Opinion

Sean Goldrick: Don’t fall for the Republican con

Gov. Dannel Malloy at St. Rose of Lima church in Newtown in 2017. Gov. Dannel Malloy at St. Rose of Lima church in Newtown in 2017. Photo: H John Voorhees III / Hearst Connecticut Media Buy photo Photo: H John Voorhees III / Hearst Connecticut Media Image 1 of / 1 Caption Close Sean Goldrick: Don’t fall for the Republican con 1 / 1 Back to Gallery

Republicans are trying to pull off one of the biggest cons in Connecticut history. What’s the con? Convincing Nutmeggers that Connecticut is an economic and fiscal basket case headed for bankruptcy, and it’s Dannel Malloy’s fault. “I will clean up the mess that Dan Malloy created,” GOP gubernatorial candidate Bob Stefanowski says.

The con claims Connecticut is hemorrhaging jobs, and that corporations are leaving in droves. In fact, under Malloy, Connecticut has added 100,000 private sector jobs, hitting multiple all-time highs this year. By contrast, the previous Republican governors John Rowland and Jodi Rell added just 43,000 private sector jobs in 16 years in office. So Malloy has created nearly 21/2 times more private sector jobs in less than half the time in office.

We’re not losing companies. When Malloy took office, Connecticut was home to 12 Fortune 500 corporate headquarters. As Malloy prepares to leave office, the state features 17 Fortune 500 corporate headquarters.

There is one area where Malloy has not matched Rowland-Rell: government jobs. While fully one-third of all jobs created during the Rowland-Rell years was in the government sector, Malloy has cut government employment to the lowest level in more than two decades. According to the Office of Policy and Management, Malloy reduced the state workforce by nearly 14 percent, resulting in the lowest ratio of state workers to population since the 1950s.

And then there’s the con that billionaires are leaving Connecticut in droves. When Malloy took office 11 billionaires called Connecticut home; today there are 17 billionaires in the state. Indeed, there are more billionaires living in Greenwich today than there were in the entire state when Malloy took office.

Then there’s the spending con, with Republicans claiming that spending has spun out of control under Malloy. The truth is that under Malloy, state spending has grown at an annualized rate of just 2 percent, the lowest rate of spending increase in decades. It’s half the rate of spending under Jodi Rell, and far lower than the 5percent-plus annual spending growth during the Rowland years. And while Rell emptied the rainy day fund, Malloy will leave office with a rainy day fund exceeding $2 billion.

The Republican debt con depends on deceiving Nutmeggers about a critical fact: That Connecticut is one of two states (Rhode Island the other) that does not operate county-level government. That’s important because Connecticut state government took over many of the responsibilities from counties, including school construction, on behalf of our 169 mostly small municipalities. Each year between a fifth and a third of all state bonding goes to finance school construction, a function that is almost never handled at the state level elsewhere.

So while state-level debt appears high, if one looks at total public debt, state and municipal issued as a percentage of the economy, Connecticut ranks 27th, roughly in the middle of the 50 states. Far from the con that we’re drowning in debt, Connecticut isn’t even close.

Consider the unfunded liabilities con. As with debt, Connecticut state government has taken on a key responsibility for municipalities: funding public school teacher pensions. Only Connecticut and New Jersey fund teacher pensions entirely at the state level, while in other states pensions are funded by local school districts. In Connecticut, teacher pensions comprise 40 percent of all unfunded liabilities. If one compares unfunded liabilities across states on normal pension liabilities, Connecticut once again comes out right in the middle of the 50 states.

And far from the con that Malloy is responsible for the high unfunded liabilities, unfunded liabilities rose sharply under Rowland-Rell in the decade before Malloy took office. Malloy dramatically strengthened teacher and state employee pension plans, engineering the two biggest give-backs by public sector unions in state history, creating new retirement tiers with lower benefits, and reducing long-term expenditures by $45 billion. And while Rowland-Rell fully funded the annual pension contributions just three times in 16 years, Malloy fully funded the pensions every one of his eight years in office.

Consider the con that Connecticut taxes are sky-high, and that GE left because of high corporate taxes. According to the Council on State Taxation, Connecticut’s effective corporate tax rate is the lowest in the nation. Indeed, the miserably managed GE paid no corporate tax to Connecticut.

And other taxes? According to the North Star Institute in Minnesota, total government expenditures in Connecticut by all levels of government as a percentage of the economy rank the state second lowest in the nation. Only New Hampshire’s government spending is lower relative to its economy.

So the Republican con is just that: a con. Governor Malloy has presided over record-setting private sector job creation, reduced government employment to the lowest level in 20 years, keep spending increases to the lowest level in decades, convinced numerous major corporations to relocate here, negotiated tens of billions in give-backs from public sector unions, fully funded state pensions, expanded the number of billionaires by nearly half, balanced the budget every year in office, and created a cash balance of over $2 billion.

Those are the facts. Don’t fall for the Republican con.

Sean Goldrick is a financial professional specializing in Asian markets. He served two terms on the Greenwich Board of Estimate and Taxation.