NEWS FLASH: So it begins – Malloy Plans to Shift More Public Funds to Charter Schools

According to a published report in the Connecticut Post, the “Education Reform Plan” that Governor Malloy will announce later this week will include Commissioner of Education Stephan Pryor’s plan to give charter schools more public funds including money that will be shifted from helping Connecticut’s poorest urban districts.  The primary beneficiary of this move will likely be Achievement First, the large Charter School Management Company that has 9 schools in Connecticut.  An ironic development considering Stefan Pryor helped create Achievement First and has served as one of its Directors until he resigned to accept Malloy’s invitation to become Connecticut’s Education Commissioner.

Details about the plan remain vague, but it would appear that Governor Malloy has decided to side with the charter schools and begin the “money follows the child” system in which scarce dollars used to help pay for education in existing school districts would be transferred to the charter schools.

The report is the Governor will “increase per-pupil funding for charter schools from $9,400 to $12,000” and that at least $1,000 per-pupil would be a transferred directly for the resource poor urban districts to the big-time donor supported charter schools that have recruited students from their area.

The Connecticut Post (see link below) claims that this would be the first time local districts would be transferring money to charter schools in their towns.  The paper notes that “for districts like Bridgeport, which sends about 1,400 students to charter school, the cost would be $1.4 million annually.”

While that loss would be a major blow to the Bridgeport Public School System, the paper’s claim that charter schools don’t get any funds from local districts is blatantly false although the “untruth” has been consistently used by Achievement First and other charter school managers in their battle to get more taxpayer funds.

For example, the City of Hartford paid $1.5 million to help renovate the old school building that Achievement First – The Hartford Academy moved into.   In addition, Hartford pays Achievement First $500 a year for each Hartford student who attends Achievement First – Hartford Academy (and that is on top of the grant Achievement First gets from the state of Connecticut).   Hartford also provided Achievement First with a “one-time payment” of $400,000 to “cover costs associated with the operation of the school”.

As Achievement First has expanded, the cost to the City of Hartford has also gone up.  According to one estimate Hartford now provides Achievement First with $2.35 million a year, money that could be helping Hartford overcome the existing challenges that face its schools.

Meanwhile, while Achievement First cries poverty, they seem to skip over the fact that the state of Connecticut gave Achievement First a $24 million grant to help build the permanent home of the Amistad Academy, which opened last year.  It was the first grant of its kind to a charter school in Connecticut and will end up costing Connecticut taxpayers well over $35 million to pay back the bonds and interest for that grant.

Apparently Governor Malloy’s new plan not only over looks these existing taxpayer-funded subsidies but he is calling for significantly more money to be given to Achievement First and other charter schools.

According to the CT Post article, the number of charter schools allowed in the state would increase from 17 to 22 including some type of incentive that would reward local school districts to setting up separate charter schools within their district.

Of course, that overlooks one of the major problems and that is how does a publicly elected municipal board of education legally allow a charter school to be set up in its district when that charter school doesn’t even allow a local elected board to citizens to oversee it.

Achievement First traditionally claims that they need and deserve exactly the same amount of money that public district schools receive.  But the fact is that they don’t have unionized faculty and staff so they can pay less…and yet these same teachers are put into the state’s teacher retirement system which will cost Connecticut taxpayers tens of millions of extra dollars in the years to come.

For more information on the breaking story see http://www.ctpost.com/news/article/Charter-schools-to-get-boost-under-Malloy-plan-3057442.php#ixzz1lcWikeVR

UConn Budget Whacked Again and Again and Again….

(Storrs) With the University of Connecticut Foundation picking up the tab for Governor Malloy’s trip to Davos, Switzerland, it seems like an appropriate time to look back at how the UConn budget has done this year – a year in which Connecticut finally has a Democratic Governor and a Democratic Legislature.

Note:  Educational attainment has always been a critical indicator of the quality of a state’s workforce. States like Connecticut and Massachusetts may have somewhat higher energy costs, higher real-estate costs, high transportation costs and even higher labor costs but they made up for it by having a workforce prepared and able to help any business succeed.

