Would-be Democratic governors speak of taxes, red lines, 'fiscal mess'

There is little consensus in the General Assembly on how to craft the next two-year state budget even through the legislature adjourned its regular session last Wednesday.

Gov. Dannel P. Malloy, at a news conference Thursday, did not offer any direction to state lawmakers in the budget-making process beyond threatening to veto the existing Democratic and Republican proposals. He declined to state specific proposals that qualify as “make-or-break” issues for him.

Malloy’s would-be replacements on the Democratic side, however, were not as hesitant – though they understood why he might be.

At the Connecticut Democratic Party’s annual dinner Saturday, the CT Mirror caught up with five major Democratic candidates who have declared or are exploring a run for governor in 2018. They are, in alphabetical order:

• Dan Drew, mayor of Middletown
• Joe Ganim, mayor of Bridgeport
• Jonathan Harris, former commissioner of the Department of Consumer Protection
• Kevin Lembo, state comptroller
• Chris Mattei, former chief of the financial fraud and public corruption unit for the U.S. attorney’s office in Connecticut.

They offered their thoughts on why they would want to lead Connecticut and what they would do if they were sitting in the governor’s office now.

Dan Drew

Given the state’s budgetary crisis, why would you want to be the one leading Connecticut as governor through these difficult fiscal times?

The reason that I’m exploring a run is because this office provides the opportunity to change people’s lives for the better. And for a very long time, I think we have gotten away from the notion that we need to do everything we can to help each other. And we have failed to support the people who form the backbone of our economy – the middle class and the working class.

We default very often when we’re developing public policy to the question of what can we do for the most elite people among us. And I think that’s the wrong mindset. And I am interested in public policy that moves in a different direction.

What budgetary items or ideas would you say are “off limits” for cutting if you were guiding the legislature in crafting a budget?

The destruction of collective bargaining and the capitulation of the government of the state of Connecticut to the preferences of the most elite and wealthy people among us. That would be my red line.

What revenue options should be on the table? Income tax and sales tax? Tolls, legalizing and taxing marijuana, new casinos?

I would be interested in a higher marginal income tax rate on the wealthiest people in our state. I would be interested in a logical policy for implementing tolls. I would be interested in legalizing and taxing marijuana. I don’t think this is just a revenue issue, and I don’t think it’s just a spending issue. I think you have to have a combination of both.

In addition to those three revenue items, I would look at fundamentally reforming how state and local government work. And I would be very interested in ending corporate welfare. I don’t think we should be borrowing large sums of money to keep companies here. It’s not the right way to develop the economy. It’s not the right way to sustain the economy. And it hurts the economy and middle-class people in the long run.

Joe Ganim

Given the state’s budgetary crisis, why would you want to be the one leading Connecticut as governor through these difficult fiscal times?

Well hopefully, being able to look at some of the experience I’ve had taking Bridgeport twice from fiscal mess to balanced budgets – I think there’s some experience there. I’m not saying I have all the answers, [just] some experience that I hope, from working with others, can help benefit the state. I applaud the efforts that are being made right now at the state level trying to balance the budget and all that. But I think I can bring some experience and hopefully a new perspective that will benefit Connecticut.

What budgetary items or ideas would you say are “off limits” for cutting if you were guiding the legislature in crafting a budget?

I’m biased to a certain extent, knowing the challenges our cities have and that we’ve neglected our cities – and looking at the challenge Hartford has. But any major city is one step away from— could be one budget away from where Hartford is. I think anything that would shortchange the most vulnerable, that would – in this case, most of them are in cities – that would hurt cities and towns, but especially the big cities that are shouldering the burden. That would be something that would be unacceptable. And I hope this governor finds it unacceptable as well, and he’s said that. So I applaud that. And the leadership in the legislature has said that as well, so hopefully we’re all going to come out with something that helps our cities.

What revenue options should be on the table? Income tax and sales tax? Tolls, legalizing and taxing marijuana, new casinos?

I think looking at those is important. They made some changes with casinos. I don’t know quantitatively how much that’s going to be. That’s another revenue source. I think we’ve long passed the moral argument of who’s in favor or against gambling. I think, collectively, I think that’s where we are. I may be wrong, but that’s how I view it. I also think that you can’t cut cities and towns to the point we’re you’re just going to raise property taxes. That, I think, should be a non-starter because that’s the most regressive tax. And the over-reliance on property taxes to fund local government and public education is just a ridiculous formula.

Jonathan Harris

Given the state’s budgetary crisis, why would you want to be the one leading Connecticut as governor through these difficult fiscal times?

Because it’s the time to do it. The challenges are real. They’re tough. We know people are being squeezed. But there’s a way out of it. I’ve been able to, in my career in the public and private sector, to hold people together to create practical solutions to our challenges. That’s what we need now. We need to bring everybody in and start talking about what our assets are here in the state, which there are multiple, and then create solutions. It’s possible. This is my state. I’ve grown up here. My family’s been here. It’s important, what’s going on, and I want to help play a role in it.

What budgetary items or ideas would you say are “off limits” for cutting if you were guiding the legislature in crafting a budget?

So I choose to tell you what I actually think needs to be done, and that is the budget has to be focused. One of the ways out of this – I did this in West Hartford as mayor, I did it just recently at [the Department of] Consumer Protection – I called it focused government.

