Inaugural Address of Governor Dannel P. Malloy 
William A. O’Neill State Armory
January 5, 2011

Thank you all for joining me today and welcome to all of the distinguished public servants here, members of the clergy, other honored guests, my extended family, friends and all the citizens throughout our great state, a special mention to my great friend Lieutenant Governor Nancy Wyman, and a special mention to the former First Lady Nikki O'Neill, the wife of the late great Governor O'Neill, and my beloved wife, Cathy, and our terrific boys, Dannel, Ben and Sam.

Thank you for being here to mark a crucial cornerstone in our democracy - the transfer of responsibilities and the conveyance of hope for our collective future, from one gubernatorial administration to the next.

I wanted to express my gratitude to each of you for being here and sharing this moment with me. And I also want to talk with you about this moment in Connecticut's history, our great challenges, what I see as a crossroads of crisis and opportunity; and how if we are all willing to engage in a shared sense of sacrifice, we can realize shared prosperity for everyone in Connecticut.

I would like to start by acknowledging my predecessor, who knows something about sacrifice and public service. Governor Rell stepped into the role of Governor at a time when our state was in a different kind of crisis, a crisis of confidence in the character and intentions of its leadership. She worked tirelessly to restore that sense of respectability, and she will hold a special place in our hearts because of her efforts.

There are many others who know about sacrifice and public service, heroes worthy of Connecticut's proud 375-year history – and they are the brave men and women from our great state who are serving in our Armed Forces in two wars and across the globe today. I hope and pray that we will have peace someday soon. And I thank them for their dedication to their country.

Today, I stand before you deeply honored by the office I am assuming, and by the essence of integrity, trust, hope and potential that this office represents for the people of Connecticut.

Humbled by the sense of history that lives within the soul of our great state.

Thoroughly grounded by our modern-day challenges.

Yet intrinsically optimistic about our prospects for a prosperous future which itself is worthy of the foundation that our ancestors worked so hard to give us.

And what a foundation it is.

In our innovative heyday we had more patents issued per capita than any other state in the union. We defined the American industrial revolution on a global basis and consequently enjoyed the highest per capita income of anywhere in the nation. We will forever be home to the world-class legacies of Harriett Beecher

Stowe, Mark Twain, Eli Whitney, Prudence Crandall, and so many others.

Perhaps nowhere was our character better defined than by Abraham Davenport of my hometown of Stamford when he spoke about The Dark Day in 1780. He was a public servant in Hartford when a mysterious episode brought darkness to the daytime skies throughout New England. There was a prevailing belief that Judgment Day was upon the land, threatening a shutdown of the Legislature, when Davenport stood and said:

"I am against an adjournment. The Day of Judgment is either approaching, or it is not. If it is not, there is no cause for an adjournment; if it is, I choose to be found doing my duty. I wish therefore that candles may be brought."

Today, we could use a few candles. Because as most people in Connecticut know, ours is not a pretty picture.

Today I see an economic crisis and an employment crisis, both fueled by an unfriendly employer environment, a lack of educational resources, a deteriorating transportation system, and an enormous budget crisis of historic proportions. All coddled by a habit of political sugarcoating that has passed our problems onto the next generation.

Well, ladies and gentlemen, the next generation is here. And we bring enough energy to make Abraham Davenport proud as we shine a light not only on Connecticut's problems, but on workable solutions that will leave our great state much better than how we found her.

If Davenport would be proud of our work ethic, my late mother would be proud of our mission.

My parents both worked very hard while raising eight children, but my mother, who was a nurse, knew I was different. She knew I had learning disabilities, but she never let those challenges overshadow my strengths. She never gave up on me, and in doing so she taught me to never give up, to press on, to recognize challenges but focus on strengths, and possibilities.

She focused her children on the importance of character, hard work, dedication, and love of family. And she repeatedly challenged us to leave the world a better place for having been here.

And that is our mission: to leave Connecticut a better place than we found her.

I see boundless opportunities to do just that.

We will need to reach deep to our roots, those of strength yet compassion, steadfastness yet innovation. And, most importantly, we will need to solve our problems together - by pursuing with great urgency not Republican ideas or Democratic ideas, but good ideas that know no political master or agenda.

I will be addressing a joint session of the General Assembly in just a few moments, where I will begin to outline the framework for making Connecticut a better place. And I will provide a great deal more detail in my Budget Address later next month. In those addresses I will put forth ideas, and I will issue challenges for new and courageous ways to understand and solve our most intractable problems.

I believe that Connecticut's best days are ahead – if we join together in what must be a shared, emerging movement for rational, honest, achievable change. A movement that restores economic vitality, creates jobs and returns Connecticut to fiscal solvency by establishing our means and living within them.

We will do these things so that in the future we can celebrate shared prosperity for us all, which on balance can only come from shared sacrifice from each of us.

It's not going to be an easy road, but the question is not whether we can overcome our challenges and emerge a winner. We already know we can from our history. And I know from personal experience that we can. When I became Mayor of Stamford, it was a classic case of a dying industrial city. We transformed it into a world-class financial center – sparking an economic, cultural and environmental renaissance that gained national attention.

I believe the people of Connecticut are willing to make sacrifices if "shared sacrifice" is really shared, that we understand where we're going, and that it is sacrifice with a purpose.

At this crossroads of crisis and opportunity, I believe we will hold fast to our heritage - while we reach deep, rally hard and choose well to leave Connecticut a better place.

To all of you, thank you. God bless you, God bless the Great State of Connecticut, and God bless the United States of America.

2011 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
January 5, 2011

Shared Sacrifice, Shared Prosperity

I. Salutation and Introduction

Mr. President, Mr. Speaker, Senator McKinney, Representative Cafero, my fellow state officials, ladies and gentlemen of the General Assembly, honored members of the Judiciary, members of the clergy, honored guests, a special mention to my close friend and the best running mate ever, Lieutenant Governor Nancy Wyman, and a special mention to the former First Lady Nikki O'Neil, the wife of the late great Governor O'Neil, my extended family, friends and all the citizens throughout our great state, and the four people who mean the most to me, my wonderful wife Cathy, and our three sons, Dannel, Ben and Sam.

Thank you for being here to mark a crucial cornerstone in our democracy - the transfer of responsibilities and the conveyance of hope for our collective future, from one gubernatorial administration to the next.

Before I begin I would like to make three important notes.

The first is to acknowledge the service of Governor Rell. She stepped into the role of Governor at a time when our state was in a different kind of crisis, a crisis of confidence in the character and intentions of its leadership. She worked tirelessly to restore that sense of respectability, and she will hold a special place in our hearts and our history because of her efforts.

Second, I would like to congratulate all of you seated here today for your victories in last year's election, both returning legislative veterans and newcomers. You are seated in a Hall surrounded by history, the echoes of lawmakers who over the centuries were called to the same higher purpose that is public service. I congratulate each of you.

And third is to acknowledge the heroic service of the brave men and women from our great state of Connecticut serving in our Armed Forces in two wars and across the globe today. I hope and pray that we will have peace someday soon. And I thank them for their dedication to their country.

II. Overview: Crisis and Opportunity; Prosperity through Shared Sacrifice

I believe that what is in our history and what is in our hearts are intertwined to create a DNA of sorts that defines us as a people. Connecticut has a storied 375-year history, one rooted in the political and military founding of this great nation; one driven by industrial, political, and artistic innovation that had become the signature of our people over time.

Today, though, as has happened from time to time over our centuries, we are faced with considerable challenges, I dare say crises of historic proportions.

We are, indeed, at a crossroads of crisis and opportunity.

We will need to reach deep to our roots, those of strength yet compassion, steadfastness yet innovation. And, most importantly, we will need to solve our problems - TOGETHER - by pursuing with great urgency not Republican ideas or Democratic ideas, but good ideas that know no political master or agenda.

We will do these things so that in our future we can celebrate shared prosperity for us all, which on balance can only come from shared sacrifice from each of us.

Today, then, marks quite a bit more than the singular act of a transition from one gubernatorial administration to another. It is a demarcation between where we have been and where we are going, about remembering who we are and what we are capable of when it counts the most.

Perhaps Connecticut Governor Wilbur Cross captured it best in a 1936 Thanksgiving proclamation when he wrote to the people of Connecticut and gave thanks:

"For the blessings that have been our common lot and have placed our beloved State with the favored regions of earth … for the richer yield from labor of every kind that has sustained our lives … for honor held above price … for steadfast courage and zeal in the long, long search after truth."

III. The Journey to this Moment: A Personal Story

As Governor Cross so eloquently pointed out, we the people of Connecticut are blessed. We come from good stock, and it is within that historical context that I stand before you a deeply humbled man.

Many observers say that this has been a six-year journey for me to this point - from when I first started considering a run for the office of governor. But in many ways it started so much earlier.

Growing up, I had learning disabilities that might have left me on the fringes. Back then, there were not programs to identify and support children with disabilities. But luckily for me, there was the inspiring dedication and skill of the school teachers who touched my life, and there was the sheer willpower of a mother of 8 children.

My parents both worked while raising a large family, but my mother, who was a nurse, knew I was different. She knew I had challenges, but she never let those challenges overshadow my strengths. She focused her children on the importance of character, hard work, dedication, and love of family. And she repeatedly challenged us to leave the world a better place for having been here.

Not unlike what is needed today for our great state. I believe we need to focus on our strengths, and acknowledge that there are no challenges before us that we can't fix with hard work, dedication, and getting in touch with the collective character that is our heritage.

In many ways, the adversity that I have faced growing up, and the adversity Connecticut faces today, are intersecting at that crossroads of crisis and opportunity.

IV. The Crossroads of Crisis and Opportunity

So today, we gather to talk about how to leave Connecticut a better place than when we found it. We must reach back to our heritage for fortitude, to make an honest assessment of where we are, and to join together to define our collective future as a people.

It will require us to think differently. To compare how things have been done in the past, and to take a different path forward. I'm reminded of the renowned poet Robert Frost, a fellow New Englander, when he wrote in The Road Not Taken:

"Two roads diverged in a wood, and I took the one less traveled by, And that has made all the difference."

Today I see an economic crisis and an employment crisis, fueled by an unfriendly employer environment, a lack of educational resources, a deteriorating transportation system, and an enormous budget crisis of historic proportions. All coddled by a habit of political sugarcoating that has passed our problems onto the next generation.

Well, ladies and gentlemen, the next generation is here.

We will conjure up the true grit and courage of our heritage and take the road less traveled, because Connecticut has met great challenges before.

In the War of 1812 when the British blockade crippled our import business, we pivoted to innovating machine tools and industrial technology - thanks to the likes of Eli Whitney and other world class inventors. They sparked a string of firsts from the Cotton Gin to the portable typewriter to color TV; from the lollipop to the Frisbee.

In our inventive heyday we had more patents issued per capita than any other state in the union.

We defined the American industrial revolution and became the Arsenal of Democracy that President Roosevelt called for during World War II. Only we started a century earlier by playing a pivotal role in the Civil War and continued through both World Wars and the Cold War in the 1960s when we built the first nuclear submarine.

And our mighty economic presence intertwined with a different kind of strength.

In the mid 1800s Prudence Crandall ran a school for African American girls in the face of discrimination and death threats, and in doing so defined the edges of equality and the power of education to change us for the better.

We shattered the glass ceiling of gubernatorial history thanks to Ella Grasso of Windsor Locks as the nation's first female governor, elected in her own right.

Our heritage also includes literary and artistic heroes of global proportions. We became home to Harriett Beecher Stowe, Mark Twain, PT Barnum and the founder of Webster's Dictionary. And of course we are still home to America's oldest continuously published newspaper, our own Hartford Courant.

We have overcome events beyond our control. Ferocious hurricanes. Blizzards. Devastating floods.

And more recently when the planes hit on 9/11 - as mayor of Stamford at the time, I remember how we all went into rapid response mode, ramping up our hospitals and preparing for the wave of transport victims we would be receiving. But of course they never came. Instead, we counted the unclaimed cars that remained in commuter parking lots. We mourned, and we persevered.

We have this astounding history, this heritage. You know, as I have traveled around the state for many years, meeting amazing people in churches and diners and town picnics - one of their consistent messages was this feeling that maybe our best days are behind us. That economic security - let alone prosperity - is a thing of the past. That maybe we won't - that we can't - leave this a better place than we found it.

And even while they were sending me that message, there was a context to it. They were asking me to help them do something about it. And that tells me the true grit that is Connecticut, the can-do spirit of innovation, is still alive and ready - to engage in the fight for a better future for everyone.

Because as our own Harriet Beecher Stowe said - and she knew a thing or two about adversity:

"When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then, for that is just the place and time that the tide will turn."

V. Shared Prosperity: Join an Emerging Movement

I can sense it. It is our time. Never give up, and the tide will turn. It's not just the story of my life. It's the story of Connecticut.

So if you believe like I do that Connecticut's best days are ahead, I hope you will join what must be a shared, emerging movement for rational, honest, achievable change. A movement that restores economic vitality, creates jobs and returns Connecticut to fiscal solvency.

We will put in place an economic development strategy that makes sense for the 21st century economy, aggressively competing with other states and nations for lucrative biotech, nanotech, fuel cell technology and stem cell research jobs.

We will join Connecticut to the Energy Economy, attracting companies that reduce our dependency on fossil fuels.

We will aggressively develop our three deepwater ports to spark commercial activity and decrease our reliance on heavy trucking and the congestion they bring to our highways.

We will make Bradley International Airport an independent entity, freeing it to better grow its passenger base.

Cities and towns will have a partner in Hartford, and we will marshal all the resources of the state government to help local projects with an economic impact. I've been on the municipal side of the equation, and I know first hand how important that partnership could be.

We will work to remove the barriers that keep us from attracting employers by lowering the highest energy costs in the country, lowering health care costs, and reforming our regulatory system to protect the public while building our economy.

I also hope you will join me in a movement to once and for all resolve our out-of-control budget crisis, and retire gimmicks and one-time solutions. We must instead adopt a responsible tell-it-like-it-is approach to balancing and managing our budget, and treat it just like any company treats a budget, with generally accepted accounting principles - commonly referred to as GAAP.

We must establish our means and live within them.

That's why, minutes before I stepped into this chamber to give this speech - I signed an executive order which begins the process of requiring the state to keep its books according to GAAP principles. We require every city and town to do it, and now we'll require the state to do it.

We will make state government make sense, to serve the people better, to shorten the distance between what they need and when they get it. In the coming weeks and months, you will hear a lot about reducing the size of government, from the size of my office, to the number of state agencies. And not just cutting for cutting sake, but re-conceiving government so that better decisions are made and implemented faster.

And as we go through this together, I believe it is imperative that we not lose sight of who we are; who we have always been. Not unlike when our beloved Governor Ella Grasso said during her Inaugural address in 1975:

"We must provide government that is efficient, that is compassionate, that is humane. But we will fulfill that role mindful of the lives that are touched by every program, aware of our heritage and our responsibilities to the people and to the communities of which we are a part."

VI. Shared Sacrifice

To get there, together, is going to take courage, conviction, and shared sacrifice. I believe we have the courage. I believe we have the conviction - we're not very good at being last in anything. And I believe that in our hearts, we are willing to make sacrifices if, if, we understand where we're going, what's at stake, and that shared sacrifice is really shared - that there's a fairness factor.

But this is not sacrifice without payoff. This is sacrifice with a purpose. This is the kind of sacrifice I think my mother was talking about that will leave the world a better place for us having been here.

It is a time of historic proportions, when we as a people must ask ourselves who we, collectively, want to be and what separates us as a people.

Do we believe in every woman, child and man for themselves?

Or do we believe as President Kennedy did that a rising tide floats all boats?

Do we believe we can be a mighty economic force?

Do we believe in the education of our children?

Do we believe in the social safety net for the most vulnerable among us, and that it should be a hand up instead of a handout?

It's going to be tough to finally address our most intractable problems while being true to ourselves, but the question is not whether it can be done. We already know we can from our history. And I know from personal experience that we can. I remember when we transformed Stamford, which was an ailing industrial city, and made it a world-class financial center - sparking an economic, cultural and environmental renaissance that gained national attention.

The question is whether we want to do it. I want to. I hope you do, too. And we will … together.

In the coming weeks, my Administration will be developing detailed proposals to set and fund priorities for the state, which I will outline in my budget address to the legislature later next month. We clearly face big problems, and in my estimation big problems call for a big table. I will be meeting with the Legislature, labor leaders, economic advisors, private industry and the not-for-profit sector so that we have a well-rounded perspective on the best solutions to our problems. And then I will begin working with the Legislature to adopt the budget.

VII. Conclusion

With your help and a shared sense of responsibility and sacrifice, we will realize shared prosperity for all.

Future generations will look back on this particular crossroads of crisis and opportunity - and say that we rallied, we reached deep, we chose well to leave this great state better than we found it. After all, we know as the people of Connecticut, it is in our nature to do so.

I look forward to serving the people of Connecticut with you. God bless you, God bless the Great State of Connecticut, and God bless the United States of America.

Fiscal Year 2012-2013 Biennial Budget Address
Governor Dannel P. Malloy
Hall of the House of Representatives, State Capitol 
February 16, 2011

Madam President, Mr. Speaker, Mr. President, Senator McKinney, Representative Cafero, distinguished members of the General Assembly, thank you for inviting me back to your house. I'd like to recognize my wife Cathy, who is here today as well.

To those of you watching on TV or online, or listening on the radio, thank you for taking the time to tune in.

Six weeks ago I had the honor of addressing you on the day I was sworn in as Connecticut's 88th Governor.

When I stood before you in January, I talked about crisis and opportunity, of standing at a crossroads of historic proportions, of having to choose our path forward.

I called for innovative thinking and for us to muster up the intellectual, emotional and political courage to take a different path, a better path, on behalf of the people of Connecticut.

I invoked the renowned poet Robert Frost, a fellow New Englander, when he wrote in The Road Not Taken:

"Two roads diverged in a wood, and I--
I took the one less traveled by,
And that has made all the difference."

So today, as I am here to present my budget, I want to take you on a road less traveled, but one that I believe will make all the difference.

Let me start by sharing some thoughts that I hope will make the state budget more real and relevant. Our state's budget can make the difference between hunger and hope for a family on the brink of homelessness; the difference between failure and opportunity for a child taking his or her first steps; the difference between despair and dignity for an aging senior; the difference between peril and security for anyone walking our streets or traveling on our highways.

Everything I've just described can be found in the line items of the budget.

But the sum of those items must have meaning as well. And, unless that meaning is clear, the line items and their sum -- are of no lasting significance.

Ladies and gentlemen, that meaning can be summed up in one word: Jobs.

Without jobs, government's resources will dry up, its programs will become exhausted, and the relief they provide will be temporary, to no lasting effect.

Jobs, ladies and gentlemen, represent the light at the end of the budget tunnel. That's why job creation drives this budget.

The reorganizations and restructurings we announced last week were done in part to help make state agencies and the people who work in them more responsive to the needs of the business community.

I've asked every member of the Bond Commission and I ask every one of you to be ready to answer one question when you want an item placed on the Bond agenda: how many jobs will this create?

And I am proposing that any surplus we have this year - currently projected to be $43 million -- be dedicated to reducing the so-called securitization, which is really just a way to tax us on our electric bills.

These bills are too high already, and I will make sure that we reduce that tax as much as possible. This will lower the cost of doing business in Connecticut, and it will provide relief for every homeowner and renter who pays an electric bill.

From this day forth, state government will exist to help create jobs, not just to perpetuate itself.

With job creation on our minds, several principles and philosophies helped guide us toward this day. But the one over-arching concept that we kept in mind is one I call shared sacrifice.

The people of Connecticut are good, decent, hard-working people.

I believe they are willing to make sacrifices, if they understand why they're being asked to do so, and if they believe that Connecticut is serious about fixing what's broken.

Why do I think that?

Because despite the challenges we face, I sense a renewed optimism in the air. I sense that people believe change has arrived. I sense that people are waiting to be led to a better tomorrow.

Two other principles that guided us: fairness and decency.

Those principles are best exemplified by the fact that even though we are asking people at the lower end of the economic spectrum to make some sacrifices, we're also treating them fairly.

How? I am proposing that we enact a robust earned income tax credit of thirty percent.

For a low-income family of four, this credit will mean an additional seventeen hundred dollars a year in their pockets.

For those who won't take a low-wage job in the hopes that something better will come along, this is an incentive to take that job - because you will only get the credit if you're working.

Ladies and gentlemen, this is money for food, for medicine, for oil to heat people's homes. It's money for the basics too many of us take for granted.

It's fair, it's decent, it's good public policy, and it's the right thing to do. Its time has come.

What else can government do?

It can foster a climate in which the private sector can do what it does best: create jobs.

And to do that, state government must get its fiscal house in order.

Right now, we're in pretty tough shape. We're staring down the barrel of a deficit of over 3.2 billion dollars next year and 3 billion dollars in year two.

At 20 percent of revenue, this places us among the hardest-pressed states. So how do we address this fiscal crisis?

First, we can't spend new money.

That's why, the base spending in the general fund next year is actually lower than our spending this year.

In fact this budget reduces the spending that would have been required to maintain current services by 1.8 billion dollars.

Second, we borrow not one penny for operating expenses.

Too much borrowing over the years for ongoing expenses is one of the reasons we're in the bad shape we're in.

Third, this budget fully funds our pension obligations.

Too many years of deferring too many of our obligations is another reason we're in the shape we're in.

Now let's talk about what this budget does do.

First, and I want everyone to hear this loud and clear: this budget says Connecticut is open for business. And it does so in two significant ways.

To begin with, it makes a substantial, direct investment in job creation.

We are combining our economic development efforts under one agency so we can have a single powerful voice when it comes to attracting, retaining, and growing jobs in Connecticut.

And that voice will have some new things to say, like our new First Five initiative that will offer powerful incentives to the first five companies that bring hundreds of new jobs to Connecticut.

This program takes our best job creation tools, like the Reinvestment Tax Credit, the Manufacturing Assistance Act and the Job Creation Tax Credit, and allows them to be combined and the benefits increased for companies that bring more than 200 new jobs to the state.

And we will hold these First Five to their commitments with mechanisms to ensure that the jobs and investment we support will last.

To these first companies that commit to creating hundreds of new jobs, Connecticut says, "Welcome, let's get to work."

The second thing this budget does is restructure state government by making it leaner, cheaper, and a better partner to the business community.

Through consolidation and outright elimination, we've reduced the number of budgeted state agencies from 82 to 58 -- that's a 30% reduction!

Getting there was not easy, but it was necessary - and let me illustrate why.

Right now we have seven separate state government entities that deal with energy. That's six too many.

This budget proposes that we have one government entity to develop and administer our energy policy.

We have more than 10 agencies whose job it is to make sure other agencies do their jobs. Isn't that my job? Isn't that your job in the Assembly?

You see, we simply cannot sustain this government in its present form. It's too expensive, and we don't have the money to do it.

And by the way, even if we had the money, we shouldn't do it.

Here's something you need to know about me:

I don't think government should always spend every penny it has just because it has it.

Here's another thing you need to know about me: I'm not one of those people who dislikes government.

In fact, I think government has done great things in the past, and can do great things in the future.

But not in the form we found Connecticut's government in.

To be clear, this budget asks those of us who work in government to share in the sacrifices that need to be made.

Knowing that I would be asking others to sacrifice, I felt I should lead by example.

That's why the Governor's staff has been reduced by 15 percent.

That's why I eliminated new longevity payments for the people I've asked to serve in my Administration.

I did those things, first, because they're the right things to do, and second, because you can't ask others to make sacrifices if you're not willing to make them yourself.

And this budget proposal does ask state employees to make sacrifices.

I know they've made them in the past, and I appreciate those sacrifices. I appreciate the good and hard work they do every day, and I hope you do as well.

But I need to ask them to do what I'm asking everyone else across the state to do: more.

Because their current wage, health care, and pension benefit levels are simply not sustainable.

To that end, this budget proposes two billion dollars in real savings and concessions from state employees over the next two years.

Some of these savings can be achieved by implementing common sense proposals, such as moving state employees to a health benefits package like the one that covers federal employees.

That change alone could save the state over 100 million dollars over two years.

Another change would involve asking state employees to do what President Obama has asked federal employees to do: accept a wage freeze.

Over two years, that would save us close to 300 million dollars.

Extending 3 furlough days per year over the next two years would save us 80 million dollars.

Adjusting the retirement age would save us close to 300 million dollars.

Other changes, like freezing longevity payments and modestly increasing medical co-pays for unnecessary emergency room visits would save the state millions more.

These are only some of the ways we can get to that 2 billion dollar figure. There are many others.

But let me be clear: we have to get to that number.

My administration has received some ideas from state employee union leaders which have the potential to save the state some money - and I appreciate those ideas.

But they're not nearly enough. The time has come to take the next step and begin discussions regarding concessions.

I don't make these suggestions to be antagonistic. Just realistic.

The alternative to the two billion dollar figure would require us to completely shred the safety net and lay off thousands of state workers.

Which is to say there's no alternative. We have to get it done. And I'm confident we will get it done.

Now, let's talk about revenue.

The fact that it took me this long into the speech to get to revenue, is a reflection of the process we went through in developing this budget.

First we downsized government. Then we cut spending. Then we identified what we need to ask state employees to do.

Only when those three processes were complete did we begin to look at revenue.

Once we got there we again adhered to a few principles, beginning with shared sacrifice. 

Asking virtually everyone to share a slightly higher tax burden is the only way we can ensure that no one group of people bears a much higher burden.

Second, we maintained a competitive advantage over our neighboring states.

So while the sales tax is going up by one quarter of one percent, that still leaves us with a lower sales tax than our neighboring states.

Third, while I do believe in a progressive income tax, I do not believe that we should punish success, or wealth.

That's why taxes will rise on incomes over one million dollars by two-tenths of one percent on top of the increases you passed previously.

And fourth, simply put, is fairness.

To look at the sales tax, for example, and to see how certain items are taxed while others are not is to understand the corrosive influence special interests have had on our state government.

For example, we tax pilates studios, but we don't tax yoga studios. Forgive me, but can anyone tell me why?

Is it because the yoga people have a better lobbyist? It's ridiculous.

