Letter to the editor submitted by Sean B. Goldrick. Goldrick specialized in Asian equity markets as a financial professional. He served two terms on the Greenwich Board of Estimate and Taxation.
Republicans are trying to pull off one of the biggest cons in Connecticut history. What’s the con? Convincing Nutmeggers that Connecticut is an economic and fiscal basket case headed for bankruptcy, and it’s Dannel Malloy’s fault. Says, Bob Stefanowski. “I will clean up the mess that Dan Malloy created.”
The con claims that Connecticut is hemorrhaging jobs, and that corporations are leaving in droves. In fact, under Governor Malloy, Connecticut has added 100,000 private sector jobs, hitting multiple all-time highs this year. By contrast, the previous Republican governors John Rowland and Jodi Rell added just 43,000 private sector jobs in 16 years in office. So Governor Malloy has created nearly two and a half times more private sector jobs in less than half the time in office.
We’re not losing companies. When Governor Malloy took office, Connecticut was home to 12 Fortune 500 corporate headquarters. As Governor Malloy prepares to leave office, the state features 17 Fortune 500 corporate headquarters.
There is one area where Governor Malloy has not matched Rowland-Rell: government jobs. While fully one-third of all jobs created during the Rowland-Rell years was in the government sector, Governor Malloy has cut government employment to the lowest level in more than two decades. According to the Office of Policy and Management, Governor Malloy reduced the state workforce by nearly 14%, resulting in the lowest ratio of state workers to population since the 1950’s.
And then there’s the con that billionaires are leaving Connecticut in droves. In fact, when Governor Malloy took office there were 11 billionaires called Connecticut home; today there are 17 billionaires in the state. Indeed, there are more billionaires living in Greenwich today than there were in the entire state when Governor Malloy took office.
Then there’s the spending con, with Republicans claiming that spending has spun out of control under Governor Mallol. The truth is that under Governor Malloy, state spending has grown at an annualized rate of just 2%, the lowest rate of spending increase in decades. It’s half the rate of spending under Jodi Rell, and far lower than the 5%+ annual spending during the Rowland years. And while Rell emptied the rainy day fund, Governor Malloy will leave office with a rainy day fund exceeding $2 billion.
The Republican debt con depends on deceiving Nutmeggers rests on obscuring a critical fact: That Connecticut is one of two states (Rhode Island the other) that does not operate county-level government. That’s important because state government took over many of the responsibilities from counties, including school construction, on behalf of our 169 mostly small municipalities. Each year between a fifth and a third of all state bonding goes to finance school construction, a function that is almost never handled at the state level elsewhere.
So while state-level debt appears high, if one looks at total public debt, state and municipal issued as a percentage of the economy, Connecticut ranks 27th, nearly in the middle of the fifty states. Far from the con that we’re drowning in debt, Connecticut isn’t even close.
Consider the unfunded liabilities con. As with debt, Connecticut state government has taken on a key responsibility for municipalities: funding public school teacher pensions. Only Connecticut and New Jersey fund teacher pensions entirely at the state level, while in other states pensions are funded by local school districts. In Connecticut, teacher pensions comprise 40% of all unfunded liabilities. If one compares unfunded liabilities across states on normal pension liabilities, Connecticut once again comes out right in the middle of the fifty states.
And far from the con that Governor Malloy is responsible for the high unfunded liabilities, the fact is that unfunded liabilities rose sharply under Rowland-Rell in the decade before Malloy took office. In fact, Governor Malloy dramatically strengthened teacher and state employee pension plans, engineering the two biggest give-backs by public sector unions in state history, creating new retirement tiers with lower benefits, reducing long-term expenditures by $45 billion. And while Rowland-Rell fully funded the annual pension contributions just three times in 16 years, Governor Malloy fully funded the pensions every one of his eight years in office.
Consider the con that Connecticut taxes are sky-high, and that GE left because of high corporate taxes. In fact, according to the Council on State Taxation, Connecticut’s effective corporate tax rate is the lowest in the nation. Indeed, the miserably managed GE paid no corporate tax to Connecticut.
And other taxes? According to the North Star Institute in Minnesota, total government expenditures in Connecticut by all levels of government as a percentage of the economy rank the state second lowest in the nation. Only New Hampshire’s government spending is lower relative to its economy.
So the Republican con is just that: a con. Governor Malloy has presided over record-setting private sector job creation, reduced government employment to the lowest level in twenty years, keep spending increases to the lowest level in decades, convinced numerous major corporations to relocate here, negotiated tens of billions in give-backs from public sector unions, fully funded state pensions, expanded the number of billionaires by nearly half, balanced the budget every year in office, and created a cash balance of over $2 billion.
Those are the facts. Don’t fall for the Republican con.