Basically, the analogy I have is, state government has become like a spork. It tries to be a spoon and a fork, and it doesn’t necessarily do either very well. And what focused government does is ask, “What are your priorities?” So, when we were at Consumer Protection, what I did was protecting public health and safety and preventing economic harm to businesses and consumers. And we said if a task that we’re doing doesn’t in some way, in a meaningful way, impact one or both of those goals, we shouldn’t do it.

So we tried to get rid of things. We did, within our discretion, change our regulations to eliminate some of the things that we were doing that didn’t go toward those goals. We went to the legislature and this year tried to eliminate some licensings, re-regulate charitable games – bingo, raffles – that shouldn’t be done. You could go through what the state government does, and there are loads of things that don’t go to the core functions that we need. And you’re not going to get the whole deficit taken care of that way, but you will get a significant amount. So I would look at the budget and say, “Does it focus?” And that’s what I would look at.

What revenue options should be on the table?

I don’t think that— We always look at it as, this tax versus that tax. And some will say, “Well, do you support more progressivity in the income tax?” You know, you can’t answer the question that way. What needs to happen is a more comprehensive, holistic view at how we raise revenue.

So we lower the cost of government through focused government. And then we need a certain amount of revenue. You want to throw that off by adjusting taxes. But you also need to do a qualitative view of revenue. Is it giving incentives for people and businesses to stay here or come here? What are the effects of how you raise the revenue? And unless you do it that way, we’re never going to get out of this.

So I would also take a look at that. It has to be comprehensive, not piecemeal. There are loads of things that should be cut when it comes to revenue. There are fees, licensing fees and things, that don’t go to protecting people, that don’t go to preventing economic harm. And those things, you need to really take a look at them. It’s not just about raising money. It’s also what types of incentives or disincentives does a tax system create. And I think – unless you get to that level of analysis – you’re being shortsighted.

Kevin Lembo

Given the state’s budgetary crisis, why would you want to be the one leading Connecticut as governor through these difficult fiscal times?

Well, it certainly would be easier to not. But when I look at the work that I’ve done over the last 20-plus years, the work done most recently on budget stability and negotiating very difficult changes to the way we plan for the future, I think I have the skills and the experience – and also the track record of standing up to the sometimes strong and powerful special interests that may not want to see change.

What budgetary items or ideas would you say are “off limits” for cutting if you were guiding the legislature in crafting a budget?

Look, I think it’s appropriate during a negotiation not to draw too many lines in the sand, and I think we have a history at the Capitol of seeing too many lines in the sand drawn very early, which make it difficult to have reasonable conversations. That said, anything that shifts costs, shifts expenses off the state balance sheet and onto the municipal balance sheet would largely be a non-starter – unless, of course, it was done in a planful way where municipalities had an opportunity to get ready for change within a couple of years. But not in this fiscal year.

What revenue options should be on the table? Income tax and sales tax? Tolls, legalizing and taxing marijuana, new casinos?

You know, I think what we have to do before we can, with a straight face, go back to the people of Connecticut and ask them for more is to demonstrate that we, in fact, have done well with what they’ve already given us.

That said, we often forget at the Capitol that there are three legs to that economic stool. One is the appropriations side, which is always looked at. One is the revenue side, which is looked at. And the third is the tax expenditure side – you know, the grants, the economic development activity. And there’s hundreds of millions of dollars there. I’m grateful that the legislature has passed the bill I forwarded last year and then got vetoed by the governor, and then passed again with huge margins this year. Because I think once you have the data, you can make smart decisions about what you’re spending money on and is there return on investment for those dollars.

Chris Mattei

Given the state’s budgetary crisis, why would you want to be the one leading Connecticut as governor through these difficult fiscal times?

You know, my view of it is that when things are tough and tough choices need to be made and priorities need to be set, what matters most in a leader is being clear about what your values are and leading with your values. And I think that’s what we need now more than ever. So, there may be some people who would be reluctant to roll up their sleeves and try and deal with the big problem, but I think if we’re true to our values, we can get out of it. And that’s what I’m doing.

What budgetary items or ideas would you say are “off limits” for cutting if you were guiding the legislature in crafting a budget?

I think the important is, we’ve been operating in a state of crisis now and haven’t really had the conversation about what our priorities are as a state. And so, in some ways, you can’t say what I would cut, or what’s off limits, without first having the conversation about what do we want to do as a state, what do we want to accomplish, and then decide what it is that you need to do in order to meet those goals. That’s a conversation that unfortunately you should be having up front instead of at the back end. It may be that the governor is trying to create some space to have that conversation by saying that all things are on the table.

What revenue options should be on the table? Income tax and sales tax? Tolls, legalizing and taxing marijuana, new casinos?

I mean, again, from my perspective, the best way to raise revenue and the most sustainable way to raise revenue and the most productive way to raise revenue is to create an economic climate where we’re creating jobs, and we’re getting more taxpayers, not fewer. And so, I think what the state legislature and the governor should be focused on, both in the short term and in the long term, is how do we create the economic growth we need in order to generate the kind of revenue that we need to support the services that all of the people in Connecticut have come to expect and that give us the quality of life that make Connecticut such a good place to live.