By CHRISTOPHER KEATING and JENNY WILSON, Hartford Courant
HARTFORD — Opening an election-year legislative session in which the state faces a projected budget surplus, Gov. Dannel P. Malloy on Thursday called for modest tax relief and investments in education, jobs and social services that he said will help put Connecticut back on track as the economy recovers.
Malloy laid out a broad agenda of multiple items that were praised by Democrats and prompted questions from Republicans about how they would be paid for.
The proposals included an increase in the minimum wage, universal preschool, free courses for college dropouts, tax rebates, aid to homeless veterans and an investment of $134 million to help Connecticut’s 17 community colleges and universities.
“I recognize everything I’ve laid out today is a lot to tackle in a short session,” Malloy said in a snow-delayed State of the State address that opened the 2014 General Assembly session. Some legislators laughed at Malloy’s remark before he added, “But working together, we can get it done.”
During a 43-minute speech that was interrupted by applause more than 50 times, Malloy said several times that “Connecticut is moving forward” in its recovery from the depths of the worst recession in decades.
With the economy improving, the atmosphere in the packed House chamber was upbeat on Opening Day, which is traditionally a day of optimism and good cheer among legislators. The enthusiastic crowd gave standing ovations when Malloy mentioned the efforts of snowplow drivers and first-responders, as well as a standing ovation for a woman who did not even attend the speech. During his comments about raising the minimum wage, Malloy mentioned the case of an East Hartford mother of four who works in the fast-food industry and recently received her first raise. She could not attend the speech, but she received a standing ovation, anyway.
Democrats, who control both the House and the Senate, praised the speech and pledged to work with Malloy to enact legislation by the end of the session on May 7.
“I think he hit all of the major themes that Democrats in the General Assembly have been advocating,” said Senate Majority Leader Martin Looney, D-New Haven. Asked Thursday if he had any points of disagreement with Malloy, Looney said, “Not for me at this point.”
But Republicans sharply criticized Malloy, saying that he was reversing some of his previous policies in an election-year turnaround. Malloy, they noted, pushed for imposing the 6.35 percent sales tax on nonprescription drugs in 2011 and now wants to eliminate that tax.
House Republican leader Larry Cafero said that Malloy “had a classic election-year speech where he’s taking credit for everything. And yet, in many respects, when he talked about not repeating the errors of the past, he’s doing exactly that. He talks about a so-called surplus, which I would argue is just excess revenue, because it’s impossible to claim a surplus when this morning his own budget director conceded deficits in years ’16, ’17 and ’18.”
Cafero added: “Here’s this governor, just eight months ago, he felt it was necessary to stop or freeze the senior rent subsidy. Eight months later, he says, let’s open it up again like he invented the idea and wants to be the hero. You can’t be the arsonist who starts the fire and then put out the fire and call yourself a hero. So many of the taxes that he wants to give back, he put in to begin with. That’s why it was a very schizophrenic speech.”
In areas of general agreement with Malloy, Senate Minority Leader John McKinney of Fairfield said that Republicans favor putting additional money into the rainy day fund for fiscal emergencies and to pay down long-term debt.
“I would put more money into paying off our debt than I would put into the rainy day fund, but I would put money into both,” McKinney said. “A rebate is a political gimmick. It’s an election year.”
One of the major themes of Malloy’s speech was bolstering education, from pre-kindergarten to college. Describing education as the “civil rights issue of our time,” Malloy called for universal access to preschool and proposed a budget that would fund more than 1,000 preschool slots for 3- and 4-year-olds.
After the state spent billions to transform the University of Connecticut in the past two decades, Malloy said he now wants to launch “Transform CSCU 2020” to improve the 17 universities and community colleges in the Connecticut State Colleges & Universities system. The initiative would create a systemwide operating fund. The governor called on the state to invest $134 million in that program, bringing “all 17 campuses into a single, student-centered, technology-rich system.”
