Ben Barnes (OPM Secretary), Bridgeport, Malloy, Mayor Bill Finch, Paul Vallas, State Budget Ben Barnes, Bridgeport, ECS Formula, Malloy, Mayor Bill Finch, Paul Vallas
Connecticut’s taxpayers cover more than 80 percent of the costs associated with running Bridgeport’s Schools.
For more than twenty-five years, Connecticut’s primary funding mechanism has been called the Education Cost Sharing (ECS) formula. Underfunded by about $2 billion dollars, the money is distributed to towns based on a variety of factors including the number of students living in poverty and the town’s ability to come up with their own funds via their local property taxes.
Every town gets some state aid; the poorest towns get the most.
There are three criteria that towns must meet to get their state aid;
First, the entire amount of the ECS state-grant MUST be spent on education
Second, any increase in the ECS grant CAN NOT be used to supplant local funding for education.
Third, the town must invest a minimum amount of its own money, a system that is called the ECS Minimum Budget Requirement (MBR).
As the CT Post is reporting, “Mayor Bill Finch’s administration is negotiating feverishly in Hartford to shrink a state-mandated $3.3 million spike in education spending that the mayor inexplicably left out of his proposed budget.”
The story goes on to read, “Since Finch did not include the money in his 2013-14 fiscal plan, Bridgeport officials are now trying to convince the state they should not be on the hook for the $3.3 million because of all the unreimbursed “in-kind” school expenses the city covers.”
Connecticut’s entire school funding system is based on the notion of shared expenses. Bridgeport is at the very top of the list of towns that benefit from the state system.
Although the ECS fails to allocate sufficient funds to cover what the state should be paying, rather than pay their share, Bridgeport officials claim that they should be allowed to duck their responsibility to pay their required share.
Adding insult to injury is the fact that Bridgeport appears to have any ally in Ben Barnes, Malloy’s Secretary of the state Office of Policy and Management.
Barnes worked for Malloy when Malloy was the Mayor of Stamford. When Malloy left the Mayor’s office in Stamford to run for governor, Barnes landed in an administrative position in Bridgeport. Soon after, he transferred over to become the chief financial officer for Bridgeport schools.
Barnes knows very well that Bridgeport’s schools are underfunded and he knows the requirements of the local Minimum Budget Requirement law.
However, instead of demanding the Bridgeport, like every other Connecticut city, meet its MBR Requirement, Barnes is quoted in the CT Post article as saying, “If a city takes over some $1 million activity for the (school) board, they get a credit, or vice versa…So we’ve agreed to look for some additional information from them. (And) we’ll provide them with some additional clarification of how we’re interpreting the statute.”
But Barnes knows that history and intent of the law and there was never the notion that a city’s “in-kind” support for its schools was meant to take the place of the city’s fundamental requirement to meet its Minimum Budget Requirement.
Last month, the school budget proposed by the Paul Vallas, Bridgeport’s “Superintendent of Schools,” counted on the additional $3.3 million the law requires Bridgeport to spend.
Now Vallas is changing his tune. According to the CT Post article, at a recent Bridgeport Board of Alderman meeting, Vallas said, “Do we need $3.3 million more? Yeah…Can we live without it? If we have to, we will find a way to do that.”
So here is the person heading up Bridgeport’s schools backing off his own budget proposal and the need for the state and the city to properly fund Bridgeport’s schools.
Meanwhile, the CT Post reports that, “Finch and his office have refused to discuss the matter publicly, instead issuing the same terse statements that the administration is focused on a resolution.”
This isn’t the first time the Bridgeport has attempted to duck their local funding requirement. A major Connecticut State Department of Education Audit in 2003-2004 and 2005-2006 raised extremely serious problems with Bridgeport’s unwillingness to fulfill its legal obligations when it comes to properly funding education.
Here we are, almost ten years later…
And we are left with the realization that the more things change, the more the stay the same.
Once again, Bridgeport officials want us to believe that Connecticut’s education funding laws applies to everyone but them.
