Saturday, February 27, 2016

How Many Vetoes Does Malloy Have In His Safe?

Projected revenue figures from Connecticut’s usually non-partisan Office of Fiscal Analysis (OFA) have been fairly accurate. The accuracy of figures produced by agencies used in assembling budgets is generally proportionate to the political independence of the number crunchers. And of course all figures utilized by partisans – especially during elections, which bend hard truths to suit the ambitions of the reigning power – should be viewed with a great deal of suspicion.

The figures most recently released by the OFA are balled fists.

This year’s budget could be in the red by as much as $266 million, a too frequent occurrence during the entire administration of Governor Dannel Malloy.

Last June’s budget covering the years 2016-17 is $900 million in the red. The most recent budget proposal from Mr. Malloy, an attempt to escape red ink during this period – which even now has progressive legislators tied to the apron strings of state unions rending their garments and tossing ashes on their heads – is $410 million in the red.

And the brand spanking new budget adopted for biennial fiscal years 2017-18 and 2018-19 will fall short by about $2 billion in each of the biennial years. Why the shortages in revenue?

Since the adoption of the Lowell Weicker Jr. income tax in 1991, Connecticut has struggled to free itself of successive prolonged recessions. The recession that shadowed the Weicker tax lasted ten years. Eventually, Connecticut managed to recover the jobs lost during the decade following the imposition  of the income tax, and the state hobbled into the future, its powers of regeneration considerably weakened.

Used to budget surpluses – the Weicker income tax was not net-neutral -- the state, protected fitfully by two Republican “firewall” governors, had convinced itself that every succeeding deficit could be settled by applying the Weicker paradigm. All the red ink was met by tax increases: Mr. Malloy, for instance, has raised taxes in each of his budgets by about $2 billion, and the future, according to OFA projections, is holding in its bony, deathless hands $4 billion of red ink for the next fiscal year. Repetition so predictably patterned points to a fundamental miscalculation – no?

After having been badly bludgeoned by successive failures – companies moving out of state; young people establishing their futures in other states, and taking with them, by the way, lifetimes of revenue generated both by themselves and their expatriated children that might have been used in tax-thirsty Connecticut to satisfy the extortionate demands of red-ink producing state workers, continuing and metastasizing budget deficits – some politicians have struck the progressive chains from their ankles and realized that Connecticut is not suffering from a revenue problem; it is suffering from a spending problem. IT ALWAYS HAD BEEN SUFFRING FROM A SPENDING PROBLEM, even in those halcyon days long ago when Governor “Maverick” Weicker saved state government the trouble of making hard spending reduction decisions by introducing into Connecticut’s revenue bloodstream an income tax that opened the sluice gates to rivers of spending, so saving state government – but not the state.

Connecticut’s budget has tripled since the last Governor William O’Neill non-income tax budget, all the surpluses have turned to deficits, the state’s income tax revenue stream has diminished, and now, for the first time in 25 years, a governor who has been the prime mover of two massive income tax increases – the largest and the second largest in state history – has APPARENTLY drawn a red line in the sand.

Connecticut’s income tax revenue has always been yoked to small businesses and financial operations, both of which have been adversely affected by prolonged recessions and steep increases in the income tax. In this sorry world in which only death and taxes are permanent, whatever you tax tends to disappear. This time, Mr. Malloy has pledged on a stack of bibles that there will be no more tax increases. He has not said he would veto revenue enhancements plugged into his budget by unrepentant progressive leaders in the General Assembly. In the past, Mr. Malloy has yielded to the importunities of President Pro Tem of the Senate Martin Looney and Speaker of the House Brendan Sharkey, neither of whom wants to lose either body to resurgent Republicans.

Mr. Malloy is the titular head of the State Democratic Party, and his messaging is plain and unambiguous: No tax increases; abandon any plan to soak millionaires; adapt to Connecticut’s new, austere economic reality; surrender the fugitive hope that a national rising tide will any time soon lift Connecticut’s economic boats; cut spending.

In imposing an income tax on Connecticut, then Governor Weicker vetoed three non-income tax budgets presented to him by Republicans and what we might call Ella Grasso Democrats. He was praised at the time by Connecticut’s media as the testosterone governor whose opposition to centrist Democrats and Republicans was brave and praiseworthy.

Now that the state has been imperiled by a quarter century of progressive government, one wonders whether Mr. Malloy has the you-know-whats to resist business as usual in the General Assembly. How many vetoes does Mr. Malloy have in his safe?

Post a Comment