Editorial -- State Budget: Pro and Con

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Sunday, May 29, 2011 - 12:02am

From the outset of his first term, Connecticut Governor Dannel P. Malloy won deserved admiration for addressing forthrightly the state's formidable, unsustainable red-inked budget and estimated deficit of $3.3 billion.

Essential in Malloy's formula to bring much-needed, long-overdue reform to Connecticut's out-of-control spending, deficit and staggering bond-indebtedness has been $2 billion of concessions over two years from state employee unions.

Part of that admiration was derived from his unflagging resolve to get desired results by working in good faith with state employee unions, workers and . . . presumably . . . Connecticut tax-paying citizens, including businesses, small and large.

We hasten to note that in his recent announcement of a $1.6 billion budget deal with state employee union leaders (saving a reported $21.5 billion over 20 years — a measure which may, or not, survive union ratification), Malloy has failed to uphold his pledge — his word. Bowing to pressure at this early juncture does not bode well as he continues his first four-year stint charting routes of solvency for Connecticut's fiscal ship of state.

Unlike state union workers contractually covered by luxurious benefits, retirement- enriched padding and protracted-terms not enjoyed by rank-and-file citizens, that $400 million gap will hurt many who can least shoulder its weight. It pursues objectives through a mix of spending cuts and revenue-creating measures. Although Malloy has avowed that taxes will not rise beyond what is already budgeted ($1.5 billion), we join the jury that's out on long-term consequences for short-term fixes.

Concerns abound.

It remains to be seen if actual savings from Malloy's described union agreement will be realized (presuming ratification does not succumb to hostile defeat or become a negotiating hostage of entitlement mindset's intractability). We question the wisdom of this "deal's" inclusion of a two-year salary freeze, no layoffs for a bloated state union workforce for four years and perpetuation of an odiously opulent benefits package, among other considerations.

Committing to four years of no-layoffs for covered state union employees by a four-year-termed governor may prove sharply consequential should broader economic conditions generate double-dip recessionary repercussions. Because funding for salaries, benefits and pension obligations consume a hefty proportion of annual expenditure, short-term commitments are urged.

What regular business under prudent leadership would subject itself to such untenable strictures and expect to survive under such an economic downdraft? Is a two-year deal insufficient to placate union demands? Moreover, that salary freeze won't assuage immediate fiscal pressures. Likewise, Malloy's promised reduction of state workforce through attrition will take an inordinate amount of time to achieve presumed results.

By not upholding his much-touted original union-centered objective of saving $2 billion over two years, many will understandably question Malloy's leadership style and integrity, even though he compares quite favorably with his New Jersey counterpart, Governor Chris Christie.

New Jersey mirrors Connecticut in needed reform. Yet, a caustic Christie (Republican), unlike Malloy, has managed to alienate union leaders and state legislators even while demonizing state Democrats. Malloy is sporting a qualified degree of success, despite Christie's characterization of him as "a liberal wimp who is clueless on the skills of governing" — a sentiment which will assuredly return to haunt New Jersey's embroiled, stagnated politics, even as Connecticut, under Malloy, moves forward.

Malloy must not be perceived as being too closely aligned with unions. State taxpayers need assurance in unequivocal terms that governor and legislature are crafting plans to reduce - not increase — onerous tax burdens. Carving workforce fat while never again entering into obscenely generous 20-year contractual deals should become cornerstones of Connecticut's restructured financial foundation.

Connecticut must become a business-friendly, transportation-efficient, tax-streamlined state if it is to survive in America's competitive marketplace. Alas, evidence of a sea change is not on our horizon.

Given Malloy's overall progress and deft ability at consensus-building, the Constitution State is poised to reap the benefits of "shared sacrifice" — his unabashed approach to fiscal viability. In the interim, as union members’ deliberate potential ratification, Malloy would do well to renew his original commitment rather than translate a failed budgetary mandate into fewer state services and inescapably escalating taxes.

Content provided by the Record-Journal, Meriden.

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