Background:

Twenty years ago, when the Democrats lost control of the governor’s office, Connecticut and Massachusetts led the nation with 27.2 percent of its workforce holding a bachelor’s degree or higher. But over the past two decades, Connecticut’s failure to provide sufficient funding our colleges and universities has begun to take a terrible toll.  While Massachusetts has stayed at the head of the pack (almost 37% of its residents now have college degrees), according to census data, Colorado, New Hampshire, Maryland, and New Jersey have passed Connecticut by and the rate things are changing the percent of college graduates in Vermont, Virginia and Minnesota will push those states past Connecticut in the next few years.  In the end, the quality of Connecticut’s workforce will have more to say about the future of Connecticut’s economy than trying to lure businesses here with grants and loans.

Democratic Regain Control of the Governor’s Office:

Last year (FY11), the state of Connecticut provided the University of Connecticut with a block grant of $233 million. Tuition and fees brought in another $675 million while Federal funds, research grants and donations added another $140 million to Connecticut’s $1 billion dollar public research university.

Faced with rising costs, the University of Connecticut would have needed a state block grant of $255 million simply to maintain its current level of services.

However, last February when Connecticut’s new Democratic Governor Dannel Malloy presented his budget to the General Assembly he proposed giving UConn $229 million.  An amount that was below what UConn had received last year and significantly below what the University needed to maintain services.

A few months later, the Connecticut General passed a new state budget and sent it to the Governor for his signature, but not before it cut an additional $4 million from UConn’s appropriation.

Once the budget and the Malloy/SEBAC Agreement were signed into law, Governor Malloy’s Administration went back and reduced every agency and department’s budget to reflect the purported savings from the union agreement.

Although UConn’s share of that agreement was at most $11 million dollars, Malloy’s budget office reduced UConn’s block grant by an additional $19 million.  By cutting deeper than necessary they were able to reduce the reductions to other agencies they deemed more important.  When the dust settled, UConn with left with a state grant of only $207 million.

Then earlier this week, when the Governor’s budget office finally admitted that the state was headed for a deficit instead of a surplus, Governor Malloy ordered another round of cuts. This time UConn’s hit was an additional $2.1 million.

At this point, UConn’s budget has been cut to $205 million. That amount is $50 million less than what was needed to maintain UConn’s level of services and $28 million below what the University received last year.

Malloy and Legislature made the deepest cuts to Connecticut’s public colleges and universities in history and additional cuts are scheduled for next year.

There has been a lot of talk about economic development.  Just today the Governor called back to reporters in Connecticut telling them that he “has been in various stages of talks with more than 20 companies that potentially could qualify for “substantial benefits” under existing state programs designed to assist companies prepared to create new jobs”.

And yet, with the exception of a handful of individual students, faculty and staff, you can search far and wide but you won’t hear any state officials, legislators, members of the UConn Board of Trustees or UConn administrators decrying these extraordinary cuts and the direct damage they will have on the future capability of Connecticut’s workforce.

The UConn Board of Trustees did recently approve the phase in of a 28-percent increase in tuition but they assured everyone that those funds would only be used to hire new faculty.

Oh, and finally, while other states have been forced to deal with the Great Recession by cutting government services few have targeted their colleges and universities for cuts.  In fact, while reducing government expenditures, Illinois, Indiana, Nebraska, North Carolina and Texas all actually increased their funding for higher education.  And other states such as Alabama, Arkansas, Mississippi and Ohio spared their colleges from budget cuts.

Hopefully the companies that Governor Malloy is trying to entice to Connecticut with taxpayer-funded corporate welfare won’t realize that Connecticut state government is doing just about everything it can to undermine our ability to have provide businesses with the educated workforce they will need.

STATE FUNDING FOR UCONN:  FY11 – FY12

FY11 –  State Funding for UConn

$233 million

This year FY12

Needed to maintain current services

$255 million

Malloy’s recommendation (Feb ’11)

$229 million

General Assembly cut to UConn’s budget

-$ 4 million

UConn budget signed into law

$225 million

“Hold-Back” Cut to UConn as a result of Malloy/SEBAC Agreement

-$19 million

UConn budget after “Hold-Back” cut

$207 million

Malloy’s January 23, 2011 Rescission

-$2.1 million

Present UConn state budget for FY12

$205 million

Summary:  This year the state of Connecticut is providing UConn with $50 million less than what was needed to maintain current services and $28 million below what was provided last year.

Malloy Takes Bold Step – Proposes Paying for State Pension Fund the Right Way.

When it comes to putting Connecticut’s fiscal house in order, mark this one as the single most important proposal Governor Dannel Malloy has made since taking office.

Imagine having a 30-year mortgage that had relatively low payments for the first twenty years and then massive payments for the last ten.  Payments that were so large that you knew, beyond any reasonable doubt, there was any way you could possibly make the payments so you would lose the house, and you were essentially living on borrowed time.

