Fighting for Your Future in Connecticut: It’s a Matter of Respect
November 2, 2018
I want to thank the residents of the 143rd district for their active participation in our representative government.
Everything I do as your representative starts with you. My job is, and always has been, to represent you. Not a party. Not an ideology. You.
I’m grateful that so many of you take the time to discuss with me what really matters to you.
The concern I hear most often from people of all ages is the fear that neither they nor their families can have a future in Connecticut. You’re worried about declining home values, our sluggish economy, and our overall tax burden. Often you tell me you’re considering leaving the state. I take this seriously, because many of our neighbors have made that choice, and Connecticut’s population has been shrinking for the past three years.
Addressing these issues has remained my priority. Every year, I’ve helped craft budgets that funded essential services without tax increases. Because the legislative majority wouldn’t consider them, progress during my first years in the House was difficult. Recently, however, as the partisan balance in the legislature has attained virtual parity, progress has become possible. Last year, we passed a bipartisan budget that included tax relief, structural budget reforms, funding for seniors and people with intellectual disabilities, and sustained education funding.
But it’s not enough.
For Connecticut to recover, we must reduce taxes on people and small businesses, reduce spending, improve the business climate, and make critical investments, all at the same time -- not overnight, but purposefully, on a continuous basis, starting now.
Eliminating estate, gift, Social Security, and pension taxes, and reducing income taxes as revenue growth and spending cuts permit
Reducing structural spending by renegotiating state union contracts, streamlining government, halting nonessential borrowing, and reducing unfunded liabilities
Promoting economic and job growth with an economic development plan grounded in business-friendly policies – not one-off incentives
Investing in transportation, education, and essential social services.
Transportation is a priority for almost everyone. Restoring Connecticut’s finances will help fund necessary investments. I’ve been a leading advocate for protecting dedicated transportation funds, bonding for Metro-North upgrades, and improving commuter service, like restoring through-trains on the Danbury Line and reopening the Wilton station. I stopped expansion of the state’s powers to use transit-related eminent domain without town approval, and helped stop rail fare hikes and service cuts by reallocating existing revenues.
You’ve asked me to protect our schools from state interference and surprise funding cuts. As Education Committee Ranking Member, I authored the first comprehensive education mandate relief bill passed in years, prevented the transfer of teacher pension costs to towns, and made the state education funding formula more predictable.
I’ve responded to your concerns about gun safety legislation with unwavering support that has helped make Connecticut’s laws among the country’s strongest. I voted to ban bump stocks and to require people subject to temporary restraining orders to surrender their firearms, and voted for the landmark 2013 bill addressing gun safety, mental health, and school security. We still have much more work to do.
Many of you are concerned about protections for healthcare and reproductive rights. My support for the individual right to make personal reproductive decisions is absolute. I recently co-sponsored and strongly advocated for an important bill that protects personal health and reproductive options. It guarantees insurance coverage, regardless of federal actions, for 10 essential health benefits, including contraception, for women and families.
Your attention to environmental conservation is impressive. I’ve consistently advocated for environmental issues – open space preservation, public water supply protection, clean energy, direct electric car sales, and more – earning the League of Conservation Voters’ Environmental Champion distinction six times.
The work I’ve done based on your priorities has led to several endorsements and recognitions.
Endorsements: CT Business and Industry Association, National Foundation of Independent Business, CT Realtors, CT Association of Retired Teachers, League of Conservation Voters, Sierra Club, Planned Parenthood
Distinctions: Moms Demand Action for Gun Sense Candidate, CT Education Association (CEA) Honor Roll.
One of Connecticut’s most cherished values is respect for the individual – regardless of background, economic circumstances, or lifestyle – and I’m proud to represent people who feel so strongly about this. In areas like education, gun safety, protection for personal choices, and human rights, the legislature has supported this fundamental principle, and I’m always pleased to play an active role.
But restoring Connecticut’s economy is also a matter of respect for the individual, and here the legislature has not delivered. I am determined to change that, on your behalf.
Playing politics is not the way forward. We can succeed only if all legislators rise above politics and put your interests before special interests. We must focus on working together to make sure that everyone can count on a future in Connecticut. It’s a question of respect – for you.
State Rep. Gail Lavielle, who serves as Assistant House Minority Leader, represents the 143rd district, which includes parts of Wilton, Norwalk, and Westport. She is Ranking Member of the General Assembly’s Education Committee and a member of the Finance, Revenue, and Bonding Committee and the Transportation Committee. She is a candidate for reelection.
Rep. Lavielle Editorial: State Must Seek Less Costly Transit Upgrades
April 10, 2018
This op-ed appeared in the Hartford Courant on April 10, 2018
Amid the deepening of Connecticut’s already profound fiscal crisis, the state Department of Transportation has announced this year that it cannot meet its obligations to the public without a substantial influx of new revenue into the Special Transportation Fund. Without that revenue, the DOT commissioner — who must do what he can with whatever funds he receives from the state — has said that rail and bus fares must be raised substantially while service must be reduced and a long list of projects costing $4.3 billion must be postponed or abandoned.
The question of where the revenue would come from has dominated most legislative discussion of the problem. Even though any source would work, the focus has been on transportation-related revenues: gas tax increases, a new tire tax, tolls, and accelerating a planned transfer from the general fund of the sales tax on new cars.
But what about spending?
If the circumstances are so dire — and they are, in every area of the state budget — the need to ask a lot of questions about the DOT’s currently scheduled infrastructure capital projects is clear. In particular, could they be more cost effective while still meeting optimal safety and operational standards? The question seems obvious, but it’s not always being asked, or answered.
As an example, one project that could benefit from this type of analysis is the Walk Bridge in Norwalk. This critical link in the Metro-North commuter rail system was built in 1896 with a complex swing mechanism that has a recent history of getting stuck.
There is no question that the Walk Bridge urgently needs to be renovated or replaced. That said, given Connecticut’s financial situation, it’s disconcerting that the state is moving ahead on a plan to rebuild the bridge with an entirely new lift mechanism at a cost of $1.1 billion, plus years of great inconvenience to Norwalk because of serious business and traffic disruption. Furthermore, the administration has not made available a full evaluation of alternative plans, despite repeated requests by Norwalkers.
Many in Norwalk believe that much cheaper and better plans may be workable, including securing the swing mechanism in a fixed position, or building a new fixed bridge at the same track height. A number of residents and business owners have even formed a non-profit neighborhood and business group called Norwalk Harbor Keeper, which is suing the state and the federal government in federal court on the grounds of incomplete analysis. The purpose is not to stop the project outright, but rather to require the state to follow the law and fully evaluate all alternatives to see if less costly and less disruptive plans could do the job.
A financial crisis as longstanding and severe as Connecticut’s requires flexible, creative thinking and a willingness to face fiscal realities. Norwalk Harbor Keeper, in urging the state at least to consider alternative plans for the Walk Bridge seriously, is setting an excellent example.
But the urging shouldn’t be necessary, and nor should lawsuits. The state is in severe financial trouble. Turning exclusively to collecting revenue from a shrinking tax base is neither good policy nor effective. As legislators, instead of listening only to the set of revenue choices put before us, we must, as a priority, require thorough scrutiny of every transportation project, to ensure that all viable alternatives have been given due consideration. Exercising this kind of oversight should cause no controversy. It is simply the responsible thing to do.
Rep. Lavielle: Tolls: Every Possible Proposal, Except a Clear One
March 13, 2018
The Transportation Committee has raised four bills about tolls in Connecticut, and all are scheduled for a public hearing on Wednesday, March 14. This year, the tolls debate is taking place against the backdrop of statements by the governor and the DOT that the state’s fund designated for transportation (STF) is running dry, and that services and projects must be cut and mass transit fares increased if there is no legislative action to increase revenue.
Whether you are among those who do not want tolls in Connecticut under any circumstances, whether you believe they are necessary, or if you’re still making up your mind, you deserve to have complete information on the proposals before you in bill form, and more generally.
To that end, I’d like to accomplish two things in this email. First, I’ll provide a reminder of a few background facts important to the current discussion of tolls in Connecticut. Second, I will provide you with an overview of the bills currently before the General Assembly.
* Federal regulations prohibit Connecticut from placing tolls just at the state’s borders.
* With a few limited exceptions, the only kind of tolls that Connecticut is presently has federal authorization to approve and implement are congestion pricing tolls, which must be demonstrably designed to manage traffic flow.
* Only electronic tolls are on the table for discussion.
* Tolls cannot be an immediate source of revenue, as they would take between 4 and 7 years (according to the DOT Commissioner) to implement. They also entail substantial up-front capital expenditures.
* No complete proposal for implementing tolls has been presented for legislative approval. One proposal that has been widely circulated was presented to the DOT by DCM Smith, a firm it consulted on the subject. This document includes maps that show 11 tolls between Danbury and Hartford on I-84 and 10 and 12 tolls respectively on the Merritt Parkway and I-95 between Greenwich and New Haven. It is not presently clear, however, whether this or any other proposal will be promoted by the administration, the DOT, or any legislators.
Bills now before the Transportation Committee
The bills now under consideration and scheduled for hearing all deal with the broad principle of authorizing tolls in Connecticut, but do not provide any particulars in terms of number of tolls, location of tolls, rates and how they would vary, construction plans, penalties for non-payment, or detailed construction and administration costs. These are the bills:
SB 389: An Act Establishing the Connecticut Transportation Authority
HB 5393: An Act Establishing the Connecticut Transportation Finance Authority to Maintain Major State Highways
HB 5046 (governor’s bill): An Act Concerning the Sustainability of Transportation Projects
HB 5391: An Act Concerning Transportation Infrastructure
* SB 389 and HB 5393 are very similar. They both propose the creation of a quasi-public agency, or transportation authority, governed by a board of political appointees who would hire an executive director and any staff. The agency’s purpose would be to construct, maintain, and operate highways and electronic tolling systems, and it would be charged with using toll revenues to pay for the costs of operation, maintenance, improvement, and administration. The agency would keep funds for these purposes in its own account, be able to employ people, issue bonds, and buy or lease property, and would be responsible for establishing toll rates, user classifications, and penalties for non-payment.
* HB 5393 stipulates that the quasi-public agency will not be created “until the General Assembly authorizes the implementation of electronic tolling systems”. This provision is not in SB 389.
* HB 5046 and HB 5391 both authorize the DOT to implement an electronic tolling system and gives it all the responsibilities assigned by the other bills to a quasi-public transportation authority. They both require toll revenues to be deposited into the STF, rather than a separate agency account.
* HB 5046 authorizes the DOT to implement tolls immediately without any other legislative action, and gives DOT absolute authority going forward in most matters related to tolls.
* HB 5391 allows the DOT to implement tolls only after the DOT has completed studies and submitted a complete tolling proposal to the legislature, and the legislature has approved it.
* HB 5391 also includes a provision decreasing the gas tax by one cent per year for five years. But this would take effect only after the implementation of tolls and only if and when the resources of the STF exceed two and one-half times the estimated debt service payments on the state’s transportation-related debt – a day likely very far away.
* HB 5391, shifting to another subject, accelerates a planned transfer of motor vehicle sales and use taxes into the STF.
What is wrong with this picture?
All of the bills under consideration share a few features. They all move the state forward in varying degrees toward approving tolls, as a general concept. They all give responsibility for determining number, location, and pricing of tolls to unelected bodies, and remove the legislature from the process once the concept is approved, placing the decisions on these matters in the hands of political appointees.
But none of these bills tells us what implementing tolls would cost, or what revenue they would provide. And none of them tells commuters, taxpayers, and motorists what this would cost them every day. In fact, they impose no limits on what that cost might be.
I don’t think it’s fair to expect you to make informed decisions when you don’t have complete information. Tolls are not an abstract concept. They are a tool for raising revenue that comes at a cost to residents. I believe you should have a clear picture of both the costs and the benefits. Because that picture is not clear, even partially, I cannot support these proposals on your behalf.
If you would like to submit written testimony on any of these bills in the next few days, you can send an email to email@example.com, and copy me if you like at firstname.lastname@example.org. You should reference the bill numbers in your subject line, and include your name and town in the body of your testimony.
Rep. Lavielle Urges Unity Against Racism at Interfaith Event in Wilton
August 24, 2017
The event on August 24, 2017, “Wilton Clergy Association’s Standing Together, Standing Strong: An Interfaith Gathering,” was organized as an opportunity for the community to gather and address the events in Charlottesville “in a positive way.”
Rep. Lavielle spoke on the need for the local community to stand solidly in support of those targeted by racist rhetoric and be “unequivocal” in denouncing Neo-Nazis and white supremacist groups, firmly rejecting the idea that those beliefs should be tolerated in Connecticut or anywhere in the country.
The following are Rep. Lavielle’s remarks at the Wednesday night event:
When members of our community are not only horrified, but frightened by events, whether they be close to home or far away, it is important for them to know that their community is behind them and with them. So I’d like to thank the Wilton Interfaith Clergy for inviting our community to gather following the alarming and revolting events in Charlottesville.
When I was growing up, we were taught that Nazism was the name of a brutal and terrible force that my father and others of his generation fought in the Second World War. We were also taught that it must never be condoned or tolerated in this country. It was very clear that it was our responsibility as Americans to ensure that it never arose in our midst.
Yet there it was, as Nazis and white supremacists marched in Charlottesville. And even worse, they brought violence with them, through both words and deeds. There is only one way to feel about it: it was alarming, and revolting.
As an elected representative, but more important, as a human being, I abhor that violence. And I condemn those acts of hate that have hurt and frightened innocent people. There are absolutely no circumstances when it is acceptable to tolerate or lend any credence to Nazis, white supremacists, or any other racist or bigoted group. Any equivocation or ambiguity on this score is unacceptable, and my stance is firm and clear against all that they represent.
There is no place for Nazis or white supremacists anywhere, in our country, in Connecticut, or in Wilton. We must stand together as a community in making clear that racism and bigotry are not accepted here. Our gathering this evening is a reminder that Wilton is a town that warmly welcomes and respects all people, accepts and values differences, which enrich our community, and does not tolerate racism, terror, or violence directed at anyone at any time.
This is an issue that transcends political, religious, and philosophical views. It is a question of basic humanity. No one in our community must live in fear or apprehension of bigotry or racism, and we must stand together in that purpose. In this, there is nothing to divide us. On the contrary, I hope that this common purpose will bring us all together in ever stronger and steadfast unity.
The Biggest Concessions in the State Union Agreement Came from Taxpayers
August 7, 2017
Connecticut families and businesses need to understand the state union agreement the legislature has just approved and what it means for them. While one union leader called it “the best and longest public-sector pension and healthcare contract in the country”, its far-reaching budgetary consequences will likely not draw such enthusiasm from Connecticut taxpayers.
The governor, to his credit, negotiated the agreement with state employee union leaders in an effort to achieve savings in the face of the looming $5.1 billion deficit and the state’s perennial budget crisis. Although the deal, estimated to save about $1.5 billion in 2018-19, takes steps toward labor cost reforms that my colleagues and I have long advocated, it doesn’t go far enough in making the structural changes necessary to eliminate Connecticut’s massive unfunded liabilities and persistent deficits. And it includes significant, long-term concessions by the state and the taxpayers who fund it.
Yes, that’s right. It’s not just union members who make concessions in a contract like this.
Among the union concessions: a two-year wage freeze, increased contributions to pensions and healthcare plans, and three furlough days, and for new hires, introduction of a hybrid defined benefit/defined contribution pension plan. The taxpayer concessions: no layoffs for four years until July 2021; a one-time bonus payment in 2020 for each employee; guaranteed 3.5% raises and step increases in both 2021 and 2022; and an extension of the current pension and healthcare benefits contract from 2022 until 2027, locking in for ten years benefits that are still among the most, if not the most, expensive in the country.
What do these benefits include? A defined-benefit pension plan, something most private sector employees have not seen in decades. Inclusion of overtime in annual salary for calculating pensions. Longevity bonuses. Employee contributions to pension plans that have until now ranged from 0% to 2%, and will still be well below those required for Connecticut teachers and municipal workers. Health insurance contributions and co-pays lower even than those paid by federal employees. Higher education tuition for family members. Paid time on the clock for union officials to spend doing union work.
State employees work hard and deserve fair compensation, and their interests are paramount in negotiating any contract. But still, in fairness, these must be balanced with those of taxpayers, who fund their wages and benefits. Taxpayers should understand the concessions that the administration negotiated and majority legislators approved on their behalf:
The contract extension prevents future legislators and governors from reducing the costs of public sector benefits, which remain among the highest in the country, for 10 years.
