Dan Haar: Malloy myth is dead wrong; he slashed state spending

State spending on regular state government actually declined by 4 percent between 2011, when Malloy took over, and this fiscal year, his last of eight annual budgets. State spending on regular state government actually declined by 4 percent between 2011, when Malloy took over, and this fiscal year, his last of eight annual budgets. Photo: Jessica Hill / AP Photo: Jessica Hill / AP Image 1 of / 11 Caption Close Dan Haar: Malloy myth is dead wrong; he slashed state spending 1 / 11 Back to Gallery

So you think Gov. Dannel P. Malloy has run up state spending in his eight-year tenure, right?

That’s what Republicans charge, loudly. Bob Stefanowski launched a nine-day bus tour on Thursday and the Republican nominee for governor won’t pass a single stop without shouting about Malloy’s supposed wild spending.

Democrats, none too eager to be seen with the nation’s second most unpopular governor, let alone defend him, seem happy to throw Malloy under that Stefanowski bus as they whistle by.

Well, think again. State spending on regular state government actually declined by 4 percent between 2011, when Malloy took over, and this fiscal year, his last of eight annual budgets.

Government agencies under Malloy saw their total spending decline by $250 million in the Malloy years, which will end on Jan. 9. That includes the University of Connecticut and the rest of the college and university system, the courts, state police and prisons, economic development, parks, environmental protection and the vast, sprawling offices that look after troubled children, mentally ill people and developmentally disabled adults.

Adjusted for inflation, that’s a cut of 16 percent, or $1.3 billion below the state government Malloy inherited from former Gov. M. Jodi Rell.

As of May, Malloy had eliminated 3,925 full-time, executive branch positions, or 13 percent of the 29,500 who were on the job when he took over. That doesn’t include cuts in the part-time ranks, or in the judicial branch, the colleges and universities and the legislature.

Speaking of Rell, she and fellow Republican former Gov. John G. Rowland combined for a $2 billion increase in government agency spending in the two terms totaling eight years before Malloy won election. That’s a 38 percent hike from the fiscal 2003 budget — compared with Malloy’s 4 percent cut.

They both talked a big game of cost-cutting. Malloy talked about maintaining services while he quietly went about the hard work of government efficiency, hiring outside lean management experts to help restructure agencies, not lop heads like Rowland threatened.

How can this be possible? The key is that we’re talking about regular government agency spending. To get there, we take out what I call the Big Five: Medicaid, bond debt, pension payments, employee and retiree health care and aid to cities and towns.

Those Big Five costs have driven a hefty increase, of course. In all, under Malloy those costs have ballooned by 40 percent, from $8.7 billion to $12.2 billion, nearly two-thirds of the budget.

That leaves the rest of state government — all the agencies, schools, colleges and universities included — spending $6.75 billion this year, down from $7 billion in Rell’s last year, fiscal 2011.

Stefanowski claims he can float a huge tax decrease by finding billions of dollars in waste, without cutting education. That leaves a base of about $5 billion to work with. The former executive’s claim of a 10 percent haircut, doable but a longshot, would save maybe $500 million in a $19 billion general fund.

More Information CUTTING WASTE Total spending change in all state agencies: Malloy, 2011-2019: Down 4 percent Rowland-Rell, 2003-11: Up 38 percent Total spending change for Big 5* costs: Malloy, 2011-19: Up 40 percent Rowland-Rell, 2003-11: Up 53 percent *Big 5 comprises Medicaid, municipal aid, employee and retiree health, pensions and bond debt.

And if you think any governor could have stopped the tsunami of Big Five expenses, think again. Those last eight years of Rell and Rowland, from 2003 to 2011, saw the Big Five rise by a combined $3 billion, or 53 percent.

These are sticky obligations, not optional expenditures For eaxmple, Malloy takes a lot of heat for running up bonded debt with projects critics call waste. In fact, his first budget — a doozy, with a $3.5 billion hole he had to fill — included his welcome present from Rell, the first of a series of payments on $900 million of “economic recovery bonds.”

Those bonds are a desperate measure designed to help cities and states survive recessions by postponing paying for regular government operations. Not Rell’s fault, but not Malloy’s doing.

It’s true that bond payments jumped from $1.7 billion to this year’s $2.2 billion under Malloy, but the so-called waste that critics point at — $10 million to study highway tolling, for example — doesn’t add up to much.

“Some of that you could blame on us,” Ben Barnes, Malloy’s budget chief, said Friday evening as I tallied the numbers. “You could say we should have not made investments, and we should have shut down the school construction program.”

Pension contributions, including the retirement funds for teachers and state employees, have jumped from $1.1 billion in Rell’s last budget year to $2.5 billion this year. Rell and Rowland liked to shortchange the pension funds, a habit we’re paying for dearly these days.

And if you think we could slash that bill by whacking benefit accumulation going forward, fuhgetaboutit. We could cut all retirement benefits from this moment on and still only save about $300 million a year. Current accruals just aren’t the problem.

Connecticut’s share of Medicaid costs climbed from $2 billion to $3.1 billion under Malloy, but the state added tens of thousands of covered people and has one of the lowest cost increase rates per-person.

As for the nearly $3 billion annual town aid bill, mostly for schools, Democrat Ned Lamont says Stefanowski would have to slash it but Stefanowski says no, and we all know a governor mucks with this pile of scratch at his or her instant peril.

Barnes and I were both surprised at the final, big-picture numbers because the various state budgeting offices don’t break them out this way. Maybe we’re all victims of outright lies by people whose political careers depend on Malloy as the whipping boy.

Maybe the weak economy under Malloy — that part is not a lie — has created a sort of reverse mirage where we can’t see good news, such as decent job gains and economic growth in the last year. Along with all the cost-cutting, he had to raise taxes because there simply was no way to balance the budgets otherwise.

State employees have had pay freezes in five of Malloy’s eight years, plus they pay more for their pensions and they pay 3 percent into a retiree health fund. Malloy has presided over two new tiers of state employees, each with lesser benefits.

Blame Malloy for lots of other things: failing to work with lawmakers and failing to persuade companies and people to stick it out. Mostly he suffered from bad timing, inheriting a true mess, unlike the humming U.S. economy that President Donald Trump took over two years ago.

What we can’t allow is for Republicans, or Democrats for that matter, to say Malloy led a barrage of wasteful spending.

“It’s just preposterous. I appreciate that they want to say what they want to say but our legacy, if you look at the details, is one of incredible fiscal restraint,” Barnes said. “The discretionary stuff is in the tank.”

Yes, we still face budget gaps due to a weak economy lacking a magnet city and old liabilities; but not due to wanton spending. And what’s not in the tank is the state’s rainy-day fund. Malloy started with basically zero. He will leave with an estimated $2 billion, maybe more, an ace in the hole for the next governor that he never had.

dhaar@hearstmediact.com