Talk about a bad week.
In rapid succession, Governor Malloy was rebuffed by his long-time labor allies, saw the state’s financial health downgraded by Moody’s and got slapped around on TV by the governor of New Jersey.
New Jersey? The Garden State has never been known as a model of governmental wisdom. To his credit, Governor Christie is trying to change that but kicking the governor of a neighboring state when he’s down hardly seems good policy. Of course, Malloy’s escalation of the tempest — he said he’ll reform Connecticut much faster than Christie will straighten out the mess in Trenton — also seems unwise.
Gentlemen, you’re not running against each other — at least not yet. Cool it and focus on the crisis at hand.
Christie does have a valid point when he says labor responds only to strength. And Malloy showed some strong action to backup his rhetoric in seeking to remove some of the most toxic fringe benefits from the bargaining process and moving ahead toward layoffs to balance the budget.
The result, however, is mixed at best, reinforcing Moody’s assessment that the state has a slim chance to recover.
The key is to head off the nuclear action of cutting off 14 percent of the state payroll and adding those folks to the unemployment rolls. Today that key is in the hands of the unions and their lawyers. Our bet is a last-minute reprieve — in the form of a modified deal and a re-vote — is a strong possibility.
Whatever the short-term outcome, the key words from Malloy are his recognition that the state’s relationship with its employees isn’t even close to sustainable. Benefits are seriously out of whack. With only 44 percent of the pension liability funded, we’re among the worst states in the nation. That’s shameful for a place with the riches, the history, the intellect of Connecticut. And we applaud Malloy for at least taking baby steps to drag the state out of the hole dug by Governor Rowland’s 20-year labor deal and a generation of legislative sleepwalking.
We’re baffled, however, by the governor’s idea of privatizing some state services without a thorough review of the effects. We applaud privatization but even a good idea needs oversight and transparency. Unilateral contracting power is a road filled with landmines that have the potential to blow up state budgets and political careers.
We’re all rooting for Malloy to balance the budget without stopping the economy dead in its tracks. Despite what New Jersey may think, he seems the only hope we’ve got.
Speaking of transparency …
The juxtaposition of two reports gives us pause.
First, the legislature made a legal revision that allows economic development officials to hide details about companies that receive taxpayer dollars. Auditors had been pointing out for some years that the Connecticut Development Authority was violating the law by withholding names and other facts about companies it funded. The legislature decided to change the law rather than make CDA comply.
Then comes a report that CDA wrote off $1.3 million in bad loans for 2010 and ended the year with a $1.7 million loss. Times are tough; some failures are an expected part of the mission of funding frail companies trying to grow. And the CDA has been toting around the burden of operating the XL Center, an ill-conceived plan, for 17 years.
Now, we’re certainly sympathetic to the argument that proprietary and competitive forces argue for secrecy. But we’re also sensitive to the lack of accountability that goes with this lack of transparency. Letting certain legislators peek as long as they promise not to tell isn’t much of a check.
We need to find a better way to review the CDA’s work.