The no-layoff provision and related conditions limit the state’s ability to cut government costs by consolidating departments or shifting services to the private sector.
The $1.5 billion in near-term savings, most of which are one-shot, leaves a $3.6 billion deficit on the table, to be closed by tax increases and service reductions.
It’s now certain that new taxes and service cuts are among the concessions to be borne by taxpayers – including state employees themselves. Although we are well into the new biennium, and the majority party has still not issued a budget proposal, Governor Malloy and legislative Democrats have made it clear that they will rely on three tools to close the deficit: 1) deep service cuts, 2) outright tax increases, and 3) indirect property tax increases stemming from municipal aid reductions and pushing state costs onto towns. As long as state labor costs remain frozen, taxpayers will be exposed to these measures, year after year.
Supporters of this deal insisted that it was the only possible option for the state. This is simply not true. Legislative Republicans offered a balanced budget in April that we have continually updated to reflect new developments. It includes no new taxes, preserves services for the neediest, increases education funding for all districts, and saves $600 million more in labor costs than the recent agreement. It respected all legal constraints, did not seek to amend existing state employee contracts, and would not have required union negotiations. Unfortunately, the majority party blocked our many efforts to bring our proposal, which aimed to balance the interests of all Connecticut residents, to a vote.
Connecticut taxpayers need advocates just like unions do. It’s our job as legislators to advocate for the taxpayers we represent. Clearly, those who voted to approve the union agreement either didn’t understand or didn’t care about the extent of the concessions it required from taxpayers, now and for years to come.
In Throes of Budget Stalemate, Governor’s Executive Order Kicks In at Midnight
June 30, 2017
Connecticut’s fiscal year ends tonight, with no budget in place for the next biennium. At midnight, the governor will take over management of the state’s finances by executive order, and will continue until the legislature passes a budget bill.
This did not have to happen. I’d like to share with you a detailed update on the situation. I’m also including here a 2-3-minute video message I taped yesterday on the House floor.
In odd-numbered years, the primary job of the legislature is to pass a two-year budget before the end of the regular session. The governor submits a budget proposal as a guideline, but it is up to the legislature to develop and enact its own budget. The governor, of course, has veto privileges.
During this year’s session, which ended on June 7, the governor issued a full budget proposal in February, and House and Senate Republicans released a no-tax-increase balanced budget in April that included many significant savings and structural changes. Both the governor and the Republican caucuses also revised their proposals to account for major shortfalls in state revenue projections. Majority Democrats, however, did not issue a budget at all. There was no budget vote by June 7, and a special session became necessary.
When there’s no budget by the end of the fiscal year, there are basically two options for running the state until one becomes law: 1) the governor runs the state by executive order, or 2) the legislature passes continuing resolutions (which the governor may veto).
This year, the governor gave the legislature a choice between following an executive order or passing a 3-month “mini-budget” (very much like a continuing resolution) that he proposed himself.
A special session had been scheduled for yesterday, June 29. Even though both chambers are virtually at parity, only the majority party can call a bill for a vote. Since there was no budget on the table, including the “mini-budget”, that could garner enough majority support in both chambers, the special session was canceled.
Nevertheless, House Republicans and House Democrats each caucused at the Capitol yesterday to discuss any options that might remain for Friday. While neither caucus supported the “mini-budget”, House Republicans did propose a one-month temporary budget plan as an alternative. We stood ready to return today, Friday, to vote on it, or on the full Republican budget.
Majority leadership declined to call either of our proposals for a vote. Instead, late yesterday afternoon, House Democrats released, after months of inaction, a two-year state budget that increases taxes by more than $800 million and does not include significant structural changes to state government (read more here). There could be no vote on it today, because full details, like individual town runs for municipal aid and school funding, weren’t available, many legislators had not had time to read it, even Senate Democrats hadn’t expressed a view on it, and the nonpartisan Office of Fiscal Analysis hadn’t reviewed it. The House Speaker suggested a date to vote on this new proposal in late July, and this may or may not happen.
Hence, at midnight tonight, the governor’s executive order will take effect for an indefinite period.
While in recent years the legislature has many times not passed a final budget before the end of the fiscal year, this is the first time in modern memory that this happened because the majority party failed to produce a complete budget during the regular session.
A prolonged budget struggle will cause serious problems for towns and cities that rely on state revenue to help run local government, and residents most at risk and in need of social services will suffer (read more here).
We should all be deeply concerned about the failure of leadership that has created this situation. People, businesses, and municipalities in Connecticut deserve immediate and urgent resolution of the state’s budget. They deserve a government that takes decisive action and does its job.
My House Republican colleagues and I continue to stand ready to debate and vote on our budget, as well as any other proposal that majority leadership is willing to call. I’m sure that many of our colleagues in the majority share the same urgency. It is time for us to convene and act.
Not a Time to Mince Words about Connecticut’s Finances
May 16, 2017
This is no time to mince words about Connecticut’s fiscal crisis. It is deep, serious, and affects everyone and everything: taxpayers, businesses, jobs, social services, infrastructure, K-12 schools, colleges and universities, towns and cities, federal funding opportunities, and Connecticut’s reputation. Let’s be clear – it’s not new. The state’s finances have been precarious for several years. But now even those who have long denied the gravity of the situation are acknowledging it.
The facts speak for themselves.
The projected deficit for the upcoming 2018-2019 biennium now exceeds $5 billion. Both the governor’s budget office and the legislature’s Office of Fiscal Analysis agree on this figure. It ballooned after they downgraded estimated revenues for the period by $1.46 billion, due to a sharp decline in income tax receipts in April.
For the third year in a row, Connecticut is slated to finish the current 2017 fiscal year on June 30 with a deficit. This time it’s very large: $390 million. To close this gap, the governor has proposed a plan that includes depleting the Rainy Day fund, canceling $19 million in scheduled municipal aid, and various one-time cuts and fund sweeps.
The state’s two massive tax increases since 2011 have not produced correspondingly robust revenues. In particular, income tax receipts, which fell $450 million below estimates in April, are not hitting their targets. Realtors, who flocked to the Capitol last week to express their concerns about the state’s economy, tell us that high earners and retirees are leaving the state, and the figures support this. Connecticut’s population declined by 8,278 in fiscal year 2016, its third straight year of shrinkage. The administration reports that it has collected 45% less in income taxes from Connecticut’s 100 wealthiest taxpayers than it did last year. Withholding taxes have also declined. According to the State Comptroller, “A general shift in the composition of employment by sector to lower paying jobs may be a contributing factor.”
Two major ratings agencies, Fitch and Moody’s, have just downgraded Connecticut’s bond rating. These moves followed downgrades within the past year by S&P and Kroll and a prior Fitch downgrade. Among the factors the agencies cited were declining tax receipts, growing budget deficits, increasing debt, and the pressures of growing public-sector labor costs and massive unfunded pension liabilities. Meanwhile, on Friday, the day of the Fitch announcement, the governor and majority party members of the state Bond Commission voted to approve $352 million in new borrowing, bringing the total for this calendar year to just under $600 million.
Against this backdrop, the legislature must pass a budget that closes the $5 billion looming deficit. This is meant to happen by June 7, when the legislative session ends, but subsequent special sessions may drag the process out indefinitely. As of now, the only two budget proposals on the table are from the governor and legislative Republicans, and revised versions of both, accounting for the newest revenue projections, will be released this week. Legislative Democrats, who withdrew their proposal last month for lack of votes, may release a new proposal as well.
The numbers show that higher taxes are not the answer. Proposals to make towns pay for teachers’ pension contributions (thus necessitating property tax increases), to introduce tolls, to build a third casino, or to tax marijuana will not resolve the perennial problem of skyrocketing state labor costs. The issue is spending, not revenue.
While every budget proposal on the table cuts into programs and services, the state cannot restore its finances by trimming its way around the edges of its overhead costs. Reducing public-sector pension and benefits costs, which account for more than a third of the budget, is critical. The governor’s proposal to deliver $1.5 billion in concessions from state employee unions over the next two years is likely not enough, but it’s a start. Negotiating is the governor’s job. If the legislature is properly doing its own job as an advocate for all taxpayers, it will stand firm and accept nothing less from the governor than what he has proposed, and will stand ready to ask for more.
Connecticut’s situation is serious, and I want to be sure that you know the facts.
Taxpayer Advocate: The Role the Legislature Must Not Forsake
April 19, 2017
Among the many factors responsible for bringing on Connecticut’s fiscal crisis are longstanding budgetary, fiscal, and regulatory policies that have not required our state government to live within the means of those who fund it. Although there could be no state government and no state services without taxpayers, their interests do not seem to have been given much priority in any state budget for the past several years.
If it is to restore and sustain Connecticut’s fiscal health, the legislature must be as attentive, if not more so, to the interests of taxpayers as it is to those of any other interest group. Unfortunately, for many years now, majority leadership has lost sight of the legislature’s role as taxpayer advocate.
Serving taxpayers better must require significant policy changes, including labor cost reforms, borrowing limits, structural expense reduction, and tax relief. But there’s also another issue that we hear less about: Connecticut’s state budget process which, right now, is not designed to ensure the taxpayer a spot anywhere near the top of the priority list. This is a problem when the legislative majority is not itself inclined to provide this assurance.
This session, I’ve introduced three bills that are meant to improve the budget process and ensure that our state government operates within the means of those who pay for its spending.
For my testimony on these bills, follow the link to the video, or click here.
HB 5465: An Act Concerning the State Budget Process
HB 5465 would require the General Assembly to establish revenue projections before setting spending priorities.
Many of the state’s well-managed towns develop a budget by first estimating how much money they have to work with – how much taxpayers are able, willing, and likely to pay – and then decide how much to spend, and what to spend it on. When the legislature develops a budget, however, it decides first how much to spend, and then projects and seeks the revenues necessary to pay for it.
This practice tends to breed inflated revenue projections. Even more important, it does not encourage the legislature to listen attentively enough to its constituents, because it proceeds from the premise that taxpayers are prepared to produce money simply because the legislature has decided to spend it. HB 5465 would force the legislature to keep its spending plans within the limits of what its constituents find reasonable to spend themselves.
HB 5701: An Act Concerning the Timing of the Adoption of the Education Cost-Sharing Grant and Municipal Aid Funding by the General Assembly
HB 5701 would require the General Assembly to determine each town’s allocation of municipal aid funds and the Education Cost Sharing (ECS) grant by April 1 of each year.
Most towns set their mill rates in the April-May timeframe, while the legislature often passes its biennial budget in early June, or even later. This bill would eliminate the uncertainty about state funding decisions that Connecticut’s cities and towns have faced every year for the past few years, and that has reached new proportions during the 2017 session. Many local officials – none of whom wants to overtax residents or not tax them enough to pay for the services they expect — have said the daunting uncertainty has literally turned local budgeting into a guessing game. HB 5701 would address this issue.
HB 5401: An Act Concerning Terms Pertaining to the Constitutional Spending Cap
HB 5401 would require the legislature to define the parameters of the state’s constitutional spending cap. This is the critical step necessary to keep the promise made to Connecticut residents when they voted overwhelmingly 25 years ago to approve a constitutional amendment establishing the cap.
While there is consensus on two of the parameters, “increase in personal income” and “increase in inflation”, the legislature is still at an impasse on the third, “general budget expenditures”, because there is still substantial disagreement about whether state contributions to state employee and teacher retirement systems should be included. HB 5401 would require that all such retirement contributions be counted as spending under the cap.
The original purpose of the constitutional spending cap was to protect taxpayers by preventing them from being required to spend more than they can reasonably afford. The state’s retirement fund contributions require spending, they cost money, and they are funded by taxpayers. Excluding them distorts reality and destroys the integrity of the cap. HB 5401 would prevent this from happening.
Connecticut Must Not Wait for Structural Budget Reform
March 27, 2017
Most people in our state government at last agree that Connecticut is in a fiscal crisis. A deficit of $3.5 billion looms in the next budget cycle; businesses, retirees, and other longtime contributors to our economy have been leaving for more fiscally friendly and stable states; the funded ratio of our state pension funds has fallen to about 35%; and our bond ratings have suffered considerably.
A major driver of Connecticut’s persistent fiscal problems is a focus on one-time revenues and cost cuts, instead of reductions in the state’s structural – in other words, ongoing — expenses. Among the most significant of those expenses are labor costs, which represent close to 40% of the state budget. Most notably, retirement and healthcare benefits for state employees are among the very most expensive in the country.
The General Assembly should long ago have passed legislation to introduce labor cost reforms. Examples would include increasing employee contributions to retirement and healthcare plans; including only base salaries in the compensation calculations used for retirement purposes; and moving most employees from defined benefit plans to defined contribution plans, as most of the private sector has done.
Since the legislature has done none of this, we should be doing it now, today.
But we can’t. Those benefits, which are set in statute in all three of our neighboring states by their legislatures, are set in Connecticut through contracts negotiated by the executive branch with public-sector employee unions. Our General Assembly, which represents both state employees and the other taxpayers who pay for their benefits, is therefore not in a position to achieve a balance of their interests. Yes, it does have the right to vote to approve or reject any such contract negotiated by the governor. But the legislative majority has refused to exercise that right since 1997, thereby allowing every negotiated union contract to take effect after 30 days.
There are still, however, laws we can change now, before the current state employee benefits contract expires in 2022. With this objective, I have co-sponsored five bills, and I presented testimony on them last Friday before the Appropriations Committee.
To read my testimony, click here.
HB 5838 would exclude retirement and healthcare benefits for state employees from collective bargaining, from July 1, 2022 forward.
HB 6083 would prohibit any governor from unduly influencing future benefits structures and costs by negotiating a contract that would extend beyond his or her term.
HB 6295 would, from July 1, 2022 forward, exclude factors like travel allowances, overtime compensation, and longevity payments from the calculation of base salary when determining retirement income for state employees.
HB 6509 would offer all new state employees participation in defined contribution retirement plans, rather than in the current defined benefit system.
HB 6512 would, from now on, require the General Assembly to vote to approve or reject all collective bargaining agreements with state employee organizations.
Connecticut’s financial situation is not sustainable. Passing these bills would help to reduce the state’s operating costs, slow the growth of its unfunded post-retirement liabilities, free up funds for essential services and needed investment in infrastructure, alleviate mounting pressure on taxpayers, and ensure that state employees receive the benefits they have been promised.
The Next State Budget: Beware of Taxes in Disguise
January 23, 2017
With the opening of Connecticut’s 2017 legislative session has come a new certainty: there’s no longer any denial that the state is in a severe financial crisis. The crisis is not new, but its acknowledgement by the administration and the legislative majority is.
Connecticut’s precarious financial situation will drive all policy decisions. The reality is incontrovertible: despite the two largest tax increases in the state’s history since 2011, a deficit of about $3.5 billion is projected for the next biennium, which begins on July 1.
The legislature’s partisan balance is now near parity, with the Democrats retaining a razor-thin majority, so budget negotiations may consider more alternatives, and perhaps be longer, than usual. We have already seen clues about what the first volleys will look like.
Addressing the General Assembly on January 4, Governor Malloy did not mention the deficit per se, but he did say that his priority was restoring stability and predictability to the state’s finances. He proposed three avenues for doing that: 1) spending cuts and efficiencies; 2) negotiating with public-sector unions to reduce the costs of pensions and benefits; and 3) reallocating municipal aid, particularly education funding, among towns.
Is this enough? What’s missing? What’s between the lines? What should we expect as the session unfolds?
The state has a longstanding spending problem, so cutting spending is essential, but it must be done strategically and by itself isn’t enough. Cuts that are structural and sustainable over time are required. They will need to be accompanied by expansion of the tax base through an economic development program that will almost certainly include tax reductions designed to attract businesses of all sizes.
As for labor costs, they represent more than a third of the state budget and continue to grow while tax pressures increase and services decline. Labor negotiations are an executive branch function. If the governor does make headway on substantially reducing benefits costs, this would not only lower current operating expenses, but also slow the growth of Connecticut’s massive unfunded retirement liabilities.
So far, so good, for the most part. The third item in the speech, however, is focused not on reducing persistent deficits by balancing spending, revenue, and debt, but instead on shifting funds among communities. While he didn’t say so precisely, the governor suggested that existing state funding should be moved to the state’s largest cities. This could mean widespread cuts to many towns and even to other cities.
For municipalities that have already felt the blow of the $20 million in midyear cuts ordered by the governor last month, the concerns raised by this idea are particularly glaring. Chief among them is that municipal aid cuts are like property taxes in disguise: towns must find the missing money somewhere. The potential ramifications of higher local taxes include increased out-migration of retirees and declines in property values.
