In a special presentation at the Greenwich Senior Center recently, Weston’s state Sen. John McKinney (R-28th District) had a lot of numbers to share when it came to the state’s fiscal crisis. And one number that could very well be on his mind is 2014.
Mr. McKinney, the state Senate’s minority leader and the son of former U.S. Rep. Stewart McKinney, is a rumored candidate for governor in 2014, and while he has made nothing official about his future plans, the visit outside his district to Greenwich was part of what is being billed as a “fiscal responsibility tour” through the state in anticipation of legislative work in the budget. And he did not hold back in his criticism of the policies of Gov. Dannel Malloy, who is set to run for a second term.
“We are consistently seeing jobs driven out of the state of Connecticut and people driven out of the state of Connecticut,” Mr. McKinney said. “We overspend, we overtax and we overregulate, and things will only get worse unless we fundamentally change the way we do business.”
If Mr. McKinney does seek the Republican nomination for governor, he would likely end up facing off with Greenwich’s Tom Foley, who narrowly lost to Mr. Malloy in 2010. Mr. Foley has not made his intentions official yet, either, but a second run for the governor’s mansion is expected.
However, the minority leader did not offer his comments as a candidate, but rather as a member of the state Senate in disagreement with the governor’s policies.
Mr. McKinney’s presentation showed that while Connecticut’s population has remained relatively flat over the past 25 years, state spending has skyrocketed more than three times the rate of inflation.
“Any time government, whether it’s local or state or federal, is increasing spending two, three, four times the rate of inflation over a long period of time, you’re going to end up in a fiscal crisis, and that’s where we have been since the economy started to fall and fail in 2008,” Mr. McKinney said.
Mr. McKinney had a chart of the state’s spending for the 2013 fiscal year, and of the $20.670 billion in appropriated funds, social services took up the biggest chunk at 22% with education coming in at 21% and 11% for repayment of debt, which he particularly focused on. He said that meant 11 cents of every dollar spent in the state is going toward interest on debt.
“As a state, we have the highest per-capita debt of any state in the nation,” Mr. McKinney said. “That 11 cents on every dollar is not a good number for the state of Connecticut.”
He added that under Mr. Malloy, spending has continued to go up, comparing the $19.169 billion in spending, $19.2 billion in revenue, and $2 billion in bonding under the last year of former Gov. M. Jodi Rell to the $20.279 billion in spending, $20.278 billion in revenue and $2.262 billion in bonding under the last fiscal year for Mr. Malloy.
Under Mr. Malloy’s proposed, budget, Mr. McKinney said, there will be a 9.64% spending increase.
“What is frightening to many of us is that the governor and his budget director, Ben Barnes, have indicated that during the last calendar year they borrowed $1.4 billion and in this calendar year they anticipate borrowing $1.8 billion,” Mr. McKinney said. “That’s a dramatic increase in the rate of borrowing for a state that has the highest per-capita debt in the nation.”
Mr. McKinney said there is still a projected budget deficit of $128 million this fiscal year, meaning that this money has to be found before the fiscal year ends on June 30. He accused the governor of making “no efforts to get that number down” and said the state could be facing a retroactive tax increase or borrowing, both of which he said have been done too many times.
Mr. McKinney’s claims drew a response from the governor’s office. Director of Communications Andrew Doba said the fiscal state of the state is improving and pointed to a letter from state Comptroller Kevin Lembo with projections of a $91.3-million deficit for the end of the fiscal year, a steep figure but also a $40-million improvement from previous projections due to revenue, particularly a $30-million gain from the state’s inheritance tax.
Mr. Lembo also speculated the deficit could disappear entirely over the rest of the fiscal year because of an improving state economy.
“The assertion that we are doing nothing to address the deficit is fundamentally untrue,” Mr. Doba said. “Comptroller Lembo’s letter shows the deficit is getting smaller and it’s possible that we could end the year with no deficit.”
While Mr. McKinney accused Mr. Malloy of spending an additional $1.8 billion, Mr. Malloy said his budget actually cuts $1.8 billion in spending.
In his remarks last week, Mr. McKinney said the two versions of what is happening in the budget could be reconciled by comparing it to a household budget. He gave the example of feeding his family on a budget and needing to spend $225 a week on food but not being able to afford it and instead spending $210 a week after spending $200 a week the previous year. Mr. McKinney said that in this case, as at the state level, spending has been raised but Mr. Malloy is taking credit for cutting by going for only $210 a week instead of $225.
“I would say we’re raising spending $10 month and Gov. Malloy is saying we’re cutting $15 a month,” Mr. McKinney said. “I don’t say this to make you laugh, because it’s true. He works off what he calls a current services budget, which is everything we wished government could be or do for the people of the state of Connecticut and if we spend anything less than what we all want to spend I’ve cut spending. Whereas we Republicans have been fighting for zero-based budgeting where we work off how much did you spend last year and how much money are you taking in?”
Mr. McKinney said a proposal in Mr. Malloy’s budget to borrow $750 million to cover state operating expenses was “very objectionable.” He said this is “literally borrowing to keep our lights on” and would lead to an additional $186 million in debt service payments.
Mr. McKinney said this is because Mr. Malloy would not make decisions on where to cut spending and added that the governor had erred in his dealings with state labor unions, making agreements preventing the state from making layoffs for four years and extending existing health care and benefit packages five more years.
Mr. Doba said the state’s issue with debt dates back to the Rell administration and that current spending was being driven to meet the needs of the people with programs like the Next Generation Connecticut investment in engineering, science and math at the University of Connecticut and other investments in education, infrastructure, middle class tax relief, and jobs programs. He added that the number concerning Mr. McKinney is not being used for what he claims it is.
“The idea that we are borrowing $750 million to cover operating expenses is patently false,” Mr. Doba said. “That money is going to be used for locking us into generally accepted accounting principles (GAAP) so future legislatures and future governors cannot take us off it. This is going to get us on the path of paying off the GAAP deficits.”
Mr. McKinney also criticized the governor for taking $74.8 million from the state’s special transportation fund to pay for general operations, which would be the second time he’s done it after pledging not to in his 2010 campaign.
Mr. McKinney said the money from that fund would be better spent paying for repairing bridges and improving infrastructure in the state instead of having to hear proposals to bring back border tolls to do it.
There was also discussion of Connecticut’s unfunded liabilities — which Mr. McKinney pegged at $66.1 billion — for the pensions of state workers. He added it could end up being closer to $80 billion because the assumes return on investment of money used for pensions could be too high.
He said Connecticut ranks among the bottom of states for how much of its pension liability is covered.
“That is a huge problem for our future economic well-being in the state of Connecticut because that’s money we owe, that’s money we have to pay and that’s money we don’t have,” Mr. McKinney said, later adding that unless the state got its short- and long-term spending and debt under control, Connecticut could not convince businesses to invest in the state.