Malloy’s Dud Budget Deal

May 24th, 2011 at 8:28 am | 6 Comments |

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Connecticut’s Governor Dan Malloy has recently attracted the praise of the left due to his self-branded “anti-Christie” style of negotiating with public sector unions. Earlier this week, sovaldi Malloy, sale after months of bargaining, announced the outline of a deal amounting to $1.6 billion in public union concessions (ultimately closing a $3.4 billion two-year deficit).

Many on the left claim that Malloy’s positive approach towards unions, coupled with his “I’m your best option” stance, creates a new governing model of cooperation and pragmatism that stands in direct contrast to the “un-American” (Malloy’s words) harsher policies of those like Governors Cuomo, Walker or Christie.

However, one ought not look over Malloy’s ends due to an appreciation of his means. Malloy’s budget is far from praiseworthy and solidifies the underlying problems of Connecticut’s long-term fiscal crisis.

First and foremost, Connecticut’s public sector workers still maintain overly lavish working arrangements. Connecticut state and local employee compensation has risen over the ten years more than 55 percent (22 percent more than the national average for private sector workers), and, before Malloy’s deal, public workers earned an average of $14,000 more than their private sector counterparts.

Malloy’s budget will do little to adjust this underlying problem. Malloy’s deal guarantees a four-year “no layoff pledge”, a 20 year extension of current benefits, and re-solidified pension plan (underfunded by $40 billion dollars currently), among other measures that keep Connecticut’s long-term fiscal stability in severe doubt. Moreover, the union concessions are comprised of what were already exorbitant privileges. For example, Malloy ended the zero dollar co-pay for emergency room visits (there have been documented cases of workers going 150 times in a year for free on top of their healthcare plans).

It’s also vital to note why Governor Malloy only needed $2 billion in union concessions to fill his short-term budget gap – a $1.5 billion dollar tax hike, the state’s largest tax increase in twenty years. Connecticut is one of only two states (the other is Michigan) that has had no job growth over the last twenty years. Connecticut’s 47th ranking in “Cost of Business”, according to CNBC, certainly has contributed to this fact, and a more hostile tax policy will undoubtedly have widespread consequences.

All in all, Malloy’s “pragmatism” was nothing more than a wasted opportunity for substantial change towards fiscal responsibility. Public sector unions are structural detriments to state economies, both regarding their benefit packages and legal mechanisms available to defend them. Even if the examples of Walker, Christie and Cuomo are too politicized, Malloy and his supporters should turn to Massachusetts, whose heavily Democratic House recently passed drastic collective bargaining reforms. While Malloy’s hope of cooperative negotiations is noble, it is, by all measures, seemingly unattainable and only exacerbates long-term problems.


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6 Comments so far ↓

  • ottovbvs

    This is rich considering that the previous Republican governor of CT Jodie Rell (who served for six years; four of her own and two remaining from that of John Rowland the previous Republcaan governor jailed for corruption) did absolutely nothing to deal with CT’s deficit problem. And indeed many of the public service deals that Graver bemoans were the product of long life deals negotiated by Rowland. He then complains about lack of job growth in CT over the last 20 years without noting that for the last 20 years the occupants of the governorship have been:

    Lowell Weicker (Independant) 1991-1995
    John Rowland (Republican) 1995-2004 (removed for corruption)
    Jodi Rell (Republican) 2004-2011
    Dannel Malloy (Democrat) 2011

    Malloy is the first governor for 20 years to make a serious effort to get CT’s budget under control. He’s passed a sensible mixture of tax increases and budget cuts that are generally approved of in the state.

  • Non-Contributor

    Yeah, lets not take a sensible approach to solving our fiscal problem instead lets take the scorched earth policies of the GOP nutbags.

  • Rabiner

    Harry,

    Whats wrong with raising taxes in addition to cutting expenditures to balance a budget? As someone who goes to Yale I’d figure you’d understand that pragmatism is needed to get things done.

    Regarding the lack of job growth for Connecticut over the last 20 years: whats the population growth been in the State?

    Regarding the raises of government employees of 55% over 10 years (not very high mind you over a decade since he doesn’t mention if the figure includes cost of living increases or not). But are these ‘overly high’ wage increases when compared to the whole workforce an apples to apples comparison or are you just comparing government workers to ALL workers who would include menial jobs?

    You should really inform us in where you get your figures and what they mean to make an informed opinion regarding your conjecture.

  • Is Playing Nice, Playing Right? | Demablogue

    [...] Connecticut Governor Dan Malloy has been praised as “anti-Christie” for his nice-guy approach in dealing with his state’s unions, and achieving $1.6 billion in union concessions in the process.  I would totally agree with that approach, if Malloy got a bit more than he actually did.  Yes, he’s managed to close a two-year $3.4 billion deficit.  However, from Frum Forum: [...]

  • Frumplestiltskin

    Public sector unions are structural detriments to state economies, both regarding their benefit packages and legal mechanisms available to defend them.

    When you start off with a pre-determined idea that public sector unions are a detriment then anything short of abolishing them will fall short. Of course though there is ZERO proof that public sector unions are structural detriments to state economes. In fact, they are part of the reason why states that have public sector unions are wealthier than those that do not.

  • Graychin

    Otto – great comment!

    I have never understood the GOP animus toward all labor unions – especially public sector unions. Unless all the GOP cares about is low taxes and corporate profits realized on the backs of workers.

    Oh – wait….