We tax people who use valet parking, unless they happen to be parking at the airport. Is there a reasonable explanation for that? If so, I'd love to hear it.

In the end, the revenues we propose to raise are broad-based, they adhere to the principles we've laid out, and in total, they amount to less than the cuts in spending we're proposing.

And so there you have it. That's how I propose we balance our budget.

No new, overall spending. A fundamental restructuring of state government. Real savings from state employees. New revenues.

So far, I've mostly spoken of the challenges we face, and the difficult decisions we need to make to meet those challenges.

Now let's talk about some good news, and let's start with the way the state keeps its books.

This budget begins the process of moving Connecticut state government to generally accepted accounting principles, or GAAP.

For those who are watching or listening and who may not be familiar with that term, it means that we're finally going to require the state to do what it requires all 169 cities and towns to do: be honest and transparent about the way it keeps its books.

There's more good news in the form of some of the investments and down payments this budget makes in some important areas.

It is dismaying to all of us, that Connecticut has the largest achievement gap of any state in the nation.

That so many of our children are falling behind without ever getting the chance to get ahead -- is something we should not tolerate.

That's why, despite the fiscal challenges we face, I refuse to put an additional burden on our cities and towns by reducing funding for local education.

Last year local education was funded with $270 million dollars in one-time revenue. That money is gone, leaving behind a gaping hole.

We've filled that hole, completely, and we should be proud of it.

But while we're proud of that achievement, we also need to recognize that the ECS formula needs to be overhauled. It's broken, and we all know it.

To that end, I will soon be reaching out to legislative leadership and relevant stakeholders to form a committee to recommend smart steps we can take to overhaul the way we fund local schools.

I'll ask this committee to begin convening at the end of the school year, and to report back to me on October first.

And then I'll seek to take that report and turn it into legislation in the next session. We need to fix this formula once and for all, and we will.

One of the other ways we can close the achievement gap is by giving every child in this state - irrespective of their family's income - a chance to have a pre-kindergarten learning experience.

Too many of our children today don't get that chance, meaning they are simply too often not ready to learn when they begin school. Which means they're behind before they even get started.

As Mayor of Stamford, I made pre-kindergarten education a reality for every child in the city; as Governor, I'd like to do the same for every child in the state.

While we don't have the money to do that today, we do have the money to make a down payment on that dream.

And this budget does that, to the tune of 5.7 million dollars over 2 years.

This state investment will leverage approximately 4.1 million dollars from private philanthropic sources, including the Graustein and Annie E. Casey Foundations, as well as the Child Health and Development Institute.

Now let's talk about education reform.

Too often over the years people have been labeled pro-reform or pro-teacher.

I reject that false choice. I'm both - I'm pro-reform, as long as it doesn't mean teacher-bashing, and I'm pro-teacher, as long as it doesn't mean maintaining the status quo.

We can't maintain the status quo, and everyone in this chamber knows it.

That's why I'm proposing reform of the teacher tenure rules to give local school districts the flexibility they need to retain new, talented teachers.

That's why I'm proposing we invest more than two million dollars to start to build the student data and teacher accountability systems we committed to last year.

That's why this budget proposes sixty million additional dollars for magnet schools, to provide for more than 8,000 additional seats, 6.5 million dollars for 747 additional charter school seats, 7.2 million dollars for more than 1,300 new seats in the OPEN Choice program, and 50,000 dollars to fund a Regional Educational Service Center to study ways communities can regionalize transportation services to save local dollars.

I am also proposing that we begin the process of transferring the State Vocational Technical Schools to the local districts and regions that host them.

These schools are a valuable option for families and students in districts across the state, and I want to share the strength of those institutions with those districts.

These are all important investments, and I'm committed to making them happen.

Before we leave the discussion of primary and secondary education, I want to issue a challenge to the teachers, administrators and custodians of this state.

We have done our part in increasing funding for education, but we need all of you to step up to the plate - as some of you already have.

I am asking you not to take this additional two hundred and seventy million dollars in funding for education and use it to demand raises that will surely result in some of your colleagues losing their jobs or having larger classroom sizes.

All that would accomplish is more people out of work and more students per teacher.

And please don't take that as a threat. It's not. It's a respectful request that reflects the reality of our times.

Look, I would not be standing here today as your Governor but for the teachers I was fortunate to have as a young child.

They, along with my mother's love and hard work, helped me overcome some pretty severe learning disabilities.

Teachers do heroic work, and I salute and admire them for it.

But in these difficult times, we need to ask that you too share in the sacrifices we're all making.

No discussion of education would be complete without discussing higher education.

Last week, I proposed a complete overhaul of our State University and community college system - all with an eye toward giving each campus the flexibility it needs to better serve its students.

I'm confident those changes will allow us to focus our resources more directly on the goal at hand: graduating more students and graduating them in two and four years.

Yes, this budget asks our colleges and universities to step up just as the rest of state government must, but we are preserving their independence.

I firmly believe that UCONN and the new Board of Regents will demonstrate the creativity, the intelligence, and the resolve to live within their block grants without raising tuition beyond the inflation rate.

There's more good news in this budget.

As proud as I am that we are fully funding the ECS grant, I'm equally proud of the fact that this budget does not cut overall funding for cities and towns.

In fact, it increases it by nearly $100 million dollars in the first year, and even more in the second.

My budget also reflects my long-standing commitment to supporting local services through property tax reform.

We accomplish this by providing significant new revenues for cities and towns with a tenth-of-a-percent sales tax on retail sales that will be returned to the town where it is collected. That will raise $24 million.

I am also including a similar provision for the hotel tax and the tax on car rentals, and expanding the local conveyance tax.

Local governments are facing the same pressures as state government and we need to help them find a way to stability just as we are doing at the state level.

As a former mayor, I simply refuse to balance the state's budget on the backs of our local taxpayers.

Another challenge we face in this state is transportation.

Coming from Fairfield County, I can assure you there are times I understand "gridlock" to be a four-letter word.

But our transportation problems are surely not limited to the southwestern part of the state; they extend to virtually every corner of Connecticut.

That's why we've committed the funds necessary for 38 new rail cars for Metro North and Shoreline East. And why, unlike in previous budget proposals, we're fully funding our other rail lines, and we're holding the line on new fare increases for bus and rail.

We are also making a fundamental change in the way we account for and fund transportation by making sure that all the taxes we collect -- for gasoline and diesel fuel used in transportation -- are used to meet our transportation needs, with 70 percent of our gross receipts tax going to support our roads and bridges.

We'll do more next year, but this is a good start.

We can't leave today without discussing public safety.

Let's start by acknowledging that we have the lowest crime rates we've had in Connecticut since the mid-1970s and let's salute the brave men and women who wear the uniform every day who've helped make that happen.

But we all know about the troubling number of incidents involving young people in our cities shooting and killing each other - often, for no reason.

Lives are being lost, families are being ripped apart, and children are growing up fatherless.

It has to stop.

I'm committed to working in partnership with our city police chiefs, mayors, and community activists to turn the tide on neighborhood gun violence.

Despite the reforms of the past decade - we are still spending money we don't need to spend imprisoning people who, if given access to the treatment they need, would pose no threat to any of us.

And who can eventually become productive members of our society.

There are simply too many people who've been arrested and jailed for minor, non-violent or drug offenses who, if given access to an alternative forms of punishment would take advantage of that additional chance to choose a different and better path.

This new policy will save us millions of dollars which is a benefit of a more enlightened policy whose time I think has come.

One final note before we leave this issue. I'm committed to making the concept of the Criminal Justice Information System a reality.

That's why I made sure the eight million dollars you authorized was put on the most recent bond agenda.

Once this system is fully implemented, the various agencies, boards and commissions that comprise the criminal justice system will be better positioned to avoid some of the mistakes and tragedies that have occurred in recent years.

We can protect the people of Connecticut while adhering to the principle that our society should be a second chance society again.

These investments reflect that belief.

Finally, this budget also moves Connecticut forward on the issue of public health.

I'm proposing that we convert our Medicaid programs to a self-insured model, so that we can implement these best practices, and save as much as $80 million per year.

We've added smoking cessation to the services covered under Medicaid, and we resisted eliminating optional services, like dentistry or eyeglasses, that too many states are embracing in this difficult environment.

And we'll squeeze more federal revenue out of our provider tax for nursing homes and direct that money to the homes themselves so they can continue to provide care to our neediest seniors.

I'm committed to making Connecticut a healthier state, and these investments will help get us there.

Before I leave you today, I want to make two final points.

The first is that I want you to know I am committed to working with anyone and everyone in this chamber in a collaborative process, as long as you share my commitment to passing a budget that adheres to the basic principles I laid out today:

Hold the line on spending, real re-structuring of state government, real savings from state employees, fairness when it comes to raising new revenues, and some important down payments on the future.

If you share those principles, I welcome your partnership in this effort.

The second point is this: I applaud every single one of you for your willingness to serve our communities and our state.

I believe deeply that public service is an honor and a privilege, and I know you do, too.

But we are not here just to serve. We are here because we have a moral obligation to make this state a better place for our having lived and served in it.

Yes, we are facing enormous challenges, but we also have an historic opportunity.

An opportunity to renew people's faith that government, at its best, can still do great things.

We can create a more competitive business climate that will result in job growth and an economic revival.

We can provide a better education for every child in this state.

We can create a 21st century transportation system.

We can and will protect our citizens.

We can provide peace of mind by providing better access to quality, affordable health care.

We can do all of these things, and more, if we have the courage to make the hard decisions we need to make today, and to seize the many opportunities that will shape our future.

It really is like what Harriet Beecher Stowe noted about crisis and opportunity when she said: "When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up, for that is the time that the tide will turn."

I truly believe Connecticut's best days are ahead. The tide is turning for us if we step up and work hard with courage and conviction. I hope you agree.

We are here for a purpose.

This is our time to do what we were elected to do, to fix what's broken once and for all.

Please, join me in this effort.

Thank you, God bless you, God bless the State of Connecticut, and God bless the United States of America.

2012 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
February 8, 2012

Building an Economic Revival

Mr. President, Mr. Speaker, Senator McKinney, Representative Cafero, my fellow state officials, ladies and gentlemen of the General Assembly, honored members of the Judiciary, members of the clergy, honored guests, and all the citizens of our great state who are watching or listening today, thank you. Thank you for the honor of inviting me into the people's House to address you.

This is an important Connecticut tradition and a privilege for me. I'd like to thank my extended family and friends for being here, and my wife and three sons for their love and support.

I'd like to recognize and thank the best partner, advisor, and confidante a Governor could ever have: our great Lieutenant Governor, Nancy Wyman.

I'd also like to acknowledge the presence here today of four legislators who have continued to work tirelessly on behalf of their constituents, even while battling challenging health issues. Senator Prague, Representative Backer, Representative Hamm, Senator Gomes - we're glad to see you here today.

Finally, and with a deep sense of respect and gratitude, I'd like all of us to honor the heroic service of the brave men and women from our great state serving in the Armed Forces, especially the nine members of the Armed Services who gave their lives in our defense this past year.

Ladies and gentlemen, I'd like to spend some time today talking about where we were a year ago, where we are today, and most important, where I am convinced we need to go in the years ahead.

A little more than a year ago, on the day I was sworn in as your Governor, Connecticut was staring into the abyss of a future none of us wanted. A combination of years of avoiding tough decisions here in Hartford and the financial meltdown on Wall Street had brought Connecticut to its knees.

We had one of the largest per capita deficits of any state in the nation, there had been no net job growth for 22 years, state government was bloated and broken, our relationship with our fellow state employees was on an unsustainable course, and the citizens of Connecticut had no faith that Hartford was any different than Washington, DC in its attempt to do the will of the people.

In short, we were facing a crisis of massive proportions.

And so I said we needed to implement wholesale change, and I said we needed to walk down a different road together, one not being travelled by other states.

I said everyone needed to share in the sacrifice.

I said the deficit was too large to cut our way out of and too large to tax our way out of.

I said we had to get spending under control.

I said we had to make government smaller, leaner, and more effective.

I swore we would end years of playing games with the state's finances and I said our fellow state employees were going to have to be a big part of the solution.

Finally, I said that we had to start keeping the state's book honestly by adhering to Generally Accepted Accounting Principles.

I said we had to do all those things while focusing simultaneously on job creation; that by focusing on those things, we would stabilize the state's finances. I said that was critical if we wanted the private sector to do what it does best: create jobs.

One year later, it turns out that by taking that less-traveled road we have passed through the crucible of that crisis. In the process, we've brought positive, far-reaching, meaningful, and systemic change to Hartford.

First and foremost, we grew jobs in Connecticut last year - 9,400 new, private sector jobs were created, the first year of job growth since 2008.

We brought honesty and transparency to the state's books by moving to GAAP.

We stopped borrowing money to pay for operating expenses, and we stopped deferring our pension obligations. That stability gave the private sector the predictability it needed to make investments and create jobs.

The best evidence of the change we've brought to Hartford can be found in some of the arguments we've been having around here lately. Instead of arguing over how many billions of dollars of debt we're incurring by deferring our obligations, we're arguing over how many billions of dollars we're saving by meeting those obligations on time.

Instead of arguing over how much more money state employee contracts will cost taxpayers, we're arguing over how much money those revised contracts will save.

Those are very different arguments than the ones heard in this building over the last 20 years.

There are other examples of the change we brought to Hartford that benefit the entire state. We changed state government by making it smaller and leaner, while preserving the safety net – those services that define us as a compassionate and decent people.

We eliminated 22 separate state agencies, and today there are 2,700 fewer state employees than there were a year ago. That means we've reduced the number of state agencies by more than 25 percent, and the number of state employees by more than 6 percent.

We changed and restructured our relationship with our fellow state employees. As a result, we're saving Connecticut taxpayers billions and billions of dollars over the next 20 years. State government is now on a sustainable course.

And a few months after we did all of that, we changed the way politics too often works by coming together as Democrats and Republicans to pass what I believe is the most comprehensive jobs package in the nation in a special session.

Yes, it has been a long thirteen months. But a state that was on its knees has stood up and said, "Enough is enough - we're ready to change our future."

Yes, we have a long way to go, but a state that was at the crossroads of crisis and opportunity is beginning to turn the corner because we chose opportunity.

To the men and women in this chamber who stood with me to make some of those tough decisions, I salute you. It took courage to cast some of those votes, and your constituents should be proud of you.

So now what? Where do we go from here?

We could simply continue the work we began 13 months ago, and just keep at it. And if we did that, I believe we would continue to make some progress.

But I believe it's time to do something different. Let me explain.

Connecticut has a long, proud history. Throughout that history, when we were at our best, we were leaders.

We led the way for a young nation as it constructed the principles that would eventually become the Constitution of the United States - a set of principles that has long been the envy of other nations, and that still guides us today.

We led the nation in the founding of colleges and universities that bred generations of great leaders.

We led the world in fostering innovation and creativity, allowing us to produce things - great things - that made this world better and safer.

Yes, we were at our best when we were leaders. But awhile back we stopped leading. And since then, we have spent too much time muddling along, mired in mediocrity.

Ladies and gentlemen, it is time for us to lead again.

Let's think big.

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.

When I speak of a vision for an economic revival, what do I see?

I see a Connecticut in ten years that is a leader in bioscience and personalized medicine.

I see a Connecticut that leads in precision manufacturing.

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. New jobs. Thousands of new jobs. Blue-collar jobs and white-collar jobs.

Jobs building new affordable housing, jobs in agriculture, jobs in technology.

Jobs that pay well and provide good benefits. Jobs that won't be shipped down south or sent overseas.

Jobs that people will come to Connecticut to find, instead of leaving Connecticut to look for.

And I see a Connecticut with public schools that are the envy of the nation - graduating students ready to be hired for those jobs here at home.

In short, I see an economic revival that is worthy of the good people of Connecticut.

I have spent the past 13 months traveling around this state, talking and listening to people from all walks of life. These people want a good life for themselves, their children, and their grandchildren.

They desperately want that sense of economic security that allows them to buy a house and raise a family, all while saving for their children's education and their own retirement.

They want their children to grow up safe, they want them to graduate from good high schools, and they want them to go further - some to college, some to a trade school, some into the Armed Services.

And when those young men and women are done, their parents want them to be able to find jobs. Not somewhere else, but here, in Connecticut.

I believe the people of Connecticut are willing to work hard to achieve all of this. They're not looking for handouts, they're looking for opportunities.

We have spent the past 13 months setting the stage for this economic revival. Now is the time to commit to making it a reality.

In order to make this happen I believe there are three things we need to do.

First, we need to maintain the fiscal discipline we imposed a year ago. That discipline has made Connecticut a more predictable, reliable, stable place in which to do business. It's given the private sector the confidence it needs to make investments and create thousands of new jobs.

Second, we need to continue to make sure the entire world knows Connecticut is open for business.

Third, we need to reform the public school system that educates our children.

And we need to commit to this vision and implement it - year after year, until we get it right.

That's been one of our problems for too long: we're good at making plans; we're not good at sticking to them. Too often we've found ourselves simply careening from idea to idea, with no clear roadmap to guide us.

Not anymore.

Going forward, let this be our roadmap to a better future. This economic revival will not happen overnight - it can't. You can't undo 22 years of economic stagnation in one year. This is a long-term plan, designed to produce short and long-term results.

This time, let's have the resolve to stick it out.

In order to continue to impose that fiscal discipline, I am committed to making sure we end the current fiscal year with a budget that is balanced, with no gimmicks, and complies with GAAP.

Yes, we will have to cut some spending and forego some things we wanted to do over the course of the next few months, but make no mistake about it: we will end this year in the black.

That fiscal discipline also guided the budgetary adjustments I am proposing we make for the next fiscal year.

This package is GAAP compliant, it proposes no borrowing for operating expenses, it continues to meet our pension obligations on an actuarial basis, and it seeks no tax increases.

More than just meeting our pension obligations, I am proposing we increase payments to the pension fund by one hundred and twenty-three million dollars.

Making this payment, and additional payments beginning in 2014, will save Connecticut taxpayers nearly 6 billion dollars over 20 years.

It will also avoid our children having to make a one-time, balloon payment of four and a half billion dollars in the year 2032.

That's right, as it stands today, absent this proposal, our children will have to come up with four and a half billion dollars in one year - all because of the past practice employed in this building of deferring pension obligations.

That practice is over.

There is no way I'm going to force our children to make that payment for debt they didn't incur.

I urge you to support this proposal. I didn't break this system, but I am determined to fix it.

Overall, my budget for next year seeks a spending increase of just 329 million dollars over the previously adopted budget, an increase of less than two percent.

In addition to the pension payment, I am proposing we spend 128 million dollars to increase funding for education, much of it targeted to our lowest performing districts.

Finally, I am proposing we spend the rest - 103 million dollars - to maintain the safety net and other critical services that help define us as a compassionate and decent people.

That money is necessary because the national economic recovery has been slow, and the people who depend on the safety net, and their caregivers, have suffered enough.

Those who will criticize a modest spending increase designed to fund education reform and make an additional pension payment are really saying that we should maintain the status quo in our schools, and that we should force our children to pay for our pensions.

I disagree. Let's give our kids a break.

So that's the first thing we need to do to make an economic revival a reality: maintain fiscal discipline.

The second thing we need to do is to continue to make sure everyone knows Connecticut is open for business. That's why we must take the jobs package we put together last October and continue to sell it across the state, the nation, and around the world.

That jobs package contains something for just about every business in Connecticut - big and small - and for Connecticut workers.

If you're a company looking for ways to expand your operations, whether through facility upgrades or new equipment, the jobs package provides much-needed access to capital.

For those companies looking to add jobs, there are new grants, loans and tax credits available to support your growth right here in our state.

If it's job training assistance you need, there is new funding in place to help you invest in your most important asset - your workforce.

And, if you're an entrepreneur, there are new reasons to start and grow your business in Connecticut.

The jobs package includes a 125 million dollar investment over five years that is being matched dollar-for-dollar by Connecticut Innovations.

This deployment of 250 million dollars will accelerate growth in high-tech startups and redefine how we help bring innovative ideas to the marketplace.

Finally, the jobs package also extends our successful First Five program, which focuses on large-scale economic development projects. We've already approved four projects. Together, those projects will generate more than 450 million dollars in capital investment and create up to 2,250 new jobs in our state. These are smart investments in growth industries, and they'll create thousands of jobs for decades to come.

We should all be proud of what we accomplished by coming together to pass this jobs package. It's solid evidence that we can make an economic revival a reality, and it's already working.

Last month, I visited Oxford Performance Materials in South Windsor, a company that makes small medical implant devices. It's the first company to take advantage of our 100 million dollar small business express program. We're loaning them $200,000 and giving them a grant of $100,000. This state assistance will allow them to expand their operations and double the size of their workforce. And this entire process took 40 days, not the many months it used to take.

The best news? There are 279 applications for the small business express package currently being processed.

I want everyone in this chamber to know that the work we did together is already paying off.

Jobs are being created as we speak.

Ladies and gentlemen, we could accomplish both of these goals. We could continue to be disciplined about the state's finances, and implement a smart economic development strategy. We could do both of those things and more, but until and unless we fix our public schools, we will not have addressed our most pressing obligation: the education of our children. And unless we do that, an economic revival, and its unlimited promise, will remain beyond our grasp.

So let's talk about education.

Let's be honest with ourselves, and let's speak bluntly: many parts of our system of public education are broken. Yes, there are many places in our state where there are good schools and students are performing well. But in too many parts of the state that is simply not the case.

In too many places, public schools are failing their two most basic missions: to provide children with an equal, world-class education, irrespective of race or income, and to ensure that their skills and knowledge match the needs of Connecticut's employers.

As I traveled around the state last summer on my jobs tour, nothing was more frustrating than a refrain I heard from too many employers. They said, "I have job openings, but I can't find workers in Connecticut with the skills to fill them."

To be honest, it was maddening to hear.

Because just prior to that, I'd spent two months traveling around the state to do 17 town hall meetings on the budget and in that time I met hundreds of people who were unemployed or under-employed.

Imagine that: we have jobs that need to be filled - good jobs -- and we have people that desperately want to work. Yet those jobs remain unfilled and those people remain unemployed.

It's got to stop.

No one should doubt my resolve: I am determined to fix our public schools.

I do not think it will be easy, nor do I think it will happen overnight.

But it will happen.

It must happen.

Before we can fix our schools, we need to understand what's wrong with them.

Our problem is not the result of ill will or bad intentions. Many people - including lawmakers in this chamber today - have tried to fix our broken system. But it hasn't worked - as evidenced by our continued failures in national grant competitions like Race to the Top, our flat test scores, and our yawning achievement gap - the worst in the nation.

We've been too timid when the situation calls for boldness.

With that in mind, I sent a letter to the leaders of the General Assembly last December in which I outlined six fundamental principles I believe must guide our education reforms. My education package is built on these principles.

First, we can enhance families' access to early childhood education by creating new seats for 500 children who can't afford preschool and by investing in a new rating system to improve quality. Early childhood educators are gifted, talented people and we need to support them. This funding is a good first step as we work to get to universal pre-K access.

Second, we need to address our badly broken system for delivering state resources to the schools. This year, we will add 50 million to the Education Cost Sharing formula, with the vast majority of that money targeted to the districts serving students with the greatest need.

But since more money alone will not raise student achievement, we will require these districts to embrace key reforms - or they will not get the money. And we will do this without reducing education funding to any city or town. Some will get more, but no one will get less.

Third, we will transform schools with the worst legacies of low achievement. The state will serve as a temporary trustee of schools that lack the capacity to improve themselves. These schools will become part of a Commissioner's Network and they will receive our most intensive interventions and supports.

Fourth, we can strengthen and expand high-quality school models - whether they are traditional schools, magnet schools, charter schools, or other successful models - and hold them accountable for their results and inclusiveness.

Fifth, let's remove red tape and barriers to success. The state can streamline its systems - in teacher certification, data collection, and elsewhere - and free districts to innovate and perform.

Those are just a few highlights of proposals that we've developed from the first five principles. We've spent time talking about them over the past week, and you can read about them, in detail, on our website.

These ideas will take us far, and they'll help us better prepare our students to succeed in a 21st century economy. But they won't take us far enough.

That's why my sixth and final principle requires us to ensure that our schools are home to the very best teachers and principals. In order to make that happen, we need to do a better job of helping and supporting our teachers.

I am proposing we overhaul our teacher preparation programs so that our brightest young people go into teaching and graduate with the skills to succeed. We will also create new career opportunities. Teachers should not have to leave the classroom to advance in their profession. Our new master teacher certificate will recognize exemplary teachers and open up new career opportunities for them.

We will also invest in better on-the-job training. Too often, our idea of professional development is to send teachers to big auditoriums to listen to lectures.

Instead, I'm proposing we invest millions of dollars in the kind of training that works, such as one-on-one coaching in the classroom.

And thanks to a consensus framework agreed to last month, we're building a smart system for evaluating teachers and principals - with student achievement as the single most important factor.

Taken together - better preparation and development, new career opportunities, and evaluations on the basis of student achievement - these proposals will go a long way to meeting our goal.

But we must do one more thing.

I'm a Democrat. I've been told that I can't, or shouldn't, touch teacher tenure. It's been said by some that I won't take on the issue because it will damage my relationship with teachers.

If the people in this chamber - and those watching on TV or online, or listening on the radio - if you've learned nothing else about me in the past 13 months, I hope you've learned this: I do what I say I'm going to do, and I do what I think is right for Connecticut, irrespective of the political consequences.

And so when I say it's time we reform teacher tenure, I mean it.

And when I say I'm committed to doing it in the right way, I mean it.

Since 2009, 31 states have enacted tenure reform, including our neighboring states of New York, Massachusetts, and Rhode Island. It's time for Connecticut to act.

For those watching or listening who don't know what tenure is, it's basically job security. Let me explain.

Right now, if you're a teacher and you have tenure, your performance in the classroom has to be rated "incompetent" before a dismissal process can even begin. Even then - even if you're rated "incompetent" - it can take more than a year to dismiss you.

The bottom line? Today tenure is too easy to get and too hard to take away.

I propose we do it a different way. I propose we hold every teacher to a standard of excellence.

Under my proposal, tenure will have to be earned and re-earned - earned by meeting certain objective performance standards, including student performance, school performance, and parent and peer reviews.

