Malloy warns House Democrats of tough decisions ahead

He won the election last month, but Governor-elect Dan Malloy resumed campaigning today with events intended to frame his approaches to assembling a new government and confronting a fiscal crisis.

With a public meeting of his transition team at the state Capitol, Malloy tried to show a diverse group of advisers that will help him shape an administration that is to take office in one month. He asked for their ideas, so long as they do not require additional state spending.

malloy with transition team 12-6-10

Gov.-elect Dan Malloy (c) with the heads of his transition team, chief of staff Tim Bannon and Lt. Gov.-elect Nancy Wyman

In a later speech to the House Democratic majority, the largest and most liberal of the four legislative caucuses, Malloy called himself a progressive ally who must follow a conservative path to restore the state’s fiscal health.

“We will make hard decisions,” he told them.

He was applauded as he promised to propose a budget “without gimmicks,” one that he later acknowledged will rely on both tax increases and spending cuts as he confronts a deficit of at least $3.5 billion.

“We can’t raise taxes by $3.5 billion, nor can we cut the budget by $3.5 billion. Let’s be honest,” Malloy said. “So this is a time when people have to be on notice that they’ll be requested to participate in shared sacrifice.”

Malloy’s message today seemed directed at both insiders, especially the House Democrats who met at a luncheon retreat at the Hartford Hilton, and the broader public, who will be asked to accept higher taxes and fewer services.

He declined to outline the degree to which he will rely on spending cuts versus tax increases. His budget proposal is not due until February.

“I think I’ve gone as far as I’m going to go today,” Malloy said.

As the first Democratic governor since William A. O’Neill left office 20 years ago in another time of fiscal tumult, Malloy is aware that the legislature’s Democratic majority looks to him as a progressive ally, while the fiscal crisis demands a conservative approach.

“You haven’t had a governor as progressive as I am, nor have you had a governor who is as fiscally conservative as I am in a long period of time,” he said. “And those two things are not mutually exclusive.”

Malloy said after comparing notes in Washington with 22 newly elected governors and 16 governors already in office, he believes no state faces greater fiscal challenges.

“It strikes me that we are probably looking at the largest per capita deficit of any of the 50 states. That’s the nature of the Connecticut problem right now,” Malloy said.

Malloy repeated his promise to rely on Democratic values as he tries to shrink and restructure government, saying he and other Democrats must not “turn our backs on our progressive nature.”

“After all, we’re Democrats,” Malloy said. “We do measure ourselves by the success of our fellow man and woman. We do believe that a rising tide should raise all boats.”

But Malloy told Democrats that the economic tide in Connecticut may not rise this year or next.

“But it will rise again,” Malloy said. “And at that time Connecticut will be prepared to share its bounty with all its citizens. That’s what I pledge to you.”