That is exactly what Connecticut has been facing.  That’s the way Connecticut has been paying its obligation to the State Employee Pension Fund.

Yesterday, Governor Malloy announced his plan to fulfill the state’s funding obligation the right way.

His plan would look much more like a mortgage that paid significantly more of the costs in the earlier years.  In this way the State Employee Pension Fund and taxpayers would benefit from the compounding effect, which in turn, would save taxpayer’s literally billions over the long run.

According to financial experts, pension funds should be financed at about 80 percent of their total liability.  In 1991, Connecticut’s State Employee Pension Fund was funded at 63 percent of the total liability.  Nineteen years later, the state’s failure to make payments and losses in the stock market meant the pension fund were funded at only 44 percent of its total liability, one of the lowest ratios of any state in the nation.

As the result of an impressive return on investments and changes from the Malloy/SEBAC agreement, a new actuarial report found that the State Employee Pension Fund is now at 48 percent funded – still well below what is considered a healthy funding ratio.

Governor Malloy’s new plan is to dramatically increase payments to the State Employee Pension Fund starting with an “extra” $123 million payment next year and then continue, each year, to increase the amount of money going into the Fund.

By paying now, instead of having a State Employee Fund that was bankrupting the state by 2030, the Fund would be well on the way to self-sufficiency guaranteeing that retirees get the pensions they are legally entitled to and allowing the state to redirect future funds to vital services.

The two primary challenges standing in the way of Malloy’s new pension fund plan is where to come up with the extra money and the significant challenge posed by the State Spending Cap.

While this year’s budget is $1 million under the spending cap and next year’s is scheduled to be $195 million under the spending cap, FY 14 is on track to be $653 million over the cap and the year after that, FY 15, the budget is projected to be $1.2 billion over the cap.

Governor Malloy’s new plan would be to change the law and make additional pension fund payments exempt from the spending cap limitation.

The Governor was less clear about where the extra funds would come from.

His plan, which would require the approval of the General Assembly, the state employee unions and the State’s Retirement Commission, drew praise Monday from labor leaders.

Since it would be a win – win – win for the state, the employees and the long-term interests of the taxpayers, approval would be likely.

For more information check CTNewjunkie: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/malloy_seeks_changes_to_state_employee_pension_fund/ and CTMirror http://ctmirror.org/story/15150/malloy-unveils-plan-reverse-two-decades-damage-employees-pension-fund

Note:  Meanwhile, with the state going from a projected surplus to a likely deficit in the last few days, Governor Malloy today announced nearly $79 million in new, emergency spending cuts.  With limited areas in which to cut, one of the prime targets was, once again, Connecticut’s public colleges and universities which Malloy had already targeted for the deepest cuts in Connecticut history.  Earlier this week, the Connecticut State Universities and Community Colleges announced tuition and fee increases to address what was already impossible to achieve spending cuts to the institutions.

In its annual report released Monday by the Center for the Study of Education Policy at Illinois State University, Connecticut ranks seventh in cutting higher education funding from last year to this year. While the average cut in other states was 4.1 percent, Connecticut’s public colleges and universities took a 12.2 percent funding cut this fiscal year.

More on this breaking news later

Oh Governor! Malloy Whacks Public Colleges and Universities again.

Cross-posted from Pelto’s Point at the New Haven Advocate)

Still reeling from the deepest budget cuts in Connecticut history, Governor Malloy has targeted UConn, CSU and the state’s community colleges for another $8 million in cuts.

The $135 million in additional budget cuts that OPM Secretary Barnes released yesterday included an additional $2 million cut to UConn, $3 million cut to the UConn Health Center, $1.6 million to CSU and $1.2 million to the community colleges.

While the concept of “cuts” is always appealing, parents, students and taxpayers deserve to know the truth and the truth is definitely not what they were provided.

The additional budget cuts were euphemistically referred to as “Technology Savings” on the Governor’s press release but, of course, that isn’t how the budget really works.

Connecticut’s institutions of public higher education are provided with a “block grant” to help pay some of the costs of running the institutions.

Twenty years ago, the state covered about 50 percent of the total college budgets.  Parents and students picked up most of the other half.

As a result of Connecticut’s failure to provide sufficient funds to our colleges, students and parents now pick up about 70 percent of the total cost of running the schools.  Tuition has increased almost 300% due to the state’s unwillingness to invest in Connecticut’s economic future.

