Malloy, Foley: Where Do They Stand?
Candidates weigh in on the state budget, taxes, business costs, and education
CBIA invited the major-party candidates for governor, Dannel Malloy (D) and Tom Foley (R) to respond to several questions with important implications for turning around the state’s economy and making Connecticut a top state for business and jobs. Here’s what they had to say.
The Office of Fiscal Analysis is projecting significant state budget shortfalls for Fiscal Years 2016 through 2018 based on current services. How would you address this problem?
Foley: I will hold spending flat for two years to stop the growth in the size and cost of state government. As part of this effort, I will direct every department head to find productivity improvements, so they can provide the same level of services or better while reducing their costs, and apply best practices and comparative costing from the private sector to reduce costs. I will also end pension fraud and abuse, invest in improved information technology and systems, and work to reduce the cost of healthcare services by at least 5% without reducing service levels.
Malloy: The OFA projections are based on unrealistic expectations of spending growth, and because of that I don’t believe that the current out year challenges are anywhere near what they are estimating.
There’s no question that since taking office, we have faced fiscal challenges that were deeper and more persistent than other states’. Our deficit was the largest on a per person basis than anywhere else in the country. And our pension system had been neglected for decades. And yes, we had to raise revenue when I first came into office. But we also made real cuts and found efficiencies that will continue to save taxpayers money well into the future.
Put this into perspective: Under my predecessors, spending increased well over 4% on average per year. In fact, in some of those years, spending increased more than 7%. Since taking office, I have held spending growth to less than 2.8%. We have reduced our overall debt by nearly $12 billion. And we’re continuing to implement efficiencies that will save money now and for the foreseeable future.
I believe that we can manage whatever challenges we face in the coming budget by continuing to limit growth and find efficiencies.
And rest assured, whatever challenges we face, we will take them on without raising taxes. It’s a pledge I would not take last time, so I don’t say this lightly. The difference now is that we have done much of the hard work that was neglected by my predecessors. These decisions haven’t always made me the most popular guy in the room, but they were necessary and set the foundation for a stable and prosperous future for Connecticut.
State Tax Policy
What changes to state tax policy would you like to see in order to encourage the private-sector investment necessary to make Connecticut more competitive in a 21st century global economy?
Malloy: We need to continue our efforts to cut red tape, make state government more business-friendly, and lower taxes.
Just this year, my administration was able to pass a bill that cut nearly 1,000 pages of outdated and burdensome regulations. Regulations that were nearly impossible to find in hard copy can now be found online. We took these steps after soliciting input from the public, and as governor I will ask for similar overhauls in the future. People need to know that they have a partner in state government, and as long as I am governor, they will.
We have also made progress in streamlining government. By adopting LEAN, we have reduced the amount of time it takes for state government to take action: improving business processes from 10% to over 80% by eliminating redundant steps and waste, while adding automation. For instance, permits at the Department of Energy and Environmental Protection that used to take four months to complete now take four hours. We’ve also brought more services online, so that people can avoid taking trips to state agencies when possible. A great example is that now people can sign up for the driving exam online and avoid a trip to the DMV.
And on taxes, we are already taking steps to reduce the burden that residents and businesses face, including eliminating the Electric Generators Tax. We have reinstated the clothing exemption for items under $50 and eliminated the tax on non-prescription drugs. Is it enough? Not yet, but we are committed to making Connecticut a state that can live within its means, and that means no more tax increases to justify new spending.
Foley: I will lower taxes on Connecticut’s hardest hit families by cutting the sales tax, the state’s most regressive tax, by half a percent; eliminate any tax or fee that is not cost-effective for the state to collect; work with cities and towns to reduce property taxes; and eliminate the business entity tax on businesses with fewer than 50 employees.
Business Costs & Transportation Infrastructure
National studies of states’ business climates have typically ranked Connecticut poorly for its high business costs, including energy and healthcare costs, and transportation infrastructure. What are your policy recommendations for making improvements in those areas and moving the state up in the rankings?
Foley: I will make Connecticut a place where businesses want to stay and invest. Right now state government is anti-business while at the same time doling out billions oftaxpayer dollars to bribe companies to stay here. That’s like stepping on the brake and the accelerator of a car at the same time. It doesn’t work.