And my proposal says, you should not only have to prove your effectiveness once, after just a few years in the classroom. My proposal says that if you want to keep that tenure, you should have to continue to prove your effectiveness in the classroom as your career progresses.

I'm trying to be careful in explaining this tenure reform proposal because I know there are those who will deliberately mischaracterize it in order to scare teachers. So let me be very clear: we are not talking about taking away teachers' rights to a fair process if an objective, data-driven decision is made to remove them from the classroom.

I believe deeply in due process.

I believe just as deeply that we need to ensure that our children are being taught only by very good teachers.

So for those teachers who earn tenure - by proving that they are effective teachers - it's the job of the local school district to make sure that you have every chance to continue to succeed. That means that if you start to struggle at any point after you've earned tenure, the district will provide support and professional development to help get you back on track.

And finally, my proposal says that we need to do a better job of recognizing our great teachers. That's why I'm proposing to allow local school districts, if they so choose, to provide career advancement opportunities and financial incentives as a way of rewarding teachers who consistently receive high performance ratings.

Over the next few weeks, we'll continue to have this discussion about tenure and I'm confident we can put in place a system that best serves our students, and their teachers.

Now let me be clear: in having that discussion, Connecticut will not join the states trying to demonize and antagonize their way to better results.

And we won't get drawn into making a false choice between being pro-reform or pro-teacher.

I've said this before and I'll say it again, I am both.

I'm pro-teacher, as long as that doesn't mean defending the status quo, and I'm pro-reform, as long as that isn't simply an excuse to bash teachers.

There are 45,000 public school teachers in this state. Most of them are good teachers. Many of them are great.

Listen, I know teachers can be great because as a young student, many years ago, I had some great teachers. They took a boy born with severe learning disabilities - a boy who had great difficulty reading and writing, a boy who struggled to process information - and they worked with him.

Patiently. Hard.

And over a long period of time they helped me overcome those disabilities.

Those teachers, and the support of my mother, are responsible for me standing here today as your Governor.

No, we cannot and will not fix what's broken in our schools by scapegoating teachers. But nor can we fix it if we do not have the ability to remove teachers who don't perform well in the classroom in a timely fashion.

In this new system, tenure will be a privilege, not a right. It will be earned and retained through effective teaching, not by counting years of service.

This is the year to reform teacher tenure. Let's get it done.

So there it is: that's my vision for Connecticut. That's what I see in our future: an economic revival.

Some people will surely say an economic revival is beyond our grasp, that I'm asking too much, that I'm setting an expectation that is too high.

They'll say we should be content to just make progress.

I say those people are dead wrong.

I say setting high expectations is exactly what we should be doing.

I say that if we work together - all of us - we can make an economic revival a reality.

We should not approach this effort as Democrats or Republicans. We should approach it as public servants with a duty to fulfill.

I know it's possible for us to do this because we just did it a few months ago - when we put our partisan differences aside to pass and sign into law the best jobs package of any state in the nation.

I met with leaders from both parties right over there, in my office, for weeks, for many hours at a time. We argued, we laughed, we got frustrated. We did a lot of things in those weeks. Mostly, we worked together.

And when it was done, almost every elected official in this building voted for a jobs package that is already creating jobs and will create thousands of jobs for years to come.

Now it's time to do it again.

Much of what we need to build this economic revival is already here in our great state. There is beauty in our parks, our hills, our beaches. Our cultural institutions are rich with the history of our nation's founding fathers, and the Connecticut-born heroes who followed them.

We have world-class colleges and universities where young men and women unlock the doors of knowledge and allow their minds to expand.

We have proud cities that reflect the diversity that is our strength. And we have beautiful small towns, where life remains simple, and good.

But most of all, Connecticut is home to many good and decent people - people from all walks of life, people who work hard. People who are respectful of others, and who do not discriminate based on gender, age, race, religion, ethnicity, disability, or sexual orientation.

These people deserve this economic revival. They have earned it. And it is our job to give it to them. Thank you, may God bless you, and may God bless the great State of Connecticut.

2013 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
January 9, 2013

Mr. President, Mr. Speaker, Senator McKinney, Representative Cafero, Lt. Governor Wyman and my fellow state officials, ladies and gentlemen of the General Assembly, honored members of the Judiciary, members of the clergy, and all the citizens of our great state who are watching or listening today: thank you for the honor of inviting me into the people's House to address you.

I'd like to offer my sincere congratulations to the newly elected leadership of the Democratic and Republican caucuses in each chamber, and especially to Speaker Sharkey and Majority Leader Aresimowicz as they take on their new roles.

Congratulations as well to the new members of the General Assembly who were sworn in earlier today. I look forward to working with you in the months and years ahead.

As we gather in this historic chamber, let us always keep in our thoughts the brave men and women of the great State of Connecticut serving in our Armed Forces around the globe. We thank them and our veterans for their service and sacrifice, and we pray for their continued safety.

I'd like to recognize my wonderful wife Cathy and my sons Dannel and Sam who join us today. As I know is true for so many of you, I could not do my job without the tremendous love and support of my family.

Finally, we are joined by two of Newtown's finest leaders: First Selectwoman Pat Llodra and School Superintendent Dr. Janet Robinson. It's an honor to have you with us today. Tested by unimaginable tragedy, your compassion and leadership over the past month has been an inspiration to Connecticut, and to me personally.

IT WON'T SURPRISE you that this speech is very different from the one I first envisioned giving. In the early days of December, I began thinking about what I'd like to say. Now, while it's only been a few short weeks on the calendar, we have all walked a very long and very dark road together.

What befell Newtown is not something we thought possible in any of Connecticut's beautiful towns or cities. And yet, in the midst of one of the worst days in our history, we also saw the best of our state.

Teachers and a therapist that sacrificed their lives protecting students.

A principal and school psychologist that ran selflessly into harm's way.

Our brave Connecticut State Police, Newtown's local law enforcement, firemen, and others that responded courageously when called upon.

In the aftermath, a selectwoman, a superintendent, and other local officials that have served around-the-clock bringing comfort and stability to Newtown.

And today, Sandy Hook's teachers are doing what they do best: putting the interest of their students first as they return to classrooms, providing stability and continuity that has never been so important and so needed.

And then, of course, there are the families. Twenty-six families that despite an unimaginable loss have gotten up each and every day since, have been there for one another, and have supported their community as much as that community has supported them.

They have persevered. And in that perseverance, we all find strength. We have lifted one another up and continued on, carrying the spirit of our fallen heroes, our wounded families, and our beautiful lost children.

AS A STATE and as a community, we will continue to do everything we can for the families of Newtown. But we also must ask ourselves: What is our responsibility? To those we've lost, to one another, to our children, and to future generations?

During this legislative session, we're going to begin to answer those questions together. Let us do everything in our power to ensure that Connecticut never again suffers such a loss; that we take real steps to make our kids and our communities safer.

Last week, my administration announced the formation of the Sandy Hook Advisory Commission, comprised of experts in mental health, education, law enforcement, and first response.

We may never know what motivated the events at Sandy Hook Elementary, but that won't stop us from working to prevent future tragedy. Over the coming months, the commission will come together to make specific, actionable recommendations in the areas of school safety, mental health services, and gun violence prevention.

This session, I know there will be others that take action on these issues, and I applaud those efforts. The more resources we can bring to bear on this issue, the better. Working together we can and will affect real change.

There are some things we know already.

We know that we must find ways to better respond to those with mental health needs. As a society, we have an obligation to take action in a meaningful way when a person seeks our help or demonstrates a need for it. We must balance our respect for individual rights with our obligation to provide for the greater public safety.

And when it comes to preventing future acts of violence in our schools, let me say this: more guns are not the answer . Freedom is not a handgun on the hip of every teacher, and security should not mean a guard posted outside every classroom.

That is not who we are in Connecticut, and it is not who we will allow ourselves to become.

We also know that this conversation must take place nationally. As long as weapons continue to travel up and down I-95, what is available for sale in Florida or Virginia can have devastating consequences here in Connecticut.

There will be more to say in the weeks ahead, but let me be clear today: our focus will be first and foremost on protecting Connecticut's families.

THOSE CONVERSATIONS WON'T always be easy, but as your Governor I've learned there is no challenge we will face that can't be overcome with the power of our community.

We have come together time and time again. We've done it with purpose - because we know there is something bigger and more important than who we are as individuals.

My friends, as we begin this legislative session let us be guided by devotion to the common good, by faith in one another, and by a determination to work together to make our community as strong as it can be in every way.

Looking back over these past twenty-four months, we've faced many challenges together: the largest per-capita budget deficit in the nation; a struggling economy; a fractured public school system; untenable energy costs; and natural disasters the likes of which our generation had never seen.

And then, in December, just when we thought the worst had happened, it actually did.

The people of Connecticut, the communities you represent, and all of us in this chamber - when tested, we met those challenges head on.

We did as our forefathers did, as our grandparents and parents taught us.

We dug in. We banded together.

We decided to focus not on what makes us different, but on what makes us the same – our common humanity.

It is this core strength and spirit of community that brought us together to accomplish so much on behalf of the people of Connecticut.

TWO YEARS AGO, we faced the single largest per-capita deficit in the nation. It was a problem decades in the making. We knew that getting our fiscal house in order was critical to creating jobs. Connecticut employers needed a responsible and predictable partner in state government.

We came together and passed a balanced budget. We cut more than we added in new revenue.

And even after revenues came in short - as they did in 31 other states - we know today that our budget as-enacted fixed more than 90 percent of the problem. Last month, Democrats and Republicans came together to make sure we closed that final gap without raising taxes.

Anyone who tells you that the budget we passed two years ago didn't do its job, that it didn't make real change in how we approach our finances, is simply not telling the truth.

I know that many of you cast hard votes to fix those problems. That's the kind of resolve and leadership that we're bringing back to Connecticut.

We've made other tough decisions along the way.

After years of underfunding our pensions, a 4.5 billion dollar payment would have been required in the year 2032 - more than four times what we'll pay this year. It would not have been possible.

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.

We didn't kick the can down the road - we picked it up.

Through a restructured benefits and pension agreement with our public employees, we're saving the state approximately 20 billion dollars.

And we made sure that state government tightened its own belt in other ways.

We shrunk the number of state agencies by more than 25 percent.

We trimmed executive branch employees by more than twelve hundred over the past two years, including more than a ten percent reduction in the number of state managers.

As we've done more with less, so have our hard-working state employees. They've adapted and found new ways to continue providing critical services to state residents.

We've all had to buckle down and make tough choices. We're going to make more of them in the weeks and months ahead.

RECENTLY, THERE'S BEEN a national conversation about economic development, about whether it makes any sense to have states competing against one another for jobs.

It's a good conversation to have, and it's the right time to have it. But a dialogue on the best way forward can't be an excuse for standing still. We see that too often in Washington.

I believe that each one of us in this chamber must approach this session with a core guiding principle: until every person in our state who wants a job can find one, we have more work to do.

We can't stick our heads in the sand or simply hope for the best. Not when other states are actively recruiting jobs from every corner of the globe - jobs that can and should come to Connecticut.

We must compete for every single job. With that mindset, we've begun to tackle the challenge of economic development in a holistic way.

Our First Five program, along with the addition of Jackson Laboratories, has leveraged 180 million dollars in public funding to drive more than two billion dollars in private investment.

That same program made it possible for Connecticut to bring two Fortune 500 headquarters to our state. The last time Connecticut was talking about two Fortune 500 companies was in 2006, and it was because they were leaving.

On Main Streets across Connecticut, the Small Business Express program is giving local employers the chance to expand and create jobs.

It was because of this program that Bevin Brothers Manufacturing in East Hampton was able to rebuild after a fire ravaged their historic bell factory. They purchased new equipment and got their employees back to work.

Just a few months ago, I announced the third plank of our economic development strategy - the Innovation Ecosystem.The program has one goal - connecting people that have good ideas with capital investors. It will create new, high-skill jobs - jobs with good wages, jobs with good benefits.

We're off to a good start, but it's only a start. The key is making government an active partner rather than a bystander who watches markets develop elsewhere.

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.

WHEN IT CAME to education, the stakes were clear: take action together or risk losing an entire generation of young people to failing schools and a widening achievement gap.

I am proud that after a long and hard debate, we were able to say with one voice that the status quo is no longer acceptable; that when it comes to public education we can't keep doing what we've always done and hope for better results; that our kids can't afford it, and neither can our state.

We worked with an eye toward the future and made an historic investment of nearly 100 million dollars, from pre-K through high school, focusing on districts that we know are most in need.

Reaching kids early is critical to success, and early childhood education had to be a central part of reform. We created 1,000 new school readiness openings statewide for our youngsters at a time when no one thought that was possible. That's 1,000 more children that will show up to kindergarten on day-one ready to learn.

We did that together, and we'll do more.

To combat an unacceptable achievement gap, we've begun transforming our underperforming schools through the newly created Commissioner's Network. Four schools have already volunteered and are benefiting from intensive intervention, increased instruction time, and improved collaboration among teachers and administrators.

I've visited these four schools in Bridgeport, Hartford, New Haven and Norwich, and each exhibits a new energy and renewed sense of purpose. More schools are lining up to be transformed in the years ahead.

Of course, reform could not be complete without supporting our teachers. They have dedicated their lives to our children, and for the first time in a very long time, we're dedicating new resources for them.

We know success is possible. We've seen it. With a cooperative effort where every voice is heard, we're going to replicate it in classrooms around our state.

The bottom line is that students are going to be better prepared for school today, and for the job market tomorrow.

WHEN IT CAME to energy, our state had been a national leader for years, in the worst possible way. We had the highest electric rates in the continental United States - rates that were squeezing the budgets of families and businesses.

We came together. We decided we needed a plan to take these problems head-on. We realized that our environmental, energy, and economic needs were all related, and that the path we chose would impact our economy for years to come.

We consolidated state agencies to better coordinate our energy functions.

We strengthened programs promoting renewable power and energy efficiency - leveraging private capital to deliver renewable energy at a price lower than almost anywhere else in the United States.

Today, we've seen electric rates drop in Connecticut by 12 percent across the board.

We can't stop now.

The comprehensive energy strategy that my administration announced this past October shows us the path forward. Together, we will expand cheaper, cleaner, and more reliable energy choices for consumers, enhancing efficiency programs for all communities, at the same time helping to create thousands of new jobs.

Putting Connecticut businesses and consumers in control of their energy future will have a real and immediate impact.

Look no further than Modern Woodcrafts, a locally-owned company in Plainville. They invested in the kind of energy efficiency initiatives that our state plan will promote. They've seen more than $35,000 dollars per year in savings on energy costs.

Or in Woodbridge, where Amity High School will have an annual budget savings of $120,000 after the town made a conversion to natural gas.

Across Connecticut, we are taking control of our energy future.

HIGH ENERGY PRICES, struggling schools, a broken budget, a sluggish economy. All problems that every person in this room knew we were facing two years ago, and we have faced them - together.

Other challenges we didn't see coming.

In 2011, Connecticut was rocked by the worst winter in our history, two storms packing a one-two punch the likes of which we hadn't seen in more than 25 years. Tropical Storm Irene and the October Nor'easter revealed holes in our emergency response system that should have been addressed years, if not decades ago.

It was a wake-up call… and we woke up.

We put in place new procedures to better coordinate our emergency response infrastructure.

We commissioned a "Two Storm Panel" to investigate exactly what went wrong and to determine what needed to be done to prevent unacceptable power and communication disruptions. That panel led directly to the passage of tough new laws; laws that hold Connecticut utility companies accountable for how they respond to emergencies.

And we created a new energy micro-grid program to increase energy reliability in critical areas.

These weren't quick fixes or window dressing. They were the result of saying we'd had enough - it was time to do more.

What does it all mean for Connecticut residents? We know we will again feel the brunt of powerful weather. But we can tell our citizens that their state is more prepared for future challenges, that their families will be safer when disaster strikes, and that the odds of anyone having to needlessly suffer through prolonged power outages have been greatly diminished. 

When Hurricane Sandy struck, we saw results from the work we'd done together. While we can never entirely prevent damage or power outages, the response was better and faster.

Once again, we saw a problem and, together, we worked to address it.

IF THESE PAST two years have proven anything, it's that we have the ability to rally around a common good and a common goal. We've done it in a way that just doesn't seem possible these days in some places - certainly not in Washington D.C.

In December, at the same time leadership from each of your caucuses were meeting with my staff for long hours night-after-night to negotiate a mitigation plan, our national budget was being driven toward, and then off, a fiscal cliff.

While we've worked to manage our state's finances, national inaction hangs like a dark cloud over our budget. For the many Connecticut families with someone working in our defense industry, Washington's inability to address problems on a reasonable deadline is causing sleepless nights.

And earlier this month, while many families and small businesses were still working to recover and rebuild from Hurricane Sandy, the gears once again ground to a halt, slowing the process of getting aid to those who need it most.

I say this not to demean any of our colleagues in Washington but in the hope that we will better appreciate what we've accomplished here in Connecticut.

TWO YEARS AGO, you first welcomed me into this chamber. I spoke then about the challenges we faced, and about the opportunities that we knew were within our grasp.

I spoke about who we are as a community. About the ingenuity, the resolve and the resilience that has defined Connecticut over centuries. About Eli Whitney, Prudence Crandall, and Harriet Beecher Stowe. About a history of overcoming challenges - together.

My friends, that is still who we are today.

We've come a long way in two years, and we've done it together - as a government, as a community, as a state.

In 2013, let us honor one another, let us honor our renewed community, and let us honor those we've lost.

We have a great deal of work to do. But if history is any judge, we will rise to the occasion.

When called upon, we will answer – as we've done time and time again - as one people, one community, one Connecticut. 

May God bless you, may God bless the great State of Connecticut, and may God bless the United States of America.

Fiscal Year 2014-2015 Biennial Budget Address
Governor Dannel P. Malloy
Hall of the House of Representatives, State Capitol 
February 6, 2013

Mr. Speaker, Mr. President, Senator McKinney, Representative Cafero, distinguished members of the General Assembly, thank you for inviting me back into the people's House to address you.

I want to recognize and thank my trusted friend and advisor, Connecticut's exceptional Lt. Governor - Nancy Wyman.

I'd like to thank my wife for being here today, and for her love and support.

As always, let us thank and honor the brave men and women of Connecticut serving in our Armed Forces around the globe.

And, let us continue to keep in our hearts the many families, first responders, educators and others that have been touched by the senseless tragedy in Newtown.

Whatever differences we may have in this building over the next several months, they will be trivial compared to what happened in a quiet town in Southwestern Connecticut. We gather today with wounds not yet healed, but also with an unwavering belief in our state and in its future.

TWO YEARS AGO, in the wake of the worst financial crisis since the Great Depression, Connecticut began a journey. The choices we made marked the beginning of a fundamental shift in how we plan for the future, in how we set priorities, and how we approach our problems.

Problems that included a worst-in-the-nation per capita deficit; a budget that relied too heavily on gimmicks and one-time revenues; financial commitments that, if we had failed to act, would fall on the shoulders of our children.

All problems for which we knew there were no simple answers. It no longer matters who caused those problems. What matters is that - together - we started to fix them.

In our balanced budget, and in the adjustments we made along the way, we did two fundamental things.

First, we made our budget honest, transparent, and built to address Connecticut's long-term obligations. In other words, we made it responsible.

Second, even as we began living within our means, we invested what resources we did have strategically - in the initiatives most likely to create jobs and grow our economy in the years ahead.

We did all that while maintaining our commitment to towns and cities, so that we weren't simply passing the buck or shifting the burden, as too many other states were doing. We did it without shredding our safety net. And, we did it while still finding ways to make historic investments in education.

In short - we got serious about our problems, and we started setting clear priorities.

LET'S CONSIDER WHERE we would be today - what kind of Connecticut we'd be living in - if we had not begun the hard work of change two years ago. If we had allowed Connecticut to continue down that other road, without a plan or clear priorities.

The simple truth is this: If we had taken that other road, there would be 41,000 more people in Connecticut going without health care right now.

We didn't let that happen. Those 41,000 individuals are covered today because of the work you did, and the choices we made together.

If we had taken that other road, 950 more Connecticut children would be showing up for school this coming September unprepared to learn. That's 950 more kids - in Windsor, in Torrington, in New Britain, and in Norwich - starting out on day one - a step behind their peers, already struggling to catch up.

We didn't let that happen. Those kids are going to be better prepared, thanks to you.

If we had taken that other road, we would have saddled our children with a 4.5 billion dollar pension payment in the year 2032; a payment that simply would not have been possible.

We didn't let that happen. We accepted our responsibility, and we avoided future disaster.

If we had taken that other road, instead of bringing Jackson Labs, or NBC Sports, or Amazon, to Connecticut, we'd be watching them build and grow in other states.

We didn't let that happen. We fought for those jobs in a way that Connecticut never had before, and we're going to bring more jobs in the months and years ahead.

And today? Today, that other road would have left us with a deficit of more than 3 billion dollars.

We didn't let that happen. We're not going to let it happen this year, either.

The budget I'm proposing today keeps us firmly in balance.

Slowly, deliberately, and sometimes painfully, we're building a more sustainable future for Connecticut.

AS WE WORK together to build that future, we know that it takes time for the changes made here in Hartford to be felt throughout the state. After all, our financial house was in rubble, and rebuilding out of rubble takes time.

It's true that today, despite the many good and difficult things we are doing to turn Connecticut around, too many hardworking people still feel left out, or just left behind.

I know many people who are ready to work… but can't find a job;

Who have a job… but the salary that was once enough just doesn't go as far as it used to;

Who saved to buy a home… and now they're worried they might lose it;

Who dream big for their children or grandchildren… but wonder what kind of future those children will have.

They are the people we represent in communities across this great state. People we talk to each and every day: our neighbors, our friends, and our families.

I want to assure you, this state government shares those same worries.

None of us here today are satisfied with an unemployment rate that remains too high; with an economy that remains too sluggish.

Connecticut families have had to buckle down, make tough decisions, pay their bills, make sacrifices and find compromise, and at the same time keep doing whatever they can to invest in their future.

And so must their government.

We still have a long road ahead - a lot of work to do - but finally we have a plan in place and a destination in mind.

THE BUDGET I am proposing today keeps Connecticut moving toward that destination.

It follows the simple principles we agreed on two years ago - passing an honest, balanced budget; living within our means; making government smaller and more responsive; and sticking to our plan for growing Connecticut's economy.

Most importantly, my plan honors those principles while protecting our hard-working middle-class families.

The simplest way it does that, is this: my proposed budget does not include any new taxes.

The families and the businesses of Connecticut have enough on their shoulders. This budget asks no more of them. In fact, I'm proposing we give them some much-deserved help.

Here's something else this budget doesn't do: it does not exceed our spending cap.

I know that past administrations chose to blow through that cap. We cannot and will not go down that road. Connecticut must live within its means.

And to help ensure we really are living within our means, here's something this budget does do: it completes the move to Generally Accepted Accounting Principles.

This budget is fully balanced under GAAP. That's a promise we made two years ago, and it's a promise kept. Simply put, that means that if you have to balance your checkbook honestly, so should your state government.

We're also simplifying our state finances.

For too long, we've continued to add line-item after line-item to our budget, making it far more complex than it needed to be. In this budget, we've either merged or eliminated nearly 150 appropriations, programs, or earmarks. That's a 22 percent reduction.

Of course, it isn't enough that we're just streamlining our books and looking at them more honestly. To get our fiscal house in order, we need to make some hard choices.  In this budget, we've made lots of hard choices.

In total, I am proposing more than 1.8 billion dollars in spending reductions from our current services budget over the next two years .

Let's put that number in context.

In November of 2010, the previous administration projected a 3.4 billion dollar structural deficit for the following year. Instead, we ended that year with a 140 million dollar gap, which we filled.

And for this fiscal year, they projected 3.1 billion dollar deficit. Instead, our budget is balanced.

As you review my plan, you may find cutbacks in programs or grants that you hold dear. Things you fought hard for. There are 187 elected legislators in Connecticut, each of you with individual priorities.

No matter what our politics, we all love this state and want what's best for it. So when it comes to finding savings, we all have our own idea of what things just can't be touched.

As Shakespeare said, there's the rub.

For too long - for decades in fact - Connecticut seemed unable or unwilling to prioritize, to make those hard decisions about where to cut back. We spent too much on too many different things, and we failed to invest in the few big, bold things we needed most.

Thanks to all of you, thanks to your hard work and willingness to find compromise, we're finally headed in the right direction. And we're going to stay the course.

IT WON'T ALWAYS be easy, especially when Connecticut continues to face rising costs in a few key areas.

Whether it's 380 million in Medicaid growth, the rising price of keeping up with our state pensions, or moving to a more honest system of budgeting - these are obligations of a responsible state government.

Connecticut long ago made a promise to teachers that paid into their retirement fund; to working parents that rely on Medicaid for basic health care; and two years ago, we made a promise to ourselves that we were finally going to get serious about our finances by moving to GAAP.

We're going to keep - and fund - those promises.

In order to do that, even as costs go up, my budget cuts 862 million dollars off current services in year one, and more than a billion dollars off in year two.

No matter how we get there, the bottom line is this: we should not spend more than the amount I've recommended in this budget.

Connecticut families know what it's like to find themselves paying a little bit more for the things they need. Groceries, a medical bill, college tuition for their child.

Costs are going up. So what do they do?

They find places to cut back. They find savings.

Their state government is going to do the same. We're going to continue the hard work of keeping our own budget in the black. Year in, and year out.

WE DO THAT - we make those cuts - so that we can stay focused on our priorities.

One of those priorities must be a refusal to shift our burdens onto Connecticut's towns and cities - a promise that we won't pass the buck to every family struggling to pay their local property tax bill.

Today, I am proposing that we make the same promise that was made - and kept - two years ago, that once again, we hold municipalities harmless in our budget. So that cuts made here in Hartford don't come at the cost of higher property taxes around the state.

The first way we do that is by helping towns fund their most important mission: education. My budget increases Education Cost Sharing funding by 152 million dollars over the next two years.

In 2014 that will mean an additional 2.8 million dollars for Hamden, and 2 million dollars more for Norwalk. It means an additional 6 million dollars for Danbury, and 1.1 million dollars more for Enfield.