Earlier this year, Governor Malloy’s proposal to cut the block grants by over $50 million dollars was approved by the Legislature.

Since the block grants are used almost exclusively to pay faculty and staff salaries, cuts to block grants mean more and more of the costs of running the schools are transferred to the students.

Now Malloy, who claims to be the “jobs governor”, is cutting another $8 million from the block grants.  His claim that it will mean a little less technology is misleading at best and perhaps it would be better to describe it as an outright lie.

The Governor does not have the authority to micro-manage higher education budgets.  That is the job of the various boards of trustees.  He can recommend that they cut technology – although he could also have recommended that they reduce the number of senior administrators and reduce the salaries of those who are left.

Cutting $8 million on top of $50 million will not be achieved by reducing technology spending.

Speaking to reporters yesterday about the package of additional cuts, OPM Secretary Barnes said “This is another example of the governor’s commitment to making government smaller and more efficient…We’ve said all along that there were a number of cuts proposed in the so-called ‘Plan B’ budget that made a lot of sense and didn’t harm necessary services.”

In the midst of the greatest recession of our lives, when Connecticut’s economic future hangs in the balance, cutting our colleges and universities makes absolutely no sense and does do harm to necessary services.

This isn’t about a little less technology, this is about cutting real programs and services at our colleges.

To put the whole thing into stunning perspective, Connecticut is now giving TicketNetwork, the Internet ticket-reseller about $8 million dollars to add 250 jobs to Connecticut’s economy while cutting $8 million dollars that would have gone help prepare Connecticut’s students for jobs of the 21st Century.

Oh…. Governor…

Robert A. Kennedy – Malloy’s choice for President of the new Connecticut Board of Regents

Earlier this afternoon, Governor Malloy held a press conference to introduce his pick for the position of President of the combined Connecticut State University and Connecticut Community College System.

See CTNewsjunkie, CTMirror, the Courant for the latest details

Kennedy recently stepped down as the President of the University of Maine which is one of the seven universities that make up Maine’s University System.

After becoming provost and vice president of academic affairs in 2000, he was later named executive vice president and provost and then selected as the University’s President in 2005.

Kennedy earned his Ph.D. in botany from the University of California-Berkeley and has held faculty and
administrative positions at the University of Iowa, Washington State University, Ohio State University, the University of Maryland and Texas A&M University.

At the University of Maine he presided over a series of significant budget cuts that included reducing the number of university employees by 7 percent.

An interesting side note is that even in the North Woods of Maine the corporatization of higher education continues to take place as the line between academia and business becomes more and more blurred.

Two years after being named President of the University of Maine, Kennedy was given a position on the Board of Directors of FairPoint Communications.

FairPoint is a North Carolina based telephone and Internet company that owns and operates at least 30 local phone companies in 18 states.  Three years ago FairPoint purchased Verizon’s telecommunications operations in Maine, New Hampshire and Vermont.

According to published news reports, Kennedy was appointed to FairPoint thanks to Verizon.  As part of the sales deal between Verizon and FairPoint, Verizon had the right to appoint three members to FairPoint’s Board of Directors and Kennedy was one of those appointed.

One of a number of controversies that developed occurred when FairPoint and the University of Maine System were competing head-to-head for federal dollars as part of an effort to enhance high-speed internet in Maine.  However spokespeople for Fairpoint and the Maine University System both reported that Kennedy was not involved in those discussions.

As a member of FairPoint’s Board of Director, Kennedy was paid $84,068 in 2008 and $89,229 in 2009.  At the time his University of Maine salary was $210,405 (not including benefits).

In June 2009 Kennedy was re-elected to serve on FairPoint’s board through 2012.

However, FairPoint corporate filings reveal that Mr.  Kennedy resigned from the Board of Directors
effective September 28, 2009.  There was no explanation as to why Kennedy left the Board.

A possible clue behind Kennedy’s decision to leave the lucrative post might be revealed in an article in Down-East Magazine’s September 2009 issue.

The article, entitled “The FairPoint Fiasco” highlights what the magazine described FairPoint’s ten month slide from Maine’s newest company to one of Maine’s “most hated.”

More recently Kennedy, a Minnesota native, was nominated to become a member of the Minnesota Board of Regents but the legislatures there choose another candidate.

Robert Kennedy will now be coming to Connecticut to oversee Malloy’s controversial plan to merge the four Connecticut State Universities with the 12 Connecticut Community Colleges.

