Malloy, Foley on the State’s Most Pressing Issues

10.31.2010
Economy

Gubernatorial candidates tell CBIA how they’ll balance the state budget, create jobs, improve education, and more

CBIA invited the major-party candidates for governor, Dan Malloy and Tom Foley, to respond to several questions of critical importance to the future of Connecticut and its business community. Here’s what they had to say.

State Fiscal Policies

CBIA: Connecticut is facing the largest projected budget deficit in the state’s history. What changes to state spending and tax policies would you propose to close that deficit?

Foley: Every day, Connecticut families discuss and make difficult decisions about how to make ends meet. But while they are cutting back expenses and struggling to pay bills, Hartford just keeps on spending their tax dollars as if there was no tomorrow. State general-fund spending, despite a large estimated deficit this year, is projected to increase another 8% by 2012. Spending at a level so far above state revenues is not only reckless and irresponsible, it is unconstitutional in Connecticut. Spending by the legislature must come down.

While Hartford continues its reckless spending, Connecticut households, on average, will pay over $8,600 in state taxes this year, or one in every eight dollars of average household earnings. The Tax Foundation ranks Connecticut as having the highest state and local taxes per capita in the nation at 63.6% above the national average. Our state taxes per capita are significantly higher than our neighbors’ in New York and New Jersey. If there is no reduction in spending and we have a balanced budget, which is required by law, average taxes per household will shoot up to over $10,000 in 2012. Our state taxes are already way too high a burden on working families and cannot be increased.

As governor, I will aggressively reduce spending, veto any legislation to close the 2012 budget deficit with new taxes, and still comply with our constitutional requirement to balance the state budget. I will increase transparency so that Connecticut taxpayers aren’t being hit with “stealth taxes” they cannot see, and I will work with the legislature to agree on a bipartisan, long-term tax policy for Connecticut that is based on sound economic policy and fairness.

I will also order a comprehensive analysis of how taxpayer dollars are being spent and determine the most fair and balanced ways to reduce spending. I will find and eliminate any wasteful or duplicate spending, apply ‘best practices’ and ‘comparative costing’ from the private sector to reduce costs, and I will invest in improved information technology and systems to help our state workforce be more productive.

The Foley administration will work with private contractors who provide services for the state to reduce the cost of services without reducing service levels. I will seek to reduce state Medicaid costs by promoting wellness programs, capping medical malpractice claims, and negotiating better contracts with providers. I will seek to bring down the cost of delivering health care in Connecticut, which is one of the highest health-care-cost states in the country. Health care costs are about a third of the budget, so reducing the cost of health care will reduce state spending.

Malloy: Priority number one is creating new jobs while protecting the jobs we have. When we do that, we’re creating revenue the right way. I’m confident I can lead an effort to bring new jobs to Connecticut, because it’s something I’ve done before. As mayor of Stamford, I proposed balanced budgets every year, while holding the line on taxes and bringing thousands of new jobs to the city.

We also need to find smart ways to save money. For instance, I’ve set a goal of reducing the number of state agencies by a third by consolidating duplicative processes. (To be clear, I have no interest in laying people off). As just one example, I would look at merging the state’s four economic development agencies into one department. I’d also suggest freezing compensation for all political appointees, and I’d want to look for ways to stop providing cars for state employees other than the five constitutional officers and law enforcement (people can be reimbursed for official use of their personal cars).

I would also reach out to labor leadership to talk about their ideas for finding savings in the state budget: ideas that have not been listened to under recent governors.

Only then, after exhausting those options, will we talk about the revenue side. When it comes to taxes, I would initiate fair and comprehensive tax reform to ease the burden on local communities, and we would work to provide for a fairer and more progressive sharing of taxation.

Finally, I will say that there is one group that should be off limits when it comes to cuts, and that is the nonprofit providers that serve as a safety net for Connecticut residents in need. Connecticut’s social services safety net has been under continuous assault in recent years. These programs are relied upon by thousands of our State’s most needy, and they’re already underfunded.

