Wednesday, December 12, 2012

The Interesting Times of Dannel Malloy


Connecticut no longer can produce sufficient revenues necessary to pay for its improvident spending. Its revenue engines, after years of uncontrolled acceleration, are sputtering and wheezing, businesses are looking for the exit, and the ONLY remaining option – assuming the state is not interested in declaring bankruptcy as its itch to spend dooms all prospects of recovery – is real spending reform.

Real reform would involve identifying spending drivers and offering solutions that cut spending permanently. Temporary and half solutions will not do. And spending reform, always painful, cannot be accomplished in the absence of a reform vanguard made up of courageous politicians and tribunes of the people who are willing to press needed spending reforms in the face of a strenuous opposition from entrenched interests.

One of the courageous politicians very well could be Governor Dannel Malloy. When Alexander Hamilton was pressing in the Federalist Papers for “energy in the executive,” he might well have been thinking of someone like Mr. Malloy.

Mr. Hamilton, arguing for a unitary executive and against an executive department in which the chief executive should render decisions in concert with a council, put it this way: “Energy in the executive is a leading character in the definition of good government. It is essential to the protection of the community against foreign attacks: It is not less essential to the steady administration of the laws, to the protection of property against those irregular and high handed combinations, which sometimes interrupt the ordinary course of justice, to the security of liberty.”

By “high handed combinations,” Mr. Hamilton was pointing to the special interests of his day, those suckers on the Republic who know well how to turn representative assemblies to their own purposes. The expression might well refer in our day to business cartels or union interests that easily could, by cuddling with powerful politicians, interrupt “the ordinary course of justice” and pervert “the security of liberty.” Pointedly, the purpose of “energy in the executive” is, in Hamilton’s view, to secure the inborn liberty of the individual “against the enterprises and assaults of ambition, of faction and of anarchy.” And no one reading Mr. Hamilton can fail to notice that the “high handed combinations” that deprive citizens of their liberty do so by a steady assault on laws protecting PROPERTY.

Mr. Malloy, everyone will agree, certainly is an energetic executive. Whether he has been captured by special interests – either the progressive gravitational pull of his party or powerful union interests or political campaign contributors or large corporations he has favored with tax money – is a matter that may be clarified after Mr. Malloy’s second budget is put to bed.

But first, Mr. Malloy’s first budget is in need of repair. Time and circumstances have continually blown large deficit holes in Mr. Malloy’s Plan B budget. The latest hole in the budget bucket amounts to $415 million, according to estimates provided by state Comptroller Kevin Lembo.

The correlation of forces in the General Assembly is such that Democrats – used to operating on the premise that every deficit presents an opportunity to jack up taxes --  will not be receptive to spending cuts; and Democrats, by their sheer numbers, control the business of the General Assembly. Indeed, the Democratic dominated General Assembly invested Mr. Malloy with extraordinary powers when his first budget, Plan A, ran aground on the Gibraltar of union opposition: Legislative Democrats, abandoning their constitutional responsibility to affirm final budgets, approved Mr. Malloy’s larval Plan A budget, rejected by the unions in budget negotiations, and pre-approved without legislative review the governor’s post union-negotiated Plan B budget.

Mr. Malloy’s first budget included the largest tax increase in state history, phantom savings, and a signed on the bottom line contract with unions that assured to the Democrats’ most pampered special interest three percent raises and increased benefits nine years into the future, a savings “hand cuff” that will hobble the governor’s negotiations with unions during his upcoming budget negotiations.

Hanging over the special session called to resolve the $415 deficit is Mr. Malloy’s vigorous, often repeated pledge that he will not resort to tax increases in backfilling Plan B’s deficit.

Given the General Assembly’s temperamental and ideological indisposition towards spending cuts, Mr. Malloy will need Republican support in the Assembly to secure even minimal savings to rebalance, for the umpteenth time, his first defective Plan B budget.

Republican leaders in the Assembly – effectively shut out of budget negotiations in 2011 – appear to be game, and there is no indication thus far that Mr. Malloy, having secured Republican support without which he will be unable to make cuts necessary to balance his first budget, will NOT once again stiff Republicans and shoo them out of the room when the time rolls around to present to the Democratic General Assembly a second budget that may, like Mr. Malloy’s first budget, rely heavily on tax increases for a deceptive “balance.”

Republicans, Democrats and tax payers in Connecticut live, as the Chinese philosopher says, not without a shutter, “in interesting times.”

3 comments:

peter brush said...

no indication thus far that Mr. Malloy, having secured Republican support without which he will be unable to make cuts necessary to balance his first budget, will NOT once again stiff Republicans and shoo them out of the room when the time rolls around to present to the Democratic General Assembly a second budget
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I'm inclined to give Malloy more credit than his D.C. associates Pelosi, Reid, B.H.O. At least he can pay lip service to the need for government spending cuts. We'll see if he can get enough of his Dem legislators to keep his no-new-tax-for-now pledge.
On the other hand, perhaps Malloy, because he can't borrow/print money,is forced more than his ideological compadres in Washington to acknowledge gross fiscal mismanagement. So that, as you suggest, when it comes time for the next budget it'll be more blind taxing and spending for busways and corporate giveaways.
It'd be nice if our guys were to take a look around at other states. Even R.I. is making some progress in dealing with the government worker compensation problem. (And, it's obviously not just a State problem, but one foisted on the municipalities by the State.) It'd be especially nice if our guys could also look at our State operations in education and "human services," particularly, and make programmatic cuts. And, what's that 12% of the budget labelled "non-functional," and why is it so small? http://www.senatedems.ct.gov/Budget.php

Don Pesci said...

Great comment Peter. In the meantime, this keeps happening:

http://www.courant.com/business/hc-foley-carrier-services-colt-20121213,0,1852385.story

peter brush said...

The state's investment for the Foley lease is a quarter of the $2 million needed to outfit the 17,000 square feet for Foley on the South Armory's second floor. The remainder came from Chevron's tax-credit financing arm, the majority investor in the project.
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Let's see, Foley is in the business of helping truckers comply with government regulation. It's getting an "investment" (i.e., handout/grant) from the State to move from Glatonbury, Ct. to Hartford, Ct. The rest of the money Foley needs to move to the run-down Colt factory comes from an oil company (Chevron) which apparently is also in the "business" of translating tax credits into cash. As time goes on the "developer" of the complex may be given $5million already bonded by the Nutmeg State in order to fix up the building with the onion. Maybe John Larson and friends will succeed in getting the feds to "designate" the Colt complex a National Park.
Now I understand why they call it the Colt "complex." The place used to actually make stuff. Now it's the plaything of bureaucrats and pols, and corporate welfare beneficiaries.