Considering the historic and massive budget cuts that Malloy proposed and the Legislature adopted for Connecticut’s public colleges and universities, Kennedy’s retrenchment experience might be just what the Governor was looking for.

UPDATE:  So Kennedy’s Connecticut salary will be $365,000 including a $25,000 per year performance bonus … a nice increase from the $210,000 he was making as President of the University of Maine.

Time to Run Government Like A Business…

(Cross-posted from Pelto’s Point at the New Haven Advocate)

How many times have you heard that one…

While UConn spends money on consultants, Governor Malloy continues the corporatization of higher education by appointing high-ranking business executives to the new Board of Regents.

Last week, Governor Malloy appointed financier Gary Holloway of New Canaan and five others to Connecticut’s Board of Regents.  Among them was a former General Counsel at Travelers, the Chairman and Chief Executive Officer of Magellan Health Services and a former Goldman, Sachs and Silver Point Capital executive.

The consolidation of Connecticut’s higher education system was one of Malloy’s most controversial initiatives and the newly created Board of Regents will be responsible for the consolidation and governance of the four Connecticut State Universities and the state’s twelve community colleges.

Putting wealthy corporate leaders on university boards of trustees, in order to get their donations, is nothing new.   In fact, there are lots of impressive buildings and programs as a result.

But more and more often these business leaders believe that their role goes beyond posterity building and instead they seek to contribute their corporate expertise to the basic operation of universities.

The attitude seems to be, since I successfully managed a multi-million dollar company, I can certainly do the same for an institution of higher education.

Of course, universities are fundamentally not about making money and the “product” they create is hard to measure by traditional business standards.

A prime example of the corporatization of higher education is the growing use of consultants.  A traditional business practice in the corporate world, university trustees are now demanding that “academic professionals” bring in real experts to determine financial and policy issues that, in turn, have a profound impact on a university and its activities.  As noted in a previous post, the UConn Board of Trustees, for example, retained a Washington DC based consultant for $3.9 million to identify how UConn can be more efficient.

So now enters the new Connecticut Board of Regents, Gary Holloway and the Governor’s other appointees.

Although lacking in public higher education experience, one thing is clear when looking at Gary Holloway’s career, he is premier player in the Advanced Capitalist System in which we live.

In fact, Holloway’s career is an amazing case study of how today’s financial investment world actually works.

Gary Holloway is a founding partner of Five Mile Capital Partners, an investment firm headquartered in Stamford, Connecticut and New York City.

According to the firm’s website, “Five Mile Capital Partners LLC is an alternative investment and asset management company…that specializes in investment opportunities in real estate, debt products, structured finance, asset-based lending and financial services private equity.”    They manage over $2 billion in assets.

Prior to forming Five Mile Capital Partnerships, Holloway was a leading force behind Greenwich Capital.  There he turned it into one of the country’s “premier investment banks in the fields of fixed income securities and structured products.”

Greenwich Capital was acquired by the NatWest Group in 1996 and four years later, NatWest was purchased by the Royal Bank of Scotland (RBS).  As Mayor of Stamford, Dan Malloy helped attract RBS to Connecticut with taxpayer subsidies.

Through all of those years and iterations, Gary Holloway served as CEO or Co-CEO of Greenwich Capitol.

In 2001, Holloway, then Chairman of Greenwich Capitol retired when RBS announced that they were “integrating their global debt business.”

Soon after, Holloway and three others formed Five Mile Capital Partners.

So what do firms like Holloway’s do?

The story of the John Hancock Tower in Boston, Massachusetts reveals their approach to making money;

In December 2006, a company named Broadway Partners Fund Manager LLC purchased the John Hancock Tower for $1.3 Billion; about $400 million more than the previous owner had paid for the building three years earlier.

Broadway Partners’ funding came from a standard mortgage and $724 million from a “mezzanine debt package”

A mezzanine debt package is a form of financing that is secondary to the debt provided by banks and other standard lenders.  Instead of being secured by a mortgage, the mezzanine lender has the right to take an ownership interest in the company being financed if the loan is not paid back.

Or as one reporter put it, “mezzanine loans aren’t secured by real estate, but by the company that owns the building or owns the company that owns the company that owns the building.”

In this case, Lehman Brothers Holdings Inc. (now-bankrupt), and Gary Holloway’s old company, Greenwich Capital (the subsidiary of the Royal Bank of Scotland) provided funding and oversaw the creation of the mezzanine loans.  In the deal, Greenwich Capital was the mortgage holder.

