Gov. Dannel P. Malloy opened the legislative session with an inspiring speech calling for an "economic revival" in the state, a revival that is built on making Connecticut a world leader in bioscience research and development and high-tech manufacturing. Underpinning this goal, in the governor's vision, will be efforts to reform public education and offer retraining to match skills with job growth opportunities.
Yet those are only two legs - promoting business growth and improving education - of the three-legged stool on which Malloy proposes building Connecticut's revival. It is the administration's approach to the third leg - "we need to maintain the fiscal discipline we imposed a year ago" - that concerns us.
Eight months into the current fiscal year, both projected tax revenues and savings have failed to meet expectations, and the administration will, by its estimates, have to cut $73.6 million to balance revenues and expenditures.
Yet rather than viewing that as a warning, the administration is asking the legislature to double down. His $20.73 billion budget proposal for 2012-2013 would increase spending $330 million above the level originally approved for this, the second year of the biennial spending plan. Gov. Malloy increases this spending without proposing tax increases, recognizing perhaps that legislators up for re-election would face a voter rebellion if they added to the $1.5 billion in new taxes approved in the last session.
The administration expects the needed revenues to provide this increased spending will come from robust economic growth and the resulting increase in tax revenues. It's a dubious bet and appears to contradict the prediction of meager growth issued by the Connecticut Center of Economic Analysis.
This leap of faith comes without a safety net as the budget proposal provides no rainy day fund. The Connecticut Mirror notes that to sustain this level of spending, the proposed budget would consume what is left of the nearly $555 million fiscal cushion Gov. Malloy and legislators built into the preliminary 2012-13 budget adopted last spring. It sets the state again on a spending path that may prove unsustainable. Figures released Wednesday project $650 million in spending over the constitutional budget cap in 2013-2014.
This is not to diminish the success of this governor and this legislature in addressing the $3.7 billion spending gap it confronted a little more than a year ago. Rather it is a warning that the legislature risks a return to crisis governing if it does not practice fiscal discipline in reality, not just rhetoric.
Political and business leaders at the State House Wednesday gave the governor's strategies for education reform and long-term job growth widespread praise. But these efforts can only succeed on a strong fiscal foundation.
We applaud the governor's plan for focusing his education reform efforts on the high-need districts; his proposed expansion of charters schools; state intervention in struggling school systems; more rigorous standards to obtain and sustain teacher tenure; improved teacher training; and expansion of early childhood education programs.
This governor also demonstrated his dedication to job growth in achieving an ambitious jobs bill with bipartisan support last October. His concession deal with state labor will produce long-term pension savings and his proposal to invest $123 million into the underfunded pension fund next year would begin the process of restoring its integrity.
Gov. Malloy has proved a strong leader. He offers an exciting vision of Connecticut's future, one that restores hope. Tempered with fiscal pragmatism, it could prove a winning formula.