Challenge Welcomed

Long-time conservative columnist Chris Powell, of the Journal Inquirer newspaper, is welcoming Governor Malloy's latest budget proposal and sees it as a challenge to the status quo.

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Malloy Starts Budget Debate

Governor Malloy's shared sacrifice budget for the next two years places the biggest sacrifice at the feet of state employee labor unions.

In a budget proposal outlined Wednesday afternoon, Malloy asked for $1.5 billion in labor concessions. He also wants municipalities to pay a larger share of the cost of pension costs and has suggested about $400 million in new taxes.

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Budget Battle Begins

Governor Malloy will unveil his budget proposal for the next two years during a speech this afternoon to the legislature.

From what we know so far the plan will seek to close cumulative projected deficits of more than $3 billion through spending reductions, cost sharing with municipalities and union concessions. For the most part, Malloy is not offering any major tax increases to enhance state revenues, although he has confirmed he will suggest the elimination of the $200 property tax credit.

The governor's budget proposal will be officially unveiled at noon.

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Malloy's Crisis

The legacy of governors is often defined by the crises they face.

In the case of Governor Dan Malloy, the one consistent crisis of his time in office has been Connecticut's out of balance state budget. The Hartford Business Journal's editorial this week suggests that in the on-going effort to address this crisis Malloy is beginning to sound more like a Republican than the highly partisan Democrat he is seen as on the national stage.

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Budget Week

The week ahead will be dominated by Governor Malloy's budget proposal for the next two years and reaction to it.

One thing is certain: the governor seems committed to the idea of a fundamental re-working of state finances. He really has no choice, because doing things as they have always been done just doesn't add up. Reaction is certain to carry with it the usual howling from various special interests, but those interests and lawmakers, are in a position similar to the one facing the governor.

The challenges facing the state require new solutions. The ritual resistance of the annual budget process cannot be given the same weight by lawmakers, because there is not enough revenue to satisfy everyone.

As each budget cycle of the Malloy administration becomes more difficult, previously unpopular choices are becoming more palatable.

Hole Dug Deep in Time

Keith Phaneuf, a reporter for the CT Mirror who has dedicated the last ten years or so of his career to understanding the Connecticut state budget, has published the first of several stories explaining the state's current fiscal predicament.

Phaneuf reports Connecticut faces difficult choices over the next 20 years or more as a result of poor decisions made by legislatures and governors during the preceding 80 years.

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Pain Required

A Hartford Business Journal editorial this week makes an obvious, yet necessary statement few are willing to make: Whatever the legislature does to balance the budget this year, the economy will suffer in some way. The challenge facing lawmakers is that deep. There are no good options.

The HBJ argues however that tax hikes are at the top of the list of painful remedies to be avoided if possible.

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Crossroads

The final unemployment report for 2016 shows Connecticut's jobless rate dropping to 4.4%, but economists say that number is deceiving because more people are leaving the state.

Two leading Connecticut economists tell the CT Mirror that what the numbers really say is it is time for Connecticut state government to focus on policies that create jobs.

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Speaking of Savings

Connecticut Comptroller Kevin Lembo says he is going forward with further study of the use of the Medicare Advantage program.

Lembo says early research indicates the state could save "tens of millions" of dollars per year if retiree health costs are better managed.

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Deficit Reduction

CT21 has often touted the expanded use of private social service providers as a means to reduce state spending and improve health services.

The industry has released a study that says expanded use of private providers could save the state more than $1 billion.

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Making the Case

Governor Dan Malloy is out making the case for a new approach to the state budget, even before he formally introduces his budget proposal for 2017.

Malloy says he wants to share as much information as possible as he begins to rollout details of a spending plan that is expected to reduce state funding to many towns.

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2018 Politics Intrude

As the 2017 legislative session gets underway, there are signs the 2018 race for governor may intrude on policy decisions.

Over the weekend, OPM secretary Ben Barnes made an argument in the Hartford Courant for the need for a more reasonable approach to state education funding. He did so however by making an example of Trumbull First Selectman Tim Herbst who recently formed an exploratory committee for statewide office - presumably governor.

The first session following a legislative election is usually the best time to implement new, potentially controversial policy ideas, but the coming governor's race may add an additional level of complexity to the policy debate.

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Malloy Warns Locals

In remarks to the Council of Small Towns, Governor Malloy again suggested everyone will have to play a role in the balancing of the state budget this year. And that means anyone receiving state financial support will likely see reductions. On the other hand, Malloy also told town leaders they will like proposals he will roll out next month concerning mandate relief.

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Reason to Hope?

Comptroller Kevin Lembo, speaking in Hartford, says he sees signs that the economy is strengthening and that may help produce more tax revenue for the state of Connecticut in the coming months. He added he sees no trends that would lead to the elimination of projected budget deficits over the next two years, but said the signs are hopeful.