According to news reports about the Hancock Building’s fate, as early as June 2008, 18 months after Broadway Partners purchased the building, a private equity firm called Normandy Real Estate Partners,
along with Holloway’s present company, Five Mile Capital Partners, began buying up the various mezzanine debt tranches (at discount prices since the value of the debt fell with the collapse of the commercial real estate market).

The news reports indicated that Normandy Real Estate Partners and Five Mile Capital purchased about $340 million of the face value mezzanine debt including “the senior-most tranche, the next two tranches, one-half of the third and a piece of the sixth.”

When Broadway Partners defaulted, as expected, on their loans in January 2009, Normandy Real Estate Partners and Five Mile Capitol were able to swoop in and buy the building at auction for $20.1 million (along with the assumption of the unpaid $640.5 million building mortgage from Greenwich Capital).

Apparently when these types of bankruptcies occur the various tranche holders got together to determine a course of action.  In this case, the media reported that “going in, lawyers and bankers assumed that Normandy and Five Mile would control the sale, be the only bidders and bid no more than the outstanding value of its loan. For an outside bidder or junior creditor to prevail, it would have to first pay off Normandy-Five Mile and all creditors senior to it at par.”

In English that means no other bidder could possibly have come up with the money necessary to out bid Normandy and Five Mile.

It isn’t clear what happened to the remaining “junior creditors” when Normandy and Five Mile closed the deal but the implication was that they didn’t get very much, if anything, on their investments.

At the time of the sale, Normandy and Five Mile put out a statement saying “This transaction completes in 18 short months the long term objective that Normandy and Five Mile Capital had for The John Hancock Tower…That swift conclusion is a testament to the hard work and effort of all our team – from the careful planning and execution of the acquisition … and ultimately the successful monetization of the investment realizing a significant profit for our investors.”

It all paints an incredible picture of how investors become winners and losers in today’s marketplace.

And that, in turn, brings us back to Connecticut’s new Board of Regents.

It will be “interesting” to watch how Gary Holloway and the other corporate executives approach their task of “re-inventing” Connecticut system of public higher education.

For More about the Hancock Tower see; http://www.thedeal.com/newsweekly/features/a-faulty-tower.phphttp://www.crunchedcredit.com/2010/06/articles/credit-crisis/the-hancock-tower-a-distressed-debt-success-story/, http://online.wsj.com/article/SB123851237251273961.html, http://www.normandyrealty.com/normandycorporate/News/tabid/55/ctl/PressReleaseDetail/mid/376/ReturnToList/False/id/84/Default.aspx

 

Oh for those who want to know more about one of our newest public servants…

Gary Holloway’s 12,000 square foot house in New Canaan is assessed at $4.6 million.  His annual property tax bill ($62,194.86) is far greater than the salary of the average unionized state employee.

The Holloways are also major campaign donors including significant amounts to Chris Dodd, Joe Lieberman and a variety of other big-time Democratic senators.  Here in Connecticut his choices have been pretty interesting.  He gave $2,500 to one-time Democratic gubernatorial candidate John Nussbaum and also donated $1,500 to Mary Glassman.

Although Holloway and his wife have primarily donated to Democrats, they did contribute $2,500 to John Rowland, $1,500 Ross Garber and were especially strong supporters of John McCain, providing McCain,
McCain/Palin and the Republican National Committee with a total of $16,700.

Now Gary Holloway and the other corporate leaders will be helping to determine the future of Connecticut’s public system of higher education.

The Power of Vengeance…Malloy Strikes Back (at the unions, at progressives, at the public?)

Governor Dan Malloy vetoes one of the more important Health Care Consumer Laws of the last decade.

SB 11: AN ACT CONCERNING THE RATE APPROVAL PROCESS FOR CERTAIN HEALTH INSURANCE POLICIES.

It was a powerful tool put forward last year by then Healthcare Advocate Kevin Lembo as a way to make sure the public interest was heard when insurance companies asked for rate increases of greater than 10 percent.

It required a series of public hearing when insurance companies sought approval for gigantic rate increases.

This year it passed the House 131 to 14.

It passed the Senate 36 – 0.

It passed the Appropriations Committee – with the Republicans voting no.

It passed the Insurance Committee – with the Republicans voting no.

It was sponsored by such notables as Senate President Williams and Senators Looney, Slossberg, Prague, Meyer and LeBeau, (some of the most moderate members of the Senate).

