Gov. Dannel Malloy’s “read my lips moment” during his 2014 reelection campaign may very well follow him forever. In fact if he has national aspirations, reneging on his promise not to raise taxes could hound him. But as a matter of what’s best for the state, it’s a good thing he didn’t insist on preventing tax hikes or the state’s safety net would have been shredded.
We can debate ad infinitum about whether Malloy knew he was going to have to sign a tax-increasing budget when he made the pledge not to. Many think he did. Only Malloy himself and perhaps a few members of his inner circle know for sure, and you can bet their not talking anytime soon. But does it matter?
The bottom line is what’s best for the state. Malloy’s pro forma budget proposal absolutely decimated the state’s safety net for the most vulnerable in the state. Those the most at risk would have been the most adversely affected. It was unacceptable. But it didn’t raise taxes.
Malloy, at the very least, knew there was no way the Democrat-controlled appropriations and finance committees would let that stand. The full General Assembly certainly wouldn’t.
Malloy also likely calculated that the money committees would overreach, not only restoring the cuts he made but adding hundreds of millions of dollars in new spending—that’s what they do. The ultimate solution (as with most things) was somewhere in middle.
For all the hand-wringing about the closed-door budget negotiations between Democratic legislative leaders and Malloy, the method works. Both sides were unwilling to admit Republicans into the room despite GOP legislative leaders asking, cajoling and begging to be part of the process. It probably would have been better to let them in. As The Shad has written before, these are not your father’s Republicans. Senate Minority Leader Len Fasano would have been an excellent addition to the process. He is sincerely interested in bipartisanship (that’s not to say he would have voted in favor of the budget if he had been in the room).
It is also fortunate that Malloy contorted himself into a pretzel to placate the business community. Connecticut was getting slapped around pretty good nationally with Connecticut resident “Morning Joe” Scarborough mocking legislators on the MSNBC morning show for almost forcing corporations out the door.
Malloy’s and legislative leaders’ rollback of some corporate tax burdens was largely symbolic. The dreaded “unitary tax” was simply delayed for a year although business leaders plan to still try to eliminate it. The $178 million rollback in taxes in a $40+ billion budget is a drop in the bucket.
The one thing that is glaringly absent is honesty about the hit the middle class takes in the final budget product. Yes, there are some measures designed to lower property taxes particularly on cars. But the property tax credit used by the middle and lower-middle class against the income tax was reduced, taking money right out of people’s pockets.
The move to tighten requirements for the HUSKY-A health insurance for adults also smacks the middle class and could eventually boot some 120,000 adults off the program (and we have empirical evidence that when parents don’t have HUSKY coverage, their kids drop off as well).
Malloy signed the final budget product and that product raises taxes. So The Shad has no doubt that he reneged on his campaign pledge. It’s not a budget anyone—particularly Democratic legislative leaders—should hold up as a stellar example of a great spending plan. But it is the best they could do under the circumstances.