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New London — Gubernatorial candidate and Greenwich businessman Tom Foley said he appreciates the endorsements from former Lt. Gov. Michael Fedele, who ran against him in 2010, and Danbury Mayor Mark Boughton, who has bowed out of the 2014 gubernatorial race, and expects state Sen. John McKinney of Fairfield, a fellow Republican also running for governor, to follow suit.
"I think the right thing for John to do is to drop out of the race and endorse me, and I hope he does it," Foley said to The Day's editorial board on Wednesday. "John is a good guy, he has a political future, but I think to run in this primary and to lose, which I think is what will happen, doesn't make sense for him. And to be taking on a Republican candidate who came as close as I did in 2010, is likely to win the primary and also has a very good shot of winning in November, I think is a mistake."
McKinney's political future could turn out similar to Fedele's, he said.
Foley said he thought Fedele "damaged himself politically" and lost the Stamford mayoral election in 2013 because of his behavior in the 2010 gubernatorial primary.
During The Day's editorial board meeting, Foley discussed his views on union contracts, pensions and state budgets, which differ from McKinney's. In light of a state budget that grew 2.5 percent this year compared to last year, looming long-term debt - about $64.6 billion - and slow economic recovery, Foley outlined plans for economic growth and government accountability.
In contrast to his opponent McKinney, Foley has said he would not attempt to open state employees' pension and health insurance benefits contracts, which have a $44 billion funding gap.
Neither he nor McKinney could unilaterally force the contract to be opened because the unions and the state would have to decide to open the contract, he said.
The state employees' contract for pensions and health insurance benefits is in place until 2022 and most state employees' contracts for wages and working conditions are in place through 2016, according to an Office of Legislative Research report. State employees are protected from layoffs until June 30, 2015.
"Many times when the wage contract is negotiated the union agrees to incorporate a new agreement on benefits as part of that," Foley said. "So if they wanted to include a reopening of that contract as part of negotiating a wage contract, I would certainly be open to that."
Contributions the state is required to make to state employees' pensions will reach $2.5 billion in 2032. In order to address the growing pension costs, Foley said he wouldn't be increasing taxes as Gov. Dannel P. Malloy did in 2011, but he would examine how much the state spends on health care services for state employees and retirees and on Medicaid.
"I am not talking about changing benefits, but I am talking about if you have a heart attack and you go to the hospital here in New London, that's probably a $100,000 bill or more, and you know is there a way to make it $80,000," Foley said. "You do that by sitting down with hospitals and other care providers and say, 'How can we work together to reduce the cost of health care services in Connecticut?'"
This approach would free up cash in the state budget for pension obligations and lowering taxes, Foley said.
Foley has said he would hold the $19 billion state budget flat for two years while McKinney has said state spending must be reduced. Foley has said holding the budget flat, which means not increasing spending by about 7 percent based on year-over-year growth assumptions that state agencies make, is cutting spending. Each year state agencies list the amount of money they need to provide services next year based on state law and the services they provide currently. Lawmakers and governors have often not provided the entire amount requested by state departments in annual budgets.
"In a move calculated to prevent Mr. Foley from having to account for real spending reductions, the "flat-fund" proposal uses a Malloy-like gimmick to show savings: he compares this year's actual expenditures to next year's current services and claims a savings," McKinney said in a news release. "But every honest person knows that spending reduction means that you actually spend less this year than you spent last year - not that you spend the same amount as you did last year."
When it comes to economic development policies, Foley said that Malloy has been living in the 1960s.
"Bribing people to keep jobs somewhere is a short-term strategy that doesn't work," he said.
He called the $300 million investment in Jackson Laboratories for 300 jobs over 10 years and the $400 in tax credits for United Technologies Corp. "crazy numbers."
Foley said he would stop the "corporate welfare" that is a burden to taxpayers, would examine and remove regulatory burdens and get rid of the $250 business entity tax for companies with 50 employees or less.
Other ways to reduce taxpayers' burdens would be to make state agencies more productive, not fill positions when state employees leave and hold state workers accountable, Foley said.
Foley said Amistad America, the organization that operates the schooner Amistad, lost its nonprofit status and continued to receive about $400,000 annually even though it couldn't account for $8 million in state funds, is an example of how Connecticut's state government operates.
"This is not just Amistad, this is how our state government has been run, money gets wasted and isn't accounted for and there is very little accountability for people who run the departments of state government," he said.
The solution, he said, was to have good people in key jobs and to make clear to employees that they would not remain in their jobs for long if they were "incompetent."