Gov. Malloy has plan to fix deficit
Published 12:58 pm, Wednesday, November 21, 2012
Gov. Dannel P. Malloy said Tuesday that he expects to have a plan in place within two weeks to deal with Connecticut's projected $365 million budget deficit.
The governor told a group of more than 300 businessmen and women gathered at Fairfield University for a conference on the state of the state that he will reduce projected expenditures between now and July 1.
"We're going to close the year in balance," Malloy said. "We closed last year in balance. In fact, we deposited $7 million into the Rainy Day Fund after it appeared we would have a deficit then."
For nearly an hour, the governor spoke on several topics at the Charles F. Dolan School of Business, including gains he made during his first 22 months in office by changing the way state pensions are funded and his success addressing traffic bottlenecks with Interstate 95 improvements in Bridgeport and New Haven, as well as improvements in Norwalk and on Interstate 84 in Hartford.
On the state deficit, Malloy said two-thirds of it stems from a reduction in expected revenues, while the remaining third involves Medicaid expenditures resulting from long-term unemployment.
While Malloy repeatedly has said he will avoid new taxes, some fiscal experts believe the $365 million deficit could balloon to a $2.1 billion shortfall by 2015.
The governor also attempted to lighten the dire economic mood that fills daily news pages.
When asked what impact the recent retirement of the state's two senior U.S. senators (Chris Dodd and Joseph Lieberman) will have, Malloy said: "I'm going to see (Sen. Richard) Blumenthal at every single parade I go to."
And when questioned about the possibility of Congress and the president failing to reach an agreement on taxes, debt reduction and spending cuts -- the so-called "fiscal cliff" -- Malloy said, "If that happens, don't be standing anywhere near a fan."
More seriously, he said that if "the fiscal cliff plays itself out to include no debt ceiling adjustment ... with the weakness that Europe is currently demonstrating, we will see a worldwide depression. If we go off that cliff, honestly, it is unthinkable."
The problems in Europe further affect Connecticut because France is "our No. 1 trade partner," Malloy said.
But the governor expressed confidence that falling off the cliff won't happen.
"We get by the cliff, we have a rational policy with respect to cutting, on a short-term basis, $4 trillion out of our gap, and we add to some extent taxes on international profits as part of that -- you'll see 12 million jobs created in the United States over a four-year period of time," he said.
While the governor told the gathering that he saved and added jobs by enticing NBC Sports' move to Stamford, and by getting CIGNA to forego Texas for Bloomfield, he noted that Connecticut and Michigan are the only two states that have seen continual job losses for "20 years in a row."
"At a time when 23 million jobs were created ... 48 states shared in the creation," Malloy said.
He said the state must focus on its strengths, which include precision manufacturing, claiming those types of companies have 1,000 open positions they can't fill.
To fill that gap, Malloy said the state has replicated the Asnuntuck Community College precision manufacturing program at three other community colleges, including Bridgeport's Housatonic Community College and three technical high schools.
Pointing out that he took over a state in financial distress during a damaging recession, Malloy said he accepts the challenge to turn the economy around.
He said he wanted to "reshape my state -- I want to make it a better and stronger state."
"I have one hell of an exciting and interesting job," he said.