For the full CT Post article go to: http://m.ctpost.com/connpost/db_43463/contentdetail.htm?contentguid=hcRAd05N&full=true#display
Achievement First/ConnCAN, Ben Barnes (OPM Secretary), Budget Cuts, Charter Schools, Education Reform, Malloy, Prosperity for Connecticut PAC, State Budget, Stefan Pryor Ben Barnes, Charter Schools, ConnCAN, Education Reform, Malloy, State Budget, Stefan Pryor
On February 6, 2013 Governor Dannel Malloy gave his Bi-annual budget address to a joint session of the Connecticut General Assembly. On the issue of public education he said, “We’re turning around struggling schools by growing our Commissioner’s Network, with funding for 17 more schools…We’re continuing to broaden the range of educational opportunities by maintaining our support for magnet schools, agricultural-science schools, and other high-quality options, including funding for additional state charter schools.”
It was just two weeks earlier that ConnCAN, the charter school advocacy group, conducted a public opinion survey designed to show broad-based public support for Malloy and Malloy’s education reform initiatives.
Interestingly, although the poll was conducted from January 23 until January 27, ConnCAN didn’t report their $35,800 expenditure on the survey until their March State Ethics Filing. By waiting a month to report the cost of their persuasion survey, they ensured that media coverage of the survey was confined to results and not the excessive amount of money ConnCAN spent to create the impression that Malloy’s actions were politically popular.
The strategy played itself out on February 13, 2013. While Malloy’s controversial budget proposals floated out there, a week after he delivered them, the Global Strategies Group, a political and public relations company released a “polling memo” declaring that the public was strongly behind the Governor and his education proposals.
Global Strategies Group is the company that Roy Occhiogrosso, Malloy’s former chief advisor, rejoined after leaving the Governor’s side on the first of this year.
The Global Strategies Group memo claimed that, “There is broad support for continuing education reforms. Connecticut voters are overwhelmingly in favor of continuing the education reforms passed last year… Support for reform crosses party lines… and demographic groups… Men and women… parents and non-parents… younger and older voters… and white and non-white voters… all support continuing reforms.” The memo also claimed that “86 percent say improving the quality of public education is a high priority, including 49 percent who say it is a top priority that needs to be addressed by the governor and the state legislature.”
Perhaps the most interesting part of this entire story is the pattern of communications that was taking place behind the scenes.
According to materials released as a result of a Freedom of Information request, in late December 2012, ConnCAN’s acting CEO, Jennifer Alexander, wrote to Malloy’s budget chief, Ben Barnes, asking for a meeting to discuss the state budget. Twenty minutes later Barnes wrote back accepting the request.
The meeting was originally scheduled for January 11, two weeks before the ConnCAN public opinion survey began, but had to be postponed due to the special deficit mitigation session.
When the meeting was postponed until after the date of the Governor’s budget address, ConnCAN’s CEO wrote on January 10, 2013:
I saw that our scheduled meeting for tomorrow was cancelled…I really do need to meet with you before the end of next week… Is there any chance we can meet sooner?
All the best,
On January 16, 2013 Alexander followed-up with a letter that included a statement that read, “I’m writing, therefore, to ask that your team come out as strongly as possible in the budget on the key pillars of the Governor’s reforms, most notably charter schools, the Commissioner’s Network, and educator evaluation. Specifically, we ask that you hold firm to fully fund: the charter per-pupil increases currently set in statute: 10 new state charter schools; all 25 of the legally allowed commissioner’s Network Schools; and the full statewide rollout of the educator evaluation program”
The ConnCAN CEO ended with, “To summarize, we know that some members of the General Assembly are not where the Governor and you are on reform. ConnCAN and others are here to help, and it will be easier for us to rally strong support if the administration comes out strong in your proposed budget on the key pillars of the Governor’s reforms, including charters, the Commissioner’s Network, and talent development.”
As we now know, Governor Malloy did “come out strong” in his budget address for the charter schools and the ConnCAN/OPM meeting was held on February 20 at 3 p.m., a week after ConnCAN released their poll backing the Governor and his reform proposals.
A sure indicator of the access ConnCAN has into Governor Malloy and the Office of Policy and Management was that when the meeting was held, it not only included OPM Secretary Ben Barnes, but the other participants appear to have been Paul Potamianos, OPM’s Executive Budget Officer; John Noonan, OPM’s Section Director for Education; Leah Grenier, the OPM budget analyst for education and Liz Donohue, Governor Malloy’s Policy Director.
The level of staff attention granted ConnCAN is impressive. ConnCAN had the top four education budget officials at the Office of Policy and Management and the Governor’s policy director? Most Connecticut advocacy groups would be happy to get one fifth of that group to hear them out.