Another concern stems from statements by both Governor Malloy and Democratic majority leaders that funding should be cut for towns that haven’t regionalized services to save money. Voluntary regionalization is one thing. Regionalization forced by the state is another. For example, a recent legislative proposal from the administration that requires regional consolidation of all municipal health departments would cost many towns four times as much as they now pay to maintain their own local departments. Is this what is meant by regional savings?
Yet another concern is what has so far been left out of the discussion. Relief from costly and cumbersome mandates to help towns reduce their expenses should be an imperative. New legislation should also allow multiple towns seeking to consolidate services to override obstacles posed by the existence of separate union contracts. Neither of these matters seems to be on the front burner now, but we must make sure they get there as the session moves forward, because both could mitigate or cancel out the effect of town aid cuts.
While none of this augurs well for smaller towns, the prospects for cities like Norwalk and Stamford, long gravely shortchanged by the state’s education cost sharing formula, remain uncertain. These and other inequities must be addressed and not disregarded as they have been for years.
Finally, another budget idea, all too familiar in recent years, has reemerged into plain view just in the last week. The Senate’s Democratic President suggested that new taxes might be necessary, and Governor Malloy and the House Speaker said that they “wouldn’t take new taxes off the table”.
Although the legislature, not the governor, ultimately determines the budget, the first step in the process is for the governor to provide his guidance. He will deliver his proposal on February 8. Despite the many promises to the contrary made before last November’s legislative elections, it’s a fair bet that new taxes will be among its major features — whether in plain view or in disguise.
Spending By Any Other Name Would Cost As Much
October 20, 2016
In 1992, an amendment imposing a spending cap on the state budget was added to the Connecticut constitution, following an affirmative vote by more than 80% of the voters. To implement the cap, the General Assembly was required to vote on its parameters, including guidelines for setting the cap and for the budget items to be classified as “spending” for purposes of inclusion under the cap.
After almost 25 years, the legislative vote on those parameters has still never taken place. In December 2015, a new law required that a commission be formed to recommend definitions for the spending cap’s parameters. The Spending Cap Commission has been meeting since March of this year.
While the Commission has reached tentative agreement on the indices for annually setting the cap, the question of what budget items should be included in the capped amount is still open. For example, there are several members who would like to exclude from the cap necessary contributions (which I believe must be scheduled and made) to the state’s massively underfunded employee retirement plans.
I believe strongly that it is essential to include under the cap all spending, except for debt service, which was specifically excluded by the constitutional amendment (and even then, I would include short-term debt service, because the state has often issued bonds to pay operating expenses, a practice I would like to see discontinued).
Connecticut’s constitutional spending cap was meant to protect taxpayers from being required to spend at levels beyond their means. Whether counted under the cap or not, all budget items still cost money, are still being spent, and are still funded by taxpayers. All budget items are subject to taxpayers’ ability and — because of the easy accessibility of tax domiciles in other states — to their willingness to pay for them.
If the legislature does, as I hope it will do, finally implement the spending cap, I hope that its parameters will not distort reality and will reflect an honest accounting of what is really being spent. Only then can it serve its purpose of requiring our state government to live within the means of the people who fund it.
After all, like Shakespeare’s rose, which by any other name would smell as sweet, spending by any other name costs just as much.
Last week, I testified for the second time before the Spending Cap Commission in Hartford, during the first of five public hearings held around the state this fall. You can read my testimony here.
As always, please don’t hesitate to contact me if you would like to discuss this or any other issue further.
From the Desk of Reps. Wilms and Lavielle: Walk Bridge Project
October 12, 2016
This is a joint statement issued by State Representative Fred Wilms and me regarding the Walk Bridge project in Norwalk. The Walk Bridge is a key part of the entire Northeast corridor that is used for rail transportation. In 2014, ridership on the New Haven Line topped at close to 40 million riders. Given the critical role of the Northeast Corridor, any kind of Walk Bridge failure is unacceptable. We believe that the best way to maximize the chances for success, both for the Walk Bridge and for Norwalk, is to explore more, not fewer, alternatives, including the full engagement of a team of technical and legal experts so that they can provide the best possible advice to Norwalk’s decision-makers.
The Walk Bridge project has attracted enormous attention from Norwalk residents and businesses. This bridge is a key part of the entire Northeast corridor that is used by both Amtrak and Metro-North. In 2014, the New Haven Line carried almost 40 million riders. Given the critical role of the Northeast Corridor, any kind of Walk Bridge failure is unacceptable.
The Walk Bridge is also a mammoth project that will have a profound impact on Norwalk for years to come. With the Mall project, the Wall Street/POKO project, the East Avenue bridge project and the Yankee Doodle bridge project all happening almost simultaneously, many Norwalkers are legitimately concerned that Norwalk may become one big construction zone. Could Norwalk end up looking like the current Wall Street? Or if this is all done right, could Norwalk be on the verge of an amazing new chapter in our history?
Given the high stakes for Norwalk, the residents and businesses will benefit from the City’s advocacy on their behalf. Nowhere is this more imperative than with the Connecticut Department of Transportation (DOT). As the lead agency for state transportation projects (like the Walk Bridge) the DOT is staffed with talented engineers, who have demonstrated a real desire to reach out to the public.
But the DOT is not local, and it is in Norwalk’s best interests not to accept at face value what the DOT advises is best for the community. That’s why it’s important to have independent experts in an Owner’s Representative role who can go toe-to-toe with the DOT. The Mayor has taken a good first step by initiating the process for the City to hire such outside experts.
Their hiring is timely, given the recent release of the DOT Walk Bridge Environmental Assessment/Section 4(f) Evaluation/Environmental Impact Evaluation report. This report evaluates the many bridge options and evaluates a range of environmental and community impacts. While comprehensive in many ways, the report appears incomplete in others.
The DOT Walk Bridge report lays out four main bridge construction alternatives:
Replacement – Moveable Bridge
Replacement – Fixed Bridge
Option 1 – No Action. The DOT makes a persuasive case against this option. Any threat to the integrity of the entire Northeast Corridor from the Walk Bridge’s malfunctioning is unacceptable.
Option 2 – Rehabilitation. This also does not appear attractive. Of the ten key project requirements, this option meets none of them. It is also surprisingly costly, at $425-475 million.
Option 3 – Moveable bridges. All three alternatives meet ten out of ten project requirements and all are thoroughly evaluated. Of the three, DOT’s preference is for the Long Span Vertical Lift (LSVL) Bridge.
Option 4 – Fixed Bridges (Low-Level, Mid-Level and High-Level). These options are discussed only briefly and then dismissed. Of the three alternatives, the first two appear feasible, while the High-Level alternative appears infeasible, with a $1 billion price tag plus enormous environmental impacts.
The dismissal of the low and mid-level fixed bridge alternatives is confusing given their following positive attributes:
(1) Both the low- and mid-Level alternatives meet nine out of ten project needs. The only need they do not meet is “marine traffic”. This is despite the low-level bridge’s clearance at 4 feet higher than the current Walk Bridge and the mid-level bridge’s clearance at 18 feet higher.
(2) Both fixed bridges cost less than the LSVL bridge. The estimated low-level cost is $290-340 million; the mid-level cost is $320-370 million while the preferred LSVL Bridge is $425-460 million.
(3) Would the fixed bridges not require towers – thus creating less visual pollution?
(4) Would Metro-North and Amtrak prefer a bridge that never breaks down, because it never has to open and close? Would that not ensure more reliable train service?
Only in Table 2-3 of the report is there buried the briefest of explanations for the DOT’s rejection of the fixed bridge option. The sole reason the DOT provides: “Some boats will no longer be able to pass upstream of the Walk Bridge”. The DOT appears to view this reason as a conversation-stopper. We respectfully suggest that it be viewed instead as a conversation-starter. At the recent candidates’ forum in East Norwalk, US Congressman Jim Himes seemed willing to look at the related federal waterway decertification issues.
To ensure the best possible outcome for Norwalk, the City’s independent experts might want to evaluate the following:
Verify whether the traffic and community disruptions in SONO and East Norwalk have been fully vetted
Describe more fully how the Maritime Aquarium, the Iron Works Building, and the Lock Building, along with the restaurants/businesses on Washington Street, will coexist with the construction
Explore whether the effects on ownership or occupation of local properties can be minimized in any way
A thorough analysis of whether the LSVL Bridge is truly the best of the three moveable bridge alternatives
Requiring the DOT to evaluate fully the pros and cons of the low- and mid-level fixed bridges
Identification of additional side projects that would benefit Norwalk and that the DOT could undertake as compensation for Norwalk’s absorption of 100% of the Walk Bridge construction’s impact.
We believe that the best way to maximize the chances for success, both for the Walk Bridge and for Norwalk, is to explore more, not fewer, alternatives. To be open to thinking outside the box, rather than running on auto-pilot. And to engage fully, the team of technical and legal experts so that they can provide the best possible advice to Norwalk’s decision-makers.
Rep. Lavielle Offers Testimony to Spending Cap Commission
October 6, 2016
In 1992, an amendment imposing a spending cap on the state budget was added to the Connecticut constitution, following an affirmative vote by more than 80% of the voters. To implement the cap, the General Assembly was required to vote on its parameters, including guidelines for setting the cap and for the budget items to be included under the cap.
After almost 25 years, the legislative vote has still never taken place. In December 2015, a new law in December required that a new commission be formed to develop recommendations for the spending cap’s parameters. The commission has been meeting and deliberating since March of this year.
Yesterday, I testified for the second time before the Spending Cap Commission in Hartford, during the first of five public hearings to be held around the state this fall, as the Commission decides on recommendations it will make to the General Assembly for consideration during the next legislative session. Following is my testimony:
Spending Cap Commission
October 5, 2016
Good afternoon. Thank you for your work on this critical subject. I am pleased that you have made progress on developing the definitions for two of the terms that are necessary for implementing the state’s constitutional spending cap.
I testified before you at your hearing last April, and I have returned because of the importance I attach to the integrity and rigor of the spending cap. I have a question about one of the two definitions you are offering for consideration, and comments about the third.
Increase in inflation
Your proposed definition includes the phrase “increase in the consumer price index for urban consumers”. Perhaps limiting the CPI index to urban residents needs further explanation.
General budget expenditures
As I did when I testified before you last, I want to recall the original purpose of the constitutional spending cap, which was to protect taxpayers by preventing them from being required to spend more than they can reasonably afford. This is a principle that I believe should guide the work of both this commission and the General Assembly. It aligns spending with a criterion several of you have spoken of as “ability to pay”.
To it, I would add another criterion that we might call “willingness to pay”. This is crucial to consider, when the disparities among states in terms of their tax environments are significant. It is naïve to believe that people who have the resources to move elsewhere or merely to change their domiciles will not do so if their financial obligations to Connecticut become overly onerous. It happens in Fairfield County all the time. This is a loss, because the state needs people who pay the taxes that fund infrastructure, education, and services for the neediest. Denying the existence of the phenomenon achieves nothing but depletion of the state’s financial resources. We can’t, of course, quantify willingness, but its importance underscores the necessity of implementing the cap and doing it honestly.
By that, I mean that an honest accounting of what is really being spent is necessary. Budget items that do not fall under the cap are still money, they are still being spent, and they are still funded by taxpayers. Excluding non-emergency items like pension contributions, debt service, expenses related to federal mandates, supplemental educational aid, one-time programs, and Medicaid costs destroys the integrity and usefulness of the cap. All of these cost money. All are funded by taxpayers.
Together they are subject to taxpayers’ ability and, yes, their willingness to pay for them.
I urge you to recognize this, and to respect Connecticut’s taxpayers by implementing a spending cap that does not distort reality and that requires our state government to live within the means of the people who fund it.
Lavielle: Rail Fare Increase Decision Ignored and Disrespected the People of Connecticut
October 4, 2016
HARTFORD — State Representative Gail Lavielle (R-143) expressed disappointment in the CT Department of Transportation’s (DOT) decision to increase rail fares by 6 percent (5 percent, plus a previously scheduled 1 percent increase) on December 1. Further, she was sharply critical of the unwillingness of the administration and majority legislative leaders to listen to public opinion and to consider alternative proposals.
“The decision to increase rail fares is disappointing, but the unwillingness of majority legislative leaders and the administration to address or even to acknowledge widespread public opposition to the increase is far more disturbing,” said Rep. Lavielle. “Eighteen legislators submitted to the governor, legislative leadership, and the DOT Commissioner a letter proposing an alternative to the fare increase that would not involve service reductions, along with almost 1,800 petition signatures. We received no response, no acknowledgement, not even an official refusal to consider our proposal. This is disrespectful to the people of Connecticut, and demonstrates that listening to commuters is not a priority for either the legislative majority or the administration.”
Explaining the rationale for its decision to increase fares, the DOT stated in its announcement: “Almost 400 people commented on the proposed fares. While some opposed a fare increase of any kind, there were no recommendations to cut service.” Rep. Lavielle noted that this statement did not tell the whole story.
“The DOT’s rationale for its decision assumes that money to replace the cuts ordered for its own budget could not be found in other state budget accounts,” said Rep. Lavielle. “While the DOT itself does not have the authority to find the money elsewhere, our proposal demonstrated that other possibilities exist. It is disingenuous to say that the only choices are fare hikes or service reductions. The public needs to know the truth. The $5.9 million in revenue that the fare increase is expected to raise can be recovered from other accounts in the state budget. The only obstacle is lack of political will.”
Rep. Lavielle noted that two of the recipients of the proposal letter and petition did respond by taking concrete action. House Minority Leader Rep. Themis Klarides (R-114) and Senate Minority Leader Sen. Len Fasano (R-34) wrote to Governor Malloy to request that the scope of the legislature’s September 28 special session be expanded to include transit fares, among other topics. Their request was denied, both through press statements from the administration and majority legislative leaders, and on the Senate floor, where majority legislators unanimously voted down a resolution to expand the scope of the session.
Rep. Lavielle also noted that in addition to the 18 House Republican legislators who submitted the proposal letter, several others of both parties representing the three other legislative caucuses spoke against the increase at the public hearing held by the DOT in Stamford. “The opposition to this increase was widespread and certainly crossed party lines,” said Rep. Lavielle, “and the disrespect shown to constituents was nonsectarian. The people of Connecticut should not take this sitting down.”
To read the letter submitted by Rep. Lavielle and 17 other legislators, click here.
Putting Out Fires is Not an Economic Development Strategy
September 30, 2016
Yesterday, the General Assembly convened in special session to vote on a deal designed to keep Sikorsky in Connecticut. My remarks on the House floor are in the attached video.
Sikorsky employs more than 7,000 people here and does business with about 300 Connecticut suppliers. It’s a key player in the state’s economy. Recently, it won an important federal government contract to manufacture a new helicopter, and as a recently acquired subsidiary of Lockheed Martin, it explored possible manufacturing sites in other states, including several where its parent already had facilities.
In a briefing earlier this week, Sikorsky management told us that it would cost the company $400 million more to stay in Connecticut than it would to move. As has so often happened, Connecticut had to act to save itself, instead of to create new opportunities. Hence the deal.
Even economically successful states do engage in incentive deals from time to time (not generally a solution I prefer). But they use them only as a supplement to sound economic development policies, based on attractive and consistent tax structures for all businesses across the board, reasonable regulations, sustained investment in essential infrastructure, and aggressive outreach to new businesses.
Unfortunately, Connecticut doesn’t have a fundamental, broad-based economic development policy in place, and this policy void forces it to rely almost exclusively on deals like this one with Sikorsky, just to hang on to the businesses that are already here. Even more unfortunately, this makes businesses not receiving this largesse feel slighted, while also raising the question, “Where does it end?”
Earlier this year, my House and Senate Republican colleagues and I proposed a range of measures designed to improve Connecticut’s economic climate by reducing both the costs and regulatory obstacles to doing business here. This week, our minority leaders formally requested that the scope of the special session be expanded to include discussion of several of these proposals, but majority leadership denied their request.
It was a missed opportunity. Sound economic development is not a series of rescue missions. It’s something that should be implemented actively every day with sound business-friendly policies firmly in place — not on an emergency basis. Emergencies are high-risk situations, and they are very costly too. Connecticut needs a coherent economic development policy, and now is not a moment too soon.
As always, please don’t hesitate to contact me if you’d like to discuss this or any other issue further.
Lavielle Named “Legislative Champion” for Fifth Consecutive Year by CT League of Conservation Voters
September 22, 2016
HARTFORD — State Representative Gail Lavielle (R-143) has been named a “Legislative Champion” by the Connecticut League of Conservation Voters (CTLCV) for the fifth consecutive year. Of the 14 legislators to receive the recognition this year, she was commended particularly for her leadership on issues affecting public water supply during the 2016 legislative session.
