Connecticut Commentary: Red Notes from a Blue State

It is nearly a forgone conclusion that tolls will be erected in Connecticut, and it is worth explaining why. Taxation in Connecticut is a matter of numbers, just as the impeachment of President Donald Trump in the House was a matter of numbers and his exoneration in the Senate will be a matter of numbers. Rationales will be offered in both chambers, but the reasons offered pro and contra are purely decorative, not compelling. It is the votes that are compelling. The same is true of Connecticut’s state budget. Democrats have commanding leads in both chambers, therefore there will be tolls. And the tolls, to be imposed only on trucks in Governor Lamont’s latest toll legislation, will metastasize in the future. That too is inevitable.

We are fast approaching “V Day,” vote day here in Connecticut, on November 6. Republicans are punching through the mask, Governor Dannel Malloy, to hobble the gubernatorial ambitions of Ned Lamont who, along with Republican gubernatorial hopeful Bob Stefanowski, has had little direct political experience. Connecticut Commentary has styled this “the Junior Varsity campaign.” The first string team – Malloy himself, his Lieutenant Governor Nancy Wyman, along with other possible experienced Democrat prospects for governor such as Comptroller   Kevin Lembo – is sitting on the back bench. It would not be too fanciful to suggest that Democrats have not fielded their strong team for two principal reasons: 1) Malloy has sunk to a new low in his favorability rating, 15 percent, which suggests that his policies have failed the state, and 2) it may be prudent to wait until the storm of disapproval has passed; there is always tomorrow.

S&P Global Ratings has lowered Connecticut’s rating one notch from A+ to A. Credit analyst David Hitchcock provided a list of reasons justifying the downgrade. Hitchcock noted, according to a CTMirror story , that Connecticut has one of the highest per capita debt ratios in the nation, having ended the last fiscal year with a taxpayer bonded debt approaching 24 billion. The state has been struggling with ways to provide support for its poorly funded municipal teachers’ pension program. Connecticut, according to Hitchcock, “has a history of deficit financing during recessions.” Connecticut has yet to recover fully from a recession that official ended several years ago. The state’s emergency budget reserve is dangerously low at $210 million, according to Hitchcock, an amount just larger than 1 percent of annual General Fund operating costs. CTMirror reports that “Comptroller Kevin P. Lembo recommends a reserve of 15 percent.”

Democrat Dan Drew, the mayor of Middletown, has withdrawn from the governor’s race. His name may now be added to a crowd of Democrat MIAs. Drew announced he was running for governor before Governor Dannel Malloy threw in the towel. His gesture of mild defiance could not have set well with the thin-skinned Malloy who, like a post-Capone Capo di tutti capi, likes his vengeance dishes served cold. Malloy’s Lieutenant Governor Nancy Wyman, pleading grandchildren, has decided not to run. Malloy’s Comptroller, Kevin Lembo, earlier decided he did not want to be governor. Attorney General George Jepsen, who easily might have held his position as long as his predecessor, Dick Blumenthal, decided to call it a day after only six years – hopefully setting an unalterable precedent. And Jepsen did not announce for governor. Blumenthal was Attorney General for two decades and might still have been there, a scourge of Connecticut businesses, had not then U.S. Senator Chris Dodd left t...

No one quite knows for certain how the play will unroll during the upcoming 2018 elections, but the cast of characters is slowly taking shape. Last April, Governor Dannel Malloy announced   he would not be running for a third term. Said Malloy, a rare emotional hitch in his voice, “I am today announcing that I will not seek a third term as governor. Instead, I will focus all my attention and energy – I will use all of my political capital from now through the end of 2018 – to continue implementing my administration's vision for a more sustainable and vibrant Connecticut economy." Malloy’s announcement opened a Pandora’s Box.  Lieutenant Governor Nancy Wyman, who rode shotgun on Governor Dannel Malloy’s coach for eight years, has only recently bowed out of the race. Wyman, it appears, has children and grandchildren whose company, she has belatedly said, she at long last would like to enjoy. Her bow-out, we are to understand, had nothing to do with Malloy’s failed...

Overheard in the MidRoad Diner during a meeting of the Reformers Club The difference between God and Governor Malloy --“God is less concerned than [Dannel] Malloy when people question Him.” Those early body-building pics of Republican House leader Themis Klarides circulating in the desk drawers of oppo-researchers -- “I’m still waiting for one of Connecticut’s opinionators to write, maybe in a column, that Klarides can easily bench-press many of her political opponents. She likes sports, contact sports too. Otherwise, why would she have gotten involved in politics?”