Then again, we are talking about ConnCAN.
The same ConnCAN that spearheaded the multi-million dollar lobbying campaign on behalf of Malloy’s “education reform” bill.
The same ConnCAN that helped raise more than $40,000 for Prosperity for Connecticut PAC, the political action committee associated with Governor Malloy that held a fundraiser at the home of Jonathan Sackler, last year, with national and state education reform leaders.
And the same ConnCAN that was founded by members of the Achievement First, Inc. Board of Directors; Achievement First being the charter school management company co-founded by Malloy’s Commissioner of Education, Stefan Pryor and where Pryor served as a Director until he resigned to take on the role of Malloy’s Education Commissioner.
What’s that quote about it’s not what you know, but who you know that matters?
Ben Barnes (OPM Secretary), Budget Cuts, Corporate Welfare, Economic Development, Healthcare, Human Services, Malloy, Mental Health Services, State Budget, State Deficit Budget cuts, Economic Development, Malloy, State Budget, State Deficit
Pick up any newspaper and you are bound to see at least one story about the impact of budget cuts and another about how state governments are giving money away to private companies in an attempt to convince them to create or retain jobs.
It is quite a commentary about our times. A lack of adequate funding means people who work for schools, hospitals and nonprofit providers of human services are or will be losing their jobs, while taxpayer continue to provide the money that is being used to try and persuade businesses to pledge that they will create or keep private sector jobs.
True, it may not be the notoriety that we want, but you certainly can’t say that Connecticut hasn’t become the epitome of this paradox.
For example, earlier this week, Wait What? readers were provided an opportunity to read two posts, one entitled Has it come to this…? and another entitled And while cutting essential services, Malloy gives $100,000 to a Stamford Brewery.
The first post reported on a recent Hartford Courant commentary piece by a father lamenting Governor Malloy’s cut to essential programs that help Connecticut’s developmentally disabled residents while the second was about the Governor’s visit to a brew pub in Stamford to celebrate a $100,000 taxpayer-funded grant that the Malloy Administration was giving to help the brew pub expand.
The two stories served to enlighten readers about the reality of our times or the juxtaposition between an era where we are cutting vital services while providing private companies with what some would call economic development incentives and what others would refer to as corporate welfare.
What I failed to report was that, in addition to the brew pub, Governor Malloy and his Commissioner of the Department of Economic and Community Development (DECD), Catherine Smith, were actually visiting three other companies around the state that day. All four of the companies were receiving funds thanks to the State’s Small Business Express Program (EXP).
Over the past eighteen months, the Small Business Express Program has given out more than $80 million. According to state officials, the program has helped “create and retain more than 7,600 jobs.” The Legislature will soon be voting to give the Governor an additional $60 million for this program.
In addition to Stamford’s Half Full Brewery, Malloy was visiting Atlantic Canvas and Awning (a company that received a loan of $50,000 and a matching grant of $10,000); Automotive Core Recycling (a company that recycles and sells catalytic converters and other auto parts and received a $250,000 loan) and Katalina’s (a cup cake bakery that received a loan of $30,000 to add equipment and furnishings to their new retail shop).
According to the Department of Economic and Community Development, the $50,000 loan and $10,000 grant “support the creation of three new jobs and retained four,” the $250,000 loan translated into one new position and retained 8 jobs, while the $30,000 loan to the bakery “created one full time job and retained two full time and two part time jobs.”
The Governor’s press release that day announced that the Small Business Express Program has already created or retained more than 1400 jobs in 2013.
Meanwhile that distraught and frustrated father, along with the others who care for Connecticut’s developmentally disabled, try to cope with Governor Malloy’s $6 million cut to employment and day service programs.
Actually, that $6 million cut was part of a much bigger list of cuts Governor Malloy ordered last November 28, 2012. That day, back in November, Governor Malloy announced $170 million in budget rescissions.
The press release didn’t actually quote Governor Malloy. Instead the task of explaining the cuts was left to Ben Barnes, Malloy’s budget director. Barnes wrote, “Many of these cuts are very difficult to make, especially now when so many residents continue to struggle in a tough economy, But as painful as they are, cuts are necessary to keep this year’s budget in balance. State government needs to live within its means.”
