A political lesson as Malloy obtains funding for small towns

Republicans got another lesson in how Democrats have consolidated power Friday as Gov. Dannel P. Malloy secured $20 million in financing for a competitive municipal grant program without disclosing how he intends to divvy up the funds.

There was no legal requirement for Malloy to first disclose his intentions to the State Bond Commission, but the Democratic governor’s approach broke with the tradition of his Republican predecessors, who revealed the grant winners before receiving the funding, a nod to their partnership with Democrats on the commission.

Malloy’s approach raised a few eyebrows among key Republican legislators, but the governor insisted afterward that economic development potential – and not partisan politics – would largely determine which community projects receive grants from STEAP, the Small Town Economic Assistance Program.

“I don’t believe those types of grants, which are competitive, should be done that type of way,” the governor said, adding that given STEAP grant eligibility rules, and the significant number of small Connecticut towns with GOP representation, a bipartisan award list was likely. “I can’t imagine that grants wouldn’t be made to communities with Republican leadership,” he said.

The General Assembly created STEAP in 2001 to complement the Urban Act Program, which provides large sums of annual state bonding to assist economic development initiatives in Connecticut cities.

STEAP grants initially were restricted only to communities with populations under 30,000 when the program was enacted in 2001, and that still remains largely the case. But the program was amended in 2005 to include six towns larger in population than that limit, yet still ineligible for Urban Act awards.

Both programs give the governor’s office tremendous discretion to assign state funding to projects that meet program criteria.

Malloy said that projects that promote job productivity, growth or retention would be his top priority, though not his only one.

Malloy also said he would differ from his predecessors, who typically capped the amount any community could receive to ensure a larger number of grants could be awarded. “I don’t believe any artificially low grant amount is conducive to that goal” of growing jobs, he said.

And why did his administration not disclose the grant recipients before seeking $20 million from the bond commission on Friday?

Malloy said application review is in process but not complete.

His budget director, Office of Policy and Management Secretary Benjamin Barnes, said that awards would be made later this fall, possibly in two stages to prevent projects ready to begin soon from having to wait for those still under review.

Both Republicans on the bond commission, Sen. Andrew W. Roraback of Goshen and Sean J. Williams of Watertown, voted to release the $20 million in bonding for STEAP, as did all eight Democrats on the panel.

Roraback said afterward that “as long as all of the projects are judged on their merits, I’m sure the awards will be bipartisan.”

House Minority Leader Lawrence F. Cafero, R-Norwalk, said that while the governor’s focus on job creation is understandable, it’s important that the administration remembers STEAP grants also were designed to support key public works, health and safety projects as well.

“We’re all very concerned about developing the economy,” he said, adding that many town applications in Republican representatives’ districts were tied to wastewater treatment and road and bridge upgrades. “But clean water, safe roads and safe bridges, that has to be a main thrust.”

Cafero added that Malloy’s approach in seeking the funds “came as a surprise to me, the way he just lump-summed it without showing how he planned to use the money. It’s never been done that way before.”

But M. Jodi Rell and John G. Rowland, Malloy’s two GOP predecessors, had a political need to share that information to obtain approval.

Specifically, the 10-member bond commission – which must give final approval before financing can be secured for major capital programs —  was evenly split between the two major parties during the first 10 years of the STEAP program’s history.

The governor chairs the panel and effectively controls two other seats, which are assigned to the administration’s budget director and top public works official. From 2001 through 2010, those seats belonged to  Rell or Rowland and to two of their respective top appointees.

But three other commission seats are awarded to the state treasurer, attorney general and comptroller – constitutional offices that have been in Democratic hands throughout the STEAP program’s history.

And with the last four spots divided evenly between the two parties – granted to the top leaders from the legislature’s  Finance, Revenue and Bonding Committee, Rowland and Rell needed Democratic cooperation to move any funding through a partisan-balanced bond commission.

But with Malloy now holding the governor’s office, and Democrats still in control of the other constitutional office seats on the bond commission, the party holds eight out of 10 seats.