“Environmental stewardship is always a priority for me, as it is for many of my constituents,” said Lavielle. “I firmly believe that conservation of natural resources goes hand in hand with conservation of financial resources, and that should underpin everything we do in the General Assembly. The League of Conservation Voters is a valuable resource and does excellent work, and I am honored to be recognized by such a distinguished organization.”
During the 2016 session, Lavielle was a vocal supporter and co-sponsor of a constitutional amendment resolution protecting land set aside by the state for conservation. She also actively supported or co-sponsored bills protecting the public water supply, reducing the use of pesticides that are harmful to essential pollinators, improving the approval process for the statewide water plan, and prohibiting the use of harmful flame retardant chemicals used in children’s products.
The CTLCV is a bipartisan, statewide, nonprofit organization dedicated to protecting Connecticut’s environment by making it a priority for elected officials. CTLCV works with the state’s environmental advocacy groups to identify, highlight, and track important bills that affect Connecticut’s natural resources, including air, water, wildlife, open space, and health. Following each legislative session, it recognizes a number of lawmakers for their leadership in protecting the environment by naming them Legislative Champions.
Lavielle: Statement on CT Supreme Court’s Review of Education Decision
September 20, 2016
HARTFORD — Today the Connecticut Supreme Court agreed to accept both the state’s and the plaintiff’s applications to appeal the recent decision by Superior Court Judge Moukawsher on education funding and policy in Connecticut. As a result, the Supreme Court will be reviewing all aspects of the Superior Court’s decision.
State Representative Gail Lavielle (R-143), Ranking Member of the General Assembly’s Education Committee, issued the following statement on the Supreme Court’s announcement.
“This is not a time to identify winners or losers in this matter. The Supreme Court’s review may be a very long process, and until it is completed, the state’s and the legislature’s obligations remain unaffected by the Superior Court’s decision.
“While the issue of education funding, which is central to the case, therefore remains unresolved, it is an area where constantly changing legislation and policy over the years, coupled with grave deficiencies in the state budget, have created acute inequities or climates of great funding uncertainty in many school districts.
“In Fairfield County, for example, Norwalk and Stamford continue to receive a level of state funding that is calculated primarily on the basis of their grand lists. This means that both have received substantially less than other municipalities that are similar to them in all respects apart from property values, including median income and poverty levels. At the same time, local governments in our area’s smaller towns like Wilton, Westport, New Canaan, and Weston, having been taken by surprise at the end of their budget seasons last spring by massive education funding cuts, now face great uncertainty about further cuts if the state’s budgetary situation continues to deteriorate. There are, of course, many districts with other types of funding-related problems around the state.
“As it was before the Superior Court decision, it is still critical today to resolve these funding issues. Norwalk and Stamford, and other districts in similar situations, should receive equitable funding, and our smaller towns with high-performing school districts need both more certainty and relief from costly one-size-fits-all mandates.
“There is nothing to stop the General Assembly from addressing these specific longstanding matters in the 2017 session, nothing except political will. I hope that there will be no movement in the legislature to use the Supreme Court review process as an excuse to delay or hinder reasonable action in these areas once again. We have a duty to set sound policy for the state’s public education funding system – not just Education Cost Sharing (ECS), but also categories like magnet schools, charter schools, and Priority and Alliance Districts. The legislature has work to do in this area, regardless of the timing and outcome of the Supreme Court’s review, and we should get on with it.”
Lavielle, House Republican Legislators Testify in Opposition to Proposed 2016 Transit Fare Increases, Document Commuter Opposition, and Propose Alternatives
September, 16, 2016
Stamford – In a concerted effort to stop the CT Department of Transportation’s proposal to raise Metro-North fares by 5% this December, State Representative Gail Lavielle, joined by House Republican legislators, State Representatives Brenda Kupchick, Laura Devlin, Mike Bocchino, Dave Rutigliano, Fred Camillo, and J.P. Sredzinski, testified at the public hearing held Wednesday at the UConn Stamford Campus Auditorium.
“I am here for my constituents today,” said Lavielle. “Commuters aren’t getting anything back from these increases. Instead, it’s a deficiency in the state budget that the public is being asked to pay for.”
Over the last few weeks, the legislators have met with early morning rail commuters on the train station platforms and riding the trains, and speaking with them about the unfair increase. At the public hearing, Lavielle and House legislative colleagues presented signed petitions containing more than 1,700 signatures of constituents who join in the opposition to the proposed hikes.
At the public hearing, Lavielle presented a letter addressed to Gov. Dannel P. Malloy, legislative leaders and CTDOT Commissioner James Redeker to Commissioner Redeker following her testimony. In the letter, Lavielle and 17 other House Republican legislators write about their objection to the proposed fare hike, explaining that rail commuters are being “forced to pay for gaps in the state budget that was passed by the legislative majority this spring.”
The letter stated, “The increase is unfair, and it is unnecessary. In a year when majority legislators and the administration have insisted that the state budget includes no new taxes, it imposes a new tax on one group of people who, as a result, have no choice but to spend more money just to be able to go to work.”
The lawmakers explain in the letter that the DOT acknowledged from the start that the proposed fare increase has nothing to do with either service improvements or cost increases, but rather, is due exclusively to a $37 million cut to the agency’s budget as a direct consequence of the 2017 budget passed by the legislative majority last May.
Lavielle also noted during her testimony that rather than merely objecting, the group of 18 House lawmakers is also offering alternatives for consideration in place of the fare hikes on rail commuters. Among their suggestions is eliminating the tax exemption on the sale of tickets to events at the XL Center in Hartford, the Webster Bank Arena in Bridgeport, and the Harbor Yard Ballpark in Bridgeport. Lavielle added, “Recreational activities are optional, but for these rail commuters, taking the train to work is not an option, and they are hostages to this steep 5% increase.”
CT Early Childhood Alliance Names Rep. Lavielle a 2016 Children’s Champion
September, 9, 2016
NORWALK – The Connecticut Early Childhood Alliance is recognizing 29 state legislators as 2016 “Children’s Champions,” including Rep. Gail Lavielle (R-143).
“It’s an honor to have been selected as a Children’s Champion by the CT Early Childhood Alliance,” said Rep. Lavielle. “It is important that parents, caregivers, and teachers have access to quality resources and essential information in order to help children grow and develop during their formative years. As Ranking Member of the General Assembly’s Education Committee, I remain committed to working with my colleagues on both sides of the aisle to develop policies that provide children the solid foundation they need to make the most of their education and lead happy, productive lives. I thank the Alliance for its recognition and especially for its work on behalf of Connecticut’s children.” Every year, the Alliance recognizes legislators for their leadership on issues that impact the well-being of Connecticut’s young children in the areas of healthy development, early care and education, nutrition, and safety.
“Although much of the focus during the session was on filling holes in the state budget, a number of early childhood issues received attention,” said Merrill Gay, Executive Director of the CT Early Childhood Alliance. “Some very important early childhood issues were raised, and some good legislation did pass.”
Among the items passed this year: Repeal of the sales tax on diapers, which was included in the budget implementer and is set to take effect July 1, 2018; and House Bill 5466, which requires background checks and notice of convictions for any household member in a family child care home or group child care home. Important issues raised included paid family and medical leave, childhood obesity prevention, increased access to early childhood programs for homeless children, and recruitment and retention of the early childhood workforce.
Founded in 2002, the Connecticut Early Childhood Alliance is a statewide organization committed to improving outcomes in the areas of learning, health, safety, and economic security for children ages birth to eight.
Lavielle Statement on Proposed Metro-North Fare Increases
July 22, 2016
Lavielle Statement on Proposed Metro-North Fare Increases
Today, the Connecticut Department of Transportation (DOT) announced a proposed 5% fare increase on the main New Haven line and its branches, as well as on Shore Line East, that would take effect on December 1. It would be in addition to a 1% increase previously scheduled to take effect around the same time. The proposal also includes increases in CTtransit bus fares statewide. The DOT will hold public hearings on the increases during the coming months.
State Representative Gail Lavielle (R-143) issued the following statement in response to the announcement:
“The total 6% increase is substantial and will hit Metro-North rail commuters particularly hard. They already had to swallow 5% increases in 2012, 2013, and 2014, and 1% increases in 2015 and 2016, and when you add it all up, their daily rail fares have become a significant drag on their household budgets. Because many commuters have no alternative to taking the train, they are essentially hostages to these increases, and they and their families are definitely feeling the impact.
“The fare increase proposal is a direct result of the $37 million in cuts imposed on the DOT in the 2017 budget passed by the majority last May. It’s just one example of the consequences of budgetary policies that are not serving the state or its residents well. Policy changes that include realistic revenue assumptions, state labor cost reforms, spending rigorously focused on essential services, limited borrowing, and business-friendly tax structures can change the direction of the state’s finances and reduce the heavy burdens falling on hard working commuters and taxpayers across the state.
“I will oppose these fare increases and work with my colleagues on both sides of the political aisle to try to find a way to stop them from being implemented.”
Mileage Tax: Why Spend Money on Something Nobody Wants?
And Why Didn’t the DOT Tell Us?
July 15, 2016
There has been quite a lot of coverage lately about Connecticut’s interest in a mileage tax. Most of it focuses on how bad a mileage tax would be for the state. I agree, it would. People in Connecticut just can’t take on one more tax, and on top of that, a mileage tax raises too many privacy issues. But I don’t think that’s what the real story is.
The story is really about trust, transparency, and inappropriate use of scarce resources. Connecticut isn’t just joining other states to ask for federal money to study the mileage tax: it has actually committed to spending taxpayer dollars and to playing a lead role in the study should the grant be awarded. This is something the public needs to know.
In 2015, when the governor’s Transportation Finance Panel suggested that a mileage tax might be a viable course to pursue, legislative leaders from both parties made statements unequivocally opposing it, and the public displeasure was equally pronounced. This made the recent news of the grant application very surprising.
Many state lawmakers and the general public first learned about the application in a June 25 story in the Washington Post. The application was submitted by the Delaware Department of Transportation (DOT) on behalf of the I-95 Corridor Coalition, a consortium of 16 states. It proposes pilot programs in five states – Connecticut, Delaware, New Hampshire, Pennsylvania, and another to be determined – designed to learn more about implementing “mileage-based user fees”. The proposal includes developing model legislation.
The program’s estimated cost is $2.98 million. The application requests half that amount, $1.49 million, in federal funds, with individual states providing the rest in matching funds.
With a commitment of $300,000, Connecticut would pay more in cash than any other state. Delaware and Pennsylvania would each pay $290,000, and Vermont $30,000, for planning and analysis. Instead of cash, New Hampshire would use $580,000 in toll credits. Eleven of the consortium’s 16 states have no active role in the program.
When asked by the Connecticut media to explain the state’s role in the grant application, the DOT spokesperson said that Connecticut had no plans for implementing a mileage tax, but that the DOT had an “obligation” to seek federal funds for studies in order to do its job better. He said nothing about spending taxpayer money to get those funds or about leading the pack. Those details appeared only in the grant application, which is available online, although hard to find.
There is overwhelming opposition to the concept of a mileage tax. Moreover, essential services are being cut because the state’s budget is stretched beyond its limits. Under those circumstances, why was it so critical for the DOT to make these commitments? As a member of the consortium that submitted the application, Connecticut would presumably have access to the pilot program’s results, so why was it necessary to be a lead participant, especially in the face of such broad opposition?
As a Ranking Member of the Appropriations subcommittee that oversees the DOT’s budget, I was not officially informed about the proposed financial commitment, and I have sent a letter to DOT Commissioner James Redeker requesting responses to these questions and others. I will share whatever information I receive.
I don’t believe there is a mileage tax in Connecticut’s near future, if for no other reason than that it’s a complicated and controversial undertaking, and, fortunately, no one seems to be even close to figuring out how to implement it. But I am extremely concerned about how the decision was made to pursue this study and to commit scarce and needed dollars to something that taxpayers and their representatives overwhelmingly oppose.
The clear message here is that the executive branch is determined for Connecticut to lead in studying the mileage tax concept, regardless of what taxpayers and their General Assembly representatives think about it. The proper course of action is for the DOT to withdraw its commitments from the grant proposal, and to improve the transparency of its communications with the legislature and the public.
What in the World Is Going On in Hartford?
April 25th, 2016
For the past few weeks, it seems like a new piece of distressing budget-related news has been coming out of Hartford at every turn. This shouldn’t be surprising, given the glaring weaknesses of the biennial budget (FY 2016 and FY 2017) passed by majority legislators last spring, which fell into deficit right after it took effect. Still, that doesn’t make the newsflashes any less distressing.
Since the end of last year, budget movements for both 2016 and 2017 have behaved like a yo-yo, falling and recovering over and over against the dark backdrop of a projected $4.5 billion deficit for the 2018-2019 biennium. Without a lifeline of profound structural changes – like public-sector labor reforms and borrowing and spending caps — Connecticut’s fiscal crisis is growing deeper every day, and the threats of even higher taxes, exiting businesses, diminished critical services to the needy, and deteriorating infrastructure loom ever larger.
Major deficits used to emerge perhaps once or twice a year. Now, however, even after two massive tax increases, the deficit alarm is sounding almost every month.
With so many rapid-fire developments happening, it may be difficult to keep them straight. So I’d like to share with you below: 1) A timeline of recent budget events, 2) A look at what’s next, and 3) A review of possible outcomes.
Budget issues have by necessity dwarfed most other matters during this legislative session. As always, please don’t hesitate to contact me if you would like to discuss these, or any other issues, further.
Recent Budget Timeline
Last December. The current FY 2016 budget deficit, which had appeared several months before, reached approximately $350 million. On December 8, the legislature passed a bill closing that deficit. While both parties worked together on the bill, Republicans voted against it, because it included no long-term structural changes designed to halt the state’s perpetual deficit cycle.
December – February. The projected deficit for 2017 grew to about $550 million.
February 3. Following the usual procedure for providing guidance to the legislature, Governor Malloy presented a budget adjustments proposal for FY 2017. It addressed the full projected $550 million deficit for 2017.
January – March. The current FY 2016 budget once again began running a deficit, which grew to $220 million.
March 29. The legislature passed a bill closing the 2016 current $220 million deficit. Again, both parties worked together on the bill. This time both parties voted in favor, because with this short-term measure designed only to balance the budget for three months, the Republican requirement for long-term structural changes was not on the table for negotiation.
February – April. The projected 2017 deficit grew to $930 million.
April 6-7. Majority legislators of both the Appropriations and Finance Committees each introduced and passed passed 2017 budget adjustments bills. They did not, however, address the full $930 million projected deficit, leaving the 2017 budget almost $400 million out of balance. Republicans voted against both bills.
April 12. Stating that the majority’s budget adjustments legislation was incomplete, the governor, in a rare move, released a second proposal that addressed the entire $930 million projected deficit.
April 20. The administration reported that a new $141 deficit had appeared in the current FY 2016 budget.
April 21. In another rare move, majority legislative leaders announced that they would produce a new 2017 budget and call it for a vote without further input from the governor.
By April 29. Revenue tallies following April 18 due date for taxes will be available and may reveal further shortfalls. This would affect both the 2016 and the 2017 budgets.
May 4. The 2016 legislative session ends.
July 1. The 2017 fiscal year begins.
A Few Possible Sequels
Scenario. After the April revenue totals are calculated, the legislative majority produces a new 2017 budget adjustments bill and calls it for a vote before the session ends at midnight on May 4. The governor signs the bill in the coming days, balancing the 2017 budget if not in reality, at least temporarily and on paper.
Scenario. The governor vetoes the budget adjustments bill passed by the legislature. The 2017 budget enacted in the spring of 2015 remains in place with an approximately $1 billion deficit, and the whole budget adjustments process is strung out indefinitely.
Scenario. The legislative majority does not finish its new 2017 budget adjustments in time and does not call for a vote on a budget bill before the session ends. Here too, the enacted deficient 2017 budget remains in place and the budget adjustments process is strung out indefinitely.
Many in Hartford have suggested that legislators currently in the majority who prefer further tax increases to structural reforms, but are unwilling to propose new taxes in an election year, may favor waiting until November to balance the 2017 budget.
GE: What We Didn’t Hear Last Week, and Should Have
January 19th, 2016
We heard a lot about GE last week. But what we didn’t hear was more telling.
In Connecticut, we heard much discussion of why GE decided to move, and many opinions about who and what are to blame. None of this was surprising, and much of it had to be said.