So then, everyone knows that Governor Dannel Malloy will not be on the ticket in 2018. Like another big tax and spender before him, former Governor Lowell Weicker, Malloy has chosen to skedaddle after having imposed on possible voters both the largest and second largest tax increases in Connecticut history. But – where to? Rumor, the Hartford Courant said , is now moving like a raging fire among “lobbyists, state employees and political insiders that Malloy would step down before his term ends in January 2019 and allow Lt. Gov. Nancy Wyman to become governor. Malloy, under the scenario, would then take a high-ranking position at the University of Connecticut or another college.” Malloy was called upon to deny these possibilities, and he did so with his usual aplomb.

It’s a pretty safe bet that Bridgeport Mayor Joe Ganim may not be Connecticut’s next governor, now that current Governor Dannel Malloy has thrown in the sponge, opening the door to a handful of Democratic gubernatorial hopefuls panting behind the curtain. Among the Democratic prospects are Mr. Ganim, elected mayor of Bridgeport four times before he was convicted of sixteen counts of corruption related activity, for which he spent seven years of a nine year sentence under lock and key. Other possible Democratic gubernatorial candidates are Comptroller Kevin Lembo, Middletown Mayor Dan Drew, former state Senator Jonathan Harris, Christopher Mattei, the  former Chief of the Financial Fraud and Public Corruption unit for the United States Attorney’s Office in the District of Connecticut who bagged former Governor John Rowland a second time,  and Lieutenant Governor Nancy Wyman who presently is playing it coy.

The CTMirror story begins with a potent image of pending disaster: “Gov. Dannel P. Malloy announced a deal Friday with state employee unions that would allow Connecticut to dodge a fiscal iceberg by holding down annual pension costs otherwise set to spike over the next 16 years.” “Iceberg sighted, full speed ahead,” cries captain Malloy, who has skippered Connecticut’s ship of state for nearly five years. The state’s unpopular governor, approval rating 24 percent, is up for re-election in 2018. “But to get that relief,” CTMirror adds, “Connecticut would shift at least $13.8 billion in estimated pension expenses owed before 2032 onto a future generation.

T here is nothing ambiguous in Gail Lavielle’s kickback. This is what the Republican State Representative said about the Democrat’s new attempt to smudge budget figures: “Here it is: documented evidence made available by the respected CTMirror that the governor and the administration are HIDING Connecticut's current deficit until after the election. Remember, the current majority legislature made this possible by voting just a couple of years ago to move the annual autumn pre-election revenue forecast until after the election. There will be more unconscionable tax increases, more service cuts, and more failing infrastructure if that majority remains. And it's all avoidable: the five-year plan we outlined this spring clearly showed how, starting with real state labor cost reforms, bonding reallocations, and implementing the spending cap.” Mrs. Lavielle’s statement was echoed by other distraught Republicans. The CTMirror story noted   that although budget projections fi...

That crunching sound you hear is the fall of the house of Malloy. Governor Dannel Malloy’s disapproval rating at Mid-March was a hefty 68 percent, according to a recent poll published by Quinnipiac College . The low approval rating of 23 percent marks Mr. Malloy, head of the Democratic Governors Association, as the most unpopular governor in the nation, only a few weeks after Mr. Malloy was awarded the Kennedy Center’s Profile in Courage Award. A previous Connecticut Governor, Lowell Weicker, also received the same award shortly after his popularity rating in the state plummeted during his contentious term in office, in the course of which Mr. Weicker had vetoed three non-income tax budgets and finally succeeded in forcing the General Assembly to impose an income tax on a state that once had attracted businesses because it was a low tax, low regulatory Eden.

Stan Godlewski, Hartford Courant As June opened, the State Democratic Party held a fundraiser in Hartford. The usual political celebrities were in attendance, along with deep-pocket notables. For once in a long while, state unions in Connecticut were on the outside looking in – and protesting. It was a difficult moment for union-friendly Democratic politicians.  Passing by State AFL-CIO President Lori Pelletier, Comptroller Kevin Lembo paused for a moment, bussed Ms. Pelletier on the cheek, acknowledged the protesters, and moved into the Hartford Convention Center to join those hawking for money at the Democratic Party fund-raising event.

As leading politicians in Connecticut – including Republicans, so far frozen out of budget negotiations by Governor Dannel Malloy -- gather together to decide collectively how to shore up sagging state revenues, a recent report issued by state comptroller Kevin Lembo contains a fly in the ointment. Mr. Lembo is predicting a $118 million budget deficit. No surprise there; deficits have been a recurring feature in budgets sent by Mr. Malloy to the Democratic controlled General Assembly. Rather than call a special session to fix the problem, Mr. Malloy has relied on his rescission authority to patch the repetitive holes.  Mr. Malloy’s last budget cuts came a bit too close to the bone and disturbed Democratic leaders in the General Assembly, who in the past had winked at Mr. Malloy’s two massive tax increases, the largest and the second largest in state history.

