Malloy's Dud Budget Deal

CT governor Dan Malloy has been praised as the "anti-Chris Christie" for his deal with the state's public sector unions. But his budget won't solve Connecticut's fiscal crisis.

Connecticut’s Governor Dan Malloy has recently attracted the praise of the left due to his self-branded “anti-Christie” style of negotiating with public sector unions. Earlier this week, Malloy, after months of bargaining, announced the outline of a deal amounting to $1.6 billion in public union concessions (ultimately closing a $3.4 billion two-year deficit).

Many on the left claim that Malloy’s positive approach towards unions, coupled with his “I’m your best option” stance, creates a new governing model of cooperation and pragmatism that stands in direct contrast to the “un-American” (Malloy’s words) harsher policies of those like Governors Cuomo, Walker or Christie.

However, one ought not look over Malloy’s ends due to an appreciation of his means. Malloy’s budget is far from praiseworthy and solidifies the underlying problems of Connecticut’s long-term fiscal crisis.

First and foremost, Connecticut’s public sector workers still maintain overly lavish working arrangements. Connecticut state and local employee compensation has risen over the ten years more than 55 percent (22 percent more than the national average for private sector workers), and, before Malloy’s deal, public workers earned an average of $14,000 more than their private sector counterparts.

Malloy’s budget will do little to adjust this underlying problem. Malloy’s deal guarantees a four-year “no layoff pledge”, a 20 year extension of current benefits, and re-solidified pension plan (underfunded by $40 billion dollars currently), among other measures that keep Connecticut’s long-term fiscal stability in severe doubt. Moreover, the union concessions are comprised of what were already exorbitant privileges. For example, Malloy ended the zero dollar co-pay for emergency room visits (there have been documented cases of workers going 150 times in a year for free on top of their healthcare plans).

It’s also vital to note why Governor Malloy only needed $2 billion in union concessions to fill his short-term budget gap – a $1.5 billion dollar tax hike, the state’s largest tax increase in twenty years. Connecticut is one of only two states (the other is Michigan) that has had no job growth over the last twenty years. Connecticut’s 47^th ranking in “Cost of Business”, according to CNBC, certainly has contributed to this fact, and a more hostile tax policy will undoubtedly have widespread consequences.

All in all, Malloy’s “pragmatism” was nothing more than a wasted opportunity for substantial change towards fiscal responsibility. Public sector unions are structural detriments to state economies, both regarding their benefit packages and legal mechanisms available to defend them. Even if the examples of Walker, Christie and Cuomo are too politicized, Malloy and his supporters should turn to Massachusetts, whose heavily Democratic House recently passed drastic collective bargaining reforms. While Malloy’s hope of cooperative negotiations is noble, it is, by all measures, seemingly unattainable and only exacerbates long-term problems.

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