On Malloy cutting spending
So you think Gov. Dannel P. Malloy has run up state spending in his eight-year term?
That’s what Republicans charge, loudly. Bob Stefanowski launched a nineday bus tour on Thursday and the Republican nominee for governor won’t pass a single stop without shouting about Malloy’s supposed wild spending.
Democrats, none too eager to be seen with the nation’s second most unpopular governor, let alone defend him, seem happy to throw Malloy under that Stefanowski bus as they whistle by.
Well, think again. State spending on regular state government actually declined by 4 percent between 2011, when Malloy took over, and this fiscal year, his last of eight annual budgets.
Government agencies under Malloy saw their total spending decline by $250 million in the Malloy years, which will end on Jan. 9. That includes the University of Connecticut and the rest of the college and university system, the courts, state police and prisons and the vast, sprawling offices that look after troubled children and developmentally disabled adults.
Adjusted for inflation, that’s a cut of 16 percent, or $1.3 billion below the state government Malloy inherited from former Gov. M. Jodi Rell.
As of May, Malloy had cut the ranks of full-time, executive branch employees by 3,925 people, or 13 percent from the 29,500 who were on the job when he took over. That’s a 13 percent cut in the headcount and it doesn’t include the judicial branch, the colleges and universities and the many part-time jobs that also disappeared.
Speaking of Rell, she and fellow Republican former Gov. John G. Rowland combined for a $2 billion increase in government agency spending in the two terms totaling eight years before Malloy won election. That’s a 38 percent hike from the fiscal 2003 budget — compared with Malloy’s 4 percent cut.
They talked a big game of cost-cutting. Malloy talked about maintaining services while he quietly went about the hard work of government efficiency, hiring outside lean management experts to help.
How can this be possible? The key is that we’re talking about regular government agency spending. To get there, we take out what I call the Big Five: Medicaid, bond debt, pension payments, employee and retiree health care and aid to cities and towns.
Those Big Five costs have driven a hefty increase, of course. In all, under Malloy those costs have ballooned by 40 percent, from $8.7 billion to $12.2 billion, a total of $3.5 billion, washing out Malloy’s cuts in regular government.
That leaves the rest of government — all the agencies and colleges — spending $6.75 billion this year, down from $7 billion in 2011.
Stefanowski claims he can float a huge tax decrease by finding billions of dollars in waste, without cutting education. That leaves a base of about $5 billion to work
with. The former executive’s claim of a 5 percent or 10 percent haircut amounts to $500 million at best in a $20 billion budget.
And if you think Malloy could have stopped the tsunami of Big Five fixed expenses, think again. Those last eight years of Rell and Rowland, from 2003 to 2011, saw the Big Five costs rise by $3 billion, or 53 percent. As of this year, they represent 64 percent of the budget.
Malloy takes a lot of heat for running up the bonded debt with projects government critics call waste. In fact, his first budget — a doozy, with a $3.5 billion hole he had to fill — included his welcome present from Rell, the first of a series of payments on $900 million of “economic recovery bonds.”
Those are a trick designed to survive recessions by postponing paying for regular government operations. A desperate measure, not Rell’s fault, but not Malloy’s, either.
It’s true that bond payments jumped from $1.7 billion to this year’s $2.2 billion under Malloy, but the so-called waste that critics point to in that spending — $10 million to study highway tolling, for example — doesn’t add up to much.
“Some of that you could blame on us,” Ben Barnes, Malloy’s budget chief, said Friday evening as I tallied the numbers. “You could say we should have not made investments, and we should have shut down the school construction program.”
Pension contributions, including the funds for teachers and state employees, have jumped from $1.1 billion in Rell’s last budget year to $2.45 billion this year. Rell and Rowland liked to shortchange the funds, a habit we’re paying for dearly these days.
Barnes and I were both surprised at the final, big-picture numbers because the various state budgeting offices don’t break them out this way. Maybe we’re all victims of outright lies by people whose political careers depend on Malloy as the whipping boy.
Maybe the weak economy under Malloy — that part is not a lie — has created a sort of reverse mirage. Along with all the costcutting, he’s had to raise taxes because there simply was no way to balance the budgets otherwise.
State employees have had pay freezes in five of Malloy’s eight years, plus they pay more for their pensions and they pay 3 percent into a retiree health fund. Malloy has presided over two new tiers of state employees, each with lesser benefits.
Could they have given back more? Sure, but the overwhelming driver of costs is promises made decades ago that can’t be undone. Remember, Republican lawmakers proposed only about $300 million in spending cuts, and some of those were unicorn ideas.
Blame Malloy for lots of other things: failing to work well with lawmakers and failing to persuade companies and people to stick it out. Mostly he suffered from bad timing, inheriting a true mess, unlike the humming U.S. economy that President Donald Trump took over two years ago.
What we can’t allow is for Republicans, or Democrats, to say Malloy led a barrage of wasteful spending.
“It’s just preposterous. I appreciate that they want to say what they want to say but our legacy, if you look at the details, is one of incredible fiscal restraint,” Barnes said. “The discretionary stuff is in the tank.”
Yes, we still face deficits due to a weak economy; but not due to wanton spending. And what’s not in the tank is the state’s rainy-day fund. He started with basically zero. He will leave with an estimated $2 billion, maybe more, for the next governor to hold.
Gov. Dannel P. Malloy waves after presenting his two-year budget in 2011 during a joint session of the General Assembly with his wife, Cathy, left, and Lt. Gov. Nancy Wyman, right, at his side.