Wednesday, February 03, 2016

The State Of The State – Crooked

“No one believes him anymore,” said Republican Assistant Minority Leader Senator Toni Boucher of Governor Dannel Malloy.

The lady doubtless has her reasons. Responding to Governor Dannel Malloy’s recent boast, “I have made it clear that I am not proposing the raising of any taxes and I oppose the raising of taxes across the board,” Mrs. Boucher said, a note of exasperation in her voice, “Where are they going to take the money from? You can’t be running hundreds of millions in shortfalls every year. It sounds like they want to withhold road and education aid to towns and cities. People are worried about the financial crisis and tolls and higher gas taxes and mansion taxes.”

There are sixteen union contracts with state employees up for renewal this year. Savings, Mrs. Boucher noted, can be found there. Union contract negotiations did not take pride of place in Mr. Malloy’s State of the State address before the Democratic dominated legislative body that had affirmed all the budgets that, soon after they were presented to the General Assembly, quickly spun out of balance.

Mrs. Boucher may have been reacting to the repeated shunning of Republicans during Mr. Malloy’s entire term in office. There are no serious Republican fingerprints on any of Mr. Malloy’s budgets; indeed, GOP leaders in the General Assembly were by design excluded from all budget discussions. A crack in Mr. Malloy’s iron curtain parted recently to allow Republican leaders to participate in pre-budget discussions, but that was mainly for show, a subterfuge particularly galling to Themis Klarides, the GOP Minority Leader in the House, who said Mr. Malloy and Democratic Leaders Martin Looney and Brendan Sharkey simply “wanted our fingerprints on the murder weapon” – a budget chronically out of balance that does not seriously address the State of the State, which is, despite Mr. Malloy’s sunny assurances, heading at warp speed towards a bankruptcy cliff.

Days before Mr. Malloy’s State of the State address, the indispensable Yankee Institute, sent out a release on an audit of the state budget: “While Public Act 11-48 required the state government to use GAAP accounting, the report found that state accounting is not meeting that standard.  Instead, it continues to utilize the modified cash basis of accounting as a compromise to avoid significant operational changes in Core-CT processes. As a result, budgets are not being controlled on a GAAP basis, and monthly reporting on the Core-CT system is not on a GAAP basis.”

In previous reports, the auditors had noted that “the University of Connecticut, the University of Connecticut Health Center, the Connecticut State University, the Connecticut Community Colleges, the Office of Legislative Management and the Judicial Department are allowed to operate as limited scope Core-CT agencies. These agencies process their transactions through their own accounting systems and then periodically enter the information into the Core-CT system.”

Applying GAAP standards to Core-CT agencies, the auditor’s report showed that “Connecticut's net position is negative $35.3 billion, which is $22.7 billion more (emphasis mine) in the red than reported in 2014.” This is not a negligible accounting error; it is deliberate avoidance of statutory responsibility by tax supported entities.

In this year’s budget address, Mr. Malloy has requested an increase in his “discretionary power” over budgets. But – funny thing about constitutionally allocated powers in a tripartite system of governance – the power to adjust budgets with which Mr. Malloy wants to adorn himself is one that belongs properly to the legislative branch, and any additional power over revenue receipts and expenditures delegated by the legislature to the governor is permanently lost to the budget writing branch of government. A very strong argument can be made that Mr. Malloy’s recission authority – the much abused authority to make limited budget cuts – should be withdrawn from a government that is chronically incapable of balancing budgets.

Some responsible Democratic legislators, as well as Senate Republican leader Len Fasano, who has a long and accurate memory, will resist Mr. Malloy’s power grab. The General Assembly must have unimpeded authority to set policy and allocate budget amounts on a line-item basis, Mr. Fasano said, “That’s our job.”

Mr. Malloy’s governing template is Wilsonian. President Woodrow Wilson regarded the constitutional separation of powers doctrine as a useless impediment, as do most modern progressives who have grown up in his shadow. During his first few weeks in office, Mr. Malloy a) presented his budget to the Democratic dominated General Assembly; b) accepted minor revisions and signed the budget; c) negotiated very expensive contracts with SEBAC union representatives; d) agreed to union revisions that materially altered future budgets years out, and e) received from Democratic leaders in the General Assembly plenipotentiary powers to accept a revised budget that had not be resubmitted to the General Assembly for affirmation.

All of which has inescapably led to increased spending, increased taxes, chronically out-of-balance budgets, opaque, not-responsive government agencies, and more dodges, budgetary sleight of hand and media manipulation than can be found in the usual failed European socialist state – think Greece – or, to bring the horrid budgetary mess closer to home, any socialist south of the border state presided over by the usual autocratic caudillo – think Venezuela – which used to be called the Paris of South America before Hugo Chavez sank his vampire teeth into its lovely neck.
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