Gov. Dannel P. Malloy finally delivered his much-anticipated budget speech to the legislature on Wednesday, and the news is exactly what we’ve been told it would be: bad. The budget is difficult, the long-dreaded deficit filled by a combination of spending cuts, government streamlining, and tax increases.
The news is most difficult, perhaps, for state workers who are yet again being asked to make concessions, this time to the tune of $2 billion. Malloy tried very hard to illustrate his theme of “shared sacrifice” when addressing state workers, calling state government unsustainable “in its current form.” He said that “The alternative to the two billion dollar figure would require us to completely shred the safety net and lay off thousands of state workers,” and warned that, one way or another, that money needed to come from state workers. “I don’t make these suggestions to be antagonistic,” he said. “Just realistic.”
For most Connecticut residents, though, the most controversial parts of Malloy’s budget will be the sales tax hike and, for high-earning residents, the small increase in the income tax. Malloy fairly sped through this part of the speech and gave no hard numbers, but he is looking to raise $1.5 billion in new revenue this way. He is also proposing that cities and towns be able to raise their own revenue through a tax increase on retail sales that will be returned to the town where it was collected, and through other means like increases in hotel and conveyance taxes.
The budget in general tries to strike a balance between higher taxes, service cuts and state worker concessions, and is tilted solidly towards the last. Even House Minority Leader Lawrence Cafero (R-Norwalk) was impressed: “That is probably the hardest push I’ve ever heard from any governor at any time,” he told the Hartford Courant on Malloy’s blunt message to the unions to either choose concessions or face layoffs. This clear message to unions is all the more surprising given Malloy’s close relationship with organized labor during the election.
Maybe that’s what it takes. Governors John G. Rowland and M. Jodi Rell tried an openly antagonistic approach to state employees, and mostly won themselves resentment and distrust for their efforts. Malloy, on the other hand, has some credibility and clout with the unions, and it’s clear he’s willing to use it to ask them to make tough sacrifices. Whether they’ll actually take him up on it remains to be seen.
Malloy’s budget is sure to provoke plenty of anger and outrage. Republicans are already unhappy at the idea of any tax increases, and advocates for higher education are pointing to a steep $143 million cut to the state’s public colleges and universities as draconian, and liable to lead to tuition increases. There is also plenty of doubt about whether Malloy can actually manage to wring such steep concessions out of the state employee unions, or pass tax increases through a legislature that has, in the past, often seemed unwilling to make difficult choices.
It’s very easy to say that the budget relies too much on taxes in a state where the tax burden is already high, or, conversely, that it taxes too little and asks state agencies and workers to shoulder an unequal portion of Malloy’s “shared sacrifice.” I’m sure we’ll hear those arguments again and again between now and June, and in many cases there will be concerns that need addressing. By and large, though, I thought the governor struck as good a balance as possible during these difficult times.
So what next? Will unions actually give enough back to close the gap? Will the governor be forced to agree to a larger tax increase than he’s proposing here? How much of the cuts will vanish in the legislature, and what will the public’s response be? We will likely get an early indicator of how voters feel about the budget when special elections are held later this month. We should also hear more as Malloy heads to “town halls” around the state to discuss the budget with residents. Malloy has done a lot of work to try and prepare the public for a difficult budget, and to justify the pain as best he can. We’ll see how effective a salesman he is for his plans, and what he might do if and when the legislature balks at them.
As for me, I think that while some of the cuts, such as those to health care for the needy and to higher education, are potentially very hurtful, this budget does a lot more right than it does wrong. Generally speaking, the balance of sacrifice does begin to address some of the major problems the state has, such as an expensive workforce, some inefficiency and redundancy, and a revenue structure that ties towns to the property tax.
It’s not perfect, but it’s a good start.
Susan Bigelow is the former owner/author of CTLocalPolitics.com. She lives in Enfield with her wife and cats.