Veteran Rep. O'Neill Says Connecticut's Fiscal Crisis Is The Worst He's Seen

By Scott Benjamin

State Rep. Art O’Neill (R-69) of Southbury says Connecticut’s fiscal plight is the worst since he was first elected in 1988 and he anticipates a tussle with the state employee collective bargaining units over concessions to offset a huge budget deficit and an underfunded pension system.

“It’s going to be difficult,” he said of resolving a projected budget deficit of $1.3 billion to $1.5 billion for the fiscal year that starts in July and improving a pension obligation that is only 35.5 percent funded.

O’Neill said he supports a Republican plan to freeze state employee wages for three years and seek a higher contribution from them for their pensions.

CTNewsJunkie columnist Terry Cowgill has stated that 25 percent of the state workers make no payments while the remainder pay 2 percent. He wrote that the national average for state employees is 7 percent.

“It would be a big step to get it there,” O’Neill said.

He offered mild praise for Gov. Dannel Malloy (D-Stamford) for appropriating more money to the pensions after they were underfunded for generations.

O’Neill, who is the third longest-serving member in the state House, said he also wants to see the state work force further reduced through attrition. However, if the collective bargaining units decline to cooperate, he would support layoffs “as a last resort.”

Malloy was about to lay off 7,500 state employees in the summer 2011 when at the 11^th hour they agreed to concessions.

However, Democratic legislators, some of whom have had support from the state employee bargaining units in their election campaigns, have pointed to a report from the state Office of Fiscal Analysis, the General Assembly’s budget arm, that corporate profits made up 20 percent of the state’s revenue in 1989 and only six percent in 2016.

State Rep. Bob Godfrey (D-110) of Danbury, who also was initially elected in 1988, has said the General Assembly should close the corporate loopholes.

However, O’Neill said the corporate tax rate was reduced in 1991 by then-Gov. Lowell Weicker (ACP-Essex) when the state income tax was approved. He said increasing the corporate tax or closing some of the loopholes would probably prompt some businesses to leave the state.

The veteran state representative said he believes the state can attract new businesses even though a recent Boston Globe report indicated that Connecticut is at a disadvantage because it is a suburban state and many people 35 and younger want to live in the innovation hubs, such as Boston, Seattle and Silicon Valley, where the higher-paying jobs are.

Connecticut reportedly benefitted some years ago when large companies wanted to build their campuses in suburbia where their employees could live in raised-ranch houses with a picket fence.

O’Neill said he believes that with its proximity to New York City, Connecticut could attract additional financial services firms. During Weicker’s administration in the early 1990s, the state lured UBS to Stamford, and Greenwich has long been a hub for hedge funds.

The recent Boston Globe report stated that Connecticut should rely less on economic runoff from Manhattan.

However, O’Neill said “we don’t have coal mines and huge railroads so we should use the advantages that we do have.”

He is critical of Malloy’s signature economic development initiative, First Five/Next Five, which has provided state incentives for businesses to stay. Such high-profile companies as ESPN, NBC Sports and Bridgewater Associates have received assistance on a pledge that they would generate more jobs.

“I don’t think the program will break even,” said O’Neill.

Malloy said while campaigning for governor seven years ago that much of the job growth would be in bio-tech, bio-med, nanno-tech and fuel cell.

O’Neill said “it is hard for government policy-makers to determine where the future jobs will be” since they don’t have as good an insight on that topic as business owners and financial consultants

He said he would rather that the state provide assistance to municipalities that have hackerspace innovation centers where small start-up companies can develop their products.

On another topic, O’Neill said Malloy has remained visible as he enters his seventh year.

About a week after he took office in 2011 there were news stories about how he was seen around the state Capitol and the Legislative Office Building more frequently than previous governors.

“I see him in the cafeteria at the Legislative Office Building once in a while,” said O’Neill.

However, he said the governor has not spent enough time with Republican leaders discussing how to resolve the state’s budget woes.

On another subject, some Democratic legislators have been critical of the governor for telling his commissioners to not answer their questions and instead having those queries directed to his staff.

“I don’t see that there has been much change in access to his commissioners,” O’Neill said. “I think it has been done much the same way as most other governors.”