Posted 11/19/12

The "D" Word

Gov. Dannel Malloy
Photo by Steve Kotchko

When Democratic Gov. Dannel Malloy proposed his first two-year budget plan in 2011, he promoted it as a remedy for Connecticut’s chronic deficit problems through a process of “shared sacrifice” involving tax hikes, spending cuts, and state employee concessions.  Malloy gave the impression that his budget, which was adopted by the Democrat-controlled legislature, would prevent the annual weeping and gnashing of teeth over deficits.

Now, as Malloy plans his second two-year budget plan, the last one he will deliver before facing reelection, the dreaded “d” word—deficit, is still in the air.

Determined to put the best possible spin on the renewed red ink, Malloy instructed reporters on how best to write about the $365 million dollar gap in the current fiscal year’s budget.  “This is not a deficit, it’s a shortfall,” said the Governor.  “There is a long time between now and June 30th (end of the fiscal year); it’s going to be addressed.”

Once again, Malloy compared his budget policies against those of his predecessors, Republican Governors Jodi Rell and John Rowland.  “Two years ago I inherited a state budget that had a structural deficit of approximately $3.65 billion dollars,” said Malloy.  “Twenty two months later, our current budget shortfall is $365million—that’s one-tenth of what it was.”

Nevertheless the budget shortfall, or deficit, or whatever must be resolved.  The Malloy administration must draw up a deficit mitigation plan soon, and there’s speculation Malloy will call the lame duck legislature back to the State Capitol for a special session in December to adopt it.

If the word deficit rubs Malloy the wrong way, it’s clear there is even more animus about the phrase tax hike.  After the Governor’s tax hikes in 2011, continually called the “largest tax increase in state history” by Republicans, Malloy’s job approval rating in the Quinnipiac University Poll has hovered around a lackluster 43%, and has never risen above the 50% mark—viewed by pollsters as safer territory for an incumbent elected official.

So you can understand why tax questions in the brewing deficit crisis cause Malloy to parse his words very carefully at news briefings.

At a meeting with state agency heads last week, Malloy declared:  “We will end the current fiscal year with a budget that is balanced honestly, and we will do it without raising taxes.” 

However, as he looks forward to the two-year budget plan he must deliver to the legislature in February, Malloy’s phrasing is far more careful.  Malloy’s budget office fears there could be a $1.2 billion dollar deficit in the next fiscal year—a problem that a few hundred million dollars of belt-tightening just won’t remedy.

Discussing the next budget challenge, Malloy said “we have absolutely no intention of raising taxes in dealing with the next biennium”. The Governor has used the phrase “no intention of raising taxes” numerous times in recent days, apparently because it safely stops short of closing the door on tax hikes.

One reporter challenged Malloy on that, asking why the Governor doesn’t just promise not to hike taxes next year.   The Governor shot back:  “I almost lost an election because I wouldn’t do that, right?”   During the 2010 campaign Malloy refused a “no tax pledge” knowing his attack on the multi-billion dollar deficit he expected to face in 2011 could not be erased without tax changes.

So, instead of cruising into the reelection cycle with budget challenges behind him, Malloy may be facing a daunting deficit and all the angst that goes with it.  Certainly he will want to avoid new tax hikes that could be a poison pill for his already tenuous standing among voters, but the alternative—significant spending cut, is just as dangerous.

Hefty state spending cuts could touch off a wave of protests by cities and towns, advocacy groups, and the public.  One person’s justifiable spending cut is another person’s destruction of a valuable state program.  If the protests are loud enough, past practice indicates that lawmakers—even friendly Democratic lawmakers—will not fall in line.

Perhaps irritated by that conundrum, Malloy last week took off on Republican State House leader Lawrence Cafero (R-Norwalk).  Cafero, and other GOP lawmakers claimed the Malloy administration kept the lid on the current year’s fiscal problems to avoid embarrassment.  Asked about that, Malloy said:  “He’s wrong.  Rep. Cafero has expressed his desire to become governor of the State of Connecticut.  I think you folks are going to have to get used to putting everything in context, every time you report what he has to say.”

Cafero admits he might “consider” a run for governor come 2014, but added:  “Right now I am privileged to be the House Republican leader.  I am not a candidate for governor.  I am what I am, I say what I say, and I haven’t changed since I’ve been here, 22 years.”

The GOP House leader said Malloy is so touchy about the continuing deficit worries he is painting his critics as opportunists.  “What he is trying to do is say to the public that ‘anybody who criticizes me is not doing so on the merits, they’re only doing it for their self-interest’”.  Said Cafero:  “I don’t think the public is going to buy that.”

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