We're also going to help grow our local economies.

Our capital budget will invest nearly 1.5 billion dollars into cities and towns in each of the next two years.

That includes 140 million in total funding for Urban Act and STEAP grants;

One hundred and seventy three million over the next two years for new projects through the Town Aid Road and Local Capital Improvement programs;

More than 980 million to help our towns build new schools - schools that will help kids learn better in modern classrooms at the same time they support property values in our neighborhoods;

And finally, we're also investing in our Local Bridge Program - 15 million dollars in the coming year for new grants to help towns update their infrastructure.

I spoke earlier about the need to make sure Connecticut families feel the benefit of what we're doing in this budget. These critical investments in cities and towns - in our roads, our schools, and our parks - represent the largest commitment in decades to growing our local economies, and improving the quality of life for our residents.

Connecticut families will feel the difference.

WE'VE TALKED ABOUT the cuts we need to make - about holding the line on spending and on taxes - and about keeping our promise to towns. But we can't stop there. Even in difficult times - especially in difficult times - we have to keep investing in our future.

It is incumbent upon state government to pursue jobs - actively and aggressively. I know some among you will criticize that philosophy. Those who think it isn't government's place to help stimulate growth.

I fundamentally disagree.

Burying our heads in the sand is not a strategy, and sitting still is not an option. Even as we find savings, even as we continue to support our towns and cities - we have to work to grow jobs.

To start with, I am proposing the Bioscience Innovation Act. This new program will establish a 200 million dollar fund to strengthen Connecticut's bioscience sector over the next ten years.

We've seen what's possible in this industry. Jackson Labs has already broken ground in Farmington and begun hiring Connecticut workers into good paying jobs with good benefits. We estimate they're going to support 6,800 permanent jobs once they're fully developed.

But this isn't just about Jackson. It's also about Alexion in New Haven, and Durata in Branford - about the many other great companies and entrepreneurs throughout Connecticut already working in this rapidly growing field.

And the impact extends beyond bioscience. Cultivating this industry and creating these kinds of jobs means we have more people eating at our restaurants and shopping in our stores. It will mean a broader economic base for our towns and for our state.

And these are investments in the truest sense of the word. With an appropriate level of state support, we're able to attract far more in private dollars, and we're able to better leverage federal funding.

We have to compete for every job. The Bioscience Innovation Act will help us do exactly that.

WE'RE HELPING EMPLOYERS in other ways. This week, my administration will finalize our state's first-ever comprehensive energy strategy - placing us on a path to a more sustainable economic and environmental future.

This plan will help us take advantage of enhanced energy efficiencies to drive down energy costs for families and for businesses.

It will promote distributed generation and micro-grids to increase energy reliability.

It will drastically improve consumer choice by addressing the expansion of natural gas - where appropriate - in an environmentally sound manner.

And for customers that are near gas lines but not connected, it will offer a new 500 dollar tax credit to help get them connected and start saving them money.

We've gone far too long without understanding the connection between high energy costs, protecting our environment, and making Connecticut businesses more competitive. These issues are linked and, finally, we're going to treat them that way.

We've already seen electric rates in Connecticut drop by 12 percent across the board over the past two years. The process of continuing those efforts as part of a broader strategy starts today.

The legislation I am proposing will remove the regulatory and institutional barriers that have long prevented our state from being an energy leader. Now is the time for us to take control of our energy future.

AS WE WORK to foster new jobs and lower energy costs, we also need to make sure we're helping grow the next generation of high-skilled workers. The creation of a strong public research university is critical to ensuring our long-term economic competitiveness.

We must provide educational opportunities in science, in technology, in engineering, and in math.

There was a time that Connecticut was a world-leader in these areas. Our inventors created the first submarine, the portable typewriter, anesthesia, helicopters, and of course… the Frisbee.

Historically, we've ranked among the top states for patents on a per-capita basis. But now, we're in a global economy. The competition has gotten stiffer.

My proposal is that we get Connecticut and UConn back in the game, in a big way. We can do it with an injection of more than 1.5 billion dollars over the next ten years into a new program: "Next Generation Connecticut."

This funding will drive innovation, enhance job creation and spur economic growth. It will allow us to make strategic investments in new facilities, to offer more scholarships and add researchers.

Together, we will fuel Connecticut's economy with new technologies and new employers; with more highly-skilled graduates, more patents, more licenses, and more high-wage jobs.

In Storrs, this funding will allow for more than 5,000 additional students, including a 70 percent increase in the number of engineering students.

In Stamford, it will help create a New School of Fine Arts and Digital Design. A one-of-a-kind digital media degree for new professionals, so they can find jobs at ESPN or NBC Sports or Charter Communications or other companies we will attract to the state.

And it will help build a new campus in Hartford - one that offers professional graduate programs in business, engineering, and social work.

That's just some of what this investment will do.

And, of course, the University of Connecticut is not the only home for Connecticut students to learn and grow. Students from Eastern, to Gateway, to Norwalk Community College, all deserve a college experience that prepares them for lifelong success.

Our consolidated system - under the Board of Regents for Higher Education - is more responsive to how today's students learn. Through that system, more funding will go to university and community college classrooms, as well as direct services.

Connecticut's four state universities and its community colleges are an integral part of our economic development strategy.

Our institutions of higher education represent so much - the opportunity we offer young students, and the potential for our economy to grow and prosper.

They are the promise of Connecticut's future.

Let's invest in them.

Let's make them beacons that shine well beyond our borders. A clear signal of the promise and the potential that Connecticut and its people hold.

Let's do that together.

IN MUCH THE same way that investing in UConn and our other state colleges will help grow our economy, we also need to support K through 12 public schools, and our teachers.

It is a moral obligation that we provide Connecticut's kids a high-quality education, but it's also in our economic interest to foster the next generation of scientists, teachers, doctors, engineers, business leaders, and entrepreneurs.

In addition to the new ECS funding I mentioned earlier, my proposed budget continues to fund the critical education reforms we began last year.

Over the next two years, we are continuing to improve student outcomes by increasing funding for alliance districts by 144 million dollars.

We're turning around struggling schools by growing our Commissioner's Network, with funding for 17 more schools.

We're continuing to broaden the range of educational opportunities by maintaining our support for magnet schools, agricultural-science schools, and other high-quality options, including funding for additional state charter schools.

And while we help our underperforming schools, we're going to get out of the way of districts that are doing well. For high-performing schools, we can eliminate burdensome reporting requirements and free them from some state mandates.

WE CAN ALSO do some new things to make sure we reach our kids as early as possible. Quality early childhood education is one of the best investments we can make to close our achievement gap and put young students on a path to success.

With the support and leadership of many - including the Graustein Memorial Fund and the Early Childhood Collaborative - today we take action on a charge given by this General Assembly in 2011: a charge to foster a true early childhood system.

I am proposing that Connecticut's early childhood efforts - which are today divided across five state agencies - be consolidated under one new agency: the Office of Early Childhood.

This office will better align state resources, increase data collection across several agencies, improve family outreach and, most importantly, prepare more youngsters for kindergarten and beyond.

Beginning with early childhood, from K through 12 and all the way through higher education, my proposed budget supports education at every level.

DESPITE THE HARD work of everyone in this chamber, and despite the many good things we've done to reshape Connecticut, too many in our middle class still may not feel the changes we're making. The economic headwind is strong, and there are still too many unemployed or underemployed.

So, the question is - what do we tell those families I spoke about earlier? The ones that might not yet feel the changes we've set in motion together.

There are things we can do to help right now. Things won't be easy for awhile, and we can't solve anyone's problems overnight. But we can lighten their load.

For one, we can begin to make our tax laws more fair and more sensible - especially when it comes to taxes that unfairly impact the middle-class, and those striving to be middle-class.

Ten years ago, a state Blue Ribbon Commission found that Connecticut's motor vehicle property tax was "especially unfair." The reason was that residents in different communities pay very different amounts on the same property value. It encourages people to register their cars in lower-tax rate towns or even out-of-state, leaving the rest of us to foot the bill.

Meanwhile, our towns and cities are spending too much time and too much money to collect this tax.

I know this issue has been taken up in different forms over the years, and that finding a workable solution has been difficult. But, I think Connecticut is getting better and better at solving tough problems.

Today, I am proposing that we exempt the vast majority of Connecticut's motor vehicles from the property tax.

We can do it by providing an exemption from the property tax for the first 20,000 dollars of a vehicle's assessed value. That means owners of vehicles with market values under 28,500 dollars would pay no property taxes at all on those vehicles.

The proposal would include more than 90 percent of all motor vehicles, whether they are owned by residents or businesses.

To ease the transition, we can allow municipalities the option of providing this exemption, or a portion of it, for the tax year beginning July of 2013. After that, it would be implemented statewide beginning in July of 2014.

This is tax relief for families who are middle class, working class and working poor.

It gives a break to businesses - especially small businesses, and it takes an administrative burden off local governments.

We don't have to stop there. This shouldn't be a one-off solution, but the beginning of a broader strategy.

That's why my budget also reinstates the tax exemption for items of clothing up to 25 dollars starting next year.

It does it as a first step toward completely reinstating the original 50 dollar exemption in July 2015.

Of course, these changes won't solve all of a working family's problems. But, as we continue the hard work of reforming our state finances - and of growing jobs, they can still mean something to families working hard to make ends meet.

Let's make it happen.

Let's provide relief for working people across Connecticut. Relief they will feel.

AND THERE IS more we can and should do to help our middle class. Today, the unfortunate reality is that the rate of home foreclosures is still too high. Many of our residents have struggled as they wait for the economy to pick back up. For some, the clock is running out.

New protections I announced last week will help give struggling homeowners a fighting chance.

My plan will hold banks accountable with tougher penalties if they don't negotiate in good faith. It will give homeowners new tools to challenge a foreclosure in court.

I've met with people that are struggling to keep their homes. If these rules had already been in place, Debbie Sargunas in Thomaston would not have suffered needlessly through a year-long mediation process with her bank; one that found her meeting with different lawyers at every turn.

We must help families like Debbie's that are struggling to keep their home. We must stem the tide of foreclosures.

The bill I am submitting to you will help do just that.

THAT'S HOW WE'RE helping homeowners stay in their homes; we also need to make sure our renters can find affordable places to live.

We need to do it so that our low income residents don't have to use so much of their personal income just to put a roof over their head.

So our young people graduating from college can stay here in Connecticut, to live and work where they grew up and went to school.

And so that our elderly - who have spent their lives in Connecticut - aren't forced to move when they least want to, and are least able to.

This budget provides 221 million dollars to invest in safe and affordable housing for Connecticut residents over the next biennium.

To help coordinate these investments, we're also providing staff and programmatic funds for the Department of Housing, a new agency that will work aggressively to address housing needs across Connecticut.

FINALLY, THIS BUDGET also moves us forward on the issue of public health. When it comes to protecting Connecticut residents, there is no more simple or more sacred responsibility than making sure everyone has access to health care.

As I said earlier, rising Medicaid costs continue to put pressure on our ability to provide critical services, but it's a challenge we can and will overcome.

Thankfully, the federal Affordable Care Act has given us an opportunity to do just that.

Connecticut has become a national leader in the creation and development of our health insurance exchange - an innovative and competitive marketplace for care. My budget continues to grow this system. Doing so will save the state money, and help get more people covered. It's that simple

My plan also funds caseload growth for our health and human service agencies - meaning they will have the necessary resources to continue providing care.

And we're finding ways to enhance how that care is delivered, by continuing to focus on the community level.

First, we're going to maintain our support for Money Follows the Person - a key program that helps our elderly that want to stay in their homes - do just that. New funding will move Connecticut closer to our goal of transitioning more than 5,200 people out of nursing homes and back into their communities by 2016.

Second, my budget will provide new, streamlined support for community and school-based health centers. Rather than using ad hoc grants distributed without a strategic plan, we'll use one formula to ensure that every center receives funding, and that the amount is based on how many people are receiving care at each facility.

And third, we will renew our commitment to our nonprofit community provider network. In addition to existing bond authorizations, my capital budget establishes a new 40 million dollar bond pool over the biennium for non-profit health and human service providers.

This pool has the potential to drastically lower costs for providers by allowing them to quickly access funds for improvements at their facilities.

It will make it easier to buy a new furnace, replace a leaky roof, or invest in a new I.T. system. It means our nonprofit organizations can devote even more of their resources toward doing what they do best: providing top-notch care.

It's an investment that our community providers - and their clients - will feel.

THIS SESSION, LET'S do the hard jobs we were elected to do - by coming together to pass a balanced budget, by finding compromise, and by remembering that no matter what our politics, we all want what's best for Connecticut.

I'd like to tell you that this budget solves all of our problems, but it doesn't.

What it does do is keep us on the steady path to progress. It furthers a plan we started two years ago: a plan to get our finances in order, to live within our means, and to do it while making bold investments to create jobs and grow our economy.

My proposed budget is a clear indication of how far we've come together, and also a stark reminder of how far we still have to go.

As we negotiate throughout this session, it is my hope that everyone in this chamber - Democrat and Republican - will be part of that process. Let's not allow ideology to stand in the way of progress or compromise.

There is much we agree on.

We all agree that we need to keep spending in check, despite rising health care costs and other long-term obligations. This budget lives within our means and within our spending cap.

To do that, we all agree that spending cuts are needed. This budget cuts more than 1.8 billion dollars over the next two years off current services.

We all agree that we have to keep investing in jobs. This budget supports small businesses and entrepreneurs while working to attract new employers.

We all agree that students of all ages deserve a quality education. This budget continues to fund education, and it puts our students on track for success.

We all agree that we have no desire to shift the burden to our towns and cities. This budget holds them harmless.

And finally, we all agree that our middle class deserves a break. In this budget, they get a few.

We help struggling homeowners stay in their home.

We make energy bills a little more affordable.

We make owning a car a little less expensive.

And we make buying clothes just a little easier.

Let's not make this budget be about division. Let's make it about coming together, and about continuing on the path we started down two years ago: a journey to build a more prosperous and more sustainable future for Connecticut.

Thank you. May God bless you, may God bless the great State of Connecticut, and may God bless the United States of America.

2014 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
February 6, 2014

Mr. President, Mr. Speaker, Senator McKinney, Representative Cafero, ladies and gentlemen of the General Assembly, honored guests, and all the citizens of our great state watching or listening today - thank you for inviting me to address you.

As always, let us thank and honor the brave men and women of Connecticut serving in our Armed Forces around the globe.

I'd like to recognize my wife Cathy and my son Dannel who are here today.

The State of Connecticut could not have a better Lt. Governor, and I could not have a better friend, than Nancy Wyman. Thanks to Nancy's hard work, Connecticut is leading the nation in getting people signed up for affordable care.

Introduction

I want to begin today with a story that I think says a lot about who we are in Connecticut, and where we're headed.

This past December I visited a small business owner named Steve Weinstein. Steve runs a farm in East Hartford that was devastated by the February snowstorm that blanketed our state last year.

Much of his property was left unusable. He lost 80 percent of his production capacity. His business was close to failure.

Steve had a choice to make. What did he do?

He dug in.

He pushed ahead.

He did the hard-but-necessary work of rebuilding.

Today Steve's company is back in business sending locally grown products to towns and cities across Connecticut. He isn't back to 100 percent - rebuilding takes time - but thanks to his hard work and just a little help from the state, he's making real progress, and he's part of Connecticut's economic recovery.

That kind of resilience is inspiring. And yet, it's something that I see almost every day in the people of our great state.

Mark Twain called Connecticut "the land of steady habits," and through our long and storied history, many of those habits have driven us to accomplish great things. Our courage helped found this country, and our ingenuity helped spur the industrial revolution.

In recent years our habits have carried us through some difficult times, as well: through the great recession, through storms that battered our homes and our businesses, and even through our darkest day just over one year ago. Time and again, Connecticut has demonstrated a resolve and a devotion that has carried us forward.

Unfortunately, there's another side to our steady habits - one that hasn't served us quite so well. Over time, certain bad habits have kept Connecticut's government from keeping up with a changing world.

Putting off hard decisions left our state with a deficit that was among the worst in the nation just three years ago.

Bouncing from one economic development strategy to the next sent mixed messages to employers.

And a tendency to shy away from big changes kept Connecticut from making desperately-needed investments in our energy infrastructure, our affordable housing stock, and our schools and colleges.

I say this not to lay blame for past problems, but because those who forget their history are doomed to repeat it.

I say it so that we can understand what we've changed, and precisely what that change has meant to the people of Connecticut:

More than 40,000 new private sector jobs grown over the past three years, spread throughout every region of Connecticut;

An unemployment rate that has gone from a high of 9.4 percent in 2010, down to 7.4 percent today;

Home values that are finally on the rise after years of decline;

Crime rates that have dropped to a 46-year low;

A plan in place that will bring cheaper, cleaner, and more reliable energy to Connecticut;

A state that now ranks nationally as top five in energy efficiency, top four in worker productivity, top three in the number of advanced degrees, top two in production efficiency, and number one in the health of its citizens.

…

Our work hasn't been easy. No person - and certainly no government - is perfect. Lord knows I'm not. All of our progress has come with setbacks along the way.

But together we've proven that positive change, while hard, is possible. That progress is possible.

That's what I want to talk to you about today:

How together we're making positive changes, and seeing real progress.

How we must ensure that hardworking families share in that progress, and share in Connecticut's recovery.

And how, in order to keep this recovery going, we need to continue making thoughtful, even bold investments in our future, and in the future of our children.

Responsible Budgeting and Tax Relief

Let's talk about how we're achieving some of that positive change. For one, together we're making hard-but-necessary budget decisions.

A big part of growing an economy that's built for the long-term is making sure state government is living within its means and controlling its debt. For too long Connecticut ignored that responsibility, racking up deficits and letting our long-term debt grow larger and larger.

It all came to a head in 2009. The budget that eventually went into effect borrowed $1 billion for operating expenses, it drained every penny from a $1.4 billion rainy day fund, and it deferred $50 million in required pension payments, part of more than $300 million in payments that would be deferred over the next three fiscal years.

Think about that. In one fell swoop, the State of Connecticut undertook the largest deficit financing in its history, used up its entire savings, and refused to pay its pension obligations.

Today, after a lot of tough decisions and strong leadership from many people in this chamber, we've come a long way:

Together we've turned a $3.6 billion deficit into a $500 million surplus;

We've cut our total long-term debt by more than 11 and a half billion dollars, the equivalent of $3,200 for each and every man, woman, and child in Connecticut;

And we've already put more than $270 million into our rainy day fund.

…

We aren't out of the woods yet. We have a lot of work left to do. But together we've taken the more responsible path. The result is this year's $500 million surplus. Last week I announced a simple, three-part approach for the responsible use of those funds.

First, the lion's share should go directly into our rainy day fund. My proposal would bring the rainy day fund to more than half a billion dollars this year.

Second, we should continue to reduce our long-term debt by making an extra $100 million payment toward state pension obligations. The return on that investment will mean a $430 million reduction in our long-term debt.

And third, we should give something back to Connecticut taxpayers, because if the people of Connecticut are going to share in the sacrifice during tough times, they should also share in the recovery as things begin to turn around.

Together, we can issue a targeted refund to Connecticut taxpayers to return to them some of the sales and gas taxes they've paid. A refund of $110 for families and $55 for individuals will help offset the payments they've made toward those taxes.

Is it going to solve all the problems of any one person in Connecticut?

Of course not. But it can certainly help.

And by giving money back to people who will spend it on things they need, we're also injecting $155 million directly into our state's economy. Economists at the University of Connecticut predict that this refund could result in 1,200 new jobs in Connecticut this year.

Let me be clear: I don't believe in short term fixes, and this should not be a one-time approach. A bill I submit to you today would ensure this framework is required for any future budget surplus.

So that whenever Connecticut has the means, we do three things: we shore up our savings, we reduce our debt, and we give back to taxpayers.

Finally, let me say this: If our surplus increases in the months ahead, the extra funds should be split between our rainy day fund and long-term obligations - not spent.

…

That's how I think we should handle this year's surplus. But that's a separate question from how we continue to manage our budget for long-term recovery. The adjustments I submit to you today follow some simple principles we've put in place together.

First, we have to live within our means. Let's not spend one penny more than the previously-adopted General Fund budget.

Second, we have to keep paying down long-term debt. Let's continue to make responsible debt payments we've already planned, on top of that $100 million additional pension payment.

And third, in addition to short-term relief from a tax refund, we should also begin providing longer-term relief, to make sure that taxpayers continue to share in Connecticut's recovery.

Here's a few ways we can do it.

First, we can continue the planned implementation of a sales tax exemption on clothing items of $50 or more. When fully restored, this will save taxpayers an estimated $140 million per year.

Second, we know that over time the cost of medication has grown more and more expensive. To help ease that burden, I propose we once again exempt non-prescription drugs from sales tax.

Third, for many years towns in Connecticut have been subject to a tax on their municipal health care plans. We should give them a break by exempting towns from this tax. This will in turn help them hold down local property taxes.

And finally, there is a group of retirees in Connecticut that has for too long been subject to a very basic tax unfairness. I'm talking about Connecticut's retired teachers.

After decades educating our children, our teachers' pension payments are taxed differently than social security - which teachers can't participate in. Let's treat teachers' pensions more like social security by exempting part of those payments from the state income tax.

My proposal would begin with a 25 percent exemption this calendar year as a phase-in to a 50 percent exemption the following year. It's the right thing to do for retired teachers and we should get it done together.

…

All told, the tax cuts in my proposed budget amount to more than $280 million over the next two years, and more than $440 million when you include the tax refund.

This is modest - but real - relief. Relief designed to ease the burden of working families and help them share in Connecticut's recovery, now and into the future.

It's my belief that it can and should be a down-payment on larger tax cuts as our economy continues to improve in the years ahead. Whether it's corporate, income, sales, or property tax, every part of Connecticut's tax code should be reviewed, scrutinized, and reduced when-and-where possible as our economy continues to grow.

Continuing to Grow Jobs

Here's another positive change we're making. After years of complacency, Connecticut is playing an aggressive role partnering with employers to create jobs and grow our economy.

Consider this: from 2002 through 2010, our Department of Economic and Community Development partnered with a total of 118 businesses. That's nine years, 118 businesses, and we didn't have any program focused on helping Connecticut's small businesses.

In the two years since we came together to pass an historic, bipartisan jobs bill, I'm proud to say that DECD's Small Business Express program has extended a helping hand to nearly one thousand small businesses around our state.

All told, this program has helped create and maintain more than 13,800 jobs. That's 13,800 good jobs that exist today because of a program almost every Democrat and Republican in this chamber voted to support.

I want to thank you for that, and I know the people in those jobs thank you, as well.

We're also focusing on industries that are most likely to grow jobs in the years ahead. So in addition to supporting our flagship insurance and financial services industries, we're focusing on jobs in bioscience, advanced manufacturing, digital media, and green technologies.

Here's another positive change we're making: we started the hard task of bringing Connecticut's regulations into the 21st century. Last fall we began an open process of listening directly to businesses, provider partners, and the public so that we could get rid of regulations that are burdensome, or just not relevant.

In the coming weeks I will announce the results of this effort, which will do away with nearly one thousand pages of unnecessary state regulations.

…

Taken together, all of these positive changes have helped create more than 40,000 new private sector jobs and lower Connecticut's unemployment rate by two percentage points in just three short years.

That's real progress. It's real change. And if you don't think so, just ask Emily Thomsen.

Emily works for Oxford Performance Materials in South Windsor, a biomedical company that makes medical implant devices. A company that, after our jobs session in 2011, received a state loan and grant that helped them purchase new machinery and hire 12 more employees, doubling their workforce.

Emily is a UConn graduate who studied biomedical engineering. But a few years after she graduated, she found herself looking for work.

Thankfully, after months of searching, she got one of those 12 new jobs at Oxford.

She's been there more than two years now, and she's already been promoted twice. She calls it her "dream job."

Emily is here with us today. I want to congratulate her on her success.

Because of the people in this chamber, there are thousands of more stories like Emily's across Connecticut.

It's been said that government doesn't create jobs - and that's true. But what government can do is help give a company like Oxford a better chance to grow here in Connecticut , to succeed here in Connecticut.

Still, as long as even one person in Connecticut is looking for a job, then we all have more work to do.

…

Here are three ways we can continue helping employers to grow jobs this session.

First, we can continue to fund the Small Business Express program, which has a proven record of success.

Second, the budget adjustments I submit to you today include $125 million to support Connecticut businesses. That includes increased funding for the Manufacturing Assistance Act, to help grow some of those target industries I mentioned, as well as a new Advanced Manufacturing Fund.

Together these initiatives will provide incentive-driven financial assistance to Connecticut businesses to help them modernize their technologies, focus on research and development, and create the jobs of tomorrow.

Third, we need to keep removing barriers to employment and reducing the number of unemployed workers in Connecticut. We can do it by continuing to support our successful STEP UP program with an additional $10 million investment in the coming fiscal year, so we can incentivize employers to hire and train more people.

To date, 578 small businesses in Connecticut have participated in STEP UP, helping more than 2,000 unemployed job seekers gain employment.

Let's make these important investments together, and let's continue to grow jobs in Connecticut.

Supporting Connecticut Workers

As we work with Connecticut employers to grow jobs, we also need to keep fighting for the people filling those jobs.

There are those who claim that any action taken in support of employees is, by definition, harmful to our economy.

I fundamentally disagree. A balanced approach that supports both workers and their employers is not only possible, it's the only responsible path.

A great example of that balance is the important work we did two years ago to guarantee paid sick leave for employees. It was the right thing to do, it was done in the right way, and it has benefited the people of our state.

Last year, we moved forward once again when we came together to raise Connecticut's minimum wage.

Thanks to the great leadership of President Williams and Speaker Sharkey, and many others here today, the approach we took is already making life just a little bit easier for some of our hardest working citizens.

One of those hard working citizens is Sue Bryant-Durham, a mother from East Hartford, with four kids at home.

Over the years Sue has held a number of different jobs to help provide for her children.

She's worked in construction, she's worked in retail, and right now she works in the fast food industry.

On January 1, Sue got the first raise she's had at that job.