Instead, I will conduct a “red tape review” to eliminate regulations and paperwork that unnecessarily burden businesses and everyday citizens, eliminate the business entity tax for businesses with fewer than 50 employees to encourage innovation and help small businesses grow, and simplify and expedite approvals for employers seeking to locate in Connecticut or make investments here that will create new jobs. I will make sure our government agencies understand the importance of supporting employers and their needs.
Finally, I will develop and market the “Knowledge Corridor” from Enfield to New Haven as a unique national asset and ensure that the needs of employers are incorporated into our infrastructure investments.
Malloy: We are tackling each of those challenges in ways this state has never seen.
Take transportation. My administration is investing more money into our infrastructure on average per year than any administration in the past 40 years, even if you adjust for inflation. We are adding rail and bus service, including the addition of half-hourly service on the New Haven line: something that has never been done in the history of that line: and moving forward the development of the New Haven-Hartford-Springfield rail line. We are also addressing long overdue congestion on our highways, like the I-84 widening project in Waterbury, and putting more money toward road and bridge repair. These projects languished under previous administrations, and now with new leadership they are moving forward.
We’re also working to lower energy costs for everyone, including businesses. Our state’s first ever Comprehensive Energy Strategy invests in natural gas expansion and renewable energy, offers incentives for energy efficiency, and will deliver cleaner, cheaper, and more reliable energy to more people in the coming years.
We’re also leading the way when it comes to getting people greater access to affordable healthcare. Our state has been held up as a national model for the implementation of the Affordable Care Act. In the first year of that program, we cut the uninsured rate in our state in half. That means more people will receive the preventative care they need early, avoiding more costly medical care in the future.
All of these changes were designed not for short-term political gain but to help our state in the long term.
Education and Workforce Development
Connecticut has a great reputation when it comes to education, but too many students continue to leave our schools without the skills necessary to be productive citizens. What will you do to ensure that young people from all socioeconomic backgrounds graduate with the tools they need to succeed?
Malloy: I have called education the civil rights issue of our time. What that means to me is that we have a responsibility to our young people to make sure they have access to a great education, regardless of their ZIP code or the economic status of their parents.
Part of how we live up to that goal is making sure the state is putting up more funding to support local education. That doesn’t mean we get in front of local control, and it also doesn’t mean we throw good money after bad. What we’re doing is giving districts additional money as long as they identify proven changes that will increase student performance.
For instance, Danbury chose to add full-day kindergarten to one of their schools. In East Hartford, they are taking major steps to address student literacy. And in Meriden, they have added extended days so that the young people who need extra help receive it.
These are small examples of a larger effort that is improving student outcomes across the state. But it is by no means the end of our effort.
Just this year, we expanded pre-kindergarten opportunities in high-needs communities by more than 1,000. We have plans to add another 3,000 slots over the next three years as cities and towns build the necessary infrastructure to support them. This comes on top of the 1,000 slots we added just a few years ago. We know that young people who start off with a quality pre-K learning experience will be better equipped once they get to school. And the fewer kids we have receiving remedial care, the more we are moving classrooms, schools, districts, and our entire state forward.
We are also making historic investments in the University of Connecticut and our state and community colleges so that the kids who graduate from our schools can get a decent and affordable college education if they choose to do so. The NextGen CT UConn initiative will lead to a dramatic expansion of science, technology, engineering, and math students so that our young people can compete for 21st century jobs. And Transform CSCU will create the infrastructure that students need to enroll in classes at any one of our 17 community and state colleges so that they can complete their degrees on time and without spending money on classes they don’t need simply to stay enrolled.
From pre-K, to K through 12, and through college, we’ve made the changes that need to happen. But we can’t stop now. With these changes in place, we have the foundation that will position our state for success for generations to come, and we must keep building.
Foley: To ensure that all young people graduate with the tools they need to succeed, I will fix our underperforming schools with “real” education reform. Real reform does not mean interfering with local control of schools that are performing well. But where schools are not performing well, I will implement intra-district school choice; implement “money follows the child,” including a variable grant amount based on a student’s needs; and provide more support for teachers.
I will work to improve transparency by introducing a statewide A-F school grading system and ensure that no one slips through the cracks by requiring that third graders pass a reading test before being allowed to go on to fourth grade and that high school students pass a regents-style exam before graduating.
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