Gov. Malloy brings his budget plan to Norwich City Hall

Gov. Dannel Malloy fields questions at Norwich City Hall March 9. Photos by Janice Steinhagen.

 Gov. Dannel Malloy admitted right up front that he wasn’t expecting to please everybody – or maybe even anybody – at his March 8 town hall meeting in Norwich City Hall.

“I’m always happy to be here in Norwich, even if I’m getting yelled at,” he told a standing-room-only crowd of more than 220 in the city’s council chambers. “I’ve managed to make everybody mad.”

And while virtually all of the speakers who came to the microphone to address the governor had some bone to pick with his proposed 2012-13 state budget, Malloy was unapologetic.

Speakers urged the governor to reinstate or increase funding for many local projects, ranging from mental health assistance to community colleges to housing for people with AIDS. Others took him to task for the burden his budget would place on taxpayers or state employees.

“I didn’t create this problem,” Malloy told the crowd – a statement he repeated several times during the evening. “I was hired to straighten it out. Don’t blame me for what happened [under previous state governments]. I did not create this mess.”

Malloy said that when he took office, he was handed a state budget that was $3.5 billion out of balance, relying on both the state’s rainy day fund and on borrowing from Wall Street to cover operating expenses.  “I could do what other people have done and deny reality,” he said, calling his budget “a more difficult course, I know, for me and for you.”

Malloy’s spending plan would involve a freeze on base spending in the general fund, consolidating state agencies from 81 to 57, and saving $1.8 billion over two years in concessions from state employees. The $785 million of cuts in spending, combined with a broad tax increase totaling $1.5 billion in revenues, would enable the state to operate without being forced to take out loans.

 “I will not borrow money to cover operating expenses,” he said. Doing so, he said, stifles the state’s ability to borrow against long-term expenditures. “That kills jobs and makes us less competitive.”

Malloy said that the median income in Norwich is $48,505, and that the average income tax increase under his proposed budget would be $500 a year. The average person would also pay an extra $42 yearly in sales tax under the proposed increase.

 Malloy said that his move to institute generally-accepted accounting principles in state budgeting for the first time marked “a break with the past.”

John Ondusko of Norwich, president of AFSCME Local 749 of state and municipal employees, took the governor to task for asking what he said was $20,000 per state employee per year to help balance the budget. “You call it concessions. I call it a special tax on state employees,” he said.

Malloy countered that the high cost of state employees’ benefits made “a real honest discussion” necessary, hinting that a Republican governor wouldn’t be so willing to consider give-backs over layoffs and higher taxes.

The proposed tax increase was a particularly sore point for many speakers. “I cannot share my sacrifices anymore,” said Joann Philbrick of Norwich, who said she is on a fixed income. “Every time I turn around, somebody wants another piece of my social security check.”

Andy Depta of Norwich echoed her sentiments. “How did you determine that I had disposable income in my wallet?” he asked the governor.

Malloy said that the alternative to a tax hike would be to cut funding for social services like nursing homes, weaken the safety net and create “massive layoffs” of state employees. “How deep should we dig the hole before it begins to fill up?” he asked.

Hal Gillis of Griswold urged Gov. Malloy to fix the tax system that allows the rich to pay a much lower tax rate than the poor. He said that corporations like Bank of America pay no state taxes, yet have uninsured employees who are eligible for the state’s Husky healthcare benefits. “You’ve got to close these loopholes,” he said.

Malloy said that while the top 1 percent of Connecticut residents in income pay a lower percentage of their total income, they are actually taxed at a higher overall rate. His budget would increase the tax rate across all brackets, he said.

Speakers from Madonna Place’s Fatherhood Initiative, Reliance House, Connecticut Community Care, and Alliance for Living urged the governor to maintain the status quo that funds their social service programs. “We’ve bent over backwards to make sure that we will have a safety net in place,” said the governor. “What I have is a balancing act.”

In an effort to encourage jobs, Malloy said that he’s proposing a law that would offer special packages to businesses that can create 200 or more jobs in the state. His budget also has upped the state’s tourism allotment from $1 million to $15 million, to capitalize on what he called the region’s “great potential” for tourism.

Besides the overflow crowd in council chambers, more people gathered in another room to hear the governor on a live video feed. When that broke down, many of those who had waited on line for hours to hear the governor were disgruntled. At the very beginning of the meeting, when the fire marshal shut the doors against an overflow crowd, voices from outside in the street could be heard calling “Let us in! We will be heard!”