More disturbing, however, has been the drumbeat of negative coverage by the national media, which culminated this week in a Wall Street Journal article entitled, “GE Escapes Connectitax: The company flees the high-tax state that hates business”. While the title is particularly acerbic, the article can’t be dismissed as merely a reflection of one paper’s bias. The Hartford Courant has been equally outspoken. So has much of the national broadcast media.
Whatever the reason for GE’s decision – tax policy, other financial and regulatory issues, lack of a dynamic urban setting, or, most likely, a combination of all of these — Connecticut has now acquired a reputation as a place where businesses are punished, undervalued, and even vilified, and policy makers aren’t interested in changing course.
While opinions vary on whether this perception reflects reality, many in the business community, both in and outside Connecticut, unfortunately now believe it does.
The consequence for Connecticut is undeniable: businesses that might consider moving or expanding here will be more and more reluctant to do so, and many of those already here will increasingly doubt the wisdom of staying.
Effective leaders in similar situations often display a frank willingness to look inward, recognize that there’s a problem, and communicate an action plan to address it. This is, for example, what ad agency chiefs do when they lose a high-profile account; what nonprofit board chairs do when a loyal donor exits; what major league coaches do when their team is on a losing streak. They do it to show the market that they’re still in the game, and to reassure clients, donors, and investors that they value their allegiance and are determined to keep it by improving their performance.
It’s hard to imagine a leader in one of these situations saying, “This is a sign that we should continue doing what we’re doing.” But that’s what happened in Connecticut last week.
Legislative majority leadership simply denied the existence of a problem. One quote: “It is an undeniable fact that Connecticut’s economy is growing and creating jobs and we are training our workforce to compete in a global economy.” And another: “It is clear that GE’s decision has nothing to do with taxes, or even business costs, and cannot fairly be viewed as a referendum on Connecticut’s growing economy.”
The response from the executive branch acknowledged that GE’s news was disappointing, and then explained that the state’s policies have been moving in the right direction. The statement that “Today’s decision is a clear signal that Connecticut must continue to adapt to a changing business climate,” was followed by a list of things the state is already doing.
Where was the recognition of possible deficiencies? Where was the willingness to look inward and examine how closely current policies correspond to what businesses expect? Where was the plan for what might constructively change going forward or the invitation to businesses to help develop it?
Of course no statement would have changed GE’s decision after its announcement. The point is that last week’s communications are a clue to the bigger picture of what’s behind negative perceptions of Connecticut, and may help explain, even to those who still believe the state is sufficiently business friendly, why its reputation is under fire.
What we didn’t hear last week is the latest example of what businesses have been missing for several years: serious attentiveness to their concerns, recognition that major policy changes are necessary, and a partnership mentality that embraces businesses of all sizes instead of a putting-out-fires approach that targets a select few. Instead, what businesses heard, and have been hearing all along, was that Connecticut’s leadership is determined to pursue its agenda without regard for what business decision-makers think of it.
This is a message that could suck the lifeblood out of any economy. The business disaffection it has spawned is hurting everyone in Connecticut.
The Budget Special Session: Using a Bucket when
You Need to Fix the Leaky Roof
December 11th, 2015
When you have a leaky roof, you can’t fix it with a bucket. You have to stop the leak at its source. Otherwise, the bucket spills over, and the leak in the roof gets worse. Nevertheless, majority lawmakers took the bucket approach to dealing with our state’s persistent and burgeoning budget problems in Tuesday’s special session.
The governor called us into special session because the budget passed by the majority last June had immediately fallen into deficit. Growing at a rate of about $100 million per month, the gap had widened to $357 million. On top of that, the legislature’s nonpartisan budget office projected a deficit of more than $4 billion for the next three years.
The budget, which hardly anyone really liked, had ushered in the second largest tax increase in Connecticut’s history, increased spending by 7% based on overambitious revenue projections, raised taxes on the middle class and the working poor, angered GE and other iconic businesses, and burdened hospitals with new tax hikes, while allowing a $350 million state employee wage increase.
At first, Governor Malloy used his rescission authority to try to close the deficit with cuts to hospitals and programs for the intellectually disabled, the mentally ill, and substance abuse treatment. But when the deficit kept growing, and pressure mounted from thousands of people, hospitals, and nonprofits upset by the cuts, and from businesses and residents upset by the taxes, he finally called for bipartisan talks aiming for a special session on measures to address the problem.
Lawmakers from both parties and the governor agreed on the size of the deficit, modest business tax rollbacks, and partial restoration of the cuts to hospitals and social services. Despite good-faith efforts from all sides, however, lawmakers were unable to agree on long-term measures that would halt the endless deficit cycle.
Ultimately, during the special session, majority legislative Democrats introduced a bill that included the business tax rollbacks agreed upon by both parties but took the “bucket” approach to the deficit, stopping short of making significant long-term reforms. In a move that could provide only temporary relief, almost 40% of the funds used to close the gap were diverted from off-budget funds and one-time sources. The bill passed without a single Republican vote in either chamber.
Republicans did, however, provide and vote for an alternative, in an amendment based on the proposal we had brought to the bipartisan negotiations. Our proposal included the bipartisan business tax rollbacks, eliminated cuts to social services, including all of the hospital cuts, closed the current deficit, and included a package of long-term structural measures that would prevent future deficits.
Our long-term initiatives included:
Implementing the constitutional spending cap
Imposing an annual cap on state bonding
Opening a competitive bid process for the Corrections Department’s $92 million healthcare plan
Introducing many labor reforms, including increasing state workers’ contributions to their pension and healthcare plans, suspending longevity payments, and calculating final average salaries by using base pay only
Requiring the legislature’s approval for all state employee contracts
Enacting a constitutional lockbox for transportation funds
Revising prevailing wage laws to help municipalities control their costs
Shifting services from the Connecticut Juvenile Training Center to community nonprofits
Combat out-of-control overtime costs by requiring regular reporting and monitoring.
For a detailed outline of our proposals, click here.
If Connecticut continues to take the “bucket” approach to budgeting, with piecemeal fixes, its massive deficits will persist year after year, while its overhead costs continue to rise. Faced with increasing tax pressure, more people and businesses will leave the state, jobs for skilled professionals will become more scarce, and services for the state’s neediest residents will deteriorate. I will continue to fight for the long-term structural reforms we need to restore stability and predictability to our economy, and rebuild the confidence of businesses and residents in Connecticut as a place to live, work, and retire.
State Budget Cuts: Something is Wrong with this Picture
September 29th, 2015
On September 18, Governor Malloy ordered $103 million in cuts to the state budget, which had taken effect just three months previously. As reasons, the administration cited downward revisions in projected revenues due to unexpectedly low tax receipts and stock market weakness. In other circumstances, the rescission order might look like reassuring fiscal prudence. Instead, it looks more like eleventh-hour backpedaling on a budget that was unworkable to begin with, and it has caused genuine alarm.
Two-thirds of the cuts, or $64 million, are reductions in Medicaid spending that directly affect hospitals. Their impact is much greater, however, because the reductions mean a loss of $128 million in federal dollars. The result is a total loss of $192 million in funding for Connecticut’s hospitals. The Western Connecticut Health Network (WCHN), which includes Norwalk, Danbury, and New Milford Hospitals, will take a $14 million hit, of which $6.3 million falls on Norwalk Hospital alone.
These cuts are actually greater than those proposed last February by the governor and then adamantly rejected by legislators of both parties. They come while hospitals are already coping with a tax imposed four years ago as part of a scheme to bring more federal Medicaid funding to the state. Although they were supposed to receive a net gain from the arrangement, hospitals have seen their taxes grow exponentially. This month’s cuts also come at a time when hospitals already have their budgets set, making strategic planning almost impossible.
This is far from just a financial issue, because Medicaid cuts affect the state’s most vulnerable populations directly. That’s a lot of people: one of five in Connecticut are on Medicaid, and of those, 25% are children. The Connecticut Hospital Association has said that the new Medicaid cuts will lead to staff reductions, longer wait times for patients, and an inability to invest in low-cost preventive services Medicaid patients need to stay healthy. According to John Murphy, CEO of WCHN, the worst consequence is that people who can’t afford basic healthcare won’t seek it, and will “carry their burdens quietly” as their health deteriorates. This isn’t a scenario that anyone wants.
While the recent rescissions hit hospitals the hardest, they also substantially cut funding for services to the intellectually disabled, to the mentally ill, and to substance abuse programs, as well as to education.
Something is very wrong with this picture. Why are critical services for our most vulnerable residents being cut while state employees are receiving $350 million in raises and fringe benefits that outstrip any available in the private sector? Why, after the two largest tax increases in the state’s history, are residents paying so much more while government services are getting worse? Why is there a willingness only now to acknowledge that a projected 7.1% increase in personal income tax revenues was an unrealistic and shaky foundation for the current budget – especially when Connecticut relies so heavily on volatile investment income?
That these questions persist makes it clear that the state budget is plagued by serious issues with spending priorities, sustainability, and fiscal responsibility. Introducing widespread cuts on an ad hoc basis every few months, as the administration has done recently, not only hurts residents, but also doesn’t address the budget’s structural problems. In fact, if nothing fundamental changes, the state will show a deficit of more than $1 billion in fiscal 2018, the first year following the current budget cycle.
The situation is serious, but it can be reversed if the will is there. I have joined House and Senate Republican colleagues in calling for a special session to put everything on the table – particularly the state’s labor costs, which represent 35% of the budget – to restore the new cuts, and to initiate long-term budget reforms with all due urgency.
There’s also a more direct alternative. The authority to negotiate the state’s labor agreements lies with the executive branch. House Minority Leader Themis Klarides has asked Governor Malloy to discuss concessions with the state employee unions, and nothing could be more timely. This would be the most direct route toward both establishing a sound, long-term fiscal foundation for Connecticut and ensuring that critical services are preserved.
Reshuffling the State’s Taxes Is Not a Solution
September 18th, 2015
This week I attended the public hearing in Hartford held by the State Tax Panel and submitted testimony.
The bipartisan Panel was created by 2014 legislation to focus on the state’s long-term tax policy. Any recommendations it makes for reforming our tax system are supposed to be revenue-neutral: no tax can be reduced without replacing it with money from another source.
The State Tax Panel’s members have a challenging task. Unless the legislature is willing to support major reductions to state employee fringe benefits and a number of other reforms, it is difficult to see how they can make changes to our tax system that will improve the state’s finances and expand our tax base. Otherwise, they will be limited to replacing one tax by another – just reshuffling the state’s fiscal cards.
In the wake of the two recent historic tax increases, the fiscal distress of Connecticut’s people and businesses is real. This summer, GE’s statements and plans have received prominent statewide and national coverage, and whether GE stays or goes, this will have affected Connecticut’s reputation as a place to do business.
But Connecticut is a great state, and the financial, economic, and infrastructure problems it is facing can be fixed. Significant reform of its tax policies is an important step toward that goal.
In my testimony, among the suggestions I made – while insisting that reducing the state’s contractual obligations must be on the table — were several aimed at:
Reducing taxes for retirees to make staying in Connecticut more feasible
Making the state more business-friendly by adopting a long-term, competitive tax structure for all businesses across the board and offering initial tax breaks to all businesses considering a move to Connecticut
Reducing pressure on local property taxes by curbing state mandates like prevailing wage laws.
To read my full testimony, click here.
Education: Bipartisan Collaboration Yields Results
August 17th, 2015
During the 2015 legislative session, I had the privilege of serving for the first time as Ranking Member of the General Assembly’s Education Committee. One of the legislature’s largest committees, its work affects every community in the state. While education should not be a partisan subject, the committee’s work has sometimes been affected by political differences in past years. This year, however, I was pleased that building a good working relationship with the committee co-chairs and drawing on the knowledge of a particularly strong group of members helped us find many areas of common ground and pass a range of bills with full bipartisan support that should have a positive impact on our state’s K-12 education system.
The new laws address a wide variety of issues:
Literacy. To address what I believe is the issue most critical for our school system’s progress, early literacy, the State Department of Education must create the position of Director of Reading Initiatives to oversee all literacy programs statewide, and most particularly reading in grades K-3.
Mandate relief. I was very pleased by progress in this area, where I have been pushing for change for several years. School districts may now apply to the Education Commissioner for waivers from costly and unwieldy mandates by proposing innovative ideas to replace them. A key goal is for successful waivers to lead to further mandate relief legislation. Another new law affects the Minimum Budget Requirement (MBR), which restricts districts from budgeting less in any year for education than in the previous year. The new law gives school boards more flexibility to control their budgets by loosening the MBR restrictions for many districts with declining enrollment, and eliminating them altogether for the highest-performing districts.
Testing and student assessments. Starting with the 2015-16 academic year, the SAT will replace the SBAC test for all eleventh-graders in Connecticut. The objectives: reducing students’ stress, increasing their learning time in the classroom, and, since the SAT will now be free, making college accessible to more students. A Mastery Examination Committee will also address the question of how much and what kind of testing is appropriate in other grades.
Helping students with dyslexia. Teacher preparation programs must now include comprehensive training in identifying and addressing dyslexia. The State Department of Education must also designate a staff member to help parents and schools identify and provide appropriate interventions for students with dyslexia.
Reciprocity for teachers. To ensure that qualified teachers are available statewide in shortage areas like bilingual education, it will now be easier for out-of-state teachers to obtain certification in Connecticut. The new law also requires more active recruitment of minority teachers and teacher training in cultural competency.
Charter schools. Serious management problems at one charter school organization led to a proposal for a long moratorium on opening any new charter schools. Working collaboratively, we crafted legislation that significantly strengthens charter school oversight and requires the State Department of Education to develop a cohesive plan for creating new charter schools, but imposes no delays on opening new ones. The new law raises standards for management and transparency, while preserving school choice in the communities that need it most.
Student health and safety. To improve students’ protection from abuse and neglect, a new law increases reporting and training requirements for school employees who are mandated reporters. Another new law expands care for students with seizure disorders by allowing specially designated and trained school employees to administer emergency medication when the school nurse is absent or unavailable.
While these new laws provide important improvements to our education system, there is still much work left to do – for example, in closing Connecticut’s achievement gap, meeting growing needs for special education, and addressing funding inequities for communities like Norwalk and Stamford. During the next session, I also look forward to revisiting and improving the student data privacy legislation that we came very close to passing this year.
As we prepare for the 2016 session, I welcome your thoughts and suggestions. As always, please don’t hesitate to contact me if you’d like to discuss education, or any other issue, further.
The State Budget: It’s Time to Start Over
June 26th, 2015
Connecticut’s new state budget, which the legislature passed narrowly on June 3, has drawn sharp criticism from nearly everyone and praise from very few. The outcry is reverberating everywhere, and genuine outrage is in the air.
Almost unanimously, Connecticut’s media has been outspoken in its criticism, and scathing coverage by the Wall Street Journal, Forbes, and “Morning Joe” has made the budget fiasco a national story. A major component is the news from many businesses, including GE, that they are considering relocation to other states.
In the wake of this public criticism, the governor has proposed cutting $220 million from the new business taxes, along with corresponding budget line items. Since the budget has already passed, he wants to include these changes in the “implementer” bills that outline how budget policy will be executed and are on the upcoming special session’s agenda.
Although something is better than nothing, the governor’s proposals do not go far enough in stemming the damage this budget will inflict on the state.
It’s not too late to start over.
The vocal opposition isn’t confined to businesses and the media. Still reeling from the 2011 record tax increase, residents descended on Hartford last month to plead against further tax hikes, and they continue to contact legislators in overwhelming numbers. Beyond upset and angry, they’re scared of the impact on their livelihoods, property values, savings, and their ability to afford living here. The budget hits everyone, at all income levels, especially the middle class.
Among the features that have struck a resounding chord of fiscal horror with so many:
A 7% spending increase and $2 billion in tax increases, despite enormous current and future deficits. It’s Connecticut’s second largest tax increase ever, on the heels of the largest. The taxes were sprung on everyone with no public hearings.
For residents, $442 million in new personal income taxes, as well as other increases. Particularly onerous for the middle class are a property tax credit reduction; repeal of the clothing/footwear under $50 exemption; and a delayed exemption increase for single filers – together with the devastating impact on jobs if companies leave the state.
For businesses, $760 million in tax increases: a permanent 20% corporate surcharge; new unitary reporting rules; restricting loss carryforwards; new data processing and internet taxes; and tax credit reductions.
Significant impact on healthcare: $212 million in hospital tax increases; a 6% tax on ambulatory surgical centers; and a $55 million reduction in Medicaid reimbursements. Patient costs will rise and fewer doctors will accept Medicaid. Job losses have already begun.