Promoting Business Investment

CBIA: All candidates at every level are talking about economic growth and jobs. True sustainable growth and job creation comes through private-sector investment. What policies do you support to encourage entrepreneurs, small businesses, and larger corporations to invest more in Connecticut?

Malloy: Job number one for Connecticut’s next governor is to finally put in place a strategy that will help revitalize our economy. For too many years Connecticut hasn’t had an economic development strategy that anyone can understand. We’ve careened from trying to build casinos and football stadiums to begging companies that we’ve bribed with taxpayer dollars to keep their jobs in Connecticut. It has to stop.

As mayor of Stamford, I worked every day not only to create jobs in the city but also to provide economic security by promoting a thriving economy. As a result, over 14 years we created close to 5,000 private-sector jobs at small, medium, and large businesses, and Stamford became an international banking and financial services center. As governor, I will apply my experience and know-how every day to protect jobs and promote Connecticut as the place to grow businesses.

My running mate Nancy Wyman and I have released a roadmap for creating jobs in Connecticut, full of specific ideas for driving job creation. That plan can be read at danmalloy.com/policy/jobs_and_economy.

Perhaps the boldest, short-term solution we’ve suggested is the creation of a new fund using close to $1 billion in unused research and development tax credits to leverage new research and advanced manufacturing space and to encourage the participation of state and municipal pension funds to augment the initial investment. This plan, done correctly, could result in a $2 billion investment and as many as 30,000 direct jobs and 75,000 spin-off jobs. Other initiatives involve expanding state investment in stem cell research and other cutting- edge biomedical fields and aggressively developing the state’s three deep-water ports to drive commerce.

We also need to make the state more business-friendly. Two areas need our immediate focus: energy costs and health care costs. If we can lower those costs by 10% or more, we’ll immediately make Connecticut significantly more business-friendly and a favored destination for the entrepreneurs and small business owners that are the greatest job creators in America. I have specific plans to do both.

Government can’t fix the economy by itself, nor should it try. But what government can do is help put in place an economic development strategy that makes sense for the 21st century economy, instead of holding onto strategies that were designed for the last century.

Foley: I have a sensible plan to help restore Connecticut’s position as the economic engine of the Northeast. This plan is in sharp contrast to my opponent who talks openly about the need to raise taxes and borrow more money to balance the state budget.

I would start by getting Connecticut’s fiscal house in order, but I would also take immediate steps to make state government more responsive to the needs of employers and to make Connecticut more employer-friendly. I would reach out to seven industries for whom Connecticut has a lot to offer and get them to bring jobs here. These sectors include

” Health care services

” Highly engineered manufacturing

” Financial services

” Medical devices

” Alternative energy research and development and manufacturing

” Pharmaceuticals

” Biotechnology

I will stand against any legislation or policies that further raise employers’ costs, and I will stand against new taxes which will dampen the economy further and cost us jobs. I support tax credits for small businesses that hire new people, and I would encourage our state chartered banks to extend more credit to small businesses.

Education Reform

CBIA: The General Assembly recently adopted legislation that increases the graduation requirements for high school students and takes steps to close Connecticut’s largest-in-the-nation educational achievement gap. What other reforms would you support to improve public schools and ensure a quality education for all students?

Foley: Connecticut has some of the best schools in the country, but we also have the country’s largest achievement gap. We have a constitutional obligation to provide a good education to all of our young people. We can and must do better. Our economy and the future of our state depend on it. To improve our schools, I will appoint members to the state Board of Education who are reformers and share my sense of urgency. Together, we will ensure the appointment of a reform-minded, action-oriented education commissioner.

I will develop accountability frameworks for students, teachers, and schools that define success and failure. This will include ending social promotion in grade 3 for students who earn the lowest score on the state’s annual standardized test and requiring students to pass an examination to graduate from high school. I will develop a comprehensive teacher evaluation system that fairly distinguishes between teachers based on their effectiveness and institute an A through F grading system for schools.