Sue is here with us today and I want to thank her for her hard work.

This session, we should continue our progress on the minimum wage. Let's take a clear stand and a clear position of leadership in this national debate.

I propose that together, we increase Connecticut's minimum wage to ten dollars and ten cents by 2017. It's a target the President has set, and we should lead the way there. We can do it by moving next January's scheduled increase to 45 cents, and then adding 45 cents the following year, and 50 cents the year after that.

This is good public policy, it's good economic policy, and it's the right thing to do. Let's increase Connecticut's minimum wage together.

…

In the same way that we're making investments in the industries most likely to grow jobs, it also makes sense to invest in the people most ready to rejoin our workforce. I can't think of anyone more ready and more deserving of our assistance, than Connecticut's veterans.

We know that homelessness and unemployment are intrinsically linked; part of a terrible downward spiral that captures too many people, especially veterans. Right now there are more than 500 homeless veterans in Connecticut.

It's unacceptable.

Today, the pledge we should take together is simple: Connecticut can and will end homelessness for veterans by the end of 2015. That's a pledge President Obama made for America, and it's a pledge we must embrace.

My budget proposal includes funding for a new security deposit assistance program to help veterans get over that first hurdle to finding a home.

It funds the hiring of job placement specialists trained in understanding the challenges - and the opportunities - unique to veterans.

And it sets aside $500 thousand to support a review of existing state facilities so that we can put them to their best use for Connecticut's Veterans.

This is all a big first step toward ensuring that every veteran in Connecticut can get back on their feet, back under a roof, and back to work.

Improving Access to Quality Education

I've said a number of times today that we need to make sure everyone can share in our recovery. We know the best way to increase someone's chances for success is a quality education.

In that spirit, I want to leave you today with five ideas that I think will help give every Connecticut student access to a great education.

I want to work with you on these five initiatives because years from now, when the great recession is a distant memory, long-after the political battles of this year have faded, this should be our legacy: that we made sure all Connecticut kids get a great education, one that starts early and takes them as far as their dreams and hard work will allow.

…

First, and for the first time in our history, let's commit Connecticut to achieving universal pre-kindergarten.

We can start with an additional 1,020 early childhood opportunities next year, expanding to 4,000 new opportunities by 2019. We can give grants to communities so they have the tools to implement these changes. And, we can give much-needed rate increases to school readiness providers, child care centers, and Care-For-Kids programs.

We know that early education is one of the best ways to level the playing field for students. We know it, because we've seen it firsthand.

Tamara Jackson is a Hartford mom with two kids who are currently receiving early learning experiences.

Her son Andrew was born two months premature, and she worried about his development.

A little over a year ago Andrew moved into a new early education program. Tamara says his progress has been nothing short of remarkable.

With the help of some great teachers, he's already caught up to his peers. His experience has put him on equal footing, and given him the tools he needs to learn.

I want to welcome Andrew's mom, Tamara who is here with us this afternoon.

Let's help more kids like Andrew by moving our state to universal pre-k.

It will be a long and thoughtful process, but if you believe as I do that education is the civil rights issue of our time, then I ask you to join me today in taking the first steps toward making sure every child has access to a pre-k experience.

This would build on our important work begun last year to create the Office of Early Childhood. We need to finish that work by codifying this Office in statute.I am ready to sign that legislation today.

…

Here's the second initiative: let's help make college a little more affordable.

We can do it with a simple promise to Connecticut parents: beginning this year, for every child born or adopted in Connecticut, the state will help them start a tax-free college savings account and put a $100 investment into it for them.

And if parents save another $150 dollars in the first four years, we'll match that for a total state investment of $250 dollars.

Is that investment going to pay for a full college education 18 years later? Of course not. But it can give new parents a boost right when they need it most, and it can help encourage college saving right from the start.

I look forward to working with our great treasurer Denise Nappier to create this "CHET Baby Scholars" program.

Together, let's make an investment in every child that will help them afford college.

Of course, this initiative would not help anyone with a child already in school. That's why my budget also increases funding to the Governor's Scholarship Program, bringing it to more than $45 million in total, which will help more students afford college in the years ahead.

…

Third, let's help give our kids the experience they need to fill the highly-skilled jobs of the future.

To ensure that our students are better prepared for college and a career when they finish high school, particularly in high-tech disciplines, we need to consider new models for hands-on learning.

This year, my administration will continue to work with teachers, community colleges, and business partners toward the creation of early college initiatives, which would allow students to earn college credit during high school.

We can do it by partnering with the IBM Corporation and other local companies to develop a Connecticut version of P-TECH, IBM's acclaimed, innovative high school and college partnership.

This approach will allow students to graduate with both a high school diploma and an associate's degree.

Let's offer students this experience, and help put them on a path to a great job.

…

Fourth, let's continue to invest in our state university and college system.

The "Transform CSCU 2020" initiative will provide an initial investment of more than $134 million to help bring all 17 campuses into a single, student-centered, technology rich-system.

It will help colleges adapt to student needs and offer the kind of dynamic higher education experience that students want and employers expect.

Let's help colleges from Norwalk to Naugatuck Valley to Eastern Connecticut State University. Let's move our state university and community college system into the 21st century.

Let's do that together.

…

Fifth, and finally, let's help graduate as many students as possible.

When a student fails to graduate from college it's a lost opportunity for the student, the college, and our economy. And right now there are an estimated 113,000 people in Connecticut who fit that description - people who began working towards a degree but for whatever reason didn't graduate.

Here's what we can do.

If you're a student who began a degree program but have been out of school for more than 18 months, Connecticut will offer one free course for each course you take at a public college - and up to three free courses in total - if you come back and matriculate.

This "Go Back to Get Ahead" program will run for a limited amount of time. It's designed to incentivize people to pay off a debt - a debt they owe themselves.

Let's help more students graduate, and let's help them share in Connecticut's recovery.

…

These five proposals - taken together - are part of a continuum, one that would help our kids from birth all the way through college. Let's work to build this future together.

A future where every child has access to an early learning experience;

A future that gives every kid the opportunity for higher education - one they can afford;

A future where we are graduating as many students as possible into good jobs, with good benefits, right here in Connecticut.

That's the kind of future Connecticut families deserve.

Conclusion

I recognize everything I've laid out today is a lot to tackle in a short session. But working together, we can get it done.

There's only one thing that can stop us: ourselves.

Teddy Roosevelt said a century ago that it's not the critic who counts, but those who strive to do great things.

We hear plenty of critics now. Even as sunshine begins to break through the clouds, there are some intent on hoping for thunderstorms.

I said earlier that Nancy Wyman has led the implementation of the most successful health exchange in America and helped achieve affordable health care for nearly one hundred thousand people. When our exchange faces some unforeseen hurdle, the critics urge us to throw up our hands and keep more people from getting covered.

We should not listen. Connecticut is moving forward.

I also spoke about the work we've done to partner with Connecticut small businesses. Will every single one of those investments pay off? Of course not. And if one fails, the critics would say that's reason enough to stop investing in small businesses altogether.

We should not listen. Connecticut is moving forward.

And now, during this session, those critics will say that for one reason or another that we can't increase the minimum wage, that we can't expand access to early childhood education, that we can't find ways to make college more affordable.

They'll say the time isn't right, or that Connecticut just can't afford to do it.

I say they're wrong. Connecticut must move forward , because the people of our state have sacrificed, and now they deserve to share in our emerging recovery.

We know that none of our progress will come without setbacks; none of it will be perfect in execution.

The question before us is how should we define ourselves: by our setbacks, or by our successes?

This session, let this be our answer:

That together we will have the courage to continue pushing for bold, positive change;

The compassion to ensure that everyone can share in Connecticut's recovery;

And the faith to believe that Connecticut's best days are still ahead.

Thank you. May God bless you, may God bless the United States of America, and may God bless the great State of Connecticut.

Inaugural Address of Governor Dannel P. Malloy 
William A. O’Neill State Armory
January 7, 2015

My fellow Connecticut residents - thank you.

Thank you to all of the distinguished public servants, clergy members, and other honored guests joining us today.

Thank you to the best Lt. Governor in the United States of America, Nancy Wyman.

Thank you to everyone here whose hard work and dedication have made this day possible.

And thank you most of all to my beloved wife, Cathy, and our three terrific boys, Dannel, Ben, and Sam.

…

Today marks a new chapter. A chapter in a story that began long before any of us were here, and one that will continue on long after our contributions end.

It's the story of who we are as a state, and as a people. It's about the challenges we face, and how we face them. It's about where we've been, and where we're going next.

Our unyielding belief in the story of Connecticut is why so many of us here today first chose to run for public office.

It's why our police and firefighters put themselves in harm's way keeping Connecticut neighborhoods safe.

It's why teachers teach, and working mothers and fathers still find time to volunteer at their children's school.

It's why, in this past election, Connecticut voters turned out to the polls in higher numbers than almost any other state.

This past chapter - these four years now behind us - were not easy.

We faced difficult choices, with few simple answers. We had contentious debates, even among friends. We weathered historic storms from which we had to rebuild. We were shaken by unthinkable tragedy in Newtown, and we found consolation within one another.

In the face of adversity, we also made progress.

We saw the creation of more than 75,000 new private sector jobs, the largest job growth Connecticut has seen in decades.

Thousands more children were given the opportunity of a quality pre-K experience. Graduation rates soared to new heights, while crime declined to historic lows.

We improved working conditions, and we raised the minimum wage.

None of this progress came easily. But history has taught us that meaningful change rarely comes with the full-throated support of every public official, or every state resident.

President James Madison said that "democracies have ever-been spectacles of turbulence and contention." Lord knows we've proven that true here in Connecticut. We've won our progress through hard work and spirited debate, by pushing forward even when it would have been so much easier to stand still.

My fellow citizens, let that be our badge of honor - that during difficult times, while others shied away from hard decisions, we made them. That in the face of fierce obstacles, we did not retreat. That during crises, we banded together.

We chose to believe that there is more that unites us in Connecticut, than divides us.

We all want a strong economy that rewards hard work with a fair wage. Where no one who works full time ever has to live in poverty, and where every family can feel economically secure.

We all want a better future for our children - strong schools and a great education that takes our kids from pre-k all the way through college and beyond.

We all want our streets and neighborhoods to be safe places to work and to live, where we enforce our laws strictly, and allow those who run afoul of them to earn a second chance, because we are all our brother's keeper.

We all want cheaper, cleaner, and more reliable energy for our citizens and for our businesses.

And we all want roads, highways, buses, trains, ports, and airports that work for every city and town, for every business, and for every person in our state.

My friends, let these shared beliefs be our guide as we pen this next chapter in our state's history.

Today, I say to my fellow citizens - Democrats, Independents, and Republicans alike - that no one party or one policy maker holds a monopoly on good ideas. We might not always agree on the details, but we can agree that we want our children to inherit a better Connecticut than we were given.

Over the next four years we will face new challenges, but we will also be presented with new opportunities.

Together, let us continue to buck the national trends of obstruction and gridlock. Let us confront hard realities, tackle old problems with renewed vigor, and set aside short-term convenience in favor of long-term prosperity. Let us dismiss petty partisanship that divides us, and focus instead on what binds us to one another.

If we can do that - if we can work together - we can grow our economy and grow more good paying jobs with good benefits.

We can make sure all our children get a great education in a great public school.

We can build a transportation system that better connects us to one another and to the rest of the world.

And we can continue to lift more and more of our neighbors into a bigger, more inclusive middle class.

That is our challenge.

Thank you, may God bless you, and may God bless the great State of Connecticut.

2015 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
January 7, 2015

Mr. President, Mr. Speaker, Lt. Governor Wyman and my fellow state officials, ladies and gentlemen of the General Assembly, honored members of the Judiciary, members of the clergy, and all the citizens of our great state: thank you for the honor of inviting me once again into the people's House.

Let me offer my sincere congratulations to those of you taking on new and important roles, specifically Senate President Marty Looney, Senate Majority Leader Bob Duff, Senate Minority Leader Len Fasano, and House Minority Leader Themis Klarides.

Congratulations as well to the freshman members of the General Assembly who were sworn in earlier today. I look forward to working with you in the months and years ahead.

As always, let us thank Connecticut's brave men and women serving our nation.

Thank you also to the best Lt. Governor in the United States of America, Nancy Wyman.

And finally thank you to my wife Cathy and our three boys for their love and support.

…

Four years ago, I joined you in this chamber for the first time as Governor. I spoke about how Connecticut has always been a leader.

About how, for generations, we shaped and changed our nation and indeed the world.

Connecticut drafted North America's first written constitution. We founded our nation's first insurance company. Our inventors gave the world the can opener, the bicycle, and the artificial heart.

Connecticut has always been a birthplace of innovation. And over the past four years, we've continued to lead - and lead nationally - on some of the biggest issues of our time.

We increased the minimum wage - the first in the nation to commit to ten dollars and ten cents per hour.

We passed paid sick leave - the first in America to do it.

Working with Democrats and Republicans, we created the strongest, smartest gun violence prevention laws in the nation. Today crime in Connecticut is at a 40 year low.

Thanks to Nancy Wyman, we cut the number of uninsured Connecticut citizens in half and became a national model for a new kind of health care system.

We've built better schools, raised test scores, made college more affordable, and put Connecticut on a path toward universal pre-kindergarten.

We added more than 500 million dollars to our rainy day fund and responsibly cut our long term debt by 12 billion dollars.

And finally, because of the decisions we made together over the last four years, our economy is gaining traction. Together we've helped private employers create more than 75,000 new jobs.

None of these things would have happened if we avoided tough decisions or failed to face our problems. We have led Connecticut down a stronger path because we didn't take the easy way out.

…

The question now before us: "what's next?"

How do we honor our remarkable history and tradition? How do we fulfill our promise for a brighter tomorrow? How do we decide what kind of Connecticut we're going to leave to our children?

We do it with courage. By having the tough-but-necessary debates about our long-term prosperity.

We do it by pushing ahead, even if it isn't easy… especially when it isn't easy.

We do it by building a Connecticut that is prepared not just for the next fiscal year, but for the next half-century.

In that spirit, I want to talk to you today about one of the largest challenges we face - something that has held us back for decades and that, left unfixed, would hamper our economy for decades to come.

I want to talk about how, for two generations, Connecticut fell short on transportation.

We know that transportation and economic growth are bound together. States that make long-term investments in their infrastructure can have vibrant economies for generations. States that don't, will struggle. It's that simple.

Transportation connects us - literally - community to community, state to state, nation to nation. It connects us to economic opportunity, and it connects us to one another.

…

First, here's the good news: thanks to the efforts of so many here in this chamber, we've increased support for transportation - dramatically.

Funding is up 65 percent during the past four years. During this period, we've sent more General Fund revenue to the Special Transportation Fund than ever before - nearly 1.2 billion dollars.

We've made sure more of the gross petroleum receipts tax goes directly toward supporting transportation.

We've taken action on long-overdue projects like widening I-84 in Waterbury, replacing the Walk Bridge in Norwalk, and adding new tracks and signal systems between New Haven and Hartford.

All told, we've invested more in transportation than any time dating back to Governor O'Neill. It's more progress than Connecticut has made in decades.

But here's the problem: it's still not enough. We have so much more to do.

We have more to do because traffic congestion still costs the average person an extra 42 hours away from your family each year.

And for our economy, it's the equivalent of 97 million dollars in lost time and wasted fuel, each and every day.

All told roads and bridges that are either deficient or overly-congested cost Connecticut drivers a total of 4.2 billion dollars annually.

It's harming us and the health of our children with additional air pollution and smog.

Simply put, our investments have not kept pace with our needs, and our residents and businesses are paying the price.

It's unacceptable. We need a new approach.

…

To be competitive regionally, nationally, and internationally, we need a transformation. For our roads, bridges, rails, and ports - even our walkways and our bikeways.

We need to change the ways we commute, the ways our businesses move their products, and the ways we get around our cities and towns. It's time for Connecticut to establish a collective vision for the next thirty years. A vision for a best-in-class transportation system.

We can have an open and honest discussion of what needs to happen to transform our infrastructure to meet the challenges and demands of the 21st Century.

We can do it this year. In this session.

To make us more business friendly, to attract new companies and more jobs, to improve our quality of life, and make our state an even better place to raise a family.

We can change Connecticut, so that thirty years from now, here is what we will leave to our children:

A state with the safest highways, railways, buses, bicycle and pedestrian systems in New England;

A state where people can move back and forth to their jobs in a reasonable and predictable amount of time, so they can spend less time in traffic and more time with their family;

A state where we attract new businesses because our highways and rail networks can deliver goods efficiently, without delay;

A state where our children want to stay and raise new generations because they have a choice to live and work with a car… or without one;

A state with three vibrant, deep-water ports exporting more and more goods made right here in Connecticut;

A state with an international airport that serves as a hub for transportation across America and around the globe;

A state whose bus and rail systems interconnect all of Connecticut, linking us to cities up and down the east coast;

A state that is crisscrossed by bicycle and pedestrian trails that make our communities more sustainable, our towns more walkable, and our cities more livable.

These are lofty goals. They might seem unattainable to some. They'll say it can't be done. That it's not even worth trying. They'll say we can't do it while also working to balance our budget.

I say we can't afford not to do it. Together, we should refuse to give in to the cynics and the naysayers. This is the Connecticut we must strive for.

Over the coming weeks I will begin a dialogue on how best to face these challenges head on.

I will come back to you next month with more details, but in the meantime I want to offer two ideas as a good place to start.

First, we should ensure that our efforts are comprehensive in their size, their scope, and their geography.

That means widening I-95 statewide and fixing its entrance and exit ramps.

It means building new rail stations and upgrading our branch lines to provide real commuter rail service, including the Naugatuck Valley.

It means creating a statewide, 21st Century bus service with real-time updates commuters can check on their cell phones.

The bottom line is that we need to improve transportation of all kinds, in towns of all sizes, across all of our state.

Second, we must make sure every penny we raise for transportation goes toward our vision to transform Connecticut.

Today, I am proposing that Connecticut create a secure transportation lock box that will ensure every single dollar raised for transportation is spent on transportation, now and into the future.

No gimmicks. No diversions.

And we should include a covenant with bond holders and all people of Connecticut to ensure that money set aside for transportation projects is only used for that purpose.

Send me a bill that accomplishes these goals and I will sign it immediately.

Until that legislation is passed and signed, I will veto any attempt to levy additional sources of new revenue for transportation.

We also know that an honest conversation about our transportation future must include a dialogue on how we pay for new projects. While traffic congestion is getting worse, more efficient cars mean that our gas taxes will soon fail to cover current investments, let alone the new ones we need to make.

The budget I present to you next month will include first steps toward funding a long-term transportation vision. But subsequent steps will need to be taken in the years beyond that.

That's why we must tie our hands and the hands of future generations. It's why we must be specific about which current or future revenues will be set aside.

Let's start this conversation with a real, working lock box.

…

My friends, we've accomplished many big things together over the past four years. But ultimately, the success of our economy over the next ten, twenty and even thirty years will be determined by one thing: our transportation infrastructure.

We need only look to Connecticut's own history to know this is true. After all, transportation is why we've led since our founding.

From the Native American trails that helped a young colony develop and thrive;

To our seaports that brought commerce from across the globe and made our state a maritime hub;

To the turnpikes and parkways that allowed our state to develop into an industrial power;

To the railroads that connected each city and town across Connecticut to one another, and to Boston, New York, and beyond.

Today, we can open a new chapter in our state's proud history, one where we begin rebuilding Connecticut, both figuratively and literally.

Let it be a chapter of smart investment and long-term thinking.

Let it be a down payment on the kind of state we want to leave to future generations.

Let it be a promise that Connecticut's 88th Governor and the 2015 General Assembly were planning ahead.

Planning for our children and our children's children. So that it was their interests that came first in our minds, and first in our hearts.

Thank you, may God bless you, and may God bless the great State of Connecticut.

Fiscal Year 2016-2017 Biennial Budget Address
Governor Dannel P. Malloy
Hall of the House of Representatives, State Capitol 
February 18, 2015

Mr. Speaker, Mr. President, Senator Fasano, Representative Klarides, distinguished members of the General Assembly, thank you for inviting me once again into this chamber to address you.

I want to recognize and thank my trusted friend and advisor, the best Lt. Governor in the United States, Nancy Wyman.

I'd like to thank my wife Cathy and my son Dannel for being here today, and for their love and support.

And as always, let us thank and honor the brave men and women of Connecticut serving in our Armed Forces around the globe.

Introduction

For a small state, Connecticut is a place of stark contrast and unique diversity.

We are home to historic and vibrant urban centers, but also to scenic small towns, parks, and forests that are the envy of our nation.

Our economy relies on a backbone of large employers that have sustained us over generations. And yet that same economy would crumble if not for a network of small businesses that showcase the ingenuity and spirit of Connecticut workers.

Our industrial centers are helping make global advances in aerospace, bioscience, and precision manufacturing.

At the same time, some 400,000 acres of local farmland support more than 27,000 Connecticut jobs.

These contrasts are found throughout our great state. They demonstrate our rich history and our distinct character. They make us who we are.

And working together in recent years, we've crafted budgets that capitalize on these unique Connecticut assets.

We protected state aid for cities and towns, at the same time we created a new state park and preserved nearly 11,000 acres of additional open space.

We worked to attract and retain large employers, at the same time we created the state's first program to help small businesses.

We made targeted investments in burgeoning, high-tech industries, at the same time we began to restore over one thousand acres of overgrown farmland.

The budget I present to you today continues to build on Connecticut's diversity and its unique strengths. It also turns our attention to some other areas of contrast. Some things that we need to address together.

As we begin this legislative session - as we look ahead to the difficult work of negotiating a budget - we should do so with these contrasts in mind.

Together we should focus on our strengths, and also shore up our weaknesses.

We should plan for long-term prosperity, while also addressing short-term problems.

We should continue to build a better tomorrow, by making smart choices today.

Budget Framework

Of course, making smart choices usually means making tough choices. The budget I present to you is filled with tough choices.

All told, my proposal contains more than 590 million dollars in cuts to the current services budget.

The vast majority of these cuts are choices that, under ideal circumstances, Connecticut would not have to make. But as our economy continues to recover, tough choices are needed if we want to achieve the following simple goals:

First, we must balance our budget by living within our means and living within our spending cap. This budget does that, with a total increase of just 3.1 percent from the prior fiscal year. This increase is in line with the responsible growth seen over the last four years. And, it's far below the five years prior to that, when spending grew an average of 4.2 percent.

Second, we must maintain our commitment to funding public education. While other states may choose to balance their budgets on the backs of public schools, Connecticut will not. My proposal supports schools by maintaining current ECS funding.

Third, Connecticut must keep its promise to cities and towns. This budget continues to fund municipal aid so that we can hold down local property taxes, and so that no teacher, no policeman, and no fireman will be laid off because state government failed to do its part.

Fourth and finally, even in this time of difficult choices, we must not ask any more of our middle class. Today I am proposing that we overhaul Connecticut's sales tax, moving it to under 6 percent for the first time since 1971.

We can pay for it by simplifying our tax code, removing some exemptions, and by reigning in loopholes and corporate tax credits.

The hard-working members of our middle class have helped turn our economy around. They've pitched in and shared in the sacrifice. Let's give them something back.

These four goals represent the framework of the budget I submit to you today. As we negotiate in the months ahead, I look forward to hearing your ideas on how we can improve upon it.

But there are a few things I will not do.

I will not support any effort to exceed our spending cap by emergency declaration.

I will not support an early retirement incentive - an idea that may save money now, but costs us much more in the long run.

And I will not sign a budget that is balanced on the backs of our towns or our public schools.

Within this framework, I will listen to anyone who has serious ideas on how we can make this budget better.

If you're willing to offer detailed proposals for saving money and growing our economy, you will be heard. But if it's just about partisan gamesmanship, I'm not interested - and I don't think Connecticut families are interested either.

Economic Development

The reason we need to work together is simple: Connecticut's economy is headed in the right direction, and the best way to keep our momentum is a collective effort.

We know we're on the right path. We know our strategy for economic development is working. This is not partisan spin. The facts tell us that Connecticut's economy is finally back on track.

Since 2011 our unemployment rate has dropped from a high of 9.1 percent down to 6.4 percent today.

In 2014 we created more than 26,000 new jobs - our best job growth since 1998.

All told, our private sector has grown more than 75,000 jobs over the last four years - regaining 94 percent of the jobs lost during the Great Recession.

We need to keep this momentum going. We can do it by supporting the good programs and policies that have brought us this far.

This budget continues to help small businesses grow jobs by fully-funding our successful Small Business Express Program.

And, it focuses on growing jobs in higher unemployment areas by assisting more businesses in urban centers.

We don't have to stop there.

Just as we are helping middle class families, we can help small businesses as well. By restructuring our business tax code and bringing it more in line with other states, we can do away with the Business Entity Tax, which unfairly impacts small employers.

My budget eliminates that tax this year.

Education

As we continue to create jobs, we also need to make sure we're growing the next generation of Connecticut workers. And in recent years, we've done great work to bolster our public schools.

Together we've made year-over-year increases to school funding, and we've done it while other states have slashed their education budgets. Our schools are better for our efforts.

Graduation rates have increased by 3.7 percent in the last four years.

Connecticut students are leading nationally in reading and math.

And we're finally making real progress on closing our achievement gap.

The support we've offered schools is the right thing to do for our kids and for their future. But it also helps prepare more kids to one day build our workforce and our economy.

We can continue our good work by filling in some of the small cracks that too many students can still slip through. To that end, I want to offer a few relatively small changes that can have a big impact.

Let's start with our youngest kids. I'm proud that last year we began the important work of moving Connecticut toward universal pre-kindergarten. But ironically, even when our kids get a full-day pre-k experience, some of them are still graduating into a Kindergarten program that only teaches them for half the day.

It just doesn't make sense. The bill I submit to you today ensures that by the fall of 2017, every child in Connecticut will receive a full-day kindergarten experience.

Over the next two years, we'll work with towns that don't yet offer full day Kindergarten. We'll make sure all our youngsters receive the time they need to learn and reach their full potential - right from the moment they enter elementary school.