The November list included a wide variety of reductions including a $53,000 cut to the Division of Criminal Justice’s Shooting Task Force; a $200,000 cut to the Jobs First Employment Service Program, a $488,000 cut to the state’s Environmental Quality Program; a $335,000 cut to the Department of Health’s Community Health Services Program and $41,000 cut to their Genetic Diseases Program; a $433,000 cut to the state’s Community Mental Health Centers, a $2.3 million cut to home care services that keep people out of more expensive nursing homes and hospitals and the list goes on and on.
More recently, the state budget plan that Governor Malloy proposed a month ago continued those cuts. In fact, his new budget makes even deeper cuts to a variety of vital and essential services.
So how is it possible that a Governor would be instituting record budget cuts while giving away record amounts of taxpayer funds to private businesses?
Truth be told, it is the difference between how the State operating budget works compared to the way the State Capital or Bond budget functions.
Even in the desperate times, the Capital budget continues to pump out cash.
The State’s operating budget is paid for with tax dollars. The State’s Capital Budget is funded via the state’s credit card.
Because we are borrowing the money and then paying the amount (plus interest) back over twenty years, the argument is that cutting the Capital Budget won’t help to balance this year’s operating budget. This year’s operating budget is still facing a $135 million plus deficit despite the terrible cuts instituted by the Governor and the additional cuts approved by the General Assembly.
Although Connecticut already has the highest per capita debt burden in the nation, since the word “deficit” applies to the operating budget and not the Capital Budget, we end up with a situation in which vital services are cut at the same time money is being handed out.
In fact, if Governor Malloy gets his way, we’ll see more cuts to essential services and more layoffs of hospital and human service workers in the coming months, and at the same time, the General Assembly will be allocating even more money for the Governor to hand out to the private sector.
Ben Barnes (OPM Secretary), Ethics, Freedom of Information, Malloy, Office of State Ethics, State Budget, State Elections Enforcement Commission, State Politics Freedom of Information Commission, Malloy, Office of State Ethics, State Budget, State Elections Enforcement Commission
In his first budget, Governor Malloy went a long way toward undermining the effectiveness of Connecticut’s landmark Freedom of Information Commission, Office of State Ethics, State Elections Enforcement Commission and Connecticut’s other watch dog and good government agencies by merging them into a single agency, reducing their resources and giving financial control to a political appointee.
Although he somehow forgot to mention it during his speech last week, Malloy’s new state budget plan takes another giant leap forward in his effort to destroy Connecticut’s once stellar standing as having one of the best good government programs in the nation.
The CTMirror has the details in an article entitled “Howls as Malloy tries to shorten leash on watchdogs,” but the quote of the day goes to Malloy’s Secretary of the Office of Policy and Management, Ben Barnes, who says of the proposal to destroy the remaining independence of the watchdog agencies, “There is nothing insidious about this.”
As quoted in the CTMirror article, James H. Smith, president of the Connecticut Council on Freedom of Information explains, “These proposals can only be explained as an effort to gain control over the guarantors of transparency and integrity in government…We ask why the Malloy administration is determined to emasculate the independent watchdogs?”
As the CTMirror explains, “Malloy’s plan would give a gubernatorial appointee, the executive director of the Office of Government Accountability, the authority to assign and discipline lawyers whose duties could include investigating Malloy or some future governor.”
The CTMirror summarizes the situation noting, “The change would remove a layer of political insulation that protects the agencies and the governor: The watchdogs are free of executive influence, real or perceived; and the governor’s office is protected against accusations of protecting friends or punishing enemies.”
Imagine what the Democrats would be saying if a Republican governor made such an outrageous proposal.
I bet if we listen carefully, we can hear John Rowland laughing…
Ben Barnes (OPM Secretary), Budget Cuts, Malloy, State Budget, State Deficit, Taxes Ben Barnes, Malloy, Municipal Aid, Slots Revenue, Tax
Right…The State Lottery was for Education; Native Gaming Slots Revenue was for cities and towns…And if you believe that, I have a bridge to sell you.
In 1993, the Mashantucket Pequot Nation signed an agreement with Governor Lowell Weicker and the state of Connecticut.
In return for the exclusive rights to have slot machines, Connecticut’s Native American Tribes would donate 25 percent of their gross slots revenue to the state of Connecticut. It was the most generous Native American Revenue Sharing agreement in the nation.