If the Malloy administration seems to be pretentious, it is because Governor Dannel Malloy is fast becoming Connecticut’s pretender in chief. Consider budget rescission. A rescission is a post-budget adjustment made by the governor without legislative approval. If the rescission is small enough, the governor need not refer his budget adjustments to the General Assembly, a politically embarrassing and time-consuming business. Any referral to the General Assembly would be a tacit admission that the budget figures previously presented and approved were out of balance, and any budget reconfiguration by the General Assembly would occasion multiple media controversies that easily can be avoided through the rescissionary process.

Governor Dannel Malloy has been chosen by his gubernatorial peers to head the Democratic Governors Association (DGA) as Chairman in 2016. Did they choose wisely? Though he claims – as most governors would -- that he has no national ambitions, Mr. Malloy’s slip, so to speak, is showing. Even as governor of the state, large ambitions course through his veins. He is very comfortable appearing on national programs with a pencil in hand that he gleefully sticks in the eye of one promising Republican politician after another. Governor of New Jersey Chris Christy is a favorite target, and recently Mr. Malloy has been throwing porcupine quills in the direction of Louisiana Governor Bobby Jindal. Mr. Malloy appears to enjoy the rough and tumble of politics, though his own skin is painfully thin.

There will be time, there will be time  To prepare a face to meet the faces that you meet… Time for you and time for me, And time yet for a hundred indecisions And for a hundred visions and revisions Before the taking of a toast and tea. These lines, clipped from T.S. Eliot’s poem The Love-Song Of J. Alfred Prufrock , might easily describe the “visions and revisions” of Connecticut’s here-again, gone-again budget deficits. Kevin Lembo – so far, Connecticut’s straight-shooting Comptroller – revised his deficit estimate early in March by $40 million, not the only revision in Governor Dannel Malloy’s second term. The boost in the deficit figure, Mr. Lembo said, was the result in part of an over-estimation of revenue the state had expected to collect from capital gains taxes paid through the personal income tax.

When Mark Twain said ““Never put off till tomorrow what may be done day after tomorrow just as well," he might easily have been talking about bonding. Usually a state sells bonds to pay for long term capital projects. But like any political practice, the selling of bonds may be subject to abuse. The use of bonding to pay off current expenses that ought to be discharged through tax increases or spending decreases is considered a “no, no” among agencies that rate state bonding. The practice, however, is a “yes, yes” among politicians who want to avoid either the unpleasant option of raising taxes or the equally unpleasant option of cutting spending. The beauty of bonding for such politicians is that it allows them to escape the wrath of voters who understandably resent tax increases imposed to pay for current budget expenses and improvident spending. The downside to bonding abuse is that current expenses are carried into the future, a benefit for cowardly politicians charged to...

A little more than a month ago, Jim Powell of Forbes Magazine did us the favor of pulling together in one piece – “ How Did Rich Connecticut Morph Into One Of America's Worst Performing Economies? ” -- a load of data much of which was  already in the public stream . It’s useful to have all the festering lilies together in one bunch, so that one might get a good whiff of them. Before and since the publication of Mr. Powell’s distressing news, some Republican opponents of Connecticut’s progressive governor and his helpmeets in the state’s General Assembly have been energetically flourishing some of Mr. Powell’s little red flags, hoping that the state’s sometimes inattentive media might awaken and take note that Connecticut is teetering on the brink.

Almost immediately after Governor Dannel Malloy and Democrats in the General Assembly had put their budget to bed, a Hartford paper noted that however much lipstick Democrats put on the budget porker it was in many important respects still a pig. Another media resource noted that while the governor had indicated he had been faithful to his earlier promise to hold the line on taxes – but not, tellingly, on spending – the new budget, Mr. Malloy’s second, placed new limits on tax credits, extended expiring taxes, boosted the gasoline tax 4 cents per gallon, drained from the transportation fund $120 million collected at the pumps during the last two years, depositing the money targeted for transportation needs into the general fund, resorted to $550 million worth of fund raids to plug holes in the budget, borrowed about two thirds of the $1.2 billion necessary to convert to a GAAP accounting system and shifted a little more than $6 billion of Medicaid spending from a constitutional c...

On budget matters, the governor proposes and the legislature disposes. Connecticut’s General Assembly has in the past been disposed to tinker with budgets presented by the state’s chief executive.   No one knows precisely what the Democratic dominated General Assembly will do to a budget that has been etch a sketched by Governor Dannel Malloy and Democratic leaders in the General Assembly. Once again this fiscal year, Mr. Malloy and Democratic legislative leaders have stiffed Republicans on budget matters. During Mr. Malloy’s first budget negotiations, Republican leaders were shooed out of the room so they might not interfere with delicate negotiations then underway between Mr. Malloy’s agents and union leaders representing SEBAC, the state union conglomerate authorized to negotiate contracts with the governor. On that occasion, Democratic leaders in the General Assembly pre-approved a budget submitted to them by Mr. Malloy and invested him with plenipotentiary powers to make ...