Connecticut Governor Dan Malloy Makes His Case

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, Dan Malloy, Connecticut's new governor—and the first Democratic governor of the state in 20 years—discussed his budget proposals.

Newly seated Dan Malloy has a 3.2 billion budget gap to close (a whopping 20 percent of the state budget) and is planning to do it by reducing spending, raising taxes, and demanding more from state employees.

Raise taxes you say? That approach singles Malloy out from his neighbors Cuomo and Christie in New York and New Jersey, respectively. But Malloy maintains that the decision is part of his broader plan to shore up the state's pension fund (into which he's committed to paying $877 million, something which has not been done in a number of years) and to avoid borrowing money to cover the state's operating expenses. Malloy doesn't fear that his wealthy residents will flee to other states even if he taxes the rich, because his top tax rates would still only be 6.7 percent.

We will maintain a substantial competitive advantage against our neighboring states of Massachusetts, Rhode Island, New York and just a few miles further from our borders, New Jersey.

Malloy's budget proposal also includes the creation of a state Earned Income Tax Credit at 30 percent of the federal level, which most other states in the northeast employ. This would mean compensation for low-income working families. Malloy portrays himself as a governor who is friendly to middle and low-income earners, and he refuses to paint public employees as public enemy number one (unlike some other newly elected governors).

Defined benefit plans in and of themselves should not be considered the enemy. They can work but they require sacrifice, by the state or municipal entity, making sure it pays its money and by employees who, if they want better benefits, have to contribute more and more and more money.

Defined benefit plans can work, Malloy said, as long as both workers and their government employers are responsible and set up a sustainable system. Analogous entities exist in the private sector, he said—they're called annuities, and no one is calling for the end of those.

Malloy is confident that he can convince his constituents of the value of his budget. He's traveling around all of Connecticut spreading his message in town hall meetings. He distinguished his approach from that of New Jersey Governor Chris Christie,  "I'm rather invested in developing a consensus," Malloy said. But success is defined by both governors similarly—passing a budget of their liking on time.