State, Local Officials React To Governor’s Budget Message

By John Voket

Both of Newtown’s state representatives and the first selectman were on hand to hear Governor Dannel P. Malloy deliver his budget address in Hartford February 16, and all three offered initial impressions following the speech Wednesday.

“I was pleasantly surprised with the Governor’s approach,” said Representative Chris Lyddy in a phone conversation shortly after leaving the event. “I appreciated the way he broke out all the things he means when he talks about shared sacrifice.”

Representative DebraLee Hovey also expressed appreciation for Gov Malloy’s expressed intent to balance the state budget, but countered that his assertions about “shared sacrifice” might be disingenuous.

“I do appreciate that Governor Malloy is not relying on any gimmicks or one-time revenues in his budget, nor is he borrowing to close the deficit, which would make things much worse,” said Rep Hovey.

First Selectman Pat Llodra, who was on hand as the guest of Rep Lyddy, said she related to many of the points the former Stamford mayor was trying to make. 

“I found the governor’s speech regarding the budget to be very engaging and compelling,” Mrs Llodra said. “He is demonstrating courage in addressing some of the fundamental issues that have brought Connecticut to this place of economic distress.”

Gov Malloy said his goal Wednesday was to “make the state budget more real and relevant” to state residents and stakeholders.

“Our state’s budget can make the difference between hunger and hope for a family on the brink of homelessness; the difference between failure and opportunity for a child taking his or her first steps; the difference between despair and dignity for an aging senior; the difference between peril and security for anyone walking our streets or traveling on our highways,” the governor said. “Everything I’ve just described can be found in the line items of the budget.”

But, he said, the sum of those items must have meaning as well. And, unless that meaning is clear, the line items and their sum are of no lasting significance.

At that point Gov Malloy introduced the foundation stone of his budget plan, which he summed up in one word: Jobs. And he laid out how his administration was planning to navigate out of the dangerous fiscal waters Connecticut is in today, leaning heavily on all state residents, employees, agencies, and businesses.

“With job creation on our minds, several principles and philosophies helped guide us toward this day,” Gov Malloy said. “But the one overarching concept that we kept in mind is one I call shared sacrifice.”

That sacrifice apparently includes digging a little deeper into various pockets to cover several tax increases the governor outlined.

Ill-Timed Taxation

Rep Hovey expressed concern about the levels of taxing and increased spending Gov Malloy proposed, saying the proposal set the wrong priorities while wasting an opportunity to fundamentally restructure state government and make government live within its means.

Particularly, Rep Hovey zeroed in on proposed increases to income and sales taxes, saying the $3.4 billion he aimed to recoup over the next two years would be put squarely on the shoulders of Connecticut’s middle class, who are already squeezed in this economic crisis.

“I don’t see much of the ‘shared sacrifice’ he has repeatedly said we must endure,” Rep Hovey said. “Instead, I see a middle class crushed with new higher taxes on nearly everything that can be taxed, and I see a government that continues to grow through new spending into the next biennium. If this is what the governor meant by a radical restructuring of government, it falls incredibly short of the mark.”

Rep Hovey noted that while neighboring states are making the tough decisions and cutting the size and scope of state government they are doing so without calling for higher taxes.

“These higher taxes will do immense damage to our largest priority, which is creating and expanding jobs in this state,” she said. “The governor’s budget will make it harder to start a business in this state, and harder to keep a business afloat here.”

Rep Hovey did praise the governor for seeking concessions from unions in the amount of $1 billion and his effort to get more rescission authority, as well as the fact that the budget does not cut aid to municipalities, which could result in greater property tax increases.

Rep Lyddy said he strongly supported the governor’s message that the state has to move forward, while being humane at the same time. And, Rep Lyddy said, the financial goals have to be accomplished without “punishing high wage earners.”

According to Rep Lyddy, Gov Malloy’s team will go to work immediately, dispatching the Secretary of Connecticut’s Office of Policy and Management (OPM) to address the legislature’s Appropriations Committee Thursday so its members can understand how the proposal breaks down to affect communities.

Then, on Friday, OPM representatives will visit with lawmakers on the Finance Committee to “talk about the tax package.”

Rep Lyddy said he is taking a wait and see position, at least in the near term.

“I’m want to see what he will do about achieving a partnership with state employees,” Rep Lyddy said, adding that he also liked Gov Malloy’s plan to consolidate state agencies to reduce costs and streamline operations.

“The governor is asking everyone in Hartford and all state employees to display greater accountability to those we serve,” Rep Lyddy said. Speaking to local concerns, Rep Lyddy pointed out that Gov Malloy pledged to fully fund Educational Cost Sharing to local communities, which is just one way the governor is “putting property taxpayers first.”

“Since his election, I’ve become a lot more comfortable with his priorities,” Rep Lyddy said. “I hope taxpayers recognize that.”

Practical Fiscal Policies

The first selectman said the governor was “demonstrating courage in addressing some of the fundamental issues that have brought Connecticut to this place of economic distress.”

Mrs Llodra said she particularly like statements such as: “State government exists to create jobs, not to perpetuate itself”; “we will not borrow money for operating expenses”; “this budget will fully fund pension obligations”; “Connecticut is open for business”; and “we will not balance this budget on the backs of municipalities.”

“His budget proposal is particularly supportive for education,” Mrs Llodra said, citing the commitment to flat funds ECS, and Excess Cost Grants.

For the municipality, the first selectman said there are some deductions, such as elimination of reimbursement for taxation on machinery, which would cost Newtown more than $200,000. Also, reduction in STEAP grants — a source Newtown has used quite successfully to fund projects.

“But the real estate conveyance tax is increased and is permanent, a potential increase for Newtown of some $300,000,” Mrs Llodra said. “On balance, the projected budget has a possible loss of revenue to the town of approximately $90,000. We can manage that.”

While she said new taxes will create a buzz and will require a considerable bit of negotiation with the legislators, and the general increase in the sales tax with a 0.1 percent bump to the municipality for products and services retailed there, “has little effect in Newtown.

Mrs Llodra observed that the elimination of the $500 property tax credit “is a direct hit on all of us, and, to balance this budget the unions will have to give $200 million in concessions…that will be very difficult to [achieve].”

“Overall, the governor seems true to his word that he will not balance the budget on the backs of municipalities; however, the individuals within the municipality will certainly feel the impact of the new taxes,” the first selectman said. “So maybe it is not the town’s government, but the people who live in the town, who will bear this burden most directly. 

In the coming weeks, Gov Malloy said he will tour the state speaking to residents and getting ideas from taxpayers at the municipal level. Conversations begin February 21 at 7 pm in Bridgeport, continue March 8 in Waterbury, and conclude in Danbury on April 6.

The entire text of the governor’s budget address can be read at www.governor.ct.gov/malloy/cwp/view.asp?A=11&Q=474024