Posted 10/15/12

Malloy's Next Budget

Gov. Dannel Malloy
Photo by Steve Kotchko

Some time next February Democratic Gov. Dannel Malloy will have to deliver his next two-year budget plan to the Connecticut General Assembly.  It won’t be loaded with the anticipation tied to his first budget as governor, because the multi-billion dollar deficit he faced in producing that initial document will not be present, unless the economy takes an unexpected new nosedive.

Though it is very early, Malloy did offer some tidbits and hints about his next budget during an address to the annual State of the State conference of the University of Hartford Construction Institute, meeting in East Hartford late last week.

As you’ll recall, Malloy faced strong criticism in his first budget, after he proposed (and won) across the board tax increases.  Republicans said instead of using tax hikes as a “last resort”, Malloy used them right out of the gate.  The Governor denied that claim, saying the tax hikes were part of his “shared sacrifice” approach to the deficit:  tax hikes, spending cuts, and state employee concessions.

In any case, most observers believe Malloy’s persistent weak job approval performance in public opinion polls is tied to his tax increases.  Malloy has never topped the 50% favorability rating in the Quinnipiac University Poll that most analysts say is the dividing line between a popular and unpopular elected official.

Malloy always brushes off poll ratings, but since the upcoming two-year budget plan will be the last before he must decide on a reelection bid, one could expect the Governor to be careful about taxes and that is the case.

“I can tell you we have no intention of raising taxes,” said the Governor, “so we are doing everything in our power to work on a budget that we’ll present that does not reflect additional taxes.”  That statement does stop short of a formal “no new taxes” pledge, but Malloy is five months, a presidential election, and who knows how many economic eruptions away from budget delivery time—so his statement provides wiggle room.

The Governor also claimed that the multi-million dollar grants and loans his administration is handing out to companies willing to create new jobs in Connecticut, the so-called “First Five Initiative”, is another preventive measure against higher taxes.

“Every one of these deals pays for itself relatively quickly,” Malloy maintained.  “If you (a high-tech or financial firm) are paying people salaries in the hundreds of thousands of dollars, the return to the state of Connecticut (in income taxes) is pretty darn quick,” he said.

On the spending side of the budget, Malloy offered no details of any new initiatives, but made it clear that he believes state spending on transportation projects, higher education campus improvements, and new affordable housing is a positive strategy that has invigorated a stagnant construction industry and helped to create jobs.

When asked about local school construction, Malloy revealed that  is an area where he wants to see reform before the state commits more in its share of new facilities in state bonding and other strategies.

“We (the administration) think it’s probably better to have decisions about school construction made by people who have some expertise in construction as opposed to people who have expertise in education,” said the Governor, who explained that he wants to “professionalize” school building projects.

“It’s hard to justify some of the money that was spent on schools over the last 20 years—some of these (schools) are literally Taj Mahal-type facilities,” Malloy charged.  “(There are) relatively small schools with theaters that would rival Broadway, windows that had to be individually handmade, lighting fixtures that were literally hand-pounded metals.”

Malloy said the whole school construction process “got a little crazy because no one was paying attention to what the final cost was.”  He claimed “they only measured the square footage per student, not the cost per student and that put too much money in some people’s pockets—so we’re trying to rein that in.”

As the months go by, it’s likely Malloy will unveil specific strategies and items in his next budget to build an understanding for his direction and goals while saving some of the “newsier” elements for direct delivery in his formal budget address to a joint session of the State House and Senate sometime in February.

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