I will implement policies that empower parents with choices when their local public school isn’t performing. I will reward excellent teachers and principals and retrain or retire those who are underperforming. I will encourage the elimination of barriers to attracting and rewarding great teachers and principals. I will promote money-following-the-child and revising the ECS [Educational Cost Sharing] system so that money flows towards schools that are succeeding, not failing.

I will set an ambitious goal to have Connecticut replace Massachusetts as the best performing state on national standardized tests. I will also aim to significantly narrow Connecticut’s achievement gap. I want to be known as the jobs and education Governor. To achieve our education goals, I will provide strong leadership and incentives for the legislature, community leaders, educators, and parents to join with me in promoting excellence in every school in Connecticut.

Malloy: As a young boy who faced a learning disability, I understand the importance of schools in helping all students reach their potential. That’s my dream for Connecticut’s children: that they are given every chance to succeed and that the environment in which they learn leaves the same impact on their lives that it left on mine.

The achievement gap that exists in Connecticut is a tragedy. We should be ashamed of it. It’s the worst in the nation, and it’s got to be fixed. As Mayor, I reduced it in Stamford. As Governor, I’ll do the same across the state. How? By strengthening our public schools, by making sure parents, teachers, and administrators are working together, and by helping to push reforms that make sense.

First, we need to provide teachers with the resources they need in the classroom. Second, the overly burdensome requirements of the traditional routes to the profession create roadblocks that turn away too many talented, capable people who desperately want to teach. Third, let’s be smart about how we evaluate teachers. A strong teacher evaluation system, like the system New Haven recently began, includes multiple measures of student progress to achieve a complete, accurate snapshot of teacher effectiveness. The New Haven system, developed collaboratively by the school district and the teachers’ union, will assess teachers’ performance based on multiple components, including student performance growth and classroom observations of teacher instructional practice and professional values.

As a state we will have to start putting money back into our educational system and maximizing opportunities for students. We need to limit school district administrative expenditures and instead offer incentives to retain and recruit classroom teachers in the face of cutbacks and a growing teacher shortage.

As governor, my guiding principle will be for our schools to maximize opportunities for students while not losing the flexibility they need to help each student reach his or her potential.

Connecticut has a long tradition of high quality education. The challenges that lie ahead: and the risk that if we stand still other states and countries will pass us by: demand a renewed commitment to public education and new approaches to learning.

Health Care

CBIA: At the federal level, Congress considered and ultimately rejected a public health care option. In Connecticut, the SustiNet plan has been advanced by its proponents as a state version of the public option. What is your position on committing potentially billions of taxpayer dollars to such a plan?

Malloy: I believe health care is something everyone should have. In fact, I view it as a moral issue. If a state can’t work with the private sector to put in place a system to care for its people when they’re sick, especially children, the frail, and the elderly, what does it say about the kind of society we are? Not something good. And not something I will allow it to say when I’m governor.

As governor, I would use the purchasing power and influence of state government to convene all parties: insurance companies, employers, unions, medical practices, hospitals, and others: to improve the quality of health care delivery and lower costs for everyone. The current system is broken. We need to connect all providers with electronic medical records, reduce duplicate testing and procedures, and change the way we pay for health care services in the state.

I was also an early supporter of legislation that would have established a health insurance option for Connecticut residents called SustiNet. In the end, the final legislation did not go as far as I had hoped. It did not create the SustiNet Health Insurance option, but did set the wheels in motion toward developing a plan that could become law. This was a step in the right direction that was inexplicably vetoed by the Governor. Thankfully, the state legislature showed great leadership in overriding that veto and moving us one important step closer to achieving quality, affordable health care for every Connecticut resident.

I am completely convinced that, with Nancy Wyman as my partner in this effort, we can expand access and bring costs down. We can improve people’s lives and make Connecticut a more business-friendly state. That’s a promise we have a moral responsibility to keep.

Foley: Sustinet is currently a plan without a purpose. There may be an appropriate role for SustiNet in the future, but establishing a public option in Connecticut is not an appropriate role for SustiNet.

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