Monday, February 11, 2013

The Real State of the State

Governor Dannel Malloy’s State of the State message gave little indication of his plans for the future. From a budgetary or strategic planning point of view, there wasn’t much “there” there, but the speech evidently was framed for a national audience.

During his first term, Mr. Malloy raised taxes massively. The progressive wing of his party, those in Connecticut who have a stake in ever increasing spending, cheered him on from the sidelines. When deficits repeatedly appeared following his first union friendly budget, Mr. Malloy quite publically took the pledge: No new taxes. He said several times on the post-election stump he would not raise taxes to liquidate a deficit of about half a billion dollars during a special legislative session. He didn’t.

Mr. Malloy’s second budget is, so far, inscrutable. Money is moved around from pot to pot. Taxes that were to elapse have been resurrected. A promised tax due to elapse on bad energy – i.e. nuclear energy – has been reinstated. The governor has proposed, much to the dismay of the Connecticut Conference of Municipalities (CCM), that a large chunk of the property tax on cars should be abolished. It is significant that the putative tax “cut” proposed by the governor comes from the municipal rather than the state’s budget pie. The cataract of money awarded to UConn continues to flow like a mighty river, presumably on the assumption that money “invested” in the state’s premier educational institution will pay dividends in job production. It is more likely that graduating students will carry their expensive diplomas to other states where energy is cheaper, state legislatures are less in thrall to the pressure of union demands, and jobs are more plentiful.

Progressive Democrats are so easily stampeded that we sometimes forget the Democratic Party here in Connecticut does have a middle, which some political commentators used to call the “vital center.” Politics, national and state, is now driven by the epicenters of both parties. The previously vital center is easily forgotten – most especially in Connecticut’s one party state when, for the first time in more than 20 years, both houses of the General Assembly and the governor’s office have been captured by Democrats. Contrary to media opinion, the Republican Party in the state is all middle. Here and there, a conservative or two – there cannot be more than a fistful in the General Assembly – opposes a post-Keynesian piece of arrant foolishness, and immediately the entire party is denounced by the state’s left of center media as dangerously ideological.

The reality is nearly the opposite. The capture by Democrats of both houses of Connecticut tripartite government has given us the most progressive administration Connecticut has seen since former governor Wilber Cross hung up his spurs. It should be noted that the third branch of Connecticut’s government, the courts, always sensitive to political power, may be politically moved both through appointments and by means of a quite understandable disposition to defer to momentarily popular majorities. Only in comparison with the Malloy administration, acting in concert with dominant Democrats in the General Assembly, do middle of the road Republicans appear to be arch-conservatives.

The real state of the state is most accurately portrayed in a “list of lasts” supplied by the Yankee Institute, a glowing candle in Connecticut’s dark night. Following the governor’s state of the state address, the institute took out full page advertisements in four major Connecticut newspapers.

“We aren’t just doing worse than average, Executive Director of the Institute Fergus Cullen said, “We are doing the worst."

Here is the institute’s “list of lasts.”

  • Barron's rated Connecticut's debt situation as the worst in the country in 2012
  • ranked Connecticut as the 2012 worst state for retirement
  • The Institute for Truth in Accounting ranked Connecticut's financial status as the worst in the nation with a debt burden of $49,000 per taxpayer
  • Connecticut's credit quality was ranked 50th in the nation by Conning Inc.'s State of the States Municipal Credit Research Report in 2012
  • Connecticut's Tax Freedom Day of May 5, 2012 was the latest in the nation according to the Tax Foundation
  • Connecticut's Achievement Gap is the worst in the nation according to the Connecticut Council for Education Reform
  • The Fiscal Policy Report Card on America's Governors by the Cato Institute gave Malloy an "F"

It really is becoming very difficult to keep the bad news under your hat.
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