When the Mohegan Sun was opened a few years later, the program became known as the Mashantucket Pequot/Mohegan Grant. According to the program description, the fund “annually distributes a grant to each of the state’s 169 municipalities. The distribution is based on numerous factors including, but not limited to, the value of state-owned property, private college and general hospitals, population, equalized net grand list, and per capita income as set forth in Sections 3-55i, j, and k of the Connecticut General Statutes. Payment is made in three equal payments on January 1, April 1, and June 30th.”
In its first full year, about $85 million was distributed to Connecticut’s cities and towns. The state of Connecticut was a bit short on revenue that year, so it withheld the other $30 million in order to help balance the state budget.
Over the years, as the two Native American casinos became more and more successful, the amount of money flowing into the state coffers grew substantially.
Some years the state provided its cities and towns a little more money (one year the grant grew to $135 million), but in other years, it cut the grant a bit. Each time, the excess stayed in the state’s General Fund.
Over the past 19 years, the Native American Tribes have given the state approximately $6.2 billion. Over that same period, the state has passed on about $1.5 billion or less than 25 percent of the money generated by the agreement. Connecticut’s state government spent the rest…
In recent years, the state has reduced the Mashantucket Pequot/Mohegan grant even further.
This fiscal year Governor Malloy’s budget allocates only about $62 million to the cities and towns via the Mashantucket Pequot/Mohegan grant program.
But then came last week’s budget proposal from the Governor.
In a major policy shift, perhaps one of the biggest in the entire budget, Governor Malloy has proposed to reduce the Native American grant program to almost zero. Instead, the Governor’s budget plan has the state borrowing an additional $56 million and giving it to towns to boost their Local Capital Improvement Grants (LoCIP). The unrestricted Mashantucket Pequot/Mohegan grant would, for all intent, cease to exist.
It is ironic, to say the least, that on the twentieth anniversary of the Native American Slots Agreement, the Governor would run a wooden stake through the heart of what is left of Governor Weicker’s original proposal to allow the Tribes to have exclusive rights to slot machines in return for a “permanent” revenue source to help cities and towns pay their bills and lower their local property taxes.
Ben Barnes (OPM Secretary), Budget Cuts, Gas Tax, Malloy, State Budget, State Deficit, Taxes Budget cuts, Malloy, State Budget, State Deficit, Taxes
There are a lot of things I don’t agree with Senator John McKinney about, but in this case he is absolutely right. Governor Malloy’s proposed budget is a sham and a shame. It is an embarrassment that a Democrat proposed such an irresponsible budget and the Democrats in the Legislature will need to start from scratch.
As Senator McKinney put it, “”There’s so many gimmicks. I don’t know where to stop…This is the most dishonest budget I’ve seen.”
He is sadly correct in his assessment.
Governor Malloy told the Connecticut General Assembly;
“The budget I am proposing today keeps Connecticut moving forward… [and is] “an honest, balanced budget [that emphasizes] living within our means.”
But, in fact, it is a proposed state budget that;
- Coddles the rich by refusing, once again, to require them to pay their fair share in taxes
- Includes the largest gas tax increases in state history
- Shifts tens of millions in municipal aid to the state’s credit card
- Includes more than $250 million in cuts to vital social services
- Cuts $146 million in state aid for Connecticut hospitals (on top of the $103 million cut)
- Eliminates Medicaid coverage for thousands of poor parents who are now covered by the program that covers their poor children
- Eliminates the Charter Oak Health Plan, an insurance program for those who can’t get affordable healthcare elsewhere
- Reduces the state’s new Earned Income Tax Credit from 30 percent of the federal EITC to 25 percent (retroactive to Jan. 1), thereby removing a portion of the incentive that seeks to keep the working poor working as opposed to going on welfare.
- Creates a new tax on power plants and continues a surcharge on the corporation tax — both of which were set to expire next fiscal year
- Borrows $750 million replace the plan he never implemented to move the state to GAAP financing
- Creates a $631 million state budget deficit in FY16
- And MOST IMPORTANTLY balances the budget by delaying repayment of $1 billion that Connecticut borrowed in 2009 under Gov. M. Jodi Rell.
