDENDA

I am advised by Christine Stewart of CTNewsJunkie that Mr. Rennie was wrong in writing that Prosperity for Connecticut was Mr. Malloy’s PAC: “He's raising money for it yes, but he got rid of his PAC which was DanPAC earlier this month.” It is important to leave this ADDENDA in place, along with the original posting, because it appeared in other venues, a newspaper among them. The text has been corrected.

Connecticut’s Vanishing Surplus

The state of Connecticut should not be running surpluses. A surplus is the amount of money the state has overcharged its citizens to meet expenditures. Connecticut has run surpluses ever since former Governor Lowell Weicker engineered his income tax to pay for extravagant spending that has increased the state’s budget from $7.5 billion under former Governor William O’Neill, the last pre-income tax governor, to $20.4 billion under Governor Dannel Malloy. Successive surpluses have been tucked into budgets for the last 20 years, with predictable results; Connecticut’s chief engine of growth for the last 20 years has been municipal and state governments.

Partially owing to surpluses and a perverse notion that the state of Connecticut never had a spending problem during these years of plenty – the operative assumption of pro-spending forces, iterated in scores of editorials and op-ed commentary, having been that the state could solve all its budget problems by increasing revenue -- the bottom line on the state budget tripled during the administration of three governors, two of them Republicans. Mr. Weicker, father of the state’s income tax, was a longtime Republican who created his own party to run as governor. The General Assembly, the organ of government primarily responsible for budgets, was during the same period dominated by Democrats.

Without engaging Republicans in the General Assembly, the governor and Connecticut’s dominant Democratic legislature approved a budget for this fiscal year that contained a surplus of $88 million. A surplus of $496 million was tucked into the 2012-13 budget.

Under the hammer blows of a failing economy, apparently undetected by Democrats in the legislature and the Malloyalists who negotiated putative savings with SEBAC, Connecticut’s fourth branch of government, surplus figures have now been paired back.

The $1.5 billion in new taxes the governor and his Democratic affiliates in the legislature imposed to rid the state of a $3.2 billion deficit in the state’s budget is not subject to the vagaries of our partially free market system. The state can take its tax increases to the bank. Cost savings of $1.8 billion that were supposed to offset the red ink are far less dependable. The relatively non-partisan Office of Fiscal Analysis was never able to affirm Mr. Malloy’s projected savings.

The biennial budget for fiscal years 2012-13 totals $40.54 billion, about $20 billion a year. Since 1980, state spending has risen from$ 4,400 per household to $10,000 per household, an increase of 227%. Connecticut has a total state debt of approximately $99,751,294,000, calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and FY2011 budget gap, according to a Sunshine Review report.

Figures such as these point to a spending problem, and spending problems are not addressed by revenue increases. Indeed, spending problems are exacerbated when revenue increases, because the depth of the spending floor increases in exact proportion to revenue gains. The more money you get, the more you spend. The more money you spend, the larger the deficit becomes with each succeeding budget. And when the grim reaper of a recession finally knocks on your door, he will find you knee deep in red ink, scrambling to meet state indebtedness, if you are a left of center progressive, by instituting permanent tax increases and dubious long term cost saving measures.

Mr. Weicker removed from Connecticut its most distinctive and appealing feature, the lack of an income tax. The additional taxes he imposed on the state, including the income tax, made the state less competitive with other non-income tax states. The recent additional taxes imposed on Connecticut by a Democratic governor and a Democratic General Assembly unwilling to include Republicans in their budget deliberations, the largest tax increase in Connecticut’s history, sent a clear message to businesses outside the state that might have considered embedding jobs in the state: The spending arc is bending in the wrong direction.

The Malloy-managed solution to “growing the economy” – remove entrepreneurial funds from the private economy by increasing taxes and use the sequestered funds to provide tax relief to large companies – is simply an admission of defeat. Targeted tax credits and loans directed at too big to fail companies are little more than bribery, though it has become difficult in present circumstances to discover who is bribing whom, the crony capitalists or the crony government.

Senate Minority Leader John McKinney's stinging analysis – “This is more proof that Governor Malloy's over reliance on tax increases was a failed approach to balancing the state budget in a responsible way. When the largest tax increase in state history isn't enough to pay the bills, I hope everyone can agree that a significant reduction in the size and cost of government is in order" – preceded only by a few hours a decision by Moody’s Investors Service to further downgrade Connecticut’s general obligation bond rating to Aa3 from Aa2.

The rating agency cited as sufficient reasons for the downgrade Connecticut’s high fixed costs for debt service and post-employment benefits, as well as low pension fund ratios and depleted reserves. Almost instantaneously, Secretary of the Office of Policy and Management Ben Barnes issued through the governor’s office a response hinting darkly that Moody’s downgrade was intended principally to “satisfy their internal corporate need to deflect attention from their historic lack of credibility.”

Moody’s downgrade,” Mr. Barnes wrote in a press release, “reflects their continued reaction to their central involvement in the financial scandals that led to the deepest recession since the Great Depression. Coming on the eve of our budget release, without an imminent bond sale, suggests that the move is motivated by factors other than Connecticut’s creditworthiness.”

Unfortunately, attacking the messenger of bad news is becoming a too familiar deflective strategy among Malloyalists surrounding the governor.