Governor Malloy gets emotional during his address while discussing Newtown.

Governor Malloy gets emotional during his address while discussing Newtown. (Ryan Bernat/ FoxCT / January 9, 2013)

A State Still Facing A Budget Deficit

In his speech, Malloy defended tax increases and a labor deal that helped balance the state budget in 2011. Frequently, he pointed to Congress' failure to lead in contrast to action taken by Connecticut in the past two years — and what his administration has already done to try to revive the state's economy.

"We cut more than we added in new revenue,'' he said. "And even after revenues came in short — as they did in 31 other states — we know today that our budget as enacted fixed more than 90 percent of the problem. Last month, Democrats and Republicans came together to make sure we closed that final gap without raising taxes."

"Anyone who tells you that the budget we passed two years ago didn't do its job, that it didn't make real change in how we approach our finances, is simply not telling the truth."

But Republicans said that synopsis was wrong.

"In every speech, I think the governor probably has a line that he wishes he could take back,'' said McKinney. "Last year, it was bashing our teachers. This year, it's calling us liars. It's hyperbole. It's not true, and I think he knows it's not true.''

McKinney said it was difficult to characterize a budget that has resulted in a projected deficit over two years of more than $2 billion as "something that worked."

"There are still some facts that he can't ignore. Our unemployment rate continues to go up. It's too high right now. That's a direct result of an economy in Connecticut where taxes are too high, businesses are over-regulated, and people don't want to live here and work here as much as they should."

Sen. Rob Kane, the ranking Senate Republican member of the budget-writing appropriations committee, said that the continuing deficits show that Malloy's tax increases did not solve all of the state's fiscal problems.

"It didn't work,'' Kane said of Malloy's tax plan. "I think he's incorrect. The budget didn't do its job. I sure hope the rhetoric ends and we all work together. ... It's obvious it didn't work.''

Malloy's chief of staff, Mark Ojakian, responded: "Sens. McKinney and Kane are entitled to their own opinions, but not their own facts. The fact is we closed the largest per-capita deficit in the nation, and we did it with more reductions in spending than we did with new revenue. We have more work to do, but Connecticut — under the governor's leadership — is making the tough choices necessary to keep our budget balanced."

In comments after the speech, state GOP Chairman Jerry Labriola offered some balance to the promises of good will and cooperation that permeated the Capitol on Wednesday.

"As we know, saying so does not make it so, and Connecticut continues to have the worst debt in the nation, a higher unemployment rate than any of our Northeast neighbors and an economy that remains dead in the water,'' he said.