Put out more state employee suggestion boxes. Democratic and Working Families Gov. Dannel P. Malloy assured us that employee suggestions would save $180 million in spending over two years. Like so much of what Malloy promised, it isn't working. The surly governor is on the brink of irretrievable failure as he acknowledges that the state's finances are in precarious deterioration.
It was only a few weeks ago, but we can look back to Nov. 1 with nostalgia. That was the day that state Comptroller Kevin Lembo projected in one of his regular reports that the state faced a $60.1 million deficit and trouble ahead. Two weeks later the deficit predictions for the current budget year that ends on June 30 had exploded to $365 million. The deficit is expected to exceed $1 billion in the year that follows.
You can measure the depth of the trouble by the boost in reverential non-sequiturs coming out of the belligerent Malloy administration. Spare a thought for budget director Benjamin Barnes. He responded to Lembo's budget projection by issuing a statement that included mandatory reverence to his Dear Leader. Barnes declared, "[W]e continue to face challenges that we must confront with the directness and transparency that are the hallmarks of Governor Malloy's career in public service." He went on that they are monitoring the situation and will tell us later what they will do about it.
It was not supposed to be like this. Malloy and his team thought a walloping tax increase would get them through the first half of his administration. The economy would pick up — as it usually does — and the increase in taxes would open the spigot to allow more state spending and maybe a tiny cut in the higher taxes. Malloy could seek a second term in 2014 as the almighty one who'd seen the state through the storm and cut taxes while expanding programs.
Dream on, fellas. Last week, Malloy was reduced to explaining another increase in the state's unemployment rate by reinventing history. He has discovered the "Great Recession" was worse than we knew. This is confusing. Many other states are enjoying a sustained recovery. Massachusetts, for example, has a considerably lower unemployment rate — 6.6 percent in October — than the 9 percent rate that continues to dog Connecticut.
If the recession was worse than Malloy thought, that historic tax increase on working people may have stifled economic activity even more than we thought. Don't look for any relief on that front. Stagnation is projected to continue for the next two years. That is deadly news for Malloy and Connecticut's future. The scope and cost of state services, however, are not stagnant. They continue to grow at a rate that exceeds our ability to pay for them.
Malloy gambled on economic growth but initiated policies that caused business journal Barron's to dub Connecticut the worst-managed state in the nation. His deal with state employees provides for a two-year wage freeze and four years of no layoffs. The wage freeze is coming to an end, but the ban on layoffs continues at a time when Malloy needs flexibility that he negotiated away. There will be no shared sacrifice in this round of trouble.
The state has to keep paying billions on the bonds it's issued. That big budget item is untouchable. The cost of Medicaid, the program that provides medical services to the poor, continues to grow as more people become eligible for its benefits. The challenge with Medicaid is that it comes with a hefty match from the federal government. If the state cuts benefits, it loses federal aid, negating much of the savings. Also, throwing poor people off Medicaid will not enhance the ambitious Malloy's prospects among influential Democrats.
The challenges will grow. Cuts in federal spending to trim that ominous deficit may mean reductions in funding to states. An increase in federal taxes will have a disproportionate impact on Connecticut because some very rich people live here. In a week when the University of Connecticut hired a communications director at an annual salary of $227,500, the public knows there are plenty of places to make meaningful cuts in spending without injuring the neediest.