Connecticut's New Guv: The Real Malloy

Welcome to Politics Bites, where every afternoon at It's a Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on The Brian Lehrer Show, John Dankosky, news director at WNPR and host of Where We Live, joined Brian to review the inauguration plans for Connecticut Governor Dan Malloy, and to discuss what's ahead for the new governor in 2011.

With the state of Connecticut facing a $3.5 billion budget deficit, newly-inaugurated governor Dan Malloy has his work cut out for him. No one is quite sure how Malloy will juggle job-spurring investments, drastic spending cuts, and possible tax hikes in his economic strategy, but he'll be expected to produce results from day one. According to John Dankosky, Dan Malloy picked an extremely difficult time to be governor of Connecticut.

Like most states, the legislature and the governor have patched things together, kicked costs down the road, not funded pension obligations, taken a lot of freebie money from the federal government, and at this point almost all the tricks are used up. We have one of the slowest job growth rates in the country, so we're not expected to come out of this economic recession anytime soon. So yeah, for Connecticut, it's pretty bad.

Connecticut's situation is easily compared to New York state's, what with a staggering deficit, already-high taxes, and a new Democratic governor at the helm. But Dan Malloy has not made the same promises as Andrew Cuomo. While Cuomo has pledged to freeze taxes for all income earners, Malloy has been less committal about doing the same in his state. Suspicion mounted over the course of the campaign that taxes would go up under a Malloy administration. John Dankosky expects that's the case, but isn't sure about what else the governor will try to fix the state's economy.

We can expect some sort of tax hike, some sort of cut to state services, some sort of negotiation with state employee unions, and beyond that, I'm not sure what. I think even Malloy knows that with all those savings we still might not get to the $3.5 billion deficit.

The rallying cry against raising taxes in New York and Connecticut is that taxes are ridiculously high already. Another talking point is that high taxes push people out of the state, including higher-income earners and businesses who take their investments and jobs elsewhere. But Dankosky brought up the point that Connecticut may have less to lose by raising taxes, considering who its neighbors are.

Connecticut has a lower income tax rate than some of the surrounding states...Many Democrats had pushed former Governor Jodi Rell to take on bigger tax increases, especially on the highest level of income earners. They essentially see, in their words, "room to grow" with New York, Rhode Island, Massachusetts. Having lower effective income tax rates, they think Connecticut can raise those rates, make some cash for the state, and have people not actually leave.

Voters will be left wondering how things might have been different had the election gone for Republican challenger Tom Foley. Dan Malloy just barely beat his opponent in November, becoming the first Democratic governor of Connecticut in 20 years. When asked whether he thought Foley would have kept tax hikes off the table, were he to have won office instead of Malloy, Dankosky said that Connecticut's dire straits mean that any incoming governor would have a hard time keeping all of their promises.

If Tom Foley had won, I think we would be seeing the same discussion. I think the difference is that Foley went into the election saying, "I don't think the economic conditions of Connecticut are as bad as everyone thinks." He was campaigning on the fact that we were going to get increased federal money in the next couple of years, that the economy would turn around. He was banking on it, thinking that we will have more jobs and get more tax revenue. At the end of the day, realistically, I think that if Foley were sitting here taking the oath of office, he'd have to be making some of the same choices that Malloy is going to have to make about taxes and cutting government.