Gov. Dannel P. Malloy framed what is likely to be his final two-year budget as a call to recast the state’s compact with its neediest municipalities – expanding the tax base of teetering cities like Hartford and Waterbury and maintaining aid to the 30 poorest school districts that educate nearly 40 percent of Connecticut’s children.
Such initiatives typically come in good times, when the state enjoys a surplus. Malloy, 61, a Democrat who took office six years ago facing an inherited $3.6 billion deficit, is trying to simultaneously continue his administration’s investments in urban education and close a fresh $1.7 billion deficit, a formula that ensures most municipalities will be asked to get by with less.
His speech at midday Wednesday to the General Assembly, where Republicans have drawn even with Democrats in the Senate and are only four votes shy of a majority in the House, was both a challenge and a plea by a strong-willed governor hobbled by a low approval rating and daunting fiscal and political realities as he passes the mid-point in his second term.
Malloy refused to concede a budget that cuts programs, shrinks aid and demands $700 million in labor concessions was a retreat in any sense. Over 26 minutes, Malloy embraced the fiscal crisis as an opportunity to make improvements in how government serves the public, many suggested by a court decision that found the state’s overall level of education funding was adequate, but its priorities confusing and misplaced.
“One of the basic principles of our country is that if you’re willing to work hard, you should have the opportunity to succeed. You should be able to buy a house, afford health care, or send your children to college,” Malloy said at the top of his address. “It’s a fundamental promise that has come to be known as the American Dream. It’s why people from around the world – the huddled masses yearning to breathe free – brave the journey in the hope of a better life here in America.”
Malloy called for the state to return to a time when aid more closely hewed to need, distributed by formulas compromised by the accretion of political bargains necessary to pass spending plans over the years.
In fact, his new proposal includes a pool of unallocated aid, a nod to the necessities of political horse trading as his administration tries to cobble a majority for passage.
“This is my way of saying to you – the legislature – that I am ready to negotiate,” Malloy said. “I am ready to hear your ideas on where that unallocated money is needed most.”
But the foundation of his speech was built on appeals to legislators’ better natures, an argument that structural changes are necessary to permanently stabilize struggling cities for the betterment of the state.
His proposal for municipalities to be given the right to tax the real property of hospitals — a boon to Hartford, which is on the verge of bankruptcy, and Bridgeport, New Haven, Waterbury and smaller urban centers —is a structural change meant to end the need for stopgaps, solutions to the crisis of the moment.
“It’s a vicious cycle that began decades ago, one that hinders poorer, urban communities, leaving them with the highest tax burdens, troubled educational systems, and substantially fewer city services, causing them to be even poorer still,” Malloy said. “In turn, suburban towns feel as though they’re shouldering too much of the burden of neighboring cities. And all the while, rural communities feel forgotten altogether.”
Malloy said the state must acknowledge it cannot prosper as a whole while its cities flounder.
“We are a small state, and our towns are interconnected. Growth in Hartford means growth in Bloomfield and Windsor. More jobs in Waterbury means more jobs in Cheshire and Beacon Falls. A more vibrant New London means a more vibrant Ledyard and Montville,” Malloy said. “We can rise together, or we can fall together. We can lift one another up, or we can drag one another down. Our future depends on the decisions we make today — this session, this year.”
On Wednesday, at least, that line drew applause.
Malloy’s speech creaked, at times, under the strain of competing messages, such as a demand for state employee concessions and an assurance to the work force, whose leaders are now negotiating with the administration, that their labors and sacrifices are appreciated and necessary.
“First, I want to once again acknowledge and commend our state employees for what they’ve already sacrificed to help balance our budget,” Malloy said. “And more importantly, I’d like to thank them for the hard work they put in each and every day serving the people of Connecticut.”
The line drew sustained applause in a chamber where many members have called on Malloy to demand that employees contribute more to their pensions — and others have chafed at what they see as a Democrat demanding too much.
Malloy clearly emphasized that he is seeking no “Wisconsin moment,” no fundamental re-writing the rules for how government negotiates, as did Republican Gov. Scott Walker.
“Public service is a calling, and an honorable one at that,” Malloy said. “I’m proud to be a staunch, lifelong advocate for the right to organize and the right to collectively bargain. I respect public employees, and it is my sincerest hope that asking for their partnership this year should not diminish the good work and real savings we’ve already achieved together.”
The speech and the budget appeared to be the works of an administration that is little contemplating seeking a third term in 2018.
The demand for $700 million in labor concessions, backed by a stated willingness to lay off 4,200 employees as an alternative, will further estrange the important Democratic base of labor, no matter how stout his defense of collective bargaining.
His approach to town aid will play better in the Democratic bases of power. New Haven and Bridgeport still produce the two largest pools of Democratic votes in statewide elections, even as Hartford’s falling voter turnouts have steadily diminished its political clout. But if Malloy’s approach to town aid is accepted, he can count on being blamed for local property tax increases throughout much of Connecticut.
“A recent court decision deemed our school funding formula to be irrational and unfair,” Malloy said. “I agree that we are not meeting our constitutional requirement of a fair and equitable public education system – one that guarantees every student the opportunity for success. Real reform must begin with our educational cost sharing formula, or ECS. I believe the updated ECS formula in my budget is more equitable, more transparent, and more fair.”
Malloy insisted that even in a time of crisis, of concession and of cutbacks, the state can move forward. He said legislators in the closely divided General Assembly represent districts that are interconnected and interdependent, “regardless of party, region, or zip code.”
His conclusion was a plea to reject the notion that for one community to gain, another must lose.
“Dignity, opportunity, prosperity – none of these are a zero-sum game,” Malloy said. “We are all guaranteed access to these fundamental rights.”
The legislators applauded the governor, but most were expected to spend the afternoon checking how their districts fared in the revisions to various aid programs.