Although employee compensation and benefits account for about 35% of state spending, the budget doesn’t touch union contractual agreements. This doesn’t sit well with taxpayers who must pay for $350 million in state employee raises and $228 million for overtime expenses, as well as 12% raises for certain appointees.
Though the budget earmarks a percentage of sales taxes for transportation, it diverts other transportation funds for different purposes and actually cuts transportation funding by $32 million in 2016.
Much heralded car tax reform: other sales tax receipts are dedicated to towns that must reduce their vehicle mill rates going forward. But they won’t be reimbursed completely for four years, and revenue shortfalls could stop this from ever happening, leading to higher property taxes.
With no structural changes that would set the state on a sustainable financial path for the future, the budget produces a $1.6 billion deficit in the next biennium.
The governor can still veto the budget. He has until mid-July to decide. The vote was far from unanimous: Republicans were joined by 13 Democrats in voting no, and numerous Democrats who voted yes did so reluctantly and under pressure. The public outcry has heightened this unease, and many of the budget’s supporters are now uncomfortable with it.
The moment is ripe. Connecticut needs a budget that creates a predictable and friendly business environment, preserves vital programs for the neediest, reduces the tax pressure on residents, and makes the structural reforms that will return Connecticut to a firm financial footing and begin repairing its reputation as an attractive place to live and do business.
In April, House and Senate Republicans shared with our Democratic colleagues and the public a proposal that we believe is a good start. While they preferred to craft their own budget without us and the input of the 42% of the population we represent, we stand ready to bring our ideas back to the table and to work together on a new budget, to save our state.
Politics must not stand in the way of good government. It’s never too late to do the right thing.
Voting Against a Budget that Is Bad for Connecticut
June 3rd, 2015
At the tail end of a session that began yesterday at 11:00 am and continued through the night, the House of Representatives voted at 5:30 this morning on the budget proposed by the governor and majority Democrats. The budget documents had become available for reading only hours before.
Many of you wrote to me to urge me to oppose the budget. I voted “No” with great conviction, but unfortunately, it passed in the House by a narrow 73-70 margin and now awaits a vote in the Senate. I would like to share with you the remarks I delivered on the House floor.
Mr. Speaker, the fiscal horror of this budget has clearly struck a chord.
That chord has resonated loudly with businesses. For the first time, we’ve entered the budget debate against the backdrop of public admonitions by three iconic companies – GE, Aetna, and Travelers — that this isn’t doable anymore. They were joined yesterday by Boehringer Ingelheim.
The chord has resonated with people, too. Not just my constituents, but constituents from all over the state. They have come to the Capitol to testify, flooded our emailboxes, and continue to light up the phones in this building.
They’re still reeling from the record tax increases of 2011. They’re not only worried and angry. They’re scared. For their livelihoods, their families, and themselves.
Why? Because this budget finds a way to hit everyone and everything – except our state’s growing public sector unions, where nearly 40% of the state’s spending remains off-limits.
This budget jars businesses — big and small and everything in between — with unpredictability ,by changing the rules with taxes meant to sunset, unitary reporting, and new sales taxes. And it hits our hospitals too.
This budget dips farther into the pockets of the young, the old, the rich, the poor, to take money they can’t save, money they can’t use to build a future or to reap the benefits of the years of work they did to earn it. It clamps down on towns by dictating their tax rates and holding a big stick over their local spending decisions, and redistributes wealth through the regional revenue sharing scheme in the former SB 1, which revived the specter of county government early in this session.
This budget plays a hat trick with two separate funding sources that leaves transportation funding almost stagnant.
This budget increases spending by 7%, and raises taxes by almost $2 billion, at a time when our state is facing a looming deficit of about $3 billion over the coming biennium and — because it can’t even collect all the taxes it already imposes — a nearly $200 million deficit in the current year.
As the administration’s budget director said a few months ago, we are in a time of permanent fiscal crisis. With its semantic sleight of hand that pulls $2 billion in spending out from under the spending cap and calls it by another name, this budget violates the fundamental protection our spending cap provides to taxpayers, and pushes them way beyond their means. And when government abuses its taxpayers, it destroys its own ability to meet its obligations to serve them.
We need a different kind of budget. A budget that spends strategically and prudently, and spends less. A budget that recognizes that in times of financial distress, we can’t have everything we want, that we must use our resources as efficiently as possible to serve as many as well as we can, and that we must make what we already have work really well before we can have anything new.
Unfortunately, with this budget, Connecticut’s taxpayers will keep paying more and more, and still their services and infrastructure won’t improve. It will cause irreparable damage to our employers and our economy, and accelerate the continuing exodus of jobs and people from our state. Mr. Speaker, I cannot support it.
Transportation: Legislative Update
April 28th, 2015
Transportation Infrastructure – Tolls – Transit Corridor Development Authority
Although this year’s legislative session has been unusually slow, there have recently been several developments in the transportation area that I would like to share with you.
Long-term Transportation Plan
On Monday, April 27, the Finance, Revenue, and Bonding Committee held a public hearing on HB 6840, which authorizes about $2.8 billion in bonding over the next five years for a list of 31 transportation projects statewide. Most of these projects involve designing, engineering, and planning in a program meant to provide the “ramp-up” for the governor’s 30-year plan to improve the state’s transportation infrastructure.
Items relevant to Fairfield County on the bill’s list include improvements to the New Haven main line, Merritt 7 station upgrades, widening of I-95, bicycle/pedestrian improvements, implementing a bus rapid transit corridor between Stamford and Norwalk, and reconfiguration of the Route 7 / Route 15 interchange.
I presented testimony on Monday to alert Committee members to the absence from the five-year plan of the electrification of the Danbury Branch Line and to convey the urgent need to upgrade the line in the near term.
To read HB 6840, click here.
To read my testimony on the bill, click here.
Tolls and Transportation Funding
The most pressing question about the governor’s 30-year, $100 billion transportation plan is how to pay for it. Governor Malloy has appointed a nine-member commission to study the funding question and to submit a report by the end of the summer.
Tolls are among the funding options being considered, even though their revenue potential is not high. As Office of Policy and Management Secretary Ben Barnes said in Transportation Committee testimony earlier this year, “I suspect that the toll options that will be most attractive will not produce as much revenue as we think we need.”
HB 6818, the bill regarding tolls that passed out of the Transportation Committee along party lines on March 18, does not require or allow the reintroduction of tolls. Instead, it requires the DOT Commissioner to deliver to the General Assembly by January 1, 2016 “a program for the establishment and commencement of tolls” which must, among other things, protect any revenues to be generated from diversion to any non-transportation purposes.
While the bill itself does not allow or require tolls, it’s still a significant step toward a potential reintroduction, because if it becomes law, it could be construed as a signal that the General Assembly favors tolls. This may, in fact, be the reason it was introduced, since the governor could, without a bill, simply instruct the DOT Commissioner to develop a program.
I voted against, and will continue to vote against, tolls for many reasons, but principally because I believe that instead of imposing more taxes and fees on taxpayers, we should be focusing on spending more responsibly the revenues we already have.
In February, I joined my House and Senate Republican colleagues in presenting a proposal that would provide a predictable and sustainable transportation funding stream of at least $1 billion each year without either tolls or new taxes or exceeding currently planned levels of bonding. The plan would accomplish this by reallocating to transportation annually $400-700 million of the state’s general obligation bonds that are scheduled to be authorized for non-essential projects.
To read the tolls bill, HB 6818, click here.
To read the Republican transportation funding proposal, click here.
Transportation Corridor Development Authority
HB 6851, the governor’s bill that would create a quasi-public agency (TCDA) run by a board of political appointees with independent bonding authority to focus on promoting transit-oriented development (TOD) statewide, passed along party lines out of the Transportation Committee yesterday.
When it was originally introduced, I called the proposal “Eminent Domain on Steroids”, because it gave the TCDA unlimited powers of eminent domain and allowed it to develop projects in municipalities without obtaining any local government approvals. In response to widespread outcry from citizens, local governments, regional Councils of Governments, and legislators, the administration has substantially modified the bill.
While I am a longstanding supporter of TOD, I voted against the bill and will continue to oppose it, as will many of the municipal CEOs and legislative bodies in our area. It creates a new government entity that towns and cities pursuing TOD do not need. And because the entity must raise money to pay for any bonds it issues, it may be more focused on revenue-generating activities than on municipalities’ best interests.
To read the TCDA bill, HB 6851, click here.
Please don’t hesitate to contact me if you’d like to discuss transportation or any other issue further.
I am always happy to hear from you.
Lavielle: Specter of County Government Comes Back to Haunt Connecticut in SB 1
March 24th, 2015
HARTFORD – State Rep. Gail Lavielle (R-143) has submitted testimony opposing provisions in a bill that she said would create a new layer of taxing authority and bureaucracy in Connecticut that would be similar to aspects of county government.
Rep. Lavielle’s testimony refers to certain provisions of SB 1, An Act Concerning Tax Fairness and Economic Development, which is currently under consideration by the General Assembly’s Planning and Development Committee.
Sections 51-55 of the bill require the establishment of a “regional property tax base revenue sharing system”. Under this system, each municipality would remit a portion of its local property taxes to its regional Council of Governments (COG), which would in turn redistribute those funds among all of its member towns and cities, according to a formula that takes into account factors including each municipality’s population and property value.
“Although we may never call our COGs ‘county government’, this bill is a move in that direction,” Rep. Lavielle continued. “If SB 1 passes as written, Connecticut’s regional structure could acquire the same administrative and cost burdens, bureaucratic complexity, and loss of local access to and authority over local revenues as county government – no matter what we call it.”
Rep. Lavielle noted that certain municipalities would gain revenues through the process outlined in the bill and that and would lose. Those that lose would likely face important shortfalls in their local budgets. To continue to provide essential services to their residents and local businesses, they would be required to raise local taxes, in many cases quite considerably. The result: residents would pay more in order to sustain the new layer of regional government, while also paying more just to maintain essential services in their own municipalities.
Rep. Lavielle recalled that in 2013, when the General Assembly passed legislation reorganizing Connecticut’s regions and imposing the COG structure on all regional planning organizations, there was much discussion about its implications, and many municipal CEOs expressed concerns that the new legislation might lead to regional taxation initiatives.
“On June 3, 2013,” she said, “I participated with several others on the House floor in a lively debate of HB 6629, the precursor bill to the COG/regional reorganization legislation passed a few days later. The proponents assured us during the debate that COGs would not be responsible for property taxation issues on a regional basis or at any other level. That assurance is not upheld in SB 1.
“I believe that this regional tax base proposal will create severe financial stress for individuals, businesses, and municipalities that are already struggling under one of the country’s heaviest combined tax burdens,” said Rep. Lavielle, “and I have urged the Committee not to approve it.
“If this proposal in SB 1 does pass out of the Committee as written, however, I hope that all of the proponents will characterize it accurately and with all possible transparency to ensure that members of the public and their elected officials fully understand it for what it is,” said Rep. Lavielle. “Creating a new level of government that collects and redistributes tax revenues is not a step that should be taken without widespread public support.”
Connecticut abolished county government in 1960.
For Rep. Lavielle’s testimony on SB 1, click here.
Eminent Domain on Steroids? A New Bill Threatens Cities and Towns
March 10th, 2015
How would you feel if a group of people who lived elsewhere in the state and whom no one had elected were to take over certain planning and zoning functions in your town or city and unilaterally make critical decisions about entire neighborhoods — like who could own property there, and what they could do with it? Although this scenario seems far-fetched, it is clearly outlined in governor’s bill HB 6851, which has just received a public hearing in the General Assembly.
HB 6851 would strip towns and cities of part of their local planning and zoning decision-making authority by transferring it to a board of state-level appointees. It would also permanently expose all those who own property anywhere within half a mile of a rail or bus station to the threat of eminent domain.
On the surface, the purpose of HB 6851 is laudable: to promote transit-oriented development. TOD both encourages the use of public transit and makes it easily accessible to people who cannot or choose not to drive. TOD’s potential beneficiaries include, among others, young professionals, seniors, people with disabilities, and people with limited incomes. Those living outside TOD areas benefit too, from reduced vehicle emissions, less traffic, a multi-generational populace, and concentration of development away from greenspaces.
TOD is a concept that many communities would like to pursue. But under HB 6851 they might not have the chance, because instead, it would be pursued for them by a group of political appointees, without any requirement for local approvals at all.
Here’s the substance of the bill:
It creates a quasi-public entity called the Connecticut Transit Corridor Development Authority (TCDA) that would be run by a board of 11 voting members, including seven political appointees and four state agency commissioners.
It allows the TCDA to promote TOD in TCDA districts, which include all properties within a half-mile radius of a rail or bus station.
It gives the TCDA board eminent domain powers within TCDA districts.
It requires the TCDA board to consult with the chief elected official of a municipality where development is taking place, but does not require the board to obtain his or her approval for anything. Nor does it require the TCDA board to consult with or obtain approvals from any local legislative bodies, boards, or commissions.
It gives the TCDA the authority to issue its own bonds, financed by revenues collected through fees and rents, as well as state taxes.
In short, the bill would give 11 non-elected people the authority to do whatever they wanted in 500-acre swaths of any city or town in Connecticut with a rail or bus station, and no one in those municipalities would be able to do anything about it.
Many transit stations are in downtown or village areas. Those areas could change dramatically, with no consideration for the views of local residents or property owners. The changes could do a lot of good, like providing needed affordable housing or new transit parking facilities, but they could also do a lot of harm. For example, the TCDA could demolish a beloved local merchant’s shop to replace it with housing or offices, take over a parking lot that generates municipal revenues and pass on the revenues to the state, or expropriate owners of private homes.
The political composition of the board also raises questions about contractor and developer selection and agreements, whatever the political party or parties making TCDA board appointments.
Were the legislative intent simply to offer TOD assistance and incentives to municipalities and to give their citizens or elected officials a vote in local decisions, HB 6851 could easily have been drafted differently. But it wasn’t. Instead, the language of the bill explicitly allows a non-elected body to supersede completely the authority of representative local government with no checks and balances whatsoever.
HB 6851 now awaits consideration by the legislature’s Planning and Development Committee. The administration’s proposal of the bill raises many disturbing questions about its policy stance on the state’s role in local government. The implications are vast for residents of every city and town in Connecticut.
Not So Fast: Breaking Through the Transportation Impasse
March 4th, 2015
Given the many issues with our commuter rail service, the congestion of our highways, and the poor condition of our roads and bridges, the General Assembly’s focus on transportation during this legislative session is welcome news to most people. But what is to be accomplished, and where are we in the process?
There are two components of what is happening with transportation in Hartford. One is establishing an infrastructure plan, an area where Governor Malloy has taken ownership. The other is determining how to pay for it, a task he has left to the legislature.
The Infrastructure Plan
Last month, the administration released its transportation plan, called “Let’s Go CT”, in two booklets that resemble marketing brochures. One, Connecticut’s 5-Year Transportation Ramp-Up Plan, provides a list of “immediate short-term investments,” with costs for each, and a total budget of $2.8 billion for the five years, to be spent on top of the baseline DOT budget. The other booklet, Connecticut’s Bold Vision for a Transportation Future, provides “the long-term 30-year vision for Connecticut transportation.” The budget estimate for the 30-year plan is $100 billion.
The booklets include cost estimates, but do not speak to funding sources.
Several types of mechanisms for funding transportation infrastructure in general are being discussed in the legislature, but they are not attached to particular projects.
Transportation Lockbox. While a law passed last year is meant to protect transportation funds from being diverted for other purposes, it’s generally accepted that the language needs to be stronger. The administration and most legislators are supporting more rigorous statutory language, as well as a constitutional amendment, to ensure that funds budgeted for transportation are used for nothing else.
Long-Term Bonding. House and Senate Republicans have made a detailed proposal for reallocating a portion of the state’s projected general obligation bonding every year to transportation, in order to make available $1 billion annually for transportation infrastructure over a 30-year period. The proposal includes no new taxes, tolls, or borrowing increases.
Tolls. The Transportation Committee has held a public hearing on a bill allowing border tolls on highways. Federal restrictions on ordinary tolls and low revenue potential may well kill the bill if public opposition doesn’t do it first. Although there are no other bills suggesting alternatives like tolled express lanes that drivers can choose to take or not, or congestion pricing, which involves higher tolls during rush hours and lower or no tolls at other times, options like these are also on the table and may be considered later in the session, through an amendment or another process. While the same federal restrictions don’t apply to these mechanisms, the revenue potential still appears limited.
What’s the Bottom Line?
