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January 9, 2017

Malloy highlights progress, vows tough budget decisions

Matt Pilon Gov. Dannel P. Malloy speaks to the media after addressing a packed room of Connecticut Business & Industry Association members at the Marriott in downtown Hartford Monday.

Gov. Dannel Malloy told a business audience Monday that he’s prepared to present a budget next month that will include hard decisions aimed at getting Connecticut government to live within its means.

“We need to live within our means. That means we have to make some hard decisions on what services we can provide,” Malloy told a packed room of Connecticut Business & Industry Association members at the Marriott in downtown Hartford.

Cuts are never easy, and as the legislature begins to grapple with a projected fiscal year 2018 deficit approaching $1.5 billion, Malloy expects that to be truer than ever.

“The legislature has been tough, I’ve got to tell you,” Malloy said.The governor said some lawmakers espouse smaller government, but then protest proposed cuts.

“You’re speaking out of both sides of your mouth,” Malloy said. “You can’t have it both ways.”

Many of Malloy’s comments Monday echoed key points of his State of the State speech delivered last last week, during which he called for employee concessions.

On Monday, he again expressed his support for providing more help to the state’s largest cities, though he didn’t name any specifically. Hartford is in arguably the most difficult fiscal position, facing a deficit of approximately $50 million in the coming year. Its mayor, Luke Bronin, has spent the last year warning the city is on an unsustainable path that it cannot solve itself.

”We have for too long turned our back on the welfare of some of our largest communities,” Malloy said.

The governor’s remarks followed a presentation by Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston.

Rosengren focused mainly on the U.S. economy. The country is nearing what he considers to be full employment and is also approaching a key inflation target that could lead to gradual increases in interest rates, he said.

“Without further gradual increases in interest rates, one might be concerned that the unemployment rate could drift below its long-run sustainable level – and as a result, inflation could eventually exceed the Fed’s 2 percent target,” Rosengren said. So, “a still gradual but somewhat more regular increase in the federal funds rate will be warranted.”

In Malloy’s speech that followed, he sought to offer some positive state-level news, including recent pension changes that will push payments further into the future but at more predictable and manageable levels, as well as a reduction in the assumed rate of return on pension investments.

Also mentioned were deals with and investments by the state’s largest manufacturers: United Technologies, Electric Boat and Sikorsky, which will ensure well-paying jobs stay in Connecticut for the next several decades.

“I understand that people are upset and angry and would prefer things be better, but if you look at what we’ve done in other respects… if you read the paper or read the headlines, you would forget that Connecticut has grown 85,000 jobs since the recession. Not as many as we’d like, but 85,000 jobs for a small state is a pretty good number,” Malloy said.

In addition, the governor noted that the state’s crime rate and prison population both continue to fall, while graduation rates have been on the rise. Meanwhile, state-backed deals with Jackson Laboratory have paid dividends in the surrounding area, he said.

”So there are good things going on. What we have to do is have a state that keeps them going. We’ve got to stop beating ourselves up and we need to pull in the same direction,” Malloy said.

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