Moving from one end of the education spectrum to the other, we also need to make sure that when Connecticut students graduate from our colleges, they can afford to pay off their loans. For too many students, loan debt is an anchor that drags them down - hindering their choices and putting the American Dream out of reach.

We can help by enabling Connecticut's Higher Education Student Loan Authority to refinance the loans of state residents. Together we can help Connecticut students become productive members of our economy and our workforce.

The bill I submit to you today makes student loans more affordable, and I urge you to support it.

Second Chance Society

Now, let's talk about another way we can help our economy continue to grow.

A way to give more people a chance at finding gainful employment.

A way to address a systemic wrong that has plagued our country, our state, and our economy for generations.

Throughout American history, one of the unifying themes that has bound us together is that of a second chance. But somewhere along the way, we lost sight of this simple principle. Too often we became a society that sought permanent punishment, instead of permanent reform.

We built modern prisons, when we should have been building modern schools; from 1985 to 2008, our prison population tripled in size.

We created a generation of offenders who had no chance at a better life when they got out of prison. No chance at a higher education. No chance at a good paying job or affordable housing.

Connecticut can do better. And over the past four years, we've started to change:

We implemented reforms to our juvenile justice system.

We decriminalized marijuana resulting in 6,000 fewer arrests every year.

We refocused on community policing, bolstering confidence in our big city police departments.

We targeted violent offenders in our communities, putting them away for longer stretches.

And thanks to the bi-partisan efforts of this General Assembly, we took dangerous guns and ammunition off our streets with the strongest gun violence prevention laws in the country.

Today we can say with confidence that these reforms are working:

Crime is at a 48 year low.

Violent crime is down 36 percent.

Homicides in urban centers like New Haven, Bridgeport, and Hartford have dropped by 48 percent since 2011.

Connecticut is proving that smart criminal justice reforms can lead to safer communities, fewer victims, and more opportunity for success. The bill I submit to you today offers a second chance to non-violent offenders:

It reduces penalties for simple drug possession to a misdemeanor.

It unties the hands of our judges by eliminating mandatory minimums.

It streamlines our pardon and paroles process for non-violent offenders.

And it offers ex-offenders new opportunities in finding both a job, and a home.

Together we can give non-violent offenders a second chance to be productive members of our community and our economy.

Now, I know some will be critical of these proposals. But the truth is, these aren't Democratic ideas or Republican ideas. These ideas are part of a growing national conversation on how to end a generational cycle of poverty, addiction, and crime. The kind of reforms I'm proposing are already happening - from Texas to California, and from Mississippi to Washington D.C.

Connecticut should be a leader in this national debate. Together, let's help more of our neighbors rejoin their families, rejoin their communities, and rejoin Connecticut's growing economy.

Let's give them a second chance.

Transportation

I want to finish today by continuing a conversation we began a little over a month ago, when I joined you in this chamber and spoke about our transportation infrastructure. About how Connecticut's economic future and our ability to grow jobs are tied directly to the condition of our roads, bridges, ports, buses, and rails… even to our walkways and bikeways.

In the intervening weeks since then, the Department of Transportation, the Office of Policy and Management, and staff in my office have been hard at work developing a new transportation vision for the next 30 years. It's based on the input of hundreds of state residents, business groups, and stakeholders.

That document is available to you as part of this budget. It is designed to give you a better understanding of what a best-in-class transportation system looks like - of what it could mean for Connecticut, both in terms of economic development and a better quality of life.

It includes a complete overview of the projects Connecticut could undertake over the next three decades.

That's a long time. So the question is, 'where do we start?'

Included in the capital budget I propose today is a plan for ramping up our efforts over the next five years. Last month, I promised I would return to you with more details.

Well, here they are.

Roadways

We can begin with our roads. There are 12 million individual trips taken on Connecticut's roads each and every day.

Our roads are relied on by companies to ship their goods, and transport their employees to work. Right now, those commuters are each spending an extra 40 hours a year in traffic due to unnecessary congestion. That's an extra full-time week of work, every year, sitting in traffic.

And for our economy, these delays cost us 4.2 billion dollars every year. That's a hidden tax on Connecticut citizens.

Even as we invest in alternative modes of transportation, making our highways work better has to be part of our strategy.

Just a few hundred feet from here, Hartford's I-84 Viaduct has reached the end of its useful life. It routinely demands significant investment to stay in good repair, and the repairs usually cause additional traffic problems.

Fixing the Viaduct will reduce congestion on I-84 at the same time it reshapes Hartford neighborhoods - communities that were devastated by the construction of the original interstate so many years ago.

My capital budget moves this project forward.

Also in the Capitol region, we need to fix the Charter Oak Bridge over the Connecticut River. Because of its deficiencies, cars and trucks routinely back up into travel lanes, posing a safety concern and causing more than 85 accidents every year.

Fixing this bridge will not only eliminate delays, it will generate 860 million dollars in new economic activity. My plan will expedite this project, and make these changes a reality.

Heading south of Hartford, the City of Middletown was cut off from its historic waterway nearly 60 years ago with the construction of Route 9. This corridor has long been a congestion point and source of frustration for drivers.

Providing a safer, less congested highway - as well as easier access to the riverfront - can dramatically reshape Middletown. My proposal gets these changes started with design and engineering work.

Heading west to Waterbury, studies have shown that we need to replace the aging interchange of Route 8 and I-84 known as the 'mixmaster.'

Getting it done will mean positive change for entire neighborhoods near the Naugatuck River, as well as a safer and less stressful commute through one of the most notorious interchanges in New England. This proposal gets us started on a complete replacement of the mixmaster.

Continuing further west to Danbury, there is a 5-mile stretch of I-84 between exits 3 and 8 that continues to experience significant and unacceptable congestion.

By alleviating this congestion, we can reduce air pollution, decrease traffic, and make the Danbury region more attractive for commerce. My budget begins the necessary work for fixing this corridor, including additional lanes and reconfigured access points.

In Fairfield County, it would be an understatement to say that the stretch of I-95 between Bridgeport and Greenwich experiences significant traffic congestion. Every day during rush hour, commuters spend between 20 and 40 minutes in un-needed delays on this stretch of highway.

Additional lanes and new access points are needed to open up this vital accessway to New York and beyond. This budget gets that work started.

In the same region, my proposal also includes funding to fix the Merritt Parkway interchange at Route 7 in Norwalk. Currently, too many drivers are forced to get off the highway in order to navigate between these two roads, leading to unnecessary traffic and accidents.

Together we can free-up capacity on both state and local roads. My budget includes funding to begin that important work.

And finally, we have road work to do in Eastern Connecticut as well.

The stretch of I-95 from Old Saybrook to New London is in need of congestion mitigation and safety improvements. Our state has talked about this problem for decades, but we've never started the long process of actually fixing it. My proposal gets us started.

As part of upgrading the highways in this part of the state, we also need to begin the necessary work to widen I-95 and fix the interchange connecting it to I-395. Here again, we have a major bottleneck and safety hazard that should have been fixed years ago.

Under my plan, we'll get started. This change is also a critical piece of extending Route 11 - another project that continues to move forward under this proposal.

We can also begin much-needed improvements to the Gold Star Bridge. It was built in the 1940s and now requires substantial investment to align it with modern standards.

With this budget, we can fix this critical piece of our economy in Southeastern Connecticut.

Railways

Next, Connecticut's railways have helped shape the history of our state. But for generations we've paid them lip service, without committing to the kind of improvements they need to remain not just usable, but a dynamic part of our economy.

A recommitment to rail can help invigorate communities throughout the state, encouraging transit-oriented development that includes new housing, new retail, and new office space.

The 5-year ramp up in my capital budget includes funding to finish design and construction for train stations up and down the New Haven-Hartford-Springfield Line.

We can finally bring commuter rail service to Enfield, West Hartford, Newington, North Haven, and Hamden. And we can reconstruct stations in Windsor and Windsor Locks.

We've also included funding to finish what we started several years ago: double-tracking the entire rail line from New Haven to Springfield.

Federal funds have only gotten us to Windsor. Now the state needs to step up and close the gap. Double-tracking will allow more frequent and faster service, and open up the possibility of new routes to Boston and Montreal.

On the New Haven Line - the busiest commuter rail line in the country - we'll build the Barnum station in Bridgeport, reconstruct the Merritt 7 station in Norwalk, and begin a new station in Orange.

Over time, we'll turn the New Haven Line into a modern rail service - with reliable and frequent stops, as well as express regional service riders can count on.

In the City of New Haven, we've included funding to complete a new parking garage, along with a pedestrian bridge connecting it to station platforms. The new garage will mean expanded ridership and further development in the area surrounding Union Station.

We've spoken about this garage for years - now we're going to get it done.

We'll also continue our commitment to replacing the Walk Bridge in order to prevent future disruptions to the New Haven Line and the Northeast Corridor.

While carrying out that massive project, we can simultaneously invest in repairs to the SAGA and Cos Cob moveable bridges in order to keep commuters moving, and to prevent our economy from being hurt by travel disruptions.

And finally on rail, we've taken steps over the past year to make improvements to the 27-mile-long Waterbury Branch. We'll continue this work with additional design funds and 70 million dollars for a complete build-out of a new signal system.

This project will allow for increased capacity and more frequent service. The additional ridership will help communities throughout the Naugatuck Valley revitalize their downtowns.

Buses

Let's talk about buses.

Public buses in Connecticut provide our residents with more than 40 million individual trips each year. By offering expanded service and a better experience, we can increase ridership even further, resulting in fewer cars on our highways and less pollution in our air.

My budget includes funding for a study of new and alternative routes that will benefit parts of our state that don't yet have sufficient service. This expansion will help connect more residents to employment centers, opening up new job opportunities.

But we can't just study the problem - we need to start fixing it.

This budget includes significant funding to purchase additional equipment to be used on these new and extended routes. 

Bridges, Walkways, and Bikeways

We've talked about highways, buses, and rail. But the transportation vision I offer you today goes deeper than that. It reaches down to the local level, with the potential to help every city and town in our state.

First, there is an existing backlog of routine bridge upgrades that we've let grow for too long. My five-year plan adds new funding on an ongoing basis to expedite this work, and help towns throughout Connecticut fix their bridges.

We've also heard from cyclists who say they want safe alternatives to riding with traffic, and from pedestrians who want more sidewalks and safer crosswalks in their communities.

To that end, I'm proposing the creation of a new program to help cities and towns install bike and pedestrian safety improvements in urban areas and town centers. These changes will help make our downtowns safer, more walkable, and more livable

We can also improve on Connecticut's many great walking trails. This budget not only provides funding for repairing existing trails that have fallen into disrepair, it also funds an accelerated completion of new bike and pedestrian trails across the state. 

Transportation Summary and Next Steps

All of the projects I just described - and many more - are included as part of our 5-year ramp up. We can begin moving on all of them with the capital budget I submit to you today. Of course the key word here is 'begin.'

That's what this budget proposal is: a beginning.

If we want to transform our infrastructure over the next 30 years, it will require additional decisions on how we're going to pay for it. I want to propose to you now a 3-step plan to responsibly begin that conversation.

Step one is the five-year ramp up I've just laid out. It includes more than 2.8 billion dollars in new capital funding, part of a 10 billion dollar transportation plan for the next 5 years.

It allows us to get started on all the projects I've spoken about today - projects that reach every corner of our state, and that utilize every major mode of transportation.

Step two is something we spoke about last month. If we're going to plan for the long-term, Connecticut needs a strong transportation lock box that ensures every dollar raised for transportation is spent on transportation.

I am glad to see that proposal has been met with bipartisan support. I look forward to signing it into law.

Step three is determining the most prudent and cost-effective way to continue funding our transportation needs beyond the initial five-year ramp-up. To that end, I will form a nonpartisan commission comprised of experts in transportation, finance, and economic development from throughout Connecticut.

They will have a single, narrow goal: offering recommendations for a sustainable structure to fund transportation over the next 30 years and beyond. I will announce the members of this new body in the weeks ahead, after consulting with leaders in your caucuses.

Taking these three critical steps is the responsible way for us to move forward together this session. It will allow us to develop a comprehensive solution for meeting our transportation needs.

We cannot take a piecemeal approach to this problem. There is no one single answer, and I won't support proposals that only get us part of the way there.

As we have this conversation, we also need to continue making the case to our constituents for why Connecticut needs a best-in-class transportation system.

We need to explain what it can mean for them - for their quality of life, and for the economic health of their state.

Let's get to work.

Conclusion

My friends, in the weeks and months ahead, we have some big questions to answer together.

How to balance our budget and live within our means.

How to grow more good jobs with good benefits.

How to make sure all our kids have an opportunity for success.

How to reform and reintegrate those who run afoul of the law.

And how best to connect ourselves to one another, and to the world beyond our borders.

We need to decide what kind of state we want to be - not just tomorrow, but 10, 20 and 30 years from now.

Throughout this work, let's remember that our forbearers faced these very same questions. They had to decide what kind of Connecticut they were going to leave us.

It's why they founded our Capitol City, and gave us North America's first written constitution.

It's why they built great schools, libraries, and parks across 169 beautiful cities and towns.

It's why they laid down lines of rail connecting us to Boston, New York, and beyond, and why they built a parkway that's now an iconic part of Connecticut's landscape.

We inherited these things. They were passed down to us. Entrusted for safe keeping.

And now we carry a sacred obligation - to our children and our children's children. To make this state an even better place for our having lived in it.

This year, this session, let's honor that obligation.

Let's preserve local budgets, and protect public schools.

Let's support our middle class, and those seeking to become middle class.

Let's build better roads, bridges, and railways.

Let's make smart decisions today, so that together, we can build a brighter tomorrow.

Thank you. May God bless you, and may God bless the great State of Connecticut.

2016 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
February 3, 2016

Mr. President, Mr. Speaker, Lt. Governor Wyman, Senator Fasano, Representative Klarides, my fellow state officials, ladies and gentlemen of the General Assembly, members of the clergy, and all the citizens of our great state: thank you for the honor of inviting me once again into the people's House.

As always, let us thank and honor the brave men and women of Connecticut serving in our Armed Forces around the globe.

I'd like to recognize my wife Cathy and my son, Dannel, who are here with me, and thank them for their tremendous love and support.

And of course, the State of Connecticut could not have a better Lt. Governor, and I could not have a better friend than Nancy Wyman.

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We live in changing times.

You don't have to take my word for it. You hear it from your constituents every day - a visceral feeling that our country and our state are not going back to how things were before the Great Recession.

Families are budgeting differently. Their expectations are changing. They know they can't rely on the same economy their parents and grandparents did, where wages and home values steadily increased.

They know it's tougher to save - for retirement, for a college education, or just for the inevitable repairs to their car or their home.

Businesses feel it too, both large and small. They're making different decisions about how they hire, and the benefits they offer. They're looking at new technologies to fundamentally change how they operate, because if they don't, they won't survive.

In short, Connecticut families and businesses alike are adapting to a new economic reality.

We in Connecticut are not alone. Our neighbor to the north, Massachusetts, is facing a $635 million shortfall. Pennsylvania is facing a $2.4 billion deficit, but still unable to overcome partisan gridlock to reach a deal. And Louisiana faces nearly a $2 billion deficit next year. Twenty-six other states have not fully recovered peak revenue from the Great Recession.

Our national economy, while making progress from the Great Recession, was fundamentally changed. A shifting workforce, the rapid rise of technology, and stagnant wage growth have made this recovery tougher for everyone, everywhere.

But here at home, the problems were compounded by our inability over prior decades to make the necessary changes and investments that would've moved our economy forward more quickly.

And now, while we have made year-after-year progress chipping away at our structural imbalance, it's clear that our work is not done. It's clear we have not gone far enough.

You don't need to look any further than our revenue projections, which continue to come in lower than expected. It's a frustration that goes beyond party affiliation. Projections used by Democrats, Republicans, and nonpartisan staff have all come up short.

In response, we have to adapt even more. Connecticut state government must reset our expectations of what we can afford, how we provide services, and how we save for our priorities. It won't be easy, and it often won't be politically popular. However, it is absolutely necessary if we want to create a more sustainable and enduring economy.

Friends, as we embark on another legislative session, my message to you is this: Connecticut is not going back to that pre-recession reality. It just doesn't exist anymore.

The people of Connecticut know it. They've accepted it.

And so must their government.

That's what I want to talk with you about today - how we adjust to this new economic reality.

There are many ways we can do it, many ways we need to change, but I want to spend my time on just one topic: I want to talk about how we budget.

There's a simple reality that, while our economy was evolving, the state budget did not change.

Together, this year we need to reshape the way Connecticut budgets. We need to make our budget more predictable, more sustainable, and more transparent.

A more sustainable budget will help us build an economy that can be one of the strongest in the region and competitive nationally.

With that said, I'm going to lay out five budget principles.

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The first principle is in many ways the simplest: Going forward, we need to limit our spending to available resources. We can do it by changing our "current services" budget approach.

"Current services" is a term readily understood inside this hall, but it's a foreign concept to our constituents. Essentially, it means that we wrongly assume government can do everything it does now, regardless of ever-growing costs.

It just isn't sustainable.

Families and businesses do not set their budget based on the amount of money they want to have next year. Neither can the State of Connecticut.

Managing our finances this way assumes we will face cuts if we don't achieve double digit growth in revenue every single year. It puts spending increases on autopilot. This must end, and this must end this year.

The budget adjustments I submit to you today are not based on current services spending. Similar to a zero-based budgeting approach, my budget limits spending in the upcoming fiscal year and beyond to actual revenue projections.

In other words, this budget is based not on how much we want to spend, but how much money we actually have to spend.

This new method will require different decisions to keep government living within its means. It won't come without sacrifice - it will require the reduction of the state workforce by more than a thousand employees through attrition and other means.

I don't take that lightly, but I do think it's necessary. I will continue to work with our state employees to make sure those reductions are done fairly and with great care.

And, if we're going to limit ourselves to available resources, there's another way we can do it. Twenty-four years ago the people of Connecticut voted for a constitutional spending cap to ensure that the state could live within its means.

It's time we give them what they asked for. The wisdom of the voters was correct in 1992, and it is correct now. Connecticut needs to enact a spending cap to keep spending in check.

An enforceable spending cap goes hand in hand with eliminating the current services model. We cannot both constrain spending with a cap and assume government will continue to grow unchecked every year.

I have previously offered this as a proposal to the General Assembly. But this year, we have to act. Otherwise, we will be forced year after year to either cut spending or look for additional revenue.

Pass an enforceable spending cap, and I again will support it.

_________

Here's the second principle: We cannot structurally balance our budget for the long run until we have addressed the primary driver of our long-term unfunded obligations.

I'm talking about Connecticut's unsustainable pension and post-employment costs.

In point of fact, we have made substantial progress addressing these costs. Reforms made in 2011 have saved us billions upon billions of dollars.

But our work addressing this debt remains unfinished. We have to do more.

Much of our liability is due to decisions made before most of us went into public service. The problem was made worse over the years as the state offered early retirement incentives that added billions to our long term costs.

Now, it has fallen upon us to fix it.

After decades of neglect, we are finally paying our pension obligations every year.

I think we all know that must continue. And yet, we still face a fiscal cliff in 2032 that will be impossible to meet. The instability created by this cliff is shaking the confidence of the business community and looming over the next generation of Connecticut taxpayers.

This past November, my administration released a study from the Center for Retirement Research at Boston College on how we could best stabilize our pension system. It offered ideas for ensuring that we can meet our obligations to our employees, pay down our unfunded liabilities, and do so without falling off that fiscal cliff 15 years from now.

Building on that work, I've proposed ways to refinance our debt, adjust our assumed rate of return, and change our most expensive Tier One pension plan to a pay-as-you-go system.

Others have put forward their proposals to address this cliff, and I appreciate those ideas. Now is the time for a frank discussion and an honest assessment of our options.

To that end, I have directed Secretary Barnes to pull together all stakeholders - including the Treasurer and the Comptroller, SEBAC and the state employees it represents, as well as the Connecticut teachers - to work on this issue together.

Using the work we've already begun, this group should develop a consensus on how to best make our pension system more affordable and more sustainable.

We should find the best combination of our ideas to help us support current pensions, pay off old liabilities, and strengthen our entire system for generations to come.

We should complete this work as soon as possible, so that the changes can be made this year and have an immediate impact on our long-term liabilities.

While this group is meeting, my administration will continue to negotiate with 13 state employee bargaining units, discussing salaries and other important issues.

As this process is ongoing, know this: I will not negotiate with our partners in labor from this podium or through the press. Instead, I will simply say that our expectations for these negotiations should be based on what we can afford, not what we previously spent.

And finally, there's one more area to discuss. Our work in the months and years ahead should include a larger, ongoing effort to align state employment benefits with our present economic reality.

Let me be clear - I strongly believe that working people who serve the public for decades deserve good benefits and a secure retirement that is offered by a defined benefit plan. But friends must be honest with each other.

The obligation of maintaining this system cannot be solely supported by our taxpayers under our current budget practices. If we want to support our pension and benefits system, we have to make changes. We should be willing to have the tough but necessary conversations about what those changes might look like.

Let's acknowledge that we should not wait until 2022 to have necessary discussions between labor and management.

Together, with our partners in labor, we can address how we pay for our long-term obligations and keep the pension and benefit system aligned with our economic reality.

To be sure, Connecticut state employees are not at fault for our current budget shortfall. But it has fallen to all of us - collectively - to address the challenges before us.

Let's give our citizens and businesses the confidence that will come from having addressed that which we know needs to be done.

_________

The third principle is this: We need to prioritize funding for core services.

Simply put, every existing line item cannot be considered a core service to be funded in perpetuity.

Together, we must concentrate on the core functions of state government, namely: protecting the public, ensuring a social safety net, building a strong economy, safeguarding our environment, providing a public education, and administering justice.

To that end, functions that fall outside of those core services must be considered on merit alone. We must transition toward making recipients of state funding compete for available dollars based on proven results.

In other words, we have to reform our earmark process.

That includes state funding to outside agencies, community organizations, and special events. Funding for these items should be time-limited, and we should re-examine these expenditures regularly.

Let's reform this process and do it this year.

My budget cuts existing earmarks by more than 20 percent in order to live within our means. And, it creates new pools so that entities receiving line item earmarks and, importantly, those entities that have not had the political clout to receive them will compete on equal footing for funds.

Any state funding that falls outside our core government services must be based on merit and merit alone.

Let's make this change together.

_________

The fourth principle is this: State agencies must be held accountable to the public and the legislature for their results.

The bill I submit to you today will require agencies to post online detailed, meaningful, timely information about how they are spending the people's money, and precisely what that money is accomplishing.

And, at the same time we're making agency budgets more transparent, we also need to push commissioners to find more cost-effective ways of accomplishing their respective missions.

I recognize that many in this chamber will have concerns with this change. Let me be clear: I have no desire to diminish the General Assembly's right to set policy or to mandate certain programs or services.

But as we shrink our budget - as we ask state employees to do more with less - giving commissioners more latitude will allow them to preserve those very programs and services.

In other words, by simplifying line items in the budget, we can give our top executives the ability to manage their agencies while providing quality services to taxpayers in the most efficient way possible.

Just as in business, our managers need the ability to lead their agency, adjust to shifting circumstances, and set priorities in the face of limited resources.

Together this year we can let managers manage, and we can hold them accountable for results.

Accountable to you, accountable to me, and accountable to the public.

_________

Here's the fifth and final principle: We've talked about limiting our spending, we've talked about our pension and post-employment cost, we've talked about setting priorities, and we've talked about focusing on results.

This final principle is one that can't be reflected in a budget book. It's about our process. It's about how we work together to deliver the best product possible to the people of Connecticut.

No budget will be perfect, but I firmly believe that by changing how we come to a budget bill, we can improve the final result.

So this is my challenge to you and to me: Let's not pass a budget on the final day of this session this year. Let's get it done early. Let's do it so that we can spend those final days working on other proposals - both yours and mine.

And that goes for budget implementers as well. No longer should implementers be a place to pass things that we didn't have time for during the session. If an idea didn't get a fair hearing during the legislative process, then it shouldn't be brought to the table at the eleventh hour. This is true of both Democrat and Republican ideas.

While I want to get a budget done early, I also understand and respect the committee process. I have no intention of circumventing it. While committees do their work, legislative leaders and committee leadership can meet regularly with me and my staff to understand each other's goals.

I welcome anyone to that table - Democrat or Republican.

No one party, no one leader, and no one individual holds a monopoly on good ideas. Now is the time for everyone to put those ideas on the table - for us to have a bipartisan discussion throughout this session.

Of course, it needs to be a real effort, one that is seen through to a responsible conclusion. To that end, I have only two conditions for our talks.

First, everyone must be willing to compromise. I know some consider compromise a dirty word, but just last November and December, Democrats and Republicans in Washington compromised on a transportation bill and passed a federal budget together. Compromise is necessary if we are going to address our challenges here in Connecticut.

Second, there comes a point where it isn't enough to bring your ideas, you also need to bring your votes. While every good idea should and will be heard, anyone who expects their ideas to be made reality must be ready to support a final budget bill. That's the price of leadership and the price of being part of the solution.

I know this is an election year. Too often, it's easier for all of us to point fingers at one another. But I assure you, there will be time for campaign politics this fall.

During this session, we can either be part of the solution or stand on the sidelines throwing stones. We cannot do both.

We can't be opposed to tax increases, but unwilling to cut the spending those taxes support.

We can't be for reigning in spending, but oppose cuts in any one line item.

We must be honest about the challenges we face, and work on them together.

_________

That's it - those are my five principles for making our budget more predictable and our economy more sustainable. For giving confidence to our residents and our businesses that government is adjusting to a new economic reality.

Budgeting more prudently can help us protect the services we value most. I believe strongly that government can and should play a positive role in the lives our citizens.

The measures I've laid out today aren't about cutting spending just to cut spending. This isn't a call for overzealous austerity, or a departure from Connecticut's core values.

Rather, they're about changing how we budget in order to preserve that which we hold dear. In order to preserve what makes Connecticut so special.

These are my ideas. I am sure there will be other ideas from those in this chamber, from leaders across the state, and citizens' concerned about our future. All of those ideas should be heard as we take on this challenge together.

I want to hear those ideas, so I plan on holding a series of town hall meetings across Connecticut. Anyone and everyone can be part of the discussion.

