Jobs & the Economy, Taxes & Government Spending

Fact Check of Gov. Malloy’s State of the State Address

  • Jan 10, 2013
  • Ben Zimmer

Governor Malloy’s 2013 state of the state address included assertions about Connecticut’s budget and economy that were, to say the least, dubious.  Here is a fact-check of his most questionable claims:

1. Gov. Malloy: “Through a restructured benefits and pension agreement with our public employees, we’re saving the state approximately 20 billion dollars.”

FACTS: According to the General Assembly’s Office of Legislative Research and the most recent actuarial reports, Governor Malloy’s 2011 deal with the state employees’ union saved the state only $1.7 billion in pension obligations and $4.94 billion in benefit obligations.  This amounts to $6.64 billion in savings, only a third of the Governor’s stated savings and a less than ten percent reduction in Connecticut’s unfunded liabilities.  Even after these savings, Connecticut still has more than $60 billion of unfunded liabilities.  When combined with the state’s $20 billion in bonded debt, this is more than $80 billion of total state debt – the third highest per capita in the country.  

2. Gov. Malloy: “That's why last year we restructured our payments to reverse years of chronic underfunding.  We’re avoiding our own fiscal cliff and saving Connecticut taxpayers 6 billion dollars over the next 20 years.”

FACTS: Gov. Malloy is referring here to his plan for Connecticut to increase state contributions to its pension funds between now and 2023 so that it can pay less between 2023 and 2033.  Gov. Malloy is touting the reduced payments between 2023 and 2033 but he conveniently leaves out that these “savings” will be offset dollar for dollar (when accounting for the time value of money) by increased expenses in the next ten years.  

3. Gov. Malloy: “By investing in growth industries like bioscience and digital media, by recruiting companies like Jackson Laboratory and NBC Sports, and by standing with our small businesses and start-ups, we’re taking steps to make sure that Connecticut leads the way.”

FACTS: Connecticut’s job growth in the last two years has lagged far behind the U.S. as a whole and neighboring states.  Our unemployment rate is a full point higher than the national average, and Connecticut has 20,000 fewer residents employed than when Gov. Malloy took office. Readers can decide for themselves on whether this amounts to “leading the way” on job creation.