Malloy Defends His Proposed State Budget at Town Hall Meeting

Saying he was a little bit nervous holding the first of 17 town hall meetings for his proposed 2012 - 2013 biennium state budget — not knowing how it would go or how he would be treated — Gov. Dannel P. Malloy told an audience in Bridgeport’s City Hall Annex Monday night that dealing with the state’s $3.2 billion deficit is not going to be easy no matter how it’s handled.

To put it in perspective, Malloy said, the deficit amounts to an obligation for every man, woman and child in Connecticut to repay $892.

And the state’s indebtedness on bonds, he said, amounts to approximately $70 billion, or $19,650 per Connecticut resident. Malloy’s appearance drew a crowd of perhaps three hundred people who overflowed the annex’s auditorium into surrounding hallways.

Introducing Malloy, Bridgeport Mayor Bill Finch, a fellow Democrat, asked the audience to be respectful of remarks made by the governor and members of the public, and the audience was mostly quiet, with only a few times when people verbally responded with boos or objections to what was said.

Providing an overview of the state’s fiscal situation, Malloy said it has been 22 years since the state grew jobs, and, “We’ve got to turn Connecticut into a job-producing state again.” Going forward in the budget process, Malloy said he'd enter into negotiations with the state’s employees’ unions hoping to bring about $1 billion in savings.

What’s happened in recent years, Malloy said, is that the state has borrowed to cover operating expenses and salaries, “mortgaging our future” while “starving off” its ability to borrow funds to invest in construction and infrastructure. As for providing new revenue, Malloy said his budget relies on a cross-section of revenue enhancements, including increased income and sales taxes.

Malloy said he’s proposed increasing the state’s sales tax to 6.25 percent, with the option for municipalities to collect an additional one-tenth of one cent on purchases. For Bridgeport, Malloy said, collecting that additional fraction of a cent could amount to about $1.25 million in additional revenue. The audience was then invited to ask questions, and a woman asked Malloy if his proposal to reduce the number of state agencies by combining them would result in reduced in state services.

Malloy said his proposal would result in more efficient delivery of services. “And I have to tell you something about Connecticut,” Malloy said. “We really – we don’t hold our government to very high standards, and so, if a government’s not performing what it’s supposed to be doing, we create another agency to do its job. That’s got to stop.” Malloy said Connecticut is competing with New York, Rhode Island and Massachusetts over where businesses want to locate.

Bill Dunn, a Norwalk resident, asked Malloy if Connecticut isn’t really competing with Texas and the southeastern and southwestern states over where to relocate, because, “no one in his right mind would move to (Connecticut, New York, Rhode Island or Massachusetts) because of taxes.”

Malloy said that over the last 20 years, most of the jobs transplanted into Connecticut have come from New York, so it’s important for the state to remain competitive with surrounding states.

Under his budget, Malloy said, “We will have substantially lower tax rates then New York, New Jersey, I believe Massachusetts, and Rhode Island, when everything’s said and done.”

“Being governor was never intended to be a game – it’s a calling,” Malloy said. “And I’m trying to answer that calling, and to do that, we have to create efficiencies over a long period of time.”

Saying he represented “the conservative grass roots,” Bob Mac Guffie of Fairfield asked Malloy why he didn’t embrace “liberating us from taxes, rather than increasing them.”

Malloy replied that Mac Guffie probably wouldn’t agree with him, but his plan is for the state to draw a line, establish its means, and stay within them. Malloy said that called for cutting spending by $1.8 billion, and, “That’s what our target is, I believe we’re going to get to it.”

Stratford resident Jerry Cunningham asked Malloy how taxpayers could take his call for spending restraint seriously when he’s proposed a “huge, expensive new taxpayer hand-out program” called the Earned Income Tax Credit? “That program is not a tax cut,” Cunningham said. “It is taking money from people who pay income taxes and giving it to people who don’t. New spending.”

Malloy replied that at about a $108 million total expenditure, the program is designed to accomplish a number of things, not the least of which is to help the families that need that help.

Cunningham then asked Malloy if he would “sunset” his tax increases, so they would end unless reapproved, and the governor replied that is up to the legislature. Malloy said that under his proposal, a suit of clothes priced over $1,000 would require payment of an additional three percent sales tax, as would a car purchased for more than $50,000.

The questions concluded with Stratford resident Maria Perez, saying she’s been a state employee for more than thirty years, listing the concessions she said state employees made two years ago to help the state close its budget deficit.  Through her union, Perez said, employees agreed to seven furlough days, an increase in insurance premiums, an increase in medical insurance co-pays, and no raises for two years.

Also, she said, employees of five years or less had to make an additional contribution to their retirement plan of between three and five percent. “And now you’re asking us to give back more,” Perez said. “Please, Gov. Malloy, don’t try to balance the state’s problems in the deficit on the backs of state employees. We didn’t create the problem.”

Malloy replied by asking, if the state’s employee unions do not agree to concessions, should taxes be raised $2.5 billion or the state cut another $1 billion out of its “safety net” covering residents needing support?

If the state cuts those funds, Malloy said, there will be no safety net, and if the state lays off employees, “what good would that have done?”

“So all’s (sic) I’m saying is, I want to sit down and work with people,” Malloy said. “This is not personal. I don’t want to hurt anybody. I was elected governor of a state that has a $3.2 billion deficit and I’m trying to find the best course to balance that.”