For more on this absurd plan read:
Ben Barnes (OPM Secretary), Budget Cuts, Malloy, Spending Cap, State Budget, State Deficit, Taxes Budget cuts, Malloy, Spending Cap, State Budget, State Deficit, Taxes
CT Mirror’s Keith Phaneuf has posted an article outlining the budget plan Governor Malloy will be presenting to the Connecticut General Assembly later today.
After reading the article, an experienced “Connecticut budget watcher” would be forced to say; “imagine the worst, fiscally irresponsible scenario and then triple or quadruple the negative aspects of the plan” … and you still don’t get to what Governor Malloy will be presenting for the upcoming Fiscal Year 2014-2015 state budget.
Much more will become available as the day goes on, but here are the highlights (or more accurately – low lights) of the Governor’s budget proposal.
While promising a budget that has no new taxes, preserves his education reform program and dramatically expands spending in a few key areas, it is now clear that the Governor’s plans and proposals are virtually completely achieved by adding even more debt to Connecticut – the state that already has the worst existing debt burden in the nation.
Not only does Malloy’s $1.5 billion UConn initiative rely on borrowed funds, but he solves Connecticut’s $1.2 billion projected budget short fall through a complex, even bizarre, borrowing scheme.
The key component of Malloy’s new budget plan relies on getting more revenue from refinancing debt from the last recession, borrowing money to pay for municipal aid that was paid for with general fund dollars in the past and engaging in a new gimmick to make it appear the state is finally moving forward with its shift to Generally Accepted Accounting Principles (GAAP).
In addition, Malloy’s budget proposal raises “about $140 million in new tax revenue by continuing expiring taxes on power plants and other businesses, and by reducing a tax credit for working poor families.
Apparently Malloy’s primary “budget financing plan” includes coming up with an additional $750 million dollars by “delaying repayment of $1 billion Connecticut borrowed in 2009 under Gov. M. Jodi Rell…Originally scheduled to be paid off in the 2015-16 fiscal year, the debt would be extended at least until 2018 in Malloy’s new budget.”
Meanwhile, two years ago, Candidate Malloy promised to immediately move the state to Generally Accepted Account Principles (GAAP). When Governor Malloy realized the cost of his campaign promise he shifted his plan to make a $75 million down payment in year one, a $50 million down payment in year two and then enter into a 15 year plan to shift the state to GAAP by investing $100 million a year for the next decade and a half. However, faced with budget deficits over the past two years, Malloy skipped the $75 million payment, then he skipped the $50 million payment and now he will be proposing to borrow the money to shift to state to GAAP, rather than actually make the necessary cash payments to resolve the problem the fiscally responsible way.
In addition, according to this new budget, Malloy will also turn to the state’s already overburdened credit card to provide more municipal aid. Last year he decided to borrow the funds, rather than pay cash, for the state’s $30 million municipal road aid program.
In this new budget, he is proposing borrowing another $60 million to give towns their Mashantucket Pequot/Mohegan Tribe slot revenue allocations. In that way, the state could keep all the Native American Indian Gaming funds for itself.
And the most incredible, piece de résistance, is that Malloy’s proposal to increase education funding – the plan he announced yesterday – appears to be paid for by changing (cutting) the Payment in Lieu of taxes program – the grant that towns get for lost revenue from state-owned property. Malloy’s plan apparently shifts money from the Public PILOT program to the Education Cost Sharing Formula, but calling the funds “NEW MONEY” for education even though the towns aren’t actually getting any additional money.
And as noted above, the CTMirror story suggests that “the governor will propose reducing the state’s new Earned Income Tax Credit from 30 percent of the federal EITC down to 25 percent.”
Finally, the Governor’s plan also re-writes the state spending gap law to allow this increased spending to take place without having to go through the more burdensome supermajority requirements that would otherwise have been needed under the state’s existing spending cap law.
More details to come as Budget Day 2013 progresses.
For the CT Mirror article go to: http://ctmirror.org/story/19025/malloys-push-avoid-taxes-preserve-education-spurs-more-borrowing
CTNewsjunkie also has additional details at: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/republican_lawmaker_is_not_impressed_with_malloys_budget/
Ben Barnes (OPM Secretary), Malloy Ben Barnes, Malloy
Faced with a projected $1.2 billion budget deficit for next year and $63 billion in overall state debt and unfunded liabilities – giving Connecticut the largest debt burden per capita in the nation – Governor Malloy recently proposed a $1.5 billion initiative for UConn, a program to augment the existing $2.3 billion 1995-2017 UConn 2000/21st Century UConn program that was designed to rebuild, renew and expand the state’s public research university.