A plan for the five-year “ramp-up” period, with a sequence and order of priority, exists, and the governor’s proposed budget includes an $800 million bonding provision to fund the first two years of it, along with appropriations to pay for the debt service.
A bill now under consideration proposes a $2 billion bond authorization for years 3-5 of the plan, but there is no anticipated funding stream to pay the estimated $800 million in debt service.
The list of initiatives for the last 25 years of the 30-year plan is not organized by priority, and has no time sequence. There is no projected funding source. It is, today, a wish list without much structure or certainty of fulfillment.
Finding the funds to pay for any or all of the plan is no small thing, because the legislature is wrestling with a budget mess of considerable magnitude: a current-year deficit of $100 million and a $2.8 billion deficit for the next two years. This situation casts something of a pall over ambitious future spending plans, even when they focus on an area as critical as transportation infrastructure.
The truth is that it’s probably not time yet to be either too excited or too worried about any initiatives in the transportation plan beyond the next two years. Until the state’s finances are in order, it may be difficult to break through Connecticut’s transportation impasse.
Transportation Takes Center Stage: It’s About Time
February 13th, 2015
Governor Malloy has announced that 2015 will be the year of transportation in Connecticut. Next week, he will present to the General Assembly a comprehensive, long-term plan for repairing and upgrading the state’s transportation infrastructure.
In preparation for the announcement, the governor has said that the plan will cover rails, roads, ports, airports, bikeways, walkways, and transit-oriented development, and that it will span 30 years of work: five years of “ramp-up” and 25 years of construction.
It’s likely that much of the remainder of this year’s legislative session, which ends on June 3, will focus on answering two transportation questions.
1) Priorities: What do we do in what order, and over what time period?
Putting aside the engineering and physical constraints that always affect infrastructure (there are certain projects that simply cannot be started until others are finished), there is likely to be substantial debate and probably disagreement about priorities.
Because so many commuters travel across our region every day, and our infrastructure is so inadequate to our needs, Fairfield County has good arguments for being at the top of the list. We have 125-150,000 cars traveling every day on a major interstate artery that is constructed more like a post road with exits every couple of miles and is almost always heavily congested. The New Haven Line and its branch lines provide 39 million passenger rides a year. But our commuter railroad is unreliable, slow, and not altogether safe. These conditions are unacceptable, especially since Fairfield County contributes more than 45% of the state’s tax revenues.
Because we believe that the transportation needs in our part of Connecticut are severe enough and important enough to the rest of the state to be a top priority, my Westport colleague Rep. Jonathan Steinberg (D-136) and I have formed and are leading a bipartisan regional caucus to advocate for urgent attention to southwestern Connecticut’s transportation infrastructure. We have been joined by colleagues from both towns and cities and from both parties, and we are planning an active advocacy agenda for the legislative session.
To read about our recent meeting and press conference, click here.
Funding: How do we pay for these transportation initiatives?
Early this week, I joined my House and Senate Republican colleagues to present a proposal that would provide a predictable and sustainable transportation funding stream of at least $1 billion each year, through bonding, for the next 30 years. The plan protects existing transportation funding sources while making a substantial commitment to prioritizing transportation in the state’s allocation of its annual capital expenditures. Here are the main components:
Preserving current plans (about $600 million per year) for transportation bonding
Reserving a set amount, beginning with $440 million in the first year, of General Obligation Bonds each year for transportation purposes, while maintaining bond funding in essential areas like school construction, housing, and municipal capital grants
Imposing a soft total bonding cap of $1.75 billion the first year, already less than the state’s 2014 bonding total, and gradually reducing the cap to $1.6 billion annually
No tolls or tax increases
Reserving a contingency fund of $100 million
Flexibility in setting transportation priorities
Infrastructure is an appropriate use of bonding, as the usefulness of the projects far outlasts the life of the bonds, and I think this plan provides a solid basis for funding the state’s transportation needs going forward.
To read more about the plan, click here.
For a plan like this one to work, funds allocated to transportation must not be diverted to other purposes. This is why I’ve been a longstanding advocate for a transportation lock box, and will support measures designed to protect transportation funds. Over the past decade, more than $1 billion of the funds designated for transportation have been used for other purposes, and this must stop.
In the interest of making constructive progress, I am not focusing on tolls either in talking with constituents or with the media. Most people in our area who have spoken with me about transportation don’t want them (although there are those who do) and this is of course a persuasive argument in itself. But there are other reasons.
First, I believe it is unlikely that tolls could raise enough revenue over time to provide a significant portion of the transportation funding we need.
And second, the regulatory constraints on imposing tolls on existing roads would make doing so very difficult, if not almost impossible. The exception is optional new tolling lanes, like express lanes, but information I’ve seen suggests that these are more effective in managing traffic than in generating revenues.
Governor Malloy has said that in order to reach the transportation infrastructure goals he will set, it will be necessary to have a serious conversation with the public about how much it will cost. I agree. But only if at the same time, there is a serious conversation with the public about the state’s real financial condition, particularly given the nearly $3 billion deficit the state faces over the next two years. This means full transparency about debt and deficits, unfunded post-retirement liabilities, annual use of borrowed funds, and how taxpayer dollars are being spent. Only then will everyone in the state who is interested in these matters be equipped to make a judgment on what Connecticut can afford and over what period of time.
I will keep you informed about upcoming developments, and I look forward to advocating for our region’s serious and pressing transportation needs, both in the Transportation Committee and in the Appropriations Subcommittee on Transportation, where I serve as Ranking Member.
Please don’t hesitate to contact me if you’d like to discuss transportation, or any other issue, further. I always appreciate hearing from you.
Rep. Gail Lavielle
Why Is the Legislature Beating Up on Businesses When the State Needs Jobs?
April 11, 2014
Multiple recent studies and surveys have shown that Connecticut’s economic recovery is among the slowest in the country. Unemployment remains higher than the national and regional averages, and the workforce continues to shrink as people either stop looking for work or leave the state to find jobs elsewhere. CNBC and Forbes both rank Connecticut near the bottom of their lists of business-friendly states. In an implicit acknowledgment of the weaknesses of the business environment, the administration itself continues to insist on the need to “play defense”, by offering significant incentives to individual businesses to ensure that they don’t leave Connecticut.
Under these circumstances, it would be odd for the General Assembly to make a concerted effort to create hurdles for creating, operating, and growing businesses. Yet during this legislative session, the Labor & Public Employees Committee has produced a steady stream of bills that do just that. One has already become law, one has just failed today in the Finance Committee, and several of them are still moving through the legislative process.
SB 249, An Act Promoting Retirement Savings, would make Connecticut the only state in the country to mandate a state-run retirement plan for private-sector workers. It would establish a state-run retirement trust and require any private-sector business with five or more employees that doesn’t offer them an IRA, 401(k), or pension plan to facilitate employee access to it. Employees would be automatically enrolled in the plan unless they explicitly opted out every two years. The Office of Fiscal Analysis estimates that the state would incur about $10 million in start-up costs for the plan. The measure would make the state a direct competitor of Connecticut’s key financial services sector, which employs more than 100,000 people and provides a full range of easily accessible retirement plan options. It would also impose multiple new costly and time-consuming obliga tions on businesses, including payroll deductions, plan payment transfers, special employee communications, and hosting open enrollment periods. These mandates would, of course, be particularly onerous for small businesses.
SB 32, An Act Concerning Working Families’ Wages, increases the state’s minimum wage from $8.70 to $9.15 on January 1, 2015, to $9.60 on January 1, 2016, and to $10.10 on January 1, 2017. This bill was signed into law by the governor in March, making Connecticut the state with the highest minimum wage in the country.
HB 5280, An Act Concerning Executive Employee Compensation, would restrict eligibility for tax credits, tax exemptions, tax abatements, or other state financial assistance to employers whose executives’ annual compensation does not equal or exceed 50 times the average annual compensation of their employees. This measure constitutes an intrusion of state government into employers’ operating decisions, as it openly incentivizes businesses to structure their payrolls in a certain way.
SB 242, An Act Concerning Sick Leave for Teacher Assistants and Radiologic Technologists. Under the current administration, Connecticut became the only state to adopt paid sick leave legislation. This bill would extend the state’s requirement for employers with at least 50 service workers to provide paid sick leave to two additional categories of employees. The inclusion of teacher assistants would result in a new state mandate on local school districts and related cost increases for municipalities. The Office of Fiscal Analysis estimates that about 12,000 school employees would be affected.
HB 5069, An Act Concerning Low-Wage Employers, passed in the Labor Committee and has just been voted down in the Finance Committee today. It would have required employers with 500 or more workers to pay their employees at least 130% of the state’s minimum wage. If they did not, they would have to pay a fee of $1.00 for each work hour paid below that rate. The measure would have applied to both independent businesses and to franchises. Taking into account the new minimum wage increases recently signed into law, employers would have had to increase their lowest wages by more than 50 percent in just 3 years.
In terms of hurting businesses, these bills span the full spectrum from increasing their costs to interfering with their internal decisions to allowing the state to engage in out-and-out competition with them. The administration has said repeatedly that Connecticut is open for business. But if these bills become law, the state might as well just tell businesses to stay away.
While our neighbors New York and Massachusetts are taking steps to reduce taxes and business costs, Connecticut seems to be doing everything possible to make its economy less competitive.
What should we do? First, stop these bills and others like them from moving forward, like the Finance Committee did with HB 5069 today. Then, we must listen to business owners and executives who tell us again and again that the two things they need most to grow and create jobs are a reduction in their ongoing, everyday costs, including labor costs and taxes, and consistent, reliable tax and regulatory policy. The economic development policies of the last three years, which are based on cherry-picking and one-shot incentives for selected businesses, have essentially dismissed that feedback. We must help all businesses, not just a few, reduce their structural costs over the long term. And we must give them confidence that Connecticut is a place where they can make five to ten-year plans to hire, invest, build, and grow.
The legislative session ends in less than a month, and confronting the Labor Committee’s current crop of bills is one of the most urgent tasks before us. While it may be possible to argue the pros and cons or the good intentions of the individual proposals, seen as a group, these bills send a clear signal that Connecticut is not a place where businesses are welcome. There are many viable strategies for stimulating economic development and job creation. Beating up on businesses is not one of them.
A Packed House for Rep. Gail Lavielle’s Public Meeting on Education Mandate Relief
November 25th, 2013
HARTFORD – State Representative Gail Lavielle (R-143), along with Weston Superintendent Dr. Colleen Palmer, hosted a public meeting last night designed to help identify state mandates that may be detrimental to teaching and learning in Connecticut’s public schools. More than 150 educators, parents and students from towns across the state attended the meeting held at Bedford Middle School in Westport.
Attendees came from a range of towns, including Fairfield, Greenwich, New Canaan, New Haven, Newtown, Redding, Ridgefield, Shelton, Stamford, Stratford, Trumbull, Weston, Westport, and Wilton.
Lavielle and Palmer are two of the appointees to a task force created during the 2013 legislative session by PA 13-108 to identify opportunities to offer relief to public schools from mandates that may be negatively affecting their ability to provide the best possible education to students. Lavielle authored the section of the bill that required the creation of the task force. With two vacancies yet to fill, the full task force has not yet convened.
“As this evening’s turnout clearly demonstrated,” said Lavielle, “the issue of mandate relief is too important to too many people in too many districts to wait. I thought we should get to work. I want to thank the Westport Public Schools and Superintendent Elliott Landon for hosting this very important public meeting. The testimony from superintendents of schools, principals, teachers, parents, school board members, union representatives, elected officials, and members of the general public will be useful in crafting legislation for the upcoming legislative session. This will go a long way toward the ultimate goal of ensuring that our schools can provide the best possible learning environment and education to our students.”
Possible opportunities for mandate relief raised by speakers included administrative processes and procedures related to teacher evaluations and student success plans, aspects of the implementation of Common Core State Standards, in-school suspensions, regional school calendars, and administrative procedures related to special education programs.
“The meeting provided a meaningful forum for educators, municipal leaders, and citizens to express their concerns regarding the ways that many state educational mandates ultimately result in forcing districts into a one-size fits all approach to meeting the needs of their students, limiting local innovation and unnecessarily wasting the precious resources of districts,” said Dr. Colleen Palmer, Superintendent of Weston Public Schools.
“We, in the education community, are very appreciative that Rep. Lavielle provided us with the opportunity to express our views on a multitude of issues concerned with Education Mandate Relief and the state of education in Connecticut,” said Westport Superintendent Dr. Elliott Landon. “As a member of the General Assembly’s Education Committee and the state’s legislative Mandate Relief task force, Rep. Lavielle clearly demonstrated her receptiveness to the concerns of parents, teachers, administrators and community members on these two vital issues. Speaking for all who were present at the hearing she conducted, we are all pleased for her willingness to give the education community a full hearing on matters that we believe need to be addressed to enhance and improve education for all of Connecticut’s school children.”
Dr. Deborah Low, Superintendent of the Ridgefield Public Schools, also spoke and discussed a number of opportunities for mandate relief, including duplicative reporting, in-school suspensions, procedures related to student success plans and teacher and administrator evaluations, requirements for committees that have overlapping roles, and unfunded mandates more generally.
“Superintendents in our region have been concerned about the proliferation of state mandates for years and I believe that this concern is shared by the teachers, community members, and board of education members who spoke at last night’s hearing,” said Wilton Superintendent Dr. Gary Richards. “I applaud Rep. Lavielle for organizing this hearing and sincerely hope that the Education Committee will put forth legislation that will address some of the concerns that were expressed last evening.”
Elected officials in attendance at the meeting included State Senator Toni Boucher (R-26), State Representative Jonathan Steinberg (D-136), and Shelton Mayor Mark Lauretti.
“The need for mandate relief has grown over the years as the education cost sharing formula has shifted state reimbursements from more affluent towns to schools with high percentages of families living in poverty,” said Boucher. “Many towns now receive only 1 to 2 cents from the state for every tax dollar sent to Hartford. Many of these are also high-performing districts and feel that they should be relieved of most state mandates as a result. It is imperative that the state convene the full task force immediately and take the issue of unfunded mandates seriously in next year’s session.“
“The size and geographic breadth represented by the attendees at the meeting was a real testament to how important this issue is to our communities,” said Lavielle. “Many of them traveled considerable distances to attend, and a number of speakers were very passionate in their remarks. I have also received many follow-up e-mails from attendees who did not speak at the meeting. I hope that this high level of interest will help convey the urgency and importance of dealing with these issues to the Education Committee during the upcoming session. I look forward to contributing what we learned last night to the work of the task force.”
Those who could not attend the Westport meeting or would like to submit written comments or discuss the issue may contact Representative Lavielle at email@example.com, 860 240 8700.
Forced Regionalization Is a Minefield for Western Connecticut Cities and Towns
October 30th, 2013
Connecticut’s planning regions are about to be reorganized. While this may not seem like earthshaking news, alarm bells are sounding in western Connecticut, where many municipal CEOs are deeply concerned.
Because Connecticut has no county government, planning regions have provided a way for municipalities to work together on matters like transportation and economic development. They’ve also received certain types of state and federal funding that are available only to regional entities. Before two recent voluntary consolidations, Connecticut had 15 planning regions with relatively light administrative structures. A law requiring the governor’s budget office (OPM) to present a plan to consolidate the regions by January 1, 2014 has been on the books for several years. While individual “border” towns can appeal OPM’s final plan, it is essentially a mandate under the law.
Several changes were made to that law last spring. One of them requires the new regions defined by OPM to adopt a Council of Governments (COG) administrative structure and to be capable of going beyond providing “necessary regional services” to “sophisticated planning activities and regional services”. New language enumerates 25 services, which include education, public safety, health, housing, and land use. One concern expressed by municipal CEOs around the state is that this may augur a shift of state and/or local functions to the regions, creating an additional layer of administration and costs, and leading to loss of local control.
OPM has recently released its preliminary plan, which reduces the number of regions to eight, and has presented it to town officials. OPM staff has been unable to answer questions about why the number of regions is being cut in half, with corresponding increases in their size.
The legislature’s chief regionalization proponent, House Speaker Brendan Sharkey, has, however, spoken openly about what he hopes this initiative will achieve. One main objective is reducing towns’ reliance on property taxes. Likening Connecticut’s tax system to a stool with three legs representing sales, income, and property taxes, he has said that the property tax leg is “extra long” and that the legs must be rebalanced.