Malloy also would offer free courses for college dropouts. Students who started working toward a degree but had not attended school in 18 months would be able to attend one free course for each course they pay for in college. The state would pay for up to three courses.
A year after the General Assembly raised the state’s minimum wage, Malloy called for an additional increase — to $10.10 an hour by 2017. Last month, President Barack Obama called for raising the federal minimum wage above $10 an hour, and Malloy said the state should take a “clear position of leadership in the national debate.”
Malloy also followed the president’s lead in calling for assistance to homeless veterans and support for the long-term unemployed. Malloy’s budget puts $500,000 toward improving residential options for veterans at an existing state facility in Rocky Hill.
Although federal support for the long-term unemployed has expired, Malloy’s budget would put $3.6 million into a state program to provide subsidized employment, financial advice and job training to 500 people.
His budget proposal also includes investments in programs aimed at getting unemployed residents back to work, both through job training and support to small business.
“It has been said that government doesn’t create jobs, and that’s true. But what government can do is help give a company … a better chance to grow here in Connecticut, to succeed here in Connecticut,” Malloy said.
The governor released a $19 billion budget proposal for the year beginning July 1, but that does not include billions in Medicaid funds that are now considered “off-budget” under a change made last year by the Democratic-controlled legislature and protested by Republicans. If the off-budget funds were included, the budget would be about $22 billion, officials said. Malloy wants to raise spending by 2.7 percent while offering $228 million in tax breaks for individuals and businesses.
Rep. Rob Sampson, R-Wolcott, who serves on the budget-writing committee, said, “You can always tell it’s an election year because the Democratic governor sounds very Republican in his remarks — talking about tax cuts and talking about jobs.”
Support For Business
Malloy proposed increasing funding by $100 million for a Department of Economic and Community Development program that offers low-interest loans for economic development projects. The governor also said he would continue to fund another DECD loan program that provides grants to small businesses, and cited the creation of nearly 14,000 jobs under that program.
DECD loan programs recently came under criticism after revelations that some recipients — who were given hundreds of thousands of dollars in loans despite serious financial problems — later defaulted.
Malloy announced a new program for businesses — a $25 million “advanced manufacturing fund.” Budget director Ben Barnes said Thursday that the fund would offer assistance to companies moving to “distressed cities” in the state.
The budget also includes plans to reduce the number of outside engineering consultants at the state Department of Transportation, which union members have complained about for years. In addition, more than 100 engineers and support positions would be added to the department’s staff.
“His targeted increase of 100 workers at the DOT specifically for engineers and planners is an important step in helping to rebuild the state’s infrastructure,” said Lori Pelletier, the leader of the state AFL-CIO. “Bonding money is one thing, but if you can’t implement the plan because of engineering backlogs, it hurts all of us.”
Malloy previously announced his plan to use the surplus. He would use a projected $500 million in extra revenue to fund emergency reserves, pension obligations and tax rebate checks for citizens. The tax-free rebate checks, $55 for individuals and $110 for families, have been described as “election-year pandering” by political opponents.
“Is it going to solve all the problems of any one person in Connecticut? Of course not,” Malloy said during his State of the State speech. “But it certainly can help.”
In addition to the rebate, which will be tax-free, Malloy has called for other tax cuts that he said would amount to $280 million in the next two years. His proposal would reduce taxes on teacher pensions, exempt municipalities from a tax on insurance premiums, extend a tax credit that encourages start-up investment and offer a two-day holiday from state park fees.
House Speaker J. Brendan Sharkey, D-Hamden, said the state’s fiscal outlook will improve greatly as the economy continues to improve. He said that Malloy’s speech hit the right tones.
“It reflected where Connecticut is going right now,” Sharkey said of the speech. “It’s positive, it’s forward-thinking, it’s conservative in spending. We’re not proposing any kind of new programs with the surplus that we have. If we’re going to bring this recovery to the average working family in Connecticut, it’s this kind of approach from this governor that we have to follow.”
Courant staff writers Jon Lender and Kathleen Megan contributed to this story.