When confronted about moving forward with increased borrowing during this period of fiscal distress, the Governor responded, “Listen, Connecticut is not going to move forward doing the same things that we did unsuccessfully for 22 years,” Malloy said Friday. “This is a big idea.”
The concept of focusing on major initiatives, even in the face of unparalleled fiscal problems, is not new for Connecticut’s governor. As observers have come to recognize, Governor Malloy wants people to see him as a “big” thinker.
A new investigative report by the CTMirror and WNPR highlights this issue extremely well.
“Stamford sewage treatment plant’s long history of problems, the financial implications for local residents and environmental consequences for the entire state.”
“Plagued by mismanagement, faulty equipment and a botched $105 million upgrade, Stamford’s Water Pollution Control Authority has come under fire for sending hundreds of millions of gallons of sewage into Long Island Sound in recent years.
Part of the problem was that three top city officials — the mayor, who is now Connecticut Gov. Dannel P. Malloy; his aide, Ben Barnes, now the state’s budget chief; and the sewage plant’s longtime director, Jeanette Brown, who resigned in 2011 — were focused on an exciting new technology that aimed to turn waste into energy.
Unfortunately, their plan had a few glitches.”
The two part investigative report can be read here Striving for innovation, spending millions, Stamford leaders ignored major problems and here Stamford’s failed attempt at energy innovation cost taxpayers tens of millions
Ben Barnes (OPM Secretary), Budget Cuts, Malloy, Spending Cap, State Budget, State Deficit, Taxes Malloy, Spending Cap, State Budget, State Deficit, Taxes
Connecticut is facing a $148 million budget deficit this year
If the state’s elected officials want to maintain current services, that is adopting a budget that preserves the present level of programs, the state will be facing a $1.2 billion deficit next year.
In addition, a current services budget would mean an expenditure level that is at least $1.2 billion over the state’s legal spending cap.
So what is pushing up state spending?
Andrew Doba, Malloy’s spokesperson, recently told CTNewsjunkie that items forcing the state budget up include, “Medicaid expansion under the Affordable Care Act, fast-growing pension contributions resulting from more prudent assumptions, and our commitment to convert to GAAP.”
Actually, Medicaid expansion under the Affordable Care Act (ObamaCARE) is an extraordinarily small part of the increase in Medicaid spending. The culprit is the poor economy and growing poverty which are pushing up caseloads. (But it is easier, I suppose, to blame the President)
Second, while pension costs are going up, Malloy’s plan is a drop in the bucket compared to what is needed to properly fund Connecticut’s $22 billion in unfunded state and teacher pension systems, not to mention that they are BELOW what Governor Malloy promised to allocate for those funds.
And third, to blame the conversion to GAAP accounting is beyond absurd. Candidate Dan Malloy promised to immediately move Connecticut to the path of fiscal honesty by converting the state’s account system to Generally Accepted Accounting Practices. When it became apparent the cost of honesty was “excessive” he proposed making a $75 million down payment last year and a $50 million down payment this year followed by a 15 year program to phase the state to GAAP accounting with a commitment of an extra $100 million a year.
Then, quiet like a mouse, Malloy and the General Assembly skipped the first $75 million down payment, then skipped the second $50 million down payment and the required $100 million initial payment next year is hardly what is causing the $1.2 billion dollar projected deficit.
Then, adding insult to injury, the notion of “balancing the budget” without taxes is simply not true. Present law already includes the largest gas tax increase in state history that will kick in on July 1, 2014 and Malloy’s budget is certainly going to include the continuation of taxes that were supposed to be eliminated this year.
And meanwhile, those making more than $1 million dollars are still benefiting from the fact that the income tax rate was increased for all middle-income families in Malloy’s $1.5 billion tax increase in 2011, but the rich saw no increase in their income tax rate whatsoever.
And finally, one of the greatest gimmicks of all is already starting to make an appearance.
Connecticut adopted a system of consensus revenue forecasting to remove some of the politics from the administrative branch of government’s desire to look at the world through rose-colored glasses.
The system requires the Office of Policy and Management and the non-partisan Office of Fiscal Analysis to determine what revenue is coming in.
