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Gov. Malloy: Don't read his lips on taxes

By Dick Ahles

Publication: The Day

Published November 25. 2012 4:00AM

'I have no intention of raising taxes," said Gov. Dannel P. Malloy when asked what he intends to do about the billion dollar deficits Connecticut faces in the final years of his first, and he hopes, not his only term as governor.

This is, of course, the same governor who imposed the largest tax increase in state history as a deficit solution in his first months in office. He obviously doesn't see it as a campaign plus to win a second term.

"No, I'm not leaving a window open," he added. "I'm giving you as definitive language as I am comfortable giving you at the moment. I have no intention of raising taxes."

Not as forceful as George H.W. Bush's "read my lips, no new taxes," but the governor doesn't have Peggy Noonan writing his one or two liners.

Notice that the key words in the Malloy pledge are "no intention" and "at the moment." If they don't add up to an open window, I don't know much about ventilation.

The reasons for the shortfall, not the deficit, as wordsmith Malloy has it, are elementary.

Despite that record $1.5 billion in additional taxes, the state's tax revenues are lower than forecast, not higher.

The state has collected lower taxes on such key items as income, corporations, retail sales and sin in the form of alcohol, cigarettes and cigars. In addition, Medicaid costs, health care for the poor, are increasing dramatically.

Whether this constitutes a deficit or a shortfall depends on whether you're the governor or the Republican House leader, Larry Cafero. My 1980 edition of Roget's Thesaurus doesn't mention shortfall, calling a deficit a shortage. Those were the days.

On the Internet, though, "A deficit is a shortfall in revenue, the amount by which a sum falls short." And so, in a burst of bipartisanship we may never see again in this dispute, both Mr. Malloy and Mr. Cafero are right. They also agree on the money involved.

The governor's budget office has released projections that include a $1.16 billion "shortfall" in the coming fiscal year and $1 billion in the 2014-15 fiscal year, which begins in July of 2014 and runs into the beginning of the next governor's first year in office. Bipartisan legislative analysts generally agree.

The numbers may have much to say about the identity of that "next governor" because the selection process is going to impact every action and reaction in Connecticut government in the coming months.

Dannel Malloy presumably intends to win a second term and any number of Republicans intend to see to it that he doesn't. Among the potential Malloy foes are the aforementioned Cafero, Tom Foley, the 2010 Republican candidate who almost won back then, Senate leader John McKinney, Danbury Mayor Mark Boughton and Linda McMahon (just kidding.)

As members of an ignored minority when the Democratic governor and legislature created the historic tax hike, the Republicans are in an enviable, "we didn't do it" spot for the moment. But Democrats correctly point out the tax increase was caused by the deficit or the shortfall inherited from Republican Gov. M. Jodi Rell.

Republicans are also enjoying the role of innocent bystanders in the continuing pre-election controversy over the Hartford to New Britain Busway, which is either a job creator or a half-a-billion-dollar boondoggle, depending on who is talking.

Almost unnoticed in the debate was a report in The Hartford Business Journal that the asset managing firm Conning Inc. finds Connecticut has the worst credit rating of all the states, dropping from 37th in June to 50th.

The "we're number 50" conclusion comes from studying the state's budget, unfunded pension obligations, debt and lackluster housing activity.

The report said the state is among the worst in job creation, tax revenue growth and recovery in home prices. Then there are its very high debt and retirement obligations - we're number one there - and the lack of a rainy-day fund.

Like President Obama, Mr. Malloy drew a bad hand in his first term and dealt with much of it. His increases in spending were less than his two (Republican) predecessors managed and the national and world economies haven't helped.

But "at the moment," a tax increase is on the other side of that window.

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