🔒Wisely, Malloy’s budget shows a pro-business approach

Gov. Dannel P. Malloy's two-year $40.6 billion budget proposal is liked by few, hated by many and loved by no one.

Yet, we think the Democratic governor proposed an overall fair budget, considering it needed to balance billion-dollar deficits in each of the next two fiscal years.

Let's be honest, no one constituency in the state was going to be held totally harmless from budget cuts or policy changes that aim to restore financial stability in a state that has lacked it for far too long.

The key to Malloy's proposed budget is that he avoided any major income or business tax hikes, something the state's slow-growing economy can't afford.

Malloy has apparently heeded the clarion calls from the business community, which responded harshly and publicly in 2015 to attempts by the legislature to raise business taxes by hundreds of millions of dollars. Months later, of course, one of those outspoken companies, General Electric, announced it was moving its corporate headquarters to Boston. (GE's move was precipitated by several factors including a desire to be in a more high-tech city.)

The governor is also demanding state labor unions cough up $1.5 billion in concessions over two years, a large number that may or may not be achievable. If it can't be done, Malloy says up to 4,200 state employees could lose their jobs. We hate to see the state resort to layoffs, but since long-term debt costs related to state retiree benefits are a major driver in Connecticut's escalating expenses, labor unions must be asked to bear a significant part of the burden.

State workers, after all, are here to serve the residents of Connecticut, not hold them hostage in the middle of a budget crisis. We urge labor unions to come to the table and negotiate givebacks because layoffs would have a harsher effect on the state's economy.

Through his budget blueprint Malloy is acting more like a chief executive and less like a politician. Yes, Malloy's budget is still a very political document, but the progressive Democrat has prescribed some of the toughest medicine to his core labor-union constituency, which helped him win two elections.

That's because economic realities have left few other options and Democrats' typical tax-and-spend playbook has proven incapable of solving Connecticut's fiscal crisis.

Indeed, long-term private-sector job and wage growth is the only way Connecticut can grow its way to balanced budgets. That can't happen if we continue to sack businesses with higher taxes. As a result, Malloy must perform a corporate restructuring to the state government apparatus, significantly lowering overhead and other costs while also improving overall efficiency.

There are concerns we still have with the budget. There is a lack of clarity on how changes to municipal funding will impact property taxes, which are already high in the state. What is known is that some municipalities will be winners (mainly poorer cities like Hartford that will receive increased funding) while many others (smaller, wealthier communities that will take a funding haircut) will be losers. If some cities and towns are forced to significantly raise property taxes to make ends meet, it could negatively impact many small businesses.

That being said, we think it's time for local communities, which have been spared from funding cuts in the past, to share in some of the state's financial pain. Cities and towns should be forced to do some of the same cost-cutting as state government.