At a press conference earlier today, Governor Malloy announced that an agreement between the State of Connecticut and Amazon had been reached that will require Amazon to collect sales tax from Connecticut residents and send the funds to the Commissioner of Revenue services.
When asked how much is expected from the agreement, Malloy announced that it would come to an extra $15 million a year and that the funds had already been built into his proposed budget. Malloy said he’d gotten the number from Amazon.
The problem, the Office of Fiscal Analysis, in its official capacity, already projected that the state would get about $9 million from a bill that required Amazon to collect the sales tax and send it on to the state – and that was before this most recent dip in economic activity.
But instead of using the more conservative, and legally appropriate fiscal impact number, or even a number developed through a consensus between his Office of Policy and Management and the Office of Fiscal Analysis, the Governor used an unconfirmed amount AND built the artificially higher number into his proposed budget.
We haven’t even gotten to budget day and already the governor is announcing assumptions that are designed to inaccurately explain away the problems and gloss over the realities of the fiscal crisis that continue to grip our state.
Yet again, fiscal reality is being pushed aside by political expediency.
Ben Barnes (OPM Secretary), Budget Cuts, Democratic Legislators, Malloy, State Budget, State Deficit Ben Barnes, Budget cuts, Malloy, State Budget, State Deficit
Last Wednesday’s blog post was entitled, “Wait,What? OPM Secretary Barnes says state budget deficit at $64.4 million.”
The article sought to remind readers that back in December, State Comptroller Kevin Lembo announced that the state deficit was exceed $415 million, but rather than accept the word of the Constitutional Officer responsible for determining the deficit, Governor Malloy and administration decided to claim the Comptroller was wrong, or as they put it, wrong again.
Readers may recall, immediately after Lembo released his official certification that the deficit would $415 million and not $365 million as Malloy’s budget chief had announced, Roy Occhiogrosso, sent an email to reporters that read; “We disagree with the number the comptroller is using today… The deficit mitigation plan the governor will propose within the next couple of weeks will, based on the best available data at the time, bring the current-year budget into balance.”
The Governor, himself, got in on the act, mocking Lembo’s prediction and saying, “These numbers are going to go up and down…We’re moving forward with our package, which addresses a set of numbers…The comptroller thinks we will spend more money than we did — he may be right…I was told similar predictions were made last year and they didn’t turn out to be right, so we’re dealing with the numbers we believe currently represent that challenge.”
It is worth repeating that Malloy summarized his position by saying, “We’re going to continue going down the path of dealing with it in a forthright, fair, and transparent manner.”
And thus the Malloy Administration and the Legislature enacted budget cuts and revenue “enhancements to eliminate a $365 million deficit.
What prompted the Wait, What? post in the first place was the announcement by Malloy’s budget chief that – even after the Governor’s budget mitigation actions – the state budget deficit now stood at $64 million.
Well, now we learn that the Office of Fiscal Analysis, the nonpartisan fiscal analysts who report to the Connecticut General Assembly, has determined that the deficit is not $64 million but $140 million.
As Keith Phaneuf reports in the CTMirror, “The state budget deficit is more than twice the size Gov. Dannel P. Malloy’s administration reported this week, according to a new analysis released Friday by nonpartisan legislative analysts.”
The full explanation can be found in Phaneuf’s story, but suffice to say the Malloy Administration failed to reveal all of the excess spending that it taking place and misreported some revenue related information.
Read Phaneuf’s report here: http://ctmirror.org/story/18895/nonpartisan-analysts-say-state-budget-deficit-approaches-140m
Soon we’ll receive the even more shocking and disturbing news of what this larger deficit means for next year’s budget.
While the Malloy Administration may seek to minimize the projected gap when he releases his proposed state budget for fiscal years 2014 and 2015, the latest numbers from the Office of Fiscal Analysis suggest that next year’s budget shortfall is not the $1 billion the Governor’s Office has hinted at but closer to $1.4 billion or more. Traditionally, OFA should be announcing their FY14 projection soon. I’m sure CTMirror will have the details the moment the numbers become available.
But what is clear is that assuming Connecticut seeks to continue to maintain its present level of diminished services, the gap between revenue and expenditures could be in the range of $1.4 billion or more for the coming budget year – almost the size of the tax increase that was adopted just two years ago.