Tuesday, October 17, 2017
Government By Gimmick: Malloy Republicanizes His Fourth Budget
Shortly after Democrat and Republican leaders in the General Assembly announced they were close to reaching agreement on a compromise budget, Governor Dannel Malloy offered his fourth budget, Republicanized, some believe, to make it acceptable to the “turncoat Democrat legislators” who had rejected Malloy’s third budget and embraced a Republican offering, the only budget so far accepted by both Houses of the General Assembly.
Malloy pitched his fourth getting and spending plan to querulous reporters as a "lean, no-frills, no-nonsense budget,” inviting comparisons to his previous offerings, which were, one is entitled to presume, fat, union-friendly, and replete with the usual frills and nonsense. Malloy’s third budget factored in a SEBAC deal that assures state union workers raises of 3.5 percent per year, following a temporary 3 year wage freeze, until the expiration of union favorable contracts in 2027. The SEBAC deal also prevents future Governors, Democrat or Republican, from discharging deficits through lay-offs, the most overused implement in Malloy’s own gubernatorial tool box.
Malloy’s fourth and final budget may be a somewhat desperate attempt on his part to remain relevant as the minutes of his final term as governor tick down to zero, a legacy adjustment budget.
Malloy’s disappearance from the political scene in January 2019 does not mean that Republicans will be deprived of a juicy political target when elections roll around in November 2018. The Governor’s policies will continue to influence state government long after he has faded into the political woodwork.
Malloy’s approval rating has always been in the dumps, his personality prickly and on occasion abusive, especially towards Republicans. Colin McEnroe, the Aristophanes of political commentators in Connecticut, who miraculously remains untainted by conservative notions, tagged Malloy as a porcupine in more than one of his columns, a designation Malloy, during a rare confessional moment, haplessly pinned on himself. This is not a man who has reached outside his own box to incorporate in his thinking alien ideas, however fruitful.
In September, Malloy and Democrat leaders in the General Assembly agreed to impose new tax increases: a fee on ride share services and fantasy sports betting contests, a surcharge on cell phone bills and the cancellation of $50 million in indeterminate tax breaks, reduced in his new budget to $30 million. These “unpopular tax increases” do not survive in Malloy’s fourth budget iteration. Tax increases have become unpopular because Democrats have gone to the tax well too often; Malloy is the author of the largest and the second largest tax increases in state history.
Malloy’s goals in putting together his most recent budget, he said, were simple: to “eliminate unpopular tax increases, incorporate ideas from both parties, and shrink the budget and its accompanying legislation down to their essential parts.” Plucked out of Malloy’s newest budget are pages and pages of implementer language. Big spenders do not like implementers that actually implement their intentions. Several months ago, Attorney General George Jepsen found that the Constitutional cap on spending attached to then Governor Lowell Weicker’s income tax bill was unconstitutional because legislators had never supplied definitions necessary to implement the tax cap, an unfortunate oversight. In his more contented moods, Malloy quite correctly might have called the quarter century old dead spending cap a gimmick.
Malloy himself is no stranger to gimmickry. For instance, when you eliminate a proposed tax increase, you have not cut spending. When you overestimate prospective tax receipts for the purpose of balancing a budget, you have not balanced the budget; your overestimation will appear later as a deficit. When you sweep dedicated funds, crack open lockboxes and dump the loot onto the General Fund, you have successfully fooled all the people all the time. When you extend far into the future negotiated contract terms favorable to unions, you have deprived future governors and legislators of tools they must use to reduce future deficits; and in the absence of permanent, long-term spending cuts, future deficits will be a permanent fixture of Connecticut’s future budgets. When you have inserted into union contracts a no-layoff clause that elapses in 2027, future governors will not be able to deploy layoffs to reduce expenditures. Indeed, this measure will deprive future governors and legislators of Malloy’s own most frequently used spending reduction tool. When you force municipalities suddenly to absorb a third of the cost of employee pensions that previously had been shouldered by the state, you have made no permanent, long term cuts in pension obligations. And when you reduce the municipal burden you have imposed by 6 percent, you have not lifted 94 percent of the load you have imposed on towns struggling to balance their own books.
This is government by gimmick. The most important innovation in the Republican budget Malloy vetoed lay in provisions that reclaim political power from unions and reestablish the constitutional budget making authority of the General Assembly which, for half a century, has contented itself with budget gimmickry. Yet every time Republicans propose – after contractual terms have terminated in 2027 – to move from contract entrapment to a statutory arrangement that allows the General Assembly to control getting and spending, Malloy and Democrat leaders begin to writhe in pain, as lesser devils do when they are sprinkled with holy water. And the inevitable suit is waved in front of the reformers' noses by lawyers who are certain that God and his angels do not favor republican government.
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