Many town CEOs worry that residents’ local tax money, instead of going directly to municipal services and schools, would go to the state through sales and income taxes, giving the state the authority to decide how to distribute it. Because the law allows regions to apply for incentive funding based on sharing of services, towns might be forced to pool resources within their regions to obtain revenue, and many could face dramatically reduced revenue streams and stressed services. One southwestern Connecticut town CEO said, “I’m skeptical about the true intent of this redistribution of resources. Not only might well-managed towns receive less, but more of our resources would also go to municipalities with no record of using the funding they already receive wisely.”
The law exempts from consolidation imposed by OPM any two regions that voluntarily consolidate to form a new region with 14 or more towns. To avoid potential destabilization of municipal revenue streams and resources, western Connecticut’s town CEOs have collaborated to form a region of municipalities that share similar characteristics and levels of need. The result: a joint application to OPM for a voluntary merger of the existing southwestern (SWRPA) and Housatonic Valley (HVCEO) regions. As one HVCEO town CEO said, “It’s the least painful way of doing something we didn’t want to do to begin with.”
Although SWRPA and HVCEO followed the law’s requirements closely and met the application deadline, municipal CEOs are concerned about signs of the administration’s continuing interest in integrating Greater Bridgeport into the new region. If everyone follows the law, this won’t happen. I have joined many SWRPA municipal CEOs in requesting OPM’s speedy written confirmation of the proposed SWRPA/HVCEO merger, which would put the matter to rest.
How far Connecticut’s regionalization goes in transforming local government remains to be seen. Better transportation planning and voluntary sharing of municipal resources to create efficiencies would make sense. But regional mandates, state redistribution of local revenues, and stretching local resources too far pose serious threats to well-managed SWRPA and HVCEO municipalities. All of us who represent this region must work together to navigate the regionalization minefield and safeguard the quality of services and financial health of our communities.
*SWRPA towns are Darien, Greenwich, New Canaan, Norwalk, Stamford, Weston, Westport, and Wilton. HVCEO towns are Bethel, Bridgewater, Brookfield, Danbury, New Fairfield, New Milford, Newtown, Redding, Ridgefield, and Sherman.
Is This Any Way to Run a Railroad?
October 15th, 2013
The recent disruption of Metro-North service raised several critical issues. An obvious one is the cost and inconvenience of disruptions for commuters. Another is their impact on rush-hour traffic congestion, and on road and rail transportation throughout the Northeast Corridor, which connects New England to the rest of the country.
There’s also an impact on the state budget. An analysis released last week by the state Department of Economic and Community Development (DECD) found that the outage lost Connecticut $2.5 million in net revenue and $62 million in GDP. While these are estimates, the numbers are consequential enough to cause legitimate concern, especially in a state with the only GDP that shrank in 2012.
None of these issues is new, but the recent outage has put them in the spotlight. Because of the New Haven Line’s importance to Connecticut’s economy and to the state’s ability to function on a daily basis, it’s urgent to take Metro-North service disruptions very seriously.
Although commuters are receiving credit this time, there’s no regular policy for compensating them for tickets they can’t use. Besides the money they lose on tickets, they also must pay for parking and gasoline if they drive to work.
I introduced a bill during the 2013 legislative session that would have required the validity of monthly and weekly tickets to be extended after outages lasting 48 hours or more. Despite strong support from the CT Rail Commuter Council, SWRPA, and many commuters, the bill didn’t pass because both Metro-North and the CT DOT objected to any type of reimbursement. Metro-North’s one-time credit issuance, however, shows that workable solutions are possible. If no policy change happens, I will raise the issue again during the 2014 session.
The ultimate objective should be minimizing or eliminating lengthy disruptions altogether. It’s a complex task that requires not only resetting investment priorities, but also a review of the way the railroad is managed.
A little background helps explain why. The state owns the tracks in Connecticut. Metro-North operates the commuter service under a decades-old, complicated contract with the state DOT. The state pays 65% of operating expenses and Metro-North pays 35%. This includes movable equipment like railcars. The state alone is responsible for the infrastructure. This has, in practice, meant repairs and upgrades, as well as maintenance. The terms of the DOT’s authority over any Metro-North actions are limited and obscure. What does all this mean for improving the New Haven Line?
This last outage has been ascribed to ConEd’s failure to provide a back-up power source while it was repairing one of two feeder lines that supply electricity to Metro-North. The repair work was scheduled. Metro-North knew about it and agreed with ConEd that relying exclusively on one power line posed no significant risk. Clearly better assessment and planning could have prevented the outage, and the DOT should require that of Metro-North. The contract should clearly give the DOT this leverage.
A fundamental issue is the serious need for investment to make service on the New Haven Line not only more frequent, faster, and more reliable, but also safer. Incidents threatening safety are becoming more common, among them the tragic derailment in Bridgeport, the locked overheated railcar in Westport, the train traveling with open doors on the New Canaan branch in the dead of winter.
The New Haven Line provides 39 million passenger rides annually and is the key mass transit artery through Connecticut’s most economically active area. Yet the administration has put investing in speculative new projects like the New Britain busway first. Redefining investment priorities would help focus attention on the safety of people riding the rails already. So would halting raids of the state’s Special Transportation Fund, which should be used only for transportation. So would review of the Metro-North contract to find a more equitable way to allocate responsibility for maintenance and repair costs.
Introducing a commuter compensation policy, reviewing the Metro-North contract, and resetting the state’s investment priorities are all critical for the New Haven Line. This railroad is too important to Connecticut not to run very, very well.
Lavielle Concerned about Connecticut’s Pension Obligations: Cites Recent CNBC Report
August 19th, 2013
HARTFORD – In the wake of Detroit’s municipal bankruptcy filing, CNBC has released a report this month on the condition of state and municipal pension obligations. The report found that Connecticut’s level of unfunded pension liabilities is one of the highest in the country. State Representative Gail Lavielle (R-143) today released the following statement on the report.
“As of its last biennial actuarial evaluation in 2012, Connecticut had $9.7 billion in assets and $23 billion in liabilities in its State Employees’ Retirement System (SERS), meaning that only 42.3% of its obligations were funded, and $13.3 billion, or about 58%, were unfunded. While an 80% funded ratio (20% unfunded) is generally considered healthy, Connecticut is one of nine states, according to CNBC, that have a ratio of less than 60%, and among those nine, it is near the bottom of the list. Viewed another way, almost 60% of Connecticut’s employee pension fund liabilities are unfunded, which is nearly three times the 20% level that would be considered healthy.
“When new rules imposed by the Government Accounting Standards Board are implemented next year, Connecticut’s funding ratio may deteriorate further. This is because, among other things, the rules require public pension fund managers to adopt more realistic assumptions when estimating future investment returns.
“The effect of Connecticut’s unfunded pension liabilities on the state’s bond ratings is certainly cause for concern. In early 2012, Moody’s downgraded its rating for Connecticut from Aa2 to Aa3, citing ‘Connecticut’s high combined fixed costs for debt service and post employment benefits relative to the state’s budget’ and ‘pension funded ratios that are among the lowest in the country and likely to remain well below average’. This year, Fitch has downgraded its outlook for Connecticut’s bonds from ‘stable’ to ‘negative’, citing ‘significant pension obligations’ as one of the reasons. Lower ratings make borrowing money more expensive for the state and, by extension, for its taxpayers.
“It’s also worth noting that the $13.3 billion in unfunded SERS obligations represent only a portion of the state’s unfunded long-term liabilities. Unfunded obligations related to the Teachers’ Retirement Fund and post-employment health and life benefits for both teachers and other state employees total about $25 billion. The state also has outstanding long-term debt of about $19 billion. The total is about $65 billion.
“Looking just at SERS, since 2007 Connecticut’s funded ratio has declined from 53.6% to 42.3%. As the unfunded obligations increase, the annual contributions necessary to cover them by the time they come due increase as well. Finding the money to make those contributions means either generating more revenue or cutting spending in other areas. Residents feel the effects either way. For the current year, the planned contribution to SERS is about $1.27 billion, around 6% of the total budget.
“Given the state’s level of debt, its heavy borrowing to pay operating expenses, and sluggish economy, it will be difficult to sustain annual contributions at that level or to increase them. Other states that have faced this problem, like Rhode Island and California, have determined that keeping up with or even increasing the contributions isn’t enough and are attempting to slow the growth rate of the obligations themselves in order to reduce their unfunded pension liabilities. Examples of their proposals include raising the minimum retirement age for state employees, moving active employees to hybrid defined benefit/defined contribution systems, suspending cost-of-living adjustments for retirees until funding ratios improve, increasing employees’ share of contributions to the pension fund, and changing the way base salaries are determined for pension payment calculations.
“In Connecticut any changes like these must be negotiated between the governor and state employee union leadership. Although it has not exercised it in recent years, the legislature does have the right – and many of us believe, the obligation – to vote on any negotiated changes. It should do its part to ensure accountability and taxpayer representation. While it’s understandable that state employees may not think such changes are in their best interests, the alternative may well be not receiving what they’ve been promised when they retire. Without a frank, open, and realistic dialogue between the administration and union leaders to explore and select options like these now, state employees risk a disappointing retirement, residents risk further steep tax increases and service cuts, and the state risks further debt rating downgrades and serious threats to its solvency and its economic survival.”
Information on the CNBC report on pensions is available at: http://www.cnbc.com/id/100929269
What Will it take to Make Connecticut Wake Up?
August 9th, 2013
An article posted on August 1 on the Forbes.com web site has gone viral. Entitled “How Did Rich Connecticut Morph Into One of America’s Worst Performing Economies?” it’s an unapologetic look at the dismal state of Connecticut’s economy and the policies that have transformed it from being one of the most prosperous in the country into the only economy that actually shrank in 2012 – the one that now ranks dead last.
Written by Jim Powell, an economic historian and frequent Forbes contributor, the article has generated intense social media activity and an outpouring of comments. Perhaps because it appears in a national media outlet, it’s raising more eyebrows and generating wider interest than homegrown pieces about Connecticut that include much of the same information. It paints a grim picture of a state with every possible advantage that has been driven to its knees by unsuccessful policies that a one-party-dominated state legislature has championed for decades with unremitting consistency.
The article has clearly touched a nerve. Not a day has gone by that several people haven’t mentioned it to me spontaneously. One constituent said, “I feel bereft, like I’ve been betrayed by my own state. I can’t stay here.” Another said simply, “It’s over. Connecticut is finished.”
What has upset people so much? For starters, there’s a litany of Connecticut’s current abysmal rankings in everything from annual economic growth to per capita debt to business friendliness, as well as data on the exodus of people and businesses to other states in recent years. And then there’s a primer on the policies and practices responsible for these outcomes that reads like a guidebook on how to sink a thriving economy. These include:
• Consistent failure to focus on attracting investors and businesses in order to sustain an influx of new businesses
• Relinquishing Connecticut’s competitive tax advantage by introducing the income tax, sustaining one of the country’s highest gas taxes, and increasing the overall tax burden more and more steeply over time
• Relentlessly increasing state spending, nearly tripling the budget over two decades and expanding the number of state government employees significantly faster than the population for 30 years
• Making state and local government more expensive to run by mandating the use of unionized construction companies for public projects
• Allowing the state’s major cities to decline due to ineffective crime prevention, housing, zoning, and business tax policies
As a framework for managing a state, these policies and practices have weakened Connecticut’s economy – called one of the country’s strongest by the New York Times in 1984 – beyond recognition. They are not working, and for many, they simply defy logic. What frightens people the most is that there’s no reason to hope they will change.
Yet there is a way. Lawmakers and the administration must listen to the clarion call of competition and look to expand the tax base instead of the taxes themselves. Doling out large one-shot forgivable loans and incentives to a few select companies doesn’t help any business, let alone all of them, address day-to-day expenses over the long term – but lowering taxes and other costs and regulatory hurdles for all businesses does. The state must stop pushing taxpayers beyond their means by respecting the spending cap and significantly reducing spending by privatizing state services where it makes sense and reforming state employee union contracts. And that’s just a start.
What more will it take for the people of Connecticut to wake up and demand a reversal of the policies that have failed them? How bad do things have to get? One concerned citizen suggested that for the public to understand the need for sweeping change and usher in a more balanced state government, we’ll have to wait until our beautiful state becomes “Detroit on the Sound”.
But this doesn’t have to happen. The alarm clock is already blaring in our ears. Connecticut must wake up now and insist that state government change course before it’s too late. Only then can we hope to see a future that is brighter than the past.
To read the Forbes article, visit: http://www.forbes.com/sites/jimpowell/2013/08/01/how-did-rich-connecticut-morph-into-one-of-americas-worst-performing-economies/.
June 27th, 2013
The dust has now settled on Connecticut’s 2013 legislative session. Because this is an odd-numbered year, it was a budget session, designed to set the course for the next biennium. Where did it take our state, and where are we going?
Like so many who contacted me during the session, I had hoped the budget would take Connecticut in a new direction. All signs pointed to a need for change.
During the last biennium, we had watched Connecticut fall to the bottom of numerous state rankings, including personal income growth, debt per capita, business friendliness, funding of pension liabilities, attractiveness for retirees, credit quality, combined individual tax burden, the size of the educational achievement gap, and the quality of roads. Unemployment has continued to hover around 8%, higher than both the national and New England averages.
Recently, the news became even worse. The U.S. Department of Commerce reported that in 2012, Connecticut’s economic growth ranked dead last. It was the only state whose GDP actually shrank. And its workforce shrank too –by 51,000 people, or 2.68%, more than that of any other state.
The policies that have brought Connecticut to this pass have entailed successive major annual spending increases and extensive borrowing and tax hikes to pay for them, culminating in 2011 in the state’s largest ever tax retroactive increase. Still, despite the nearly $2 billion in new taxes, the state found itself with a midterm deficit and a persistent cash shortage. Although a $220 million yearend surplus is projected, it is due to a one-shot influx of estate and gift taxes that is unlikely to recur. So the state still faces a structural deficit, consistently spending more than it takes in.
While no one thought that all legislators would agree on how to do it, there was certainly an expectation that the budget would address these issues head-on and lay out a clear strategy for improvement. Instead, it maintained existing policies and eroded the only protection that taxpayers have against spending that takes no account of their financial circumstances.
The budget passed by the majority and approved by the governor makes no structural tax or spending policy changes. It increases spending by nearly 10%, borrows $750 million to pay operating expenses, delays payment of $400 million in debt service, and imposes more than $300 million in new taxes, including a 16% increase in the gasoline tax and an extension of the 20% corporate tax surcharge that was to expire on July 1. It also raids about $120 million from the Special Transportation Fund and more than $130 million from other special-purpose funds in order to generate one-time revenues. For all of these reasons and more, I could not support it.
While officially the biennial budget totals about $38 billion, it actually spends nearly $44 billion, about $6 billion more than the state’s constitutional spending cap would allow. By law, to exceed the cap, the legislature must vote to do so with a 3/5 majority and the governor must declare a budgetary emergency. Instead of respecting this process, the majority changed a longstanding accounting practice by taking $6.3 billion in Medicaid spending“off-budget” – continuing to spend it, just not counting it toward the cap.
This sets a dangerous precedent. The cap was introduced two decades ago, in response to the passage of the state income tax, to ensure that the state’s spending would not outstrip its ability to raise revenues from taxpayers. It is meant to set realistic parameters for how much residents can afford to pay in taxes, thus keeping the state from pushing them beyond their means. Skirting the cap leaves taxpayers exposed by giving the state an unlimited license to spend.
Without real policy changes, there is nothing to stop Connecticut’s downward spiral, with taxpayers caught in the vortex, paying more and more for services that don’t improve.
What are the alternatives? The minority party proposed many, but the majority declined to consider them. These included real, structural spending cuts, including replacing defined benefit retirement plans for state employees with defined contribution plans; increasing their healthcare co-pays and contributions; eliminating longevity bonuses; limiting future hires; privatizing state services that can be better provided at a lower cost by community organizations. It is time to stare reality in the face and recognize that the state cannot continue to spend more than its taxpayers can afford. Our infrastructure and services are increasingly suffering from the failure to do that. The money is just not there.
Another priority should be expanding the tax base by attracting new businesses and providing an economic climate that helps all businesses –not just a few — grow and create jobs. The administration’s current policy of targeted spending on selected companies and industries has not been effective in stimulating broad job creation, because it doesn’t give businesses a structural foundation for long-term growth. Only a favorable tax and regulatory environment that reduces their ongoing costs can do that, and Connecticut’s failure to provide one has led to increasingly vigorous recruitment efforts by other states.
For those of us who love this breathtakingly beautiful state, Connecticut’s economic plight tugs at our heartstrings. We want the answer to the question “Whither Connecticut?” to be “Upward, forward, toward jobs, security, and prosperity”. The evidence is clear: the same old tax and spend policies won’t take us there.