Gov. Dannel P. Malloy has stood for more than 10 hours in 10 communities on 10 different nights, giving Connecticut an unprecedented opportunity to vent about his plan to raise taxes and cut services.
Malloy began another round of town-hall meetings Monday in Greenwich, still game for all manner of complaint, comment and, occasionally, compliment. But it is unclear how or if these continuing conversations will change a governor and his budget.
His staff sees the town-hall tour as a success, an opportunity for him to repeatedly and soberly make the case in each of the 17 communities with a daily newspaper that his budget is a sound and sustainable way to erase an inherited $3.3 billion deficit.
“He thrives on direct constituent contact,” said Roy Occhiogrosso, his senior adviser. “As unpleasant as you think it might be for him to hear things that are critical, it is not. He appreciates the feedback. We talk about it.”
But what of the arguments that others are making to him, that his proposed tax structure is inequitable? Or that some cuts are ill-considered? At a recent press conference, a question about what he has learned on the road drew a sharp reply.
“I am in agreement with everyone who doesn’t want any taxes and doesn’t want any cuts,” Malloy said, the hint of a smile on his lips. “That’s what I’ve learned.”
It was a glib answer, evidence of the banter he enjoys with reporters. But it also seemed to reflect frustration at critics who treat budgeting like ordering off an a la carte menu, picking what they like, discarding what they don’t.
At every stop, Malloy hears that his taxes fall too heavily on the middle class, often from speakers reading talking points prepared by organized labor. Hairdressers tell him haircuts should remain tax-exempt. The blind plead for their programs to be left untouched. And on it goes.
“This is a democracy. And in a democracy, everybody gets to choose the parts they like and choose the parts they don’t like,” Malloy said. “And everyone is a member of the democracy except me when I have to propose a budget, because I have to do things I like and things I don’t like.”
But he reacted just as sharply when a reporter asked if it was fair to conclude Malloy had not yet heard anything on the road that will be reflected in his budget.
“I didn’t say that,” Malloy said. “I am learning things, and there may be adjustments.”
Was there anything to which he could point?
“Not for you,” Malloy said. “Not today.”
Occhiogrosso later told the reporter, “My guess is somewhere along the way he’ll have a more comprehensive response to your question than he had today.”
Malloy, 55, a Democrat who won last fall by half a percentage point, will be tested over the next four to six weeks like few previous governors. He already has demonstrated he can be resolute, telling audiences things they don’t want to hear.
Soon, he will have to demonstrate his ability to be flexible, to give ground while staying true to the basic principles he outlined in his budget message: No borrowing, either directly or by deferring pension contributions. No gimmicks. Preserve the social safety net. And maintain the tax advantage Connecticut has over its neighboring states.
The Democratic legislature is starting to engage, pressing for some of the changes suggested to Malloy at his town halls. His staff has had to scramble to avoid the embarrassment of having some of the governor’s budget bills die in committee.
And the Republican minority is working on an alternative budget, one heavy with spending cuts.
The governor says he is talking to legislators and hearing their concerns.
“I am engaging in these discussions to be educated, as well as to educate. And I’ve heard some things that have caused me to pause. I’m not going to go into what those are at the moment,” Malloy said. “I think there are some adjustments that might be appropriate.”
His administration already has conceded there are some inequities that must be addressed. His plan to eliminate a $47 million program that reimburses municipalities for a tax exemption on manufacturing equipment, for example, would hit blue-collar communities that could least afford it, such as East Hartford, Bristol and Waterbury.
But Malloy and legislators cannot fully engage until they know the outcome of his administration’s efforts to obtain labor concessions and other savings. The biennial budget he proposed Feb. 16 relies on $1 billion in labor savings in each of the next two fiscal years.
It’s hard to fix a $47 million problem or debate the merits of a property tax credit he wants to eliminate, when there might be a $1 billion disaster around the corner.
“I am preparing recommendations with respect to what that would look like,” Malloy said. “I hope we don’t have to go there. It would be nasty and ugly.”
On WNPR’s “Where We Live,” Malloy fleshed out exactly how ugly.
“You want me to cut the budget more? I’ll cut the budget more. You want me to eliminate more programs? I’ll do that. And in the absence of reaching a restructuring agreement we’ll lay off lots of people. I don’t want to do any of those things,” Malloy said.
The budget he proposed nearly six weeks ago established Malloy as a governor comfortable going his own way. A former mayor, he stands alone, or nearly so, among governors of both parties in preserving aid to municipalities, keeping the state’s fiscal crisis from flooding downstream.
The state provides $2.8 billion in aid to municipalities, a tempting target. Want to avoid a tax increase? Skip concession talks with labor? Presto, wipe out local aid and the state’s crisis turns into a challenge approaching a rounding error on a $19 billion annual budget.
In New Jersey, cutting aid and deferring $3.6 billion in pension contributions, essentially a gargantuan loan, is how Gov. Chris Christie is avoiding tax hikes. In New York and Massachusetts, Democratic governors also are cutting aid, passing on their problems to mayors.
Connecticut already is heavily reliant on the property tax, and Malloy said he will keep a campaign pledge not to hand off the state’s problems to cities and towns in a state where property taxes and state and federal aid are their only significant revenue sources.
At each of his town hall meetings, Malloy comes ready to explain the impact on local property taxes. State employee unions try to broaden the discussion by drawing Malloy into a debate over corporate and income taxes.
Matt O’Connor, a spokesman for the CSEA/SEIU Local 2001, a state employees’ union, hands out fliers at most town halls that accuse the Bank of America of paying no federal or state corporate taxes last year.
Malloy ignored the fliers at his early town halls, but now he comes with his own data, saying that Bank of America pays taxes, except in a year when it reported no profit. O’Connor thinks the governor is engaging the issue.
“This question is starting to percolate: What are these corporations paying? Where is that shared sacrifice?” O’Connor said. “I have detected it is making an impact with the governor.”
Perhaps. At his press conference, Malloy sounded like his opinion on corporate taxes has not changed since he started going out on the road, beginning Feb. 21 in Bridgeport.
“We benchmark what we’re doing in the tax package against other states. There are a number of people who are talking about corporate taxes,” Malloy said. “Listen, what we’re trying to do is be in step with other states. I’m not trying to build additional incentives to large employers or small employers in the state leaving our state for other localities.”
On successive nights this week, Malloy will make his pitch and take his lumps. After Greenwich, he visits Manchester and Windham. He’ll been in Norwalk, New Britain and Danbury the following week, then finish April 12 in Middletown.
O’Connor expects to be there, handing out his fliers.
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