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Malloy Prepares

It is becoming quite obvious that Governor Malloy intends to present a budget proposal in four weeks that will be drafted based more on making the numbers work than any political considerations. The state's fiscal health has reached a point where there is really no alternative.

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Support for Union Concessions

The influential Hartford Business Journal is urging lawmakers to seek and support concessions from state employee unions as one way to balance the state budget.

More important, is the paper's larger point in an editorial published this week. The HBJ says its reason for supporting concessions is the need to avoid other cuts or tax increases that will have a negative effect on Connecticut's economic climate. This observation is a sign that the legislature is still operating in a political atmosphere that favors a "do no harm" approach on economic policy.

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Malloy Setting Table

Governor Malloy is clearly setting the table for the upcoming legislative session, but the question remains; will the legislature respond and can it respond effectively when it is so narrowly divided along partisan lines?

In this State of the State address, Malloy made clear he intends to offer a budget next month that will attack Connecticut's chronic fiscal crisis in three ways: More efficient spending, labor concessions, and reductions in municipal aid - particularly to wealthy towns.

Malloy's stated goal is consistent with policy recommendations made by the Connecticut Institute for the 21st Century. Connecticut taxpayers and businesses deserve and expect sound, predictable public policy from their state government. CT21 has argued this is the only way to build a strong economy with the potential for long term growth.

Jitters - Hartford Courant

Malloy Warns - CT Mirror

Malloy Asks Labor - CT News Junkie

Malloy Describes Lean Budget

One month before he is due to present his budget proposal to the legislature, Governor Dannel Malloy drew some broad outlines for his policy goals in 2017, during his State of the State address.

Malloy said the new budget must focus on creating a leaner government that is built around priority based spending. He told lawmakers we can only spend the money we have and that makes for difficult choices. He also urged lawmakers to work with him on reforming two major areas of state spending: State employee pensions and municipal aid.

The priority based spending model is consistent with the approach suggested often in recent years by the Connecticut Institute for the 21st Century.

Text of Governor Malloy's Address

Session Opens

Today’s State of the State address from Governor Dannel Malloy may reveal the first hints of the policy agenda at the state capitol for 2017.

With narrow partisan margins in both the House and Senate, and a looming budget deficit, there is reason to expect a slow moving or even paralyzed process. There are only hard choices to be made this year as Connecticut faces potential budget shortfalls - over the next two years - of $3 billion or more.

Governor Malloy has three basic choices from a leadership perspective. He can put his best budget proposal on the table and then leave hard decisions in the hands of the legislature. He can propose a traditional Democratic policy approach and hope the Democratic leadership can secure the votes to pass it. Finally, he can take a more conservative approach to the state’s budget challenges in the hope he can force moderates on both sides of the aisle to come together to form a bi-partisan majority.

As is always the case, there are many options in between. Today’s speech will only give hints of what is to come, because Malloy is not due to unveil his specific budget proposals until next month.

It does seem clear that the results of the recent legislative elections, and disappointment in the business community over decisions made during the last two sessions of the legislature, are still having an impact on the tone of the debate and policy priorities. The legislature remains extremely sensitive about moving forward on any issue that might be perceived as having a negative effect on the state’s economy or business climate.

More Preview Analysis:

Is Connecticut Broken - Hartford Courant

What to Know - CT Mirror

Unscripted 2017 - CT News Junkie

 

An Important Session

A closely divided legislature facing an unprecedented budget crisis could make the 2017 session of the General Assembly one of the most important in recent Connecticut history.

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Lembo Urges Support for Union Deal

Comptroller Kevin Lembo is urging lawmakers to approve a deal worked out between state employee unions and the Malloy administration over pension costs.

He argues now is not the time for partisan warfare over the issue.

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Power Deal

After more than a month of negotiation, Democrats and Republicans have come to agreement on how the state Senate will be managed with both sides holding 18 seats.

The final deal could have an impact on policy debate in the upcoming session; slowing the progress of certain legislation and perhaps pulling the discussion toward the center.

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Major Budget Cuts

Buried at the end of a routine story on this month's Connecticut budget projections is a big hint about the nature of the debate over state spending that will commence in two weeks at the start of the legislative session.

"[Governor]Malloy already has warned legislators he will not propose any major tax increases to help balance the books, meaning he also will recommend deep spending cuts," as reported by the CT Mirror.

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An All Options Budget

With the state facing combined budget shortfalls in each of the next two years totaling approximately $3 billion, all options must be on the table, according to the governor's office and top lawmakers.

That's the assessment of a Hartford Business Journal analysis, less than three weeks before the start of the next session. While all parties seek to avoid tax increases, most at the capitol acknowledge it will be difficult to balance the budget without at least some changes to the tax code.

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