For myself, in addition to what I laid out today, I look forward to continuing our work together to fix our broken transportation system - work that must begin with a constitutional transportation lockbox. I want to thank each of your leaders, Democrat and Republican, for their votes in support of a lockbox this past fall.

Together, let's get this resolution on the 2016 ballot. Let's get this done and let's get this done early this session.

I also look forward to continuing a discussion from last year about making our criminal justice system more fair and equitable. Together, we can be the first in the nation to acknowledge that young adults in our juvenile or adult systems need a different approach.

We can give more young people a better chance to reform and become contributing members of our economy. And we can do it while saving taxpayers money.

These will be just some of my priorities this year. I know that you will have yours as well. I look forward to hearing them, and to continuing our progress together.

I say "continuing" because, despite my calls for change, we should also recognize that progress is happening. We're moving forward already.

Consider what we've accomplished.

Thanks to our concerted efforts to grow our economy, Connecticut's private sector has grown more than 80,000 jobs in the last five years.

In just the last six months, we've secured employers like Synchrony Financial, and we welcomed new employers like Serta Simmons from Massachusetts and MC Credit Partners from New York.

These employers alone will create and retain more than 700 jobs in Connecticut.

Last week, Electric Boat announced they will add 800 new jobs to their workforce this year and 4,000 in the years to come.

We've held onto major employers like United Technologies and Sikorsky along with their 24,000 employees.

And we've done it at the same time we're supporting more small businesses than ever before. In 2015, our Small Business Express Program worked with more than 230 businesses to create or retain more than 4,400 jobs.

Together in a special session last fall, we made changes to our tax code that both parties agreed were necessary to help our business community. Because of our work, employers can continue their strong pace of hiring and invest in the new innovative economy that will drive us into the future.

Our community colleges and regents system have answered the challenge for precision manufacturing training. The University of Connecticut has increased engineering capacity by 50 percent, helping meet the demand for technology and manufacturing job openings across Connecticut.

The Manufacturing Innovation Fund has launched two new programs geared specifically at training. One of those programs has already assisted 88 companies in training their workforce.

Our teachers and public schools are working hard as well. Test scores are up. Graduation rates have increased, and we're closing the achievement gap every year.

We're making housing more affordable. Last year alone we created or funded more than 11,000 units of housing.

Together, we ended chronic veterans' homelessness - the first state in the nation to do it. This year, we will end chronic homelessness for everyone.

And finally crime is at a 48-year low. Violent crime is down again from the previous year, our prison population has reached new lows, and this year we closed our fourth prison. These efforts have saved taxpayers tens of millions of dollars and made us safer.

This is progress we all can be proud of.

But if we want to sustain it, if we want to build on it, we have to fix how we budget. I know it will be a challenge.

So, as we begin this new session of the General Assembly, let us resolve together that we will use fresh eyes to look for answers to old problems.

Let us take new approaches to our challenges and find innovative ways to meet them.

Let us accept that we can't wish away our problems.

Let us seize this moment together to address the unfinished work before us.

Let us collectively believe that we can change the way our state budgets while we hold true to our Connecticut values.

We can adjust to a new economic reality while we protect our quality of life.

We can support our business community and train a 21st century workforce.

We can ensure that our progress leaves no one behind.

We can look to the years ahead with optimism for the future, pride in the state we all love, and hope that we can achieve what is right… and do it together.

Thank you and God bless you. May God bless the United States of America. And may God bless the great State of Connecticut.

2017 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
January 4, 2017

Mr. President, Mr. Speaker, Lt. Governor Wyman, and my fellow state officials, ladies and gentlemen of the General Assembly, honored members of the judiciary, members of the clergy, and all the citizens of our great state: thank you for the honor of inviting me once again into the people's House.

Let me offer my sincere congratulations to those of you taking on new and important leadership roles, as well as those who have been reelected into leadership positions.  I also want to congratulate the new members sworn in earlier today.  I look forward to working with all of you.

Let me note, since we were here last together, we have lost some dear friends, including Mary Fritz and Betty Boukus, both of whom served in this house.  Our hearts are heavy as we continue to mourn their passing.

As always, let us thank Connecticut's brave men and women serving our nation around the globe.

Thank you, as well, to my dear friend and the best Lt. Governor in the country, Nancy Wyman.

And finally thank you to my wife Cathy and our three sons for their love and support.

…

This past September, the Connecticut General Assembly met in a special session.  You met to take historic action in support of our state’s economy and our incredible workforce.

The legislation you voted to support – and that I signed into law – protected 8,000 jobs at Sikorsky Aircraft. Equally importantly, it shored up thousands more jobs up and down Sikorsky’s supply chain, and across every corner of our great state.  It nearly doubled their spending with local suppliers to almost $700 million per year over the next decade and beyond.

Thank you for that work.

In recent years we’ve secured similar investments from United Technologies and Electric Boat.  Taken together, these agreements cement our leadership in advanced manufacturing around the globe.

A decade ago, if any of us had told our constituents that in 2017 not only would Electric Boat would be ramping-up their production rather than winding it down, not only would Pratt and Whitney be planning to put thousands more people to work, but that Sikorsky would be committed to Connecticut for another generation to come… well, they wouldn’t have believed us.  They would have told us that we were overly optimistic at best, and naive at worst.

And yet, here we are today. Working together, we have turned what many once considered impossible, into a reality.

Together we’ve protected Connecticut’s aerospace and defense industries for a generation and likely beyond.  More importantly, we’ve given these employers, and the tens of thousands of employees who work for them, something that is vital in today’s world:

We’ve given them predictability.

We know that predictability creates confidence.  And we know that confidence creates growth.

When we give people reason to believe that their job is here to stay, we’re giving them the confidence to purchase a home, to buy a new family car, or to start a college fund.  In other words, we’re giving them confidence to take part in our state economy.

And it’s equally true for their employers.  Predictability allows businesses to expand, to make new hires, to put down new roots right here in Connecticut. This is what companies and their workers are looking for.  They deserve it, and it’s on us to provide it.

That’s what I want to talk to you about today – about what we’ve done in recent years to make our budget more predictable, and our economy more sustainable.  And about how we can continue that important work this legislative session.

I’m going to discuss three key areas that I believe we should focus on this year in order to balance our current budget, and also continue our progress towards long-term prosperity.

The good news is that, for each of these three areas, positive change has already begun.

…

To start, we need to continue making state government leaner and more cost-effective.

The responsible way to do that is by setting priorities, and allocating our resources where they are needed most.  Because the truth is, we simply can’t afford to continue doing everything we’ve done in the past.

In recent years, commissioners and state employees have been hard at work finding creative ways to continue providing essential services while also saving money.  These cuts were not painless.  Important work had to be phased out so that other vital services could continue.  But the results are plain to see.

Last year we cut nearly $850 million to bring our current fiscal year in balance.  In so doing, we spent less in the General Fund than we had in the previous year for the first time since 2002.

We’ve reduced the number of state agencies by 28 percent since 2011 — shrinking from 81 agencies down to 58.

During that same time period, we reduced the size of our executive branch workforce by nine and a half percent.  We now employ 5,000 fewer full-time employees than we did in 2008.

And don’t let anyone tell you that these reductions are only in front-line employees.  We’ve reduced the number of state management positions by 28 percent.

While we had to go through the unfortunate, but necessary, process of layoffs last year, the vast majority of these reductions have come through attrition.

We’re also spending less on overtime.  With your strong partnership and encouragement, overtime costs dropped 14.5 percent last year, saving the state $37 million.

All told, excluding higher education, the executive branch workforce is at the smallest it has been since Ronald Reagan was president.

And now, in this biennium, we need to continue that work, ensuring we reduce spending responsibly and with great care.

Commissioners will need to once again work with their staff – and with you, our legislative partners – to find additional savings.  Like families across Connecticut, just because we responsibly managed our budget in recent years doesn’t mean we can take this year off.  We must continue to live within our means, spending only as much revenue as we have, and no more.

In September, my administration asked agencies to begin thinking about what additional cuts would mean.  Having further explored these options, many of their recommendations will be included in the budget I present to you next month.

Cuts in specific areas, or outright eliminations, should not be taken to mean that certain work is not valued.  It simply means that we can no longer afford to do it all, and that our spending must be focused on the very core, essential services for our residents.

And to be clear, saving money isn’t just about cutting line-items, or reducing headcount.  Agencies will continue to modernize systems, reduce waste, and increase productivity in order to cut costs as much as possible before impacting services, or the valuable employees who provide them.

Together, we can continue to make state government more efficient, more sustainable, and more reflective of our economic reality.

…

The second area I’d like to talk about are the obligations we have to Connecticut’s state workers, educators, and retirees.

Connecticut’s state pension systems were created 80 years ago, but not a single dime was deposited into the account during the first 30 years of its existence.  It was a pay-as-you-go system.

Over many decades, legacy costs, insufficient contributions, lower-than-assumed returns, and early retirement packages left us with a significant unfunded liability in the state’s employee and teacher retirement systems.

The stark reality is that, after 80 years, the state has set aside only one-third of the money necessary to responsibly fund its obligations.

Let me put it in context.  Of the $1.65 billion that we will pay next year into the state retirement systems, 78 percent of that – or nearly $1.3 billion – is what we’re paying to make-up for what past administrations and past legislatures failed to do.

Simply put, our generation is paying for Connecticut’s past mistakes.

Is it frustrating to do that?  Of course.  Is it necessary?  Absolutely.

It's also the right thing to do. Our state retirees dedicated their lives and careers to public service.  We need to pay them the pensions they were promised.

Let’s also acknowledge and thank today’s state workers for their efforts in support of Connecticut residents and businesses.  In 2011, we worked at the bargaining table to help put Connecticut on a more sustainable fiscal path.  Together we changed benefits, reduced longevity pay-outs, restructured state pensions, raised the retirement age, and required all employees to pay for a portion of their post-employment benefits.

We saved the state $1.6 billion on our unfunded liability in the immediate two years following that agreement – and a total of $21.5 billion over the following 20 years.  Had we not realized that level of savings, our current $1.5 billion projected deficit would be much, much worse.

Since making this agreement in 2011, the state has honored its commitment to fully fund the pension obligations each and every year – finally doing together what should have been done for the prior 80 years.

Building upon these years of work, my administration recently came to a crucial agreement with our state employees and our retirement commission, an agreement which will make our pension payments more affordable, and yes, more predictable.

Independent analysts are taking note.  Moody’s Investors Services, a national credit rating agency, deemed this to be ‘a credit positive’ step for our state.  And the plan’s actuaries say these changes will ‘enhance the stability’ of our pension system.

I urge you to support these important reforms.

Today, despite all this hard work and real progress, it’s clear we have more work to do to make our short and long-term labor obligations more affordable.

Fixed costs continue to increase every year, hampering our ability to maintain vital public services.  Pension obligations for both state employees and teachers are on track to cost the state an additional $360 million in the next fiscal year compared to this current year.  Clearly, the fiscal challenges we face during the next biennium are very real.

In the weeks ahead, my administration will continue working with labor leaders to find solutions for bringing employee costs in line with our economic reality.  These talks have been frank and direct so far, and I’m appreciative that state workers are taking part in them.

It’s very hard, but we must reach an agreement on how to make our pensions and benefits more affordable, as we face these fiscal challenges together.  We must recognize that a responsible and balanced solution to our budget problem is one that includes state employee concessions.

These changes can and should be reached respectfully, and at the bargaining table.  Our state must honor its legal obligation to our public servants and state retirees, while at the same time keeping our promises to Connecticut taxpayers.

Here's another promise: We will not remake the poor decisions of the past.  We will not saddle future generations with fiscal cliffs and unpayable fixed costs.  Responsible changes must be made — and they must be made this year.

As our past record demonstrates, when we come together, hold realistic expectations, and seek common ground, we can deliver results.

…

The third and final area I’d like to focus on with you today is how we go about distributing aid to our towns and cities – primarily how we fund public education.

The state provides a total of $5.1 billion in municipal assistance.  That’s more than one fifth of our overall budget this year, making it our biggest single expense – not state employee pensions, not Medicaid, not debt service, not salary and benefits of our employees; town aid accounts for the largest portion of our state budget.

It simply would not be fair for us to talk about continued state agency reductions, or talk about the need for labor concessions, without talking about new ways to provide town aid.

Of the $5.1 billion distributed to municipalities, 81 percent of that – or $4.1 billion – is educational funding.  That doesn't include school construction financing, which accounts for approximately one quarter of Connecticut’s bonded debt.

Now that I’ve put what we spend into context, let me say this – of course Connecticut should be spending lots of money on local education.  We all believe that investments in education are a down payment on our state’s future.  Our budget must reflect those values.

The question is, in a time of scarce state resources, are we spending this money in the best way possible?  Are we ensuring that all students, regardless of the life circumstances into which they are born, regardless of what town or city they live in – can receive a quality public education?

I don’t believe we are meeting that standard.  And I will point out that a recent court decision says that, as well.

It’s why I have long-advocated that we direct our support to those municipalities that are struggling the most — so that we can level the playing field for our students and our taxpayers.

While we have made progress on this front in recent years I still believe we have not gone far enough.  Connecticut needs a new way to calculate educational aid – one that guarantees equal access to a quality education regardless of zip code.

Our state constitution guarantees it, and our moral compass demands it.

We need a formula that appropriately measures a given community’s burden.  A formula that recognizes specific challenges faced by local property taxpayers.  And a formula that takes into account the impact those challenges have on the education provided to our children.

The budget that I will present to you next month will outline a more equitable system for providing town aid.  It will be based on the local property tax burden, student need, and current enrollment.

The system will be designed to be more fair, transparent, accountable, and adaptable – meaning that it will provide flexibility to fit the needs of a given community.

The result will be a fairer distribution of our state’s limited funds.

And if we are successful in this effort, there will be an important ancillary benefit – we can help ensure that no Connecticut city or town will need to explore the avoidable path of bankruptcy.

To be clear, that kind of help shouldn’t come without strings attached.  If the state is going to play a more active role in helping less-affluent communities – in helping higher-taxed communities – part of that role will be holding local political leadership and stakeholders to substantially higher standards and greater accountability than they’ve been held to in the past.  We should do it so that increased aid doesn't simply mean more spending on local government.

Those are the steps I believe we need to take on town aid funding.  The budget I propose next month will lay out a detailed path for getting there.

Now, based on prior experience, I can assume that the proposal I put before you will not be exactly what arrives on my desk a few months later.  I understand that.  That's how it works.  And I’m ready to partner with you.

But understand this – we need real change.  Change that leads to a better, more equitable system for town aid.  For the sake of our collective future, there is no reason to wait.

So let’s get to work.

…

I began today by talking about our recent historic partnership with Sikorsky.  But of course, it’s not just about the aerospace industry.

Regardless of region, employment, or income, people in every industry and at every income level are counting on us to get it right.

A family in Farmington where both parents work in the insurance industry deserves the reassurance of a more stable business climate – one that keeps their jobs here in Connecticut.

A math teacher in Norwalk should have the peace of mind that her pension and benefits will be intact when she retires after decades of hard work.

A New London High School graduate, following in his father’s footsteps building submarines here in Connecticut, is owed a stable job with livable wages – enough to buy a home and raise a family.

If you don’t think we can do it for these people, and for all people in our state, if you don’t think we can help our constituents and make their lives and their careers more positive and more predictable, I ask that you look no further than the progress we've made in recent years to see exactly what is possible when Connecticut works together.

Years of good economic development are helping to grow jobs.  In fact, since the end of the Great Recession, we have recovered 85,000 jobs.

Through the Small Business Express program, more than 1,600 companies have retained 18,000 good jobs and are now creating even more.

The Manufacturing Assistance Act has helped 150 companies since 2011, retaining 34,500 jobs and growing 8,500 more jobs.

All told, unemployment is now at 4.7 percent – its lowest level since 2007.

In 2012, we worked across party lines and passed comprehensive education reforms.  Today, thanks to great teachers and principals, our students are some of the best readers in the country.

And after years of decline, our graduation rates have risen for five years in a row and are now at their highest point in Connecticut’s history.

We’ve made monumental advancements for our most vulnerable children in Connecticut, as well.

Many people have doubted that we would finally be in a position to resolve the 25-year-old Juan F. case, which has kept DCF under federal oversight.  For too long, this has been an embarrassment for our state, and an unacceptable situation for our children.

But today, the end of that federal oversight is within reach.  We are finally ready for Connecticut state government to reclaim its responsibility for Connecticut kids. Please join me in support of this progress.

We are also improving our transportation system as we speak, thanks to the investments we've made together.  The on-time and on-budget completion of the Q Bridge project means that, on a daily basis, 140,000 motorists are getting to where they need to go with greater ease.

And with CTfastrak, more people are riding Connecticut transit buses to work.  Exceeding all initial projections, average ridership on CTfastrak is as high as 19,000 people per weekday.

And finally on the criminal justice front, Connecticut is leading the nation, and is now safer than it has been in fifty years.

Our prison population has dropped significantly, and high-risk, violent offenders are serving more of their sentence than ever before.  Recidivism has declined substantially.  This progress has allowed us to save taxpayers $70 million in the current fiscal year.

All of this work – all of it – is making Connecticut a better, more desirable place to work and live.

I need to do one other thing.  I would be remiss if I didn’t take a moment to stress the importance of predictability and stability in the wake of November’s presidential election.

I have no desire to rehash or re-analyze the results – we all get plenty of that from cable news.  But I do want to offer two brief thoughts on what we can learn from November, and how it might impact our work here at home this session.

First, it is now more clear than ever that too many Americans feel disconnected from their government.  They feel the system isn’t working for them – that they aren’t able to take part in the American Dream.

While we might disagree on the role of government in that effort, on whether it should be more active or less, I offer to you that a greater degree of predictability in government – in all government, at all levels – will help reengage and reinvigorate our democracy.

Second, regardless of your party or who you voted for, most of us can agree that this presidential transition has been nothing if not unpredictable.  It has left some people and some communities feeling anxious and uncertain.

But let me remind you of this – our state has a long legacy of acceptance, compassion, and fairness.  Regardless of whether your family settled in Connecticut 300 years ago or three days ago, you are welcome here.

As the people of Connecticut navigate a changing national landscape, we will continue to ensure that every state resident is treated with dignity and respect.

That will not change.  Not now.  Not ever.

…

This year, here in Connecticut, we must focus on these historic strengths as we also work to make our budget and our economy more vibrant.  We must continue our progress together.

I’m asking for your partnership.  I’m asking that we approach this session and this budget in a spirit of authentic, bipartisan collaboration.

Next month, I am going to come back to you with more details on the topics I laid out today: about how government should continue to become smaller and more effective; about how we can continue working with our partners in labor to create a sustainable benefit system that we can afford not just now, but into the years ahead; and about why we should find a fairer way to fund public education, so that we can ensure dollars are going to where they are needed most.

All of it will be geared toward building a more predictable budget and a more sustainable Connecticut economy.

We are in this together, and together we shall prevail.

Thank you.  God bless you, and may God bless the great State of Connecticut.

Fiscal Year 2018-2019 Biennial Budget Address
Governor Dannel P. Malloy
Hall of the House of Representatives, State Capitol 
February 8, 2017

Mr. Speaker, Mr. President, distinguished members of the General Assembly, thank you for inviting me once again into the people’s house to address you.

I want to recognize and thank my trusted friend and advisor, the best Lt. Governor in the United States, Nancy Wyman.

I'd like to thank my wife Cathy and my son Dannel for being here today, and for their love and support.

And as always let us thank and honor the brave men and women of Connecticut serving in our Armed Forces around the globe.

INTRODUCTION

One of the basic principles of our country is that if you’re willing to work hard, you should have the opportunity to succeed.  You should be able to buy a house, afford health care, or send your children to college.

It’s a fundamental promise that has come to be known as the American Dream. It’s why people from around the world – the huddled masses yearning to breathe free – brave the journey in the hope of a better life here in America.

At all levels of government, so much of what we do is really about delivering on that fundamental promise. While we can disagree strongly on policy or politics, we collectively judge ourselves by how many of our constituents have the opportunity for success.

That concept – the opportunity for success – is what I want to talk to you about today.  But not just the opportunity for individual state residents.  Rather, I want to speak about the opportunity that we provide to our towns and cities as well, so that they also can succeed.

The truth is that, for too long, we’ve allowed certain communities to be disproportionately impacted by the state’s fiscal challenges.  While we’ve made advancements in recent years to address this inequity, I don’t believe that we’ve gone far enough.

Disparities have persisted and grown over the years, creating large pockets of concentrated poverty where communities sometimes sacrifice education for services – or services for education – or both. 

It’s a vicious cycle that began decades ago, one that hinders poorer, urban communities, leaving them with the highest tax burdens, troubled educational systems, and substantially fewer city services… causing them to be even poorer still. In turn, suburban towns feel as though they’re shouldering too much of the burden of neighboring cities.  And all the while, rural communities feel forgotten altogether.

The result is a broken, disparate system where towns are pitted against one another, constantly fighting for limited state dollars.

As towns have been forced into this race to the bottom, their state government has yet to build the kind of world-class education system necessary for growing a new generation of workers.  We’ve yet to build a modern transportation system that efficiently moves people or products from place to place.  And we’ve yet to build enough thriving, vibrant city centers – with lower tax rates – where industry and businesses want to grow.

The truth is, other states have had the foresight to make necessary investments in these areas, and as a result they’ve gained a competitive advantage on us. 

But it’s not too late.

The opportunity is before us to turn the tide this year so that we can compete nationally and internationally in our own right.

To do it, we’ll need to continue building a better, fairer system for supporting town services and local schools. We’ll need to continue investing in a modern transportation infrastructure that meets the needs of both our residents and our businesses. And we’ll need to continue growing vibrant city centers – communities that are more than just great places to work, but also great places to live and raise a family.

This biennium budget lays the foundation for that kind of progress.  Progress that doesn’t just help our big cities, but that bolsters all of Connecticut.

We are a small state, and our towns are interconnected. 

Growth in Hartford means growth in Bloomfield and Windsor. 

More jobs in Waterbury means more jobs in Cheshire and Beacon Falls. 

A more vibrant New London means a more vibrant Ledyard and Montville.

We can rise together; or we can fall together. We can lift one another up; or we can drag one another down.  Our future depends on the decisions we make today. 

This session. 

This year.

CONTINUED SAVINGS IN STATE GOVERNMENT

The budget I present to you contains a total of $18 billion in General Fund spending. 

This keeps us within the spending cap and growing at a pace well below inflation. More importantly, it does it while making required increased contributions to our pension systems of more than $357 million in the first year.

If we enact a budget that spends only the amount I’ve proposed, the result would be an eight-year period where Connecticut’s general fund budget grew an average of only two percent.  That is substantially less than the rate of growth in the prior eight years.  And unlike those prior eight years, we’re keeping spending in check while also fully-funding our pensions.

This year, we can build on our record of fiscal responsibility. To do it, my plan contains $1.36 billion in new spending reductions.  These cuts are not made lightly, and I know they will include things that people in this chamber strongly support.  Let me assure you, they include things that I myself strongly support. 

But our economic reality demands that we re-envision state government.  Together, we need to provide essential, core services and we need to find ways to do it at less cost to taxpayers.

The truth is, we’re getting pretty good at doing exactly that.  Last year, we cut $850 million in spending from the adopted budget.  Those reductions were not easy.  They are a credit to all of you who took a hard vote in support of our state’s fiscal health, and I thank you for that.

This year, while you review my budget, it’s natural to focus on what we’re cutting back.  But I encourage you to also recognize the many, many important things we preserve.

For example, even as we cut spending, we are still putting millions of dollars toward helping Connecticut’s chronically unemployed get back to work and back on their feet.

We’re still providing the necessary investment to match every single chronically homeless person to permanent housing—making Connecticut the first state in the nation to do it.

We’re still funding new technology for law enforcement that will help keep crime at historic lows.

We’re still fully funding our critical arts and tourism awards.

We’re still redeveloping brownfields in every corner of this state, turning blighted properties into economic opportunities.

We’re still committed to supporting people with intellectual disabilities – we do it with millions of dollars in new funding in my proposed budget.

And finally, even as we cut back, we’re still going to keep Connecticut’s beautiful state parks open and available to all our constituents.

We’re doing all these things, and so much more in this budget.

Of course in order to preserve these core functions, we need to guarantee that spending remains in check. 

To that end, I am once again proposing a strong constitutional spending cap, and I hope you'll join me in making it a reality this year.

PARTNERING WITH STATE EMPLOYEES

Of course, as we continue to make reductions to state agencies, we also need to redefine the relationship between state government and state employees.

As I said last month, my administration is engaged in productive conversations with state employee representatives.  Those discussions can and will continue to play out in good faith, and I’m hopeful that we will reach a positive conclusion in the weeks ahead.

At the same time, I have an obligation to submit a balanced budget to this General Assembly.  It’s only appropriate that I reflect my goals for labor savings.  To that end, to help close the $1.7 billion hole we face, the budget before you assumes approximately $700 million in state employee labor savings.

The budget also details how these savings could be achieved should we fail to reach an agreement with our employees, because presenting a budget without planning for this contingency would be irresponsible.

Now, while I will not betray the confidence of my administration’s conversations with labor thus far, I do want to say a few things about the potential for a new labor agreement. 

First, I want to once again acknowledge and commend our state employees for what they’ve already sacrificed to help balance our budget.  And more importantly, I’d like to thank them for the hard work they put in each and every day serving the people of Connecticut.

Public service is a calling, and an honorable one at that.  I’m proud to be a staunch, lifelong advocate for the right to organize and the right to collectively bargain.  I respect public employees, and it is my sincerest hope that asking for their partnership this year should not diminish the good work and real savings we’ve already achieved together.

Here’s something else I want to recognize, and it’s something I would like everyone in this chamber to keep in mind in the coming weeks. State employees have an existing contract, one that was originally negotiated 20 years ago by a former governor – John Rowland. 

In other words, we are not starting from scratch when we revisit the SEBAC contract.  While it is fair for us to ask for savings, it’s equally fair for our employees to also ask for changes as long as the end result is a more affordable and more sustainable labor agreement.