Other co-sponsors included Representatives Willis, Grogins and Nardello.

This year’s version had the strong support of Victoria Veltri, the Acting Healthcare Advocate, who took over when Kevin Lembo became State Comptroller.

State Senator Martin supported the bill saying “I believe that our state would benefit most if Connecticut’s rate review system met the federal requirements such that Connecticut would be permitted to perform its own rate review rather than having the reviews done by HHS.”

Other supporters included ConnPIRG, Citizens for Economic Opportunity, the Connecticut Citizens Action Group, the Connecticut Working Families Party, the CT AFL-CIO and the Advocacy for Patients with Chronic Illness – Connecticut’s leading advocate for those facing serious illness.

On the other hand, big business came out with all guns blazing.  The regional director of America’s Health Insurance Plans spoke against the bill (the nation’s primary lobbying entity for the insurance industry).

Other industry organizations against the bill included the IAC (Insurance Association of Connecticut), the Connecticut Association of Health Plans, the American Council of Life Insurers and Anthem Blue Cross-Blue Shield (who had requested and almost got last year’s record-breaking premium increases).

And then last Friday – hours before the long weekend was to begin – when media coverage was sure to be limited – Governor Dan Malloy came to the rescue of the insurance industry.  He took out his veto pen – for the first time – and used it to veto this important legislation ensuring his commitment to greater transparency was – once again – nothing but empty rhetoric.

Malloy’s rationale; “The Connecticut Department of Insurance already conducts an objective actuarial analysis of each and every rate increase request… The current process fully protects Connecticut’s residents from excessive and discriminatory rate increases.”

mmmm… I vaguely remember candidate Malloy trying to make a campaign issue of Anthem’s outrageous rate increase request last year…

More to come…

Open government and community colleges fall with a single vote

With one vote last night the Democrats in the Connecticut House of Representatives undermined both Connecticut’s community college system and our open government process.

They will claim it was only ‘merging’ agencies and “systems” but even the most cursory reading of the 350 page bill reveals some of the politics behind the move.

The reduction in staff will ensure that the State Election Enforcement Commission’s ability to investigate and audit public campaign finance grants is, for all intensive purposes, so limited as to be destroyed.

The bill dramatically limits the time a person can serve on the state elections enforcement commission thereby ensuring that no members have any history with how the law functions or perspective needed to ensure that the law fulfills its destiny.   The Speaker of the House called the changes to the Elections Enforcement Commission an opportunity to bring in “new blood” but people who follow Connecticut’s once landmark campaign finance law know it is payback for the good work the Commission has done to uphold Connecticut’s open system of government.

And above all else, the legislation will have a profound negative impact on Connecticut’s community colleges – the gem of Connecticut’s public higher education system.

The damage done will become apparent soon enough.  Among the first that will be impacted will be the nearly 100,000 Connecticut  citizens who rely on student financial aid.

Despite repeated attempts to get the Malloy Administration to delay the merger long enough to develop a good strategic plan, the House approved changes that severely damage our community colleges and the students who attend them.

Years and years of work by Democrats and especially progressive legislators to build a more open government and a better system of public higher education have all been undermined by a single vote.

And most shocking of all.  Every single progressive Democrat voted for this terrible piece of legislation.

There are simply no words to convey the disappointment.

There is a sickness and a meanness and a short-sightedness that has crept into American politics and government and this vote proves, once and for all, that Connecticut has not been spared from its arrival.

Right… There are simply no words to convey the disappointment.

A Giant Step in Connecticut’s Race to the Bottom…

Cross-posted from Pelto’s Point at the New Haven Advocate)

Hidden behind the shadows of this year’s state budget debate is a growing set of actions that will do more damage to Connecticut’s future than anything we’ve seen during this Great Recession.

Connecticut’s fundamental truth is that our most precious natural resource is our people and the only economic development strategy that will work is to ensure that we have the most educated, knowledgeable and capable workforce in the nation and the world in order to successfully compete in the 21st Century global marketplace.

As we lose our educational edge to southern and midwestern states, not to mention China and India, we are seeing a disaster of unparalleled proportions taking shape – a disaster that will make the Rust Belt and its failed manufacturing economy almost look good.

While the debate about taxes and state employee concessions makes headlines, few realize that the state budget Governor Malloy proposed and the Democratically-controlled legislature enacted will make the deepest cuts to our public colleges and universities in state history.

