Did You See This Editorial?

October 22, 2018

The Rep-Am hits the nail on the head.

Connecticut budget: Gov. Malloy’s fiscal failure

Heading into the 2015-17 biennium, Connecticut faced a $2.2 billion deficit. Democratic Gov. Dannel P. Malloy and all but four of the legislature’s Democrats approved a budget Gov. Malloy and Democratic legislative leaders depicted as strong medicine. We warned that this budget would do nothing to stabilize Connecticut’s finances.

There now is no doubt the budget was a failure, and it recently earned Connecticut an embarrassing distinction. 

This is a significant part of the legacy of Gov. Malloy, who will leave office Jan. 9.

The aforementioned budget covered fiscal years 2015-16 (July 1, 2015-June 30, 2016) and 2016-17 (July 1, 2016-June 30, 2017). It is best remembered for ushering in one of the largest tax increases in Connecticut history. 

Spending increases of 3.9 percent and 3 percent were authorized for FYs 2015-16 and 2016-17, respectively, and unionized state employees were not asked for concessions.

The budget also relied on gimmickry and unreliable revenues.

In a July 2, 2015 editorial, we described the budget as a “house of cards.” Sure enough, the budget was in trouble by mid-September 2015. Even after revisions were made, Connecticut finished FY 2015-16 $170.4 million in deficit, and it closed FY 2016-17 $22.6 million in the red. Both deficits necessitated transfers from the state’s troubled rainy day fund.

The Mercatus Center, an affiliate of Virginia-based George Mason University, recently examined the fiscal solvency of all 50 states in the United States. 

Connecticut came in 49th place, besting only notoriously troubled Illinois.

Hartford’s Yankee Institute for Public Policy reported Oct. 15 the Mercatus Center based its ranking on a 2016 report from Democratic Connecticut Comptroller Kevin P. Lembo, who noted revenues provided via the 2015 tax increase were “well below the original anticipated rate of growth.”

Yankee summed up the situation by stating, “The increased revenues related to the 2015 tax increase were not enough to keep Connecticut from taking a big step backwards.”

Upon signing the 2015 budget act, Gov. Malloy said, “I believe we have a budget that helps deliver prosperity for the future.”

There is no disputing that this budget hinders Connecticut in achieving prosperity. It should have been obvious to the governor, and his legislative allies, that this would be the case, especially since the similar 2011 budget act didn’t get the job done.

The 2015 fiasco should factor into history’s evaluation of Gov. Malloy, who is set to leave his successor an approximately $4 billion deficit for the 2019-21 biennium.