Finally on this topic, let me say that I am very hopeful we can achieve a positive conclusion and meet the labor savings target laid out in my budget.  It won’t be easy, and that’s fine. I think we’re up to the challenge.

If we stay at the table, if we treat one another with respect, and if we recognize that we all want what’s best for our state, then we can – and will – get this done.

A FAIRER SYSTEM FOR TOWN AID

Here’s the final topic I want to discuss with you today.

As I said to you from this podium last month, we cannot talk about more cuts in services, and we cannot talk about labor savings, without discussing town aid.

At more than $5 billion, municipal aid accounts for our single largest state expenditure.  And addressing town aid also means that we are addressing educational aid, which amounts to $4.1 billion – or 81 percent – of all municipal funding from the state.

Here’s a simple truth I know you all agree with: education is economic development.

A pipeline of skilled and prepared workers is essential for thriving industries and growing businesses.

It’s why we value our state’s public education system.  It’s why we’ve put so much effort into improving how our children are educated.  And it’s why we’ve raised the bar for our students in recent years.

And to be sure, they are rising to that challenge. Test scores are up, and graduation rates are at an all-time high.

But the system for how state aid is delivered to their schools is still not where it needs to be. A recent court decision deemed our school funding formula to be irrational and unfair.  I agree that we are not meeting our constitutional requirement of a fair and equitable public education system – one that guarantees every student the opportunity for success. 

Real reform must begin with our educational cost sharing formula, or ECS.  I believe the updated ECS formula in my budget is more equitable, more transparent, and more fair.

For the first time in more than a decade, the formula counts current enrollment.  We will stop reimbursing communities for students that they no longer have.  By recognizing shifting demographics in small towns and growing cities, state funding can change with time to reflect changing communities.

The new formula also uses a more accurate measure of wealth by using the equalized net grand list as well as a better measure of student poverty, allowing the state to direct support to communities with higher concentrations of poverty.

By considering a given communities’ ability to pay, we can adjust to what taxpayers can actually afford.  Because let’s be honest – if a city has a mil rate over 40, not only is that city failing its residents, but Connecticut is failing that city.

This proposed formula is fair and it is honest.  It is predictable and it is sustainable.  Let’s make it a reality together.

…

Of course, you can’t talk about education funding without talking about Special Education.

For the last quarter century, Connecticut has combined Special Education dollars into ECS.  The result is that we’ve unfairly obscured the real cost of Special Education in our communities. 

It isn’t fair to local leaders trying to balance their budget, and it certainly isn’t fair to students with disabilities and their families.

In my proposed budget, Special Education is now a separate formula grant from ECS, and Special Education funding is increased by $10 million. 

School systems will also be required to seek Medicaid reimbursement where available, ensuring that no community leaves federal dollars on the table.

…

Of course, as we work to make ECS and Special Education funding more fair and more equitable, we also have to grapple with how we fund this new system. 

As I’ve already said today, part of the way we do it is by continuing to reduce spending in our state agencies and by working to find savings with state employees.  Making those changes helps free up more dollars for town aid, but we need to do even more.

There’s a very large portion of education aid that’s almost always left out of the conversation.  I’m talking about how we pay for teacher pensions.

This year, state government is set to pay $1.2 billion for a system that supports 86,000 active and retired teachers and administrators.  So you see, when we talk about funding for education, we have to include the state contribution to teachers’ pensions as part of that conversation.

Now I want to be very clear – the teachers’ retirement program is a sustainable, well-organized system, and hardworking teachers make a six percent contribution to it.  I am not proposing that teachers’ benefits be limited or cut back.

Teachers retirement pension system has always been funded without any contribution from towns or cities.  My budget does not propose that we demolish that system or shift the entire costs to towns. 

But this year, as we continue making cuts to state services, and as we ask state employees to find saving, we need towns to begin sharing the cost of their employees’ pensions.  After all, teachers are municipal employees.  The state doesn’t pay the pensions of policemen, or firemen, or anyone else.

As such, my budget asks our towns and cities – all of them – to contribute one-third of the cost toward their teacher pensions. 

It isn’t just about saving the state money, I believe this is sensible policy.  After all, this funding is not distributed based on student need or relative town wealth.  Rather, it’s based entirely on local decisions about how much towns decide to pay their local educators, and how many teachers and administrators they employ.

Under my proposal, towns maintain that control but they do it with some skin in the game. 

Let me illustrate for you the disparity that this current system has created in communities across the state.

In the current fiscal year, the state is spending $24 million to cover the pension costs of teachers and administrators in our most affluent municipality, Greenwich – a school district that enrolls 8,800 students.

Compare that to the City of New Britain – a city with a higher concentration of poverty – which enrolls 10,000 students, where the state will provide only $18 million to cover pension costs for teachers.

That’s 25 percent less funding for a system with 14 percent more students.

I’m not blaming our wealthy towns for this inequity.  It’s not their fault.  We need to do a better job.  We need to make the system more reasonable. 

And to do that, we need towns to partner with their state in fully-funding teachers’ and school administrators’ retirement benefits—not all of the cost, but part of it.

My budget reflects this partnership – a re-envisioning of education funding to meet 21st century challenges.

…

Now, I know that state assistance is not always about dollars and cents.  Sometimes, we help the most when the state gets out of the way.

For our towns to thrive, we must remove bureaucratic red tape that is not producing a discernable benefit for taxpayers.

Last week, I proposed changes to do precisely that.  My budget will give municipalities greater flexibility and additional tools for making local government leaner and more cost efficient.

My proposals are designed to increase local control over budgets and contracts, keep down project costs, modernize out-of-date requirements, and remove unnecessary red tape.

This session, if we are going to ask more from our towns, it’s only right that we also free them from unnecessary burdens.

…

Of course, at the same time we are providing mandate relief, we can also increase transparency for how town aid is utilized. 

For communities that would receive additional state dollars in this budget, that support can only come with greater accountability for how taxpayer dollars are being spent – whether that be on education, city services or paying off long term debt.

Directing state aid and oversight to those who need it the most ensures that the collective strength of a region – or a state, for that matter – is that much stronger.  It is in our collective best interest that no town is brought to the brink of bankruptcy.

Over the years, our state has had various iterations of state boards to oversee towns experiencing financial distress.  My proposal this year builds upon lessons learned from these past experiences.  It will create a Municipal Accountability Review Board, chaired by the State Treasurer and the Secretary of OPM.

Ultimately, this board – empowered to review municipal finances – will oversee efforts to restore fiscal stability where warranted.

Through this tiered accountability framework, we can intervene early to help struggling municipalities.  And we can position the state to take action well before a city or town needs a bailout.

Surely, our towns and cities will sometimes struggle. It is our responsibility to put these municipalities back on the path to fiscal health. 

We can take action to avoid fiscal crises and then remove these communities from enhanced state oversight when appropriate, and when they’re ready.

…

Those are my ideas for changing town aid and for putting Connecticut on a path to addressing pockets of concentrated poverty in towns and cities across our state.

The details of how we get there are in the budget that is now before you.

As a former mayor, I know the view from town hall.  There will be voices in some communities who want to know why their town should receive less funding, while others receive more.  I know those voices will be well represented by each of you in this chamber.

In answer, my budget leaves $75 million in year one and $85 million the following year in local aid unallocated. 

This is my way of saying to you – the legislature – that I am ready to negotiate.  I am ready to hear your ideas on where that unallocated money is needed most.

When we come together and constructively debate our different ideas, the end result is that much stronger.

CONCLUSION

You see, the fact is the wellbeing and quality of life of all our constituents is interconnected, regardless of party, region, or zip code.

From the farmer to the factory worker… the nurse to the mechanic… the teacher to the actuary… all are impacted by the successes and failures of Connecticut as a whole.

Unfortunately, far too many people feel as though the system is rigged against them and their communities.  A history of shortsighted state government and a record of half-step policy fixes have left people believing that in order for one person or one community to gain, someone else has to lose.

I reject that notion.

Dignity, opportunity, prosperity – none of these are a zero sum game.

We are all guaranteed access to these fundamental rights.

This session, this year, we must reset the system for ensuring equal opportunity for success. 

We must guarantee that no community or family shoulders more burden than they can bear.

We must keep our promise to our students and teachers.

Together let’s ensure that all Connecticut communities see their fair share of success.

Let’s give taxpayers, communities, and businesses more predictability and more sustainability.

Let’s have the courage to collectively tackle the challenge of inequity in town aid.

Let’s do it so that ten years from now, no Connecticut city or town needs to levy a mil rate of 35 or more.

As we negotiate this budget, we should remember that we are in this together. 

It’s about more than just how my town or my community or my family did. 

It’s also about neighboring towns, neighboring communities, and neighboring families, as well.

We will rise or fall together, as one Connecticut.

And working together, I know we will prevail.

Thank you.  May God bless you, and may God bless the great State of Connecticut.

2018 State of the State Address
Governor Dannel P. Malloy
State Capitol, Hall of the House of Representatives
February 7, 2018

Mr. President, Mr. Speaker, Lt. Governor Wyman, and my fellow state officials, ladies and gentlemen of the General Assembly, members of the clergy, and all the people of our great state: thank you for the honor of inviting me once again into the people’s House.

I want to thank the best Lieutenant Governor in the world, Nancy Wyman.

As always, let us thank Connecticut’s brave men and women serving our nation here at home and around the globe.

And finally thank you to my wife Cathy, our children, and for the first time our granddaughter Grace Elizabeth for their love and support.

…

Historically, when I come before you to begin a new session, I spend much of my time focusing on our state budget and my ideas for keeping it in balance. This year, I began that conversation a little early.

On Monday I put forward a proposal to keep our budget in balance this fiscal year and next. And last week, I issued a detailed plan to shore up our Special Transportation Fund to the benefit of every business and every family in Connecticut. Those plans and their supporting legislation are now before you. 

As always, there will be plenty of time throughout the session for us to continue our conversations about responsible stewardship of state resources. I plan to work with you on all those things. And to be sure, we have quite a lot of work to do.

But for this day, with this opportunity, and with this honor to address you once again, I’d like to do something different. I’d like to begin the 2018 legislative session by focusing our attention on just one thing. Something that is a simple concept, but also a bold aspiration.

I’d like to talk about fairness.

Fairness lies at the very center of our national origin, and our national purpose. It is part of the American promise – that if freedom means anything, it means a fair shot at a decent life for all people.

Fairness is also the compact we make with one another – in our homes, in our neighborhoods, and in our workplaces. It’s the golden rule we teach our children: to treat others as you wish to be treated.

No matter your creed or culture, no matter when or how you or your ancestors arrived in this country, fairness is a common sensibility we all hold dear. It is a touchstone of what it means to be American. And here in Connecticut, the pursuit of fairness has been a constant throughout our history. 

After all, Connecticut is the birthplace of John Brown, and Harriet Beecher Stowe.

Fairness inspired our state heroine, Prudence Crandall, when in 1832 she defied unjust laws by inviting black women from around the country here to Connecticut to be educated.

In 1869 fairness drove Frances Ellen Burr and Isabella Beecher Hooker to form the Connecticut Woman Suffrage Association, helping lead the way nationally in the fight to allow women to vote.

Here in Hartford, restaurant cooks and waiters sought fairness in 1902 when they formed Connecticut’s first black labor union, fighting for their declared principles of ‘living wages, justice, protection, and equal rights.’

And in 1943, fairness was demanded by the inmates of our Danbury prison, when they staged a 135-day hunger strike to protest racial segregation in their dining hall. Because of their efforts, Danbury became the first federal prison in America to have integrated meals among its inmates.

This common thread of fairness has woven its way through Connecticut’s history, all the way to present times. In recent years, we have worked hard to ensure that when it comes to equity, justice, and basic compassion for one another – our actions have lived up to our rhetoric.

We’ve been driven by Connecticut Fairness.

Connecticut Fairness recognizes that love comes in all forms. It’s why in 2008 we became just the third state in our nation to legalize gay marriage.

Connecticut Fairness means fighting discrimination wherever we see it. It’s why in 2011 we ensured that all people’s rights were protected – regardless of their gender identity or expression.

Connecticut Fairness means that people should be valued in their place of work. It’s why we were the first state in the nation to raise our minimum wage over ten dollars.

Connecticut Fairness means that we protect survivors of domestic violence. It’s why in 2016 we prohibited the possession of a firearm for anyone who becomes subject to a temporary restraining order.

Connecticut Fairness means we don’t punish children for the actions of their parents. It’s why we passed the Connecticut DREAM ACT – to make sure that kids brought to this country by their parents still have access to affordable higher education.

And Connecticut Fairness means we help those most in need. It’s why we’ve welcomed vulnerable people when other states would not – from our fellow citizens in Puerto Rico, to those fleeing war and poverty around the globe.

Simply put, Connecticut Fairness means we take care of one another – especially our most vulnerable. We reach out to one another across our great cities and towns, across our neighborhood streets, and across the aisle here in state government.

…

This year, I urge you to consider Connecticut’s rich tradition of fairness in the context of a national and global landscape that is changing by the hour, leaving many of our constituents feeling anxious about their future, and about the future of their state and nation.

Too many people are falling behind financially, even as they work harder and harder. The gap between the rich and the working poor continues to grow.

Too many historically marginalized groups are still subject to harassment, oppression, and unequal treatment. 

Too many of our fellow citizens are denied a real chance, let alone a second chance, at a good and productive life.

Too many people are embracing a newfound disregard for truth; it’s a bizarre reality where facts are called fake, and the free press is mocked and maligned in a way that we have never seen before.

We find ourselves at a defining moment in our history, as a state and as a nation. We can no-longer afford the luxury of silence, or the alluring comfort of the status quo.

This year, in the face of growing national inequity and unfairness, I want to begin a conversation about a series of commonsense changes we can adopt to advance our proud tradition of Connecticut Fairness.

I’m going to touch on a number of diverse topics that reach across the spectrum of services we offer our citizens. As I share them, I want you to keep in mind that each of these proposals builds upon work we have already begun together during the past seven years.

We won’t be able to solve every problem or right every wrong, but together we can send a signal to the rest of the nation – and indeed the rest of the world, that Connecticut leaders will always recognize injustice and inequity, and that we will meet it head on with compassion, with love, and with fairness.

… 

Let’s start with a basic human right that should never be out of reach for anyone. Let’s talk about healthcare.

When the federal government finally gave Connecticut the chance to provide affordable healthcare to more of our citizens, Nancy Wyman got to work. Under Nancy’s leadership, Connecticut has built one of the most successful healthcare exchanges in the nation. We’ve cut the number of uninsured people in half.  Just this year, over 100,000 residents found their health insurance through our exchange.

But now, affordable healthcare is under assault in Washington. If we fail to act, premiums will rise, and lifesaving treatments will be put out of reach for more and more families.

Connecticut Fairness should mean keeping health insurance affordable for everyone. We must take action to ensure stability in our insurance marketplace and to contain premium costs for consumers. We can do something our neighbors in Massachusetts have already done on a bipartisan basis and under a Republican governor.

Together, let’s pass a bill that preserves the most vital elements of the Affordable Care Act – including the individual mandate.  Let’s make it clear that in Connecticut, healthcare is a fundamental right.

And while we’re working on health care, we can do one more thing: we can pass a law that ensures that, irrespective of what happens in Washington, birth control for Connecticut women will remain cost-free.

…

Connecticut Fairness also means that hard-working people should know that they will not lose their job just for getting sick. It’s why in 2011 we passed the first ‘paid sick’ law in the nation.  Since then, eight states and Washington DC have followed our lead.

A person should not worry about losing wages when they catch the flu.

A working parent should not need to choose between lost pay and taking care of a sick child.

And customers should not worry about being served by a sick employee.

This year, the opportunity is before us to improve our paid sick leave laws.  Let’s catch up with states that have now surpassed us on this front.

Together, let’s pass a bill that closes loopholes, protects even more of our workers, and makes Connecticut a healthier place to live and to work.

…

Connecticut Fairness also means that as we worry about the health of our residents, we also need to worry about the health of their environment.

The science is indisputable. Our climate is changing – temperatures continue to rise, the ice caps continue to melt, and our weather is more severe than at any time in modern history.

In 2008, Connecticut set ambitious goals to reduce greenhouse gas emissions by the year 2020, and to the credit of many people in this chamber, we hit that goal eight years early.

In recent years, we’ve diversified the kinds of energy we use, bringing in more than a billion dollars in new investments in fuel cells and other green energy and creating 13,000 new jobs along the way.

But we have to do more, because Connecticut Fairness means caring not just about our own immediate interests, but also about the interests of future generations.  And the truth is, future generations face an undeniable threat: sea levels in Connecticut are now set to rise nearly two feet by the year 2050.

To help communities up and down our beautiful shoreline, we need to create a new comprehensive resiliency plan – one that gives Connecticut towns the tools and the resources they need to protect their residents.

And we can’t stop there.  We have to lower carbon emissions everywhere.  We have to once again make Connecticut a national leader in green energy.

Together, let’s create a new, more aggressive target for clean air. Let’s mandate that by the year 2030, 75 percent of Connecticut energy is clean energy.

… 

Connecticut Fairness also means that people across our state should have access to safe, affordable housing.

For too many working families, the cost of housing dominates their monthly budget. The simple truth is that no one should have to choose between a roof over their head or health care; a roof over their head or warm clothing; a roof over their head or nutritious food for their children.  These are choices that no family should have to face.

It’s why over the past seven years we’ve funded nearly 20,000 new units of affordable housing in Connecticut. It’s why we worked so hard to make Connecticut just the second state in the nation to end homelessness among veterans, and why we have led the nation in the fight to end chronic homelessness for all of our people.

We know that a diverse mix of housing creates better neighborhoods. It enables young people graduating college to move back to their hometowns. It allows seniors to remain in their communities. It lets teachers and police officers and firefighters actually live in the towns that they serve.

Unfortunately, there are still too many places in Connecticut where the supply of affordable housing is simply not keeping up with demand.  We need to take action this year to build more housing. We need to incentivize cities and towns to develop more inclusive options for their residents.

We can do it by building upon the efforts of the bipartisan Fair Housing Working Group that has been focused on recommitting Connecticut to this important endeavor.

Together, let’s pass a bill that ensures that all people have a place to live, regardless of their income or their zip code.

…

Connecticut Fairness also means that the wellbeing of our constituents always takes precedence over the desires of powerful special interests.

We’ve held true to this maxim before. During some of the darkest days in our history, in the aftermath of an unspeakable tragedy of senseless gun violence, state leaders emerged united and determined.

We passed bipartisan gun violence prevention laws that are among the strongest in the nation, and the people of Connecticut are safer for it. In fact, over the last four years violent crime has dropped faster in Connecticut than in any other state in the nation.

While Connecticut has done its part, Congress continues to capitulate to the demands of the NRA over the demands of the American people. It is not right, and it is not fair. We have a duty to build on our past work together, and to continue protecting Connecticut families.

After last year’s horror in Las Vegas, Congress tried and failed to ban modifications that allow weapons to fire at machine gun-like speed. These devices are cheap, they are deadly, and they are completely and utterly unnecessary in our society today.

After all, it is only fair that small children not face terror in their schools; that churches remain places of worship, not scenes of violence; that concerts are venues for celebration, not carnage.

Surely, regardless of where each of us stands on the second amendment, we can all agree that no innocent person should know the terror of gunfire raining down on them at a rate of 90 bullets every ten seconds.

Together, let us do what Congress could not do. Let’s close dangerous loopholes and ban bump stocks in the State of Connecticut.

…

Here’s something else Connecticut Fairness recognizes: everyone deserves a legitimate second chance. This includes our youngest adults who are just beginning to build a life of their own.

Unfortunately, all too often, a young person’s opportunity at a genuine second chance is unfairly derailed before they’re even old enough to buy alcohol or rent a car.

The research is clear: the brains of young adults are still developing well into their twenties.  And the fact is, under current law the infractions of the vast majority of young adults in our court system do not result in even a single day of jail. And yet, simply appearing in adult court becomes an indelible mark on their record, potentially damaging them for life as they apply for college or a job.

In response, since 2010 Connecticut has twice raised the age for what constitutes a juvenile in our court system – not once, but twice.

The result has been less crime, fewer victims, fewer prisoners, and reduced cost for taxpayers. In fact, our efforts have been hailed as a national model for success.  We know what works.

This year, it is time to take another measured, sensible step forward. We can ensure that young adults who have not fully matured are not branded for the rest of their lives for mistakes they made when they were young.

Together, let us pass a bill that offers Connecticut’s young adults a real second chance. Let’s give them classrooms instead of prison cells, and opportunity instead of incarceration.

… 

Another thing that Connecticut Fairness entails is protecting a person’s right to vote. Our democracy depends on open and fair elections, and Connecticut has a track record of protecting and expanding voting rights.

In 2012 we passed ‘same-day registration’ so that eligible voters could sign-up on Election Day and cast their ballot in the town in which they reside.

In 2016 we implemented one of the country’s most comprehensive “motor voter” programs, making registration easier and more convenient.

But still, our modern lives and busy schedules don’t always align with a 14-hour block of time for voting. People who work hard and follow the rules should be able to express their most fundamental democratic right. That’s why I will continue working with Secretary of State Denise Merrill and with everyone in this chamber to make voting more accessible.

Here’s one simple but powerful way we can start. Together this session, we can pass a constitutional amendment that would allow all Connecticut residents to vote early for any reason.

And on this topic, let us not waste a moment in our effort to make voting easier and more accessible.  Let’s plan ahead. Let’s look at best practices around the nation for increasing voter participation.

To that end, today I will issue an executive order directing my administration to explore and report on the feasibility and benefits of creating a ‘vote by mail’ system in Connecticut. Let’s work together on this effort.

…

The final few ideas I want to share with you today are all squarely focused on furthering the cause of fairness in the workplace.

We can start with fair wages.

Holding a full-time job should afford a person a standard of living that meets their basic needs. In 2014 we led the nation by raising our minimum wage to more than 10 dollars an hour. But the truth is, over time, the cost of living continues to rise. Basic necessities like rent, food, and utilities continue to increase. As a result, family budgets are more strained.

We should be leaders on this issue once again.

Senator Looney, you have been a stalwart champion for working people in our state. I am committed to working with you and members of both chambers this session. Together, let’s pass a bill that ensures another January does not come and go without a raise in Connecticut’s minimum wage.

I also want to focus for a moment on the more than 8,000 professionals caring for our loved ones who are elderly or disabled. These hardworking people do lifesaving work, and they do it ‘in-home,’ which is better for their patients and for Connecticut taxpayers. They deserve a livable wage, and to finally be covered for workers compensation.

A negotiated contract that will soon come before you for approval will do just that. It’s the right and fair thing to do, and I urge you to support it.

…

Connecticut Fairness also means that people should be paid according to their know-how and their skill, not their gender or their race.

We know that asking for salary history disproportionately impacts women and people of color. When a person begins their career underpaid, they are unlikely to ever catch-up.  That’s why Connecticut took a stand against unfair compensation practices.  Together, we passed a law prohibiting employers from silencing workers when it comes to salary. 

But we have more work to do. On average, women in Connecticut still only earn 82 cents for every dollar that a man makes. For women of color, the disparity is even more glaring. Our moral compass demands that we do better.

This year, we should build upon prior successful efforts to promote fair pay. We should encourage employers to base their salaries on the qualifications of an applicant, the demands of a given job, and the value of that position in the marketplace – not on how much someone was previously paid.

I know that legislative leaders of both parties – as well as Senator Bye, Representative Porter and others – are working hard on this topic, and I want to work with you. Together this year, let’s pass a bill that helps make sure every person in Connecticut receives equal pay for equal work.

…

Connecticut Fairness also means that everyone has the right to feel secure and free of harassment in their places of work.

The fact is, most Americans spend the majority of their waking hours at work. It is also true that our places of employment often come with an innate power structure that can leave too many people vulnerable and open to abuse.

Far too many people have been denigrated, intimidated, and violated in their workplace. I want to applaud the legions of courageous women across our nation who have come forward to share their stories of sexual harassment.

The reality is we are long overdue for an honest reckoning over harassment in the workplace.  There is an immediate need to change workplace culture – from small towns to Hollywood, from the mailroom to the boardroom, and from the jailhouse, to the statehouse, all the way up to the White House.

Very often, men see women first and foremost as our mothers, our sisters, and our daughters.  But women are not simply a reflection of the men around them. Their value isn’t defined by something external, but rather something innate – a basic human dignity we all possess, and that we must all recognize in one another.

That’s why we need to hear the voices of the victims, we need to believe them, and we need to act.

This session, let’s have a conversation about respect, about boundaries, and about basic human decency. Let’s improve and expand training in all workplaces, public and private. Let’s empower bystanders to help stop harassment. Let’s focus on changing our culture, not just changing compliance. And let’s make sure these efforts endure beyond this year, and beyond this generation!

Together, let’s pass a bill that moves this important conversation forward, because we know we can no longer wait.

Time. Is. Up.

…

My friends, as we begin another session together, I am reminded of my mother’s words.  She told me every day that we have an obligation to leave this world a better place for our having lived in it.

That is the obligation we all feel. It is why we ran for office in the first place. It is what led us into this chamber. It’s our shared belief in Connecticut Fairness.

Together, we have the advantage. We have strength in numbers. Good people are never outnumbered. Not in this state, not in this nation.

Again and again this past year, in the face of growing anxiety across our nation and around the globe, we saw clear examples of our common humanity.

As minority groups have been marginalized and harassed, and as the government deports law-abiding residents, communities are banding together to say “no” and to demand that Congress take action.

As gerrymandering and voter suppression have taken root in far too many places, people who just a few short years ago would never have considered running for office are now putting their names on the ballot – and winning.  They are standing up and demanding to be heard.

And as women from every walk of life have faced degradation from the highest office in our land, they are now marching en masse in some of the largest single-day demonstrations in our nation’s history.

Let us offer a beacon of hope to all these people fighting on the right side of fairness.

We can hold fast to our common humanity. We can strive to be evermore inclusive, and evermore compassionate. We can stop the tides of prejudice and hate from washing away our progress and drowning our ideals. 

Our fight to build a more just and more equitable society can never be deterred.

History will judge us by our action this year, this session, to build a better, fairer Connecticut.

So let’s get to work.

God bless you, God bless America, and God bless the great State of Connecticut.