On Jan. 19, Connecticut

Gov. Dannel P. Malloy sat down with The Day's

editorial board to discuss a wide range of issues.

This transcript is excerpted from that hour-long meeting.

Q: Have you had the chance to speak with New London's new mayor?

MALLOY: Yes I did, I had a conversation with him a week or two ago about the Coast Guard Academy and offered to be as helpful as we could. Understanding that the community did not want to exchange the waterfront portion of the property (I) certainly urged him to, which he had already acted on, to reach out to the academy and find a way for us in this region to meet their needs and offered to play any appropriate role.

Q: What about the potential for locating the future Coast Guard museum in New London?

MALLOY: We're aware that there's a desire to build a Coast Guard museum. We certainly have a preference that it be built in this area, and in New London specifically ... and we stand ready to have those discussions. I think the Coast Guard's taken the position they need to resolve their current space issues first. I think that's fair and legitimate on their part. We should be able to figure this thing out.

Q: As a former mayor yourself, did you offer Mayor Finizio any advice?

MALLOY: (Long pause) The rest of our discussion is our discussion.

Q: You have said you want the coming legislative session to focus on education. What are the administration's priorities and will your office submit specific legislative proposals?

MALLOY: We will propose specific legislation and specific language, and again, it will be unlike anything that Connecticut has seen on the educational front previously.

I believe in my heart of hearts it has to be done in a comprehensive fashion. So every one of the principles will be addressed with specific language that carries those out and obviously the next question is, how much money can we put to the issue? I think we're making those determinations …

What's driving much of our thought is that there are ... districts that are more troublesome than others, probably in the area of 29 or 30 ... that really need more attention so we've got to get away from the one-size-fits-all attitude and concentrate on lifting the achievement levels in those, let's call them, 30 school districts. If we do that, it will make a great difference in closing the achievement gap, lifting up achievement levels of the children in those districts. And by the way, most of them are the biggest districts, not all, but most of them are the bigger districts in the state.

Q: Is the state successfully working with the labor unions to achieve savings and improve the efficiency of government, as envisioned by the labor agreement?

MALLOY: I think … we are making progress. We had an interesting short-term setback that's good in the long term. We had more people sign up for the changed (health) benefit than we had anticipated, so in the short run we don't recognize the additional monies that they would otherwise be paying, but in the long run they're in a system that is going to encourage good health. So that's a bit of a setback but we budget around it, we're going to end the year in black.

And with respect to savings, we're implementing stuff literally every day that I think is making us more efficient. For instance, yesterday we rolled out and spoke about a system to make it easier for our not-for-profits to comply with contract-making with the state. It's going to save them money and it's also going to save us money. It's the elimination of duplication that's going to save us money. Every time we act on a permit request more quickly than we used to means that we're becoming more efficient.

We're doing all that stuff every single day. There's no doubt that Connecticut's government is leaner today than when I became governor, has fewer people working for it, is meeting adjusted timelines, and making progress.

Q: What is your outlook for the economy? Do you expect to see some traction when it comes to job creation and growing the economy?

MALLOY: Unemployment got as high, if I remember correctly, last year as 9.3 percent, and ... we're going to get new numbers on Monday. (The new data showed unemployment dropping to 8.2 percent).

The answer is absolutely (we are getting economic traction). We can see it.

I think this jobs proposal, this package that we put together in October - that everyone forgot about because we had the worst winter storm in fall in our history - there's $630 million to be spent over a five-year period of time to reshape our economy. But one of the things that we absolutely did in this thing was to build incentives for hiring, anywhere from $500 to $900 a month for anywhere from six months to three years depending on the class of people and that sort of thing.

I visited a company yesterday that was reported on which is our first express package, assistance to small business, and from start to finish it took 40 days to process and make a loan of $202,000 and make a grant of $100,000, which is leading to the hiring of about 12 more people. Connecticut a year ago couldn't have made a decision on anything in 40 days, nor could you get a permit out of DEEP in 60 days or get approval for modifications to a road system in 60 days, but those are all our targets and we're meeting those targets more often than not … We have 200 applications outstanding right now and every one of those is tied to job production.

Q: Can you talk about the plans to build a branding campaign to promote Connecticut tourism and your approach to trying to attract tourists to Connecticut?

MALLOY: Vitally important, I mean, I've been talking about that since before I was elected. We put $15 million into each of the years of the biennium budget. A process was undergone to select a company. My proviso has been that this has got to be a campaign that has legs, meaning that we're going to build a campaign that can last for years and addresses our strengths and weaknesses.

I want people in Connecticut to feel better about Connecticut. I want people outside of Connecticut to feel better about Connecticut. I want people to see us as a place to live, a place to work, a place to visit for tourism and conventions, and that's what we have going.

I think we have a stronger relationship with the attractions in this part of the state than we've had in the past. I think this portion of the state has got to benefit from that campaign. There's no way you can't.

Q: Have you developed an approach to Internet gaming and growing casino competition in other states? Are you having discussions with the tribes that operate the two casinos in southeastern Connecticut?

MALLOY: Yes, and (there are many) possibilities … we (are) talking about … whether we should have Keno, whether we should have online purchase of lottery tickets, which I actually do support just for convenience purposes. If I want to buy a year's worth of Lotto numbers and lock in my numbers now, and do it electronically, why shouldn't I be able to? To what happens to the casinos if online comes and it's tied to the success of other states, and how do we use the two to three years, maybe it's two to four years, between now and Massachusetts getting up and running with their ... casinos, how do we strengthen our destinations?

We have two fully developed casino complexes with lots of hotel rooms, lots of convention space, lots of other entertainment space. That's unlikely to be replicated in the near-term in Massachusetts, so how do we build on the strength of those facilities, how do we encourage more activity ...

So these are comprehensive discussions, but I don't have anything to report to you, I'm just telling you some of the issues that we're talking about.