DAN HAAR

On Mal­loy cut­ting spend­ing

Stamford Advocate (Sunday) - - Front Page - DAN HAAR

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.

As­so­ci­ated Press file photo

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.

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