Malloy challenge: Aim for 'full-scale economic revival'

HARTFORD -- Gov. Dannel P. Malloy on Thursday asked lawmakers to increase spending by $329 million, which would be used to invest in pension obligations and public schools.

Kicking off the 13-week budget-adjustment session, Malloy said that better schools would help set the scene for an "economic revival" in the state that a year ago was at a "crossroads of crisis" with a record-setting $3.5 billion deficit.

"I see a Connecticut in 10 years that is a leader in bioscience and personalized medicine," he said in a 38-minute State of the State and budget address to a joint session of the House and Senate.

"I see a Connecticut that leads in precision manufacturing," he said. "I see a Connecticut that is home to a reinvigorated insurance industry, and I see a Connecticut that is a mecca for digital and sports entertainment. I see a Connecticut, ladies and gentlemen, where there are many, many jobs."

A year after the largest tax hike in state history, Malloy's proposal would raise spending above the current year's budget by 1.6 percent with no new taxes in the next year of the budget, which takes effect July 1.

Minority Republicans and Democrats alike praised Malloy's speech, with GOP lawmakers reserving opinions until the governor can balance the current budget, which has a projected deficit between $74 million and $145 million.

"Let's think big," Malloy told a joint session of the House and Senate in a packed House chamber. "Let's be bold. Today, I am challenging the people in this chamber and business leaders across the state to join me in committing to build nothing less than a full-scale economic revival. Not a recovery, a revival."

Malloy wants to invest $128 million in educational initiatives, about $98 million in state employee pensions and $103 million in so-called safety net programming.

The legislative session runs until 12:01 a.m. on May 10. Lawmakers will begin their review of the budget proposal Thursday afternoon, when Benjamin Barnes, the governor's secretary of the Office of Policy and Management, answers questions from members of the budget-setting Appropriations Committee.

Last year, the Democratic-dominated General Assembly approved a two-year, $40 billion spending package that included about $1.4 billion in new taxes in the first year, with an equal amount in concessions from unionized state employees. Still, the proposed level of spending would put the state about $650 million over the constitutional spending cap during the 2013-14 fiscal year and more than $41 billion over the cap the following year.

Senate Majority Leader Martin M. Looney, D-New Haven, said Malloy touched on all the major themes that the General Assembly needs to focus on to create more jobs and address the achievement gap in state schools over the next three months.

"I think what the governor has committed to is a critical necessity for our state if we are going to regain our position of pre-eminence in terms of the quality of our workforce," Looney said.

Senate Minority Leader John McKinney, R-Fairfield, said that Malloy's themes of fiscal constraint, increasing jobs and educational initiatives are things that can attract bipartisan support.

"On the issue of education reform, a lot of what the governor has proposed are things that Republicans have fought for for the last couple of years and, candidly, Democrats in the Legislature have opposed us," McKinney said in an interview on the House floor.

"I think increasing spending $329 million in this year is too much," McKinney said. "We foisted the largest tax increase in history on the people as part of a shared-sacrifice plan, which was intended to solve our problems. I'm willing to work with the governor on cutting spending."

Republicans have submitted legislation to lower income and corporate taxes, as well as a repeal of the estate tax and a cap on gasoline taxes.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said he hopes that all of Malloy's vision comes to fruition.

"He delivered a beautiful speech," Cafero said outside the House. "It was well-written. Who could argue with a lot of his initiatives? We're going to help him with regard to education, pension reform, which we called for well before he even got up here."

But Cafero said Malloy's proposals depend on a "solid" state economy that is still reeling from the recession.

At the start of his speech, Malloy acknowledged lawmakers who have continued to work "even while battling challenging health issues," including Rep. Terry Backer, D-Stratford, a brain cancer patient, and Sen. Edwin A. Gomes, D-Bridgeport, who had heart surgery last summer.