In the coming days, the General Assembly will hide inside a so called “implementer bill” an authorization for a massive re-organization of the Connecticut State University System and Connecticut’s Community and Technical Colleges – a planned merger that fails to consider for what is best for our colleges and more than 100,000 students who attend them.

A story in yesterday’s edition of the CT Mirror offers us a glimpse into the devastating impact these decisions will have on our public institutions of higher education.

As a direct result of Governor Malloy’s budget cuts and policies being championed by the Governor and his Commissioner of Higher Education, Connecticut’s community colleges are on the verge of ending their historic policy of “open enrollment”, a policy that assures that anyone, regardless of background or economic standing has the opportunity to attend one of our state’s community colleges as they seek to acquire the knowledge and
skills to succeed.

Stop for a moment and understand what is taking place.

The Malloy Administration is implementing a change in policy that would take us from a state in which every person has a right to expand their skills and advance their education to one in which, as Higher Education Commissioner Michael Meotti said, the state must focus resources on those who have a real chance of benefiting from taking courses.

The CTMirror article reports that “Meotti said that Connecticut should reconsider offering access to post-secondary education to those who are destined to fail. Three of every four students who enter the community college system lack basic knowledge in math, English and reading and are
required to take remedial courses upon entry into a community college, according to the State Department of Higher Education.”

Meotti adds in his own words that these “are students who are so not ready and have no ability to be successful in a college classroom,”

Wait?  What?

The Democratic Commissioner of Higher Education, serving under a Democratic Governor and a Democratic Legislature, in a state
with the highest achievement gap of any nation, a place that can only succeed if we have a well trained workforce says that our community colleges should be reserved for those who are destined to succeed?

We aren’t talking about entrance to Yale or even UConn (although remember George W. Bush went to Yale and his academic skills certainly didn’t predict his “success”).  We are talking about ability to attend on of Connecticut’s 12 community colleges, institutions whose primary role is not to provide academic degrees but to ensure that every person has the opportunity to learn and grow and strengthen their skill set so they can build a better quality of life for themselves, their families and their community.

Imagine if what Meotti said was uttered by someone like Michelle Bachmann, Sarah Palin, Eric Cantor or Paul Ryan.  Demonstrators in Connecticut would take to the streets decrying their elitist, arrogant positions and suggesting that it was based on some inherent classism or racism.

A claim that only some people are “destined to succeed”?

Certainly Mike Meotti isn’t racist but the policies he is pushing would have devastating consequences on those who need a little more help because they are coming out of failing schools or don’t have the life experiences or network to ensure that they will absolutely “succeed” in college.  Let’s face it, minorities, women, those from poorer socio-economic backgrounds will all be disproportionately hurt by these proposed policies.

And these are just the words of Malloy’s point person on higher education.

As the CTMirror points out, Governor Malloy himself “has a plan to decrease the high use of the state’s community colleges for remedial coursework.”

And the Governor added “We want to draw down [the number of] students who are having to use their time and energy” on remedial courses, he said. “That’s probably the best way to get at this problem.”

One assumes that the Governor is expecting that Connecticut’s public high schools can improve student performance to the point that students graduate with the fundamental skills they need to be successful in college.  However, the challenges facing our schools, especially those in urban areas, schools that will be producing 40% of Connecticut workforce, are significant and improvements will take years, even decades, to fully implement. In the mean time, Malloy’s proposed approach would mean tens of thousands of Connecticut residents would be shut out from the opportunity to go to a community college to acquire additional education and skills.  Hardly the appropriate path to take if we want a stronger economy, not to mention a more equitable and just society.

Instead of ending open enrollment in our community colleges, how about we actually throw the doors wide open and use our scarce resources to give these students the tools they need to succeed, even if they need some remedial work before taking some of the more advanced courses.

How about we don’t cut $20 million dollars from the most efficient and effective part of Connecticut’s system of higher education, our community colleges.

What if we remembered that not everyone begins or even finishes their primary and secondary school experiences with the same set of skills and capabilities, but every person, old or young, white or black, man or woman, rich or poor can always learn and improve their skills as they seek to position themselves to succeed.

And Instead of simply talking about jobs, how about we actually do something to ensure we have a broad based, multi-talented workforce that is prepared for the jobs our businesses will need… oh and Governor, some of those jobs aren’t in state of the art research labs but still require skills beyond what people are getting in high school.

But most importantly, where are the voices of reason on this vital issues?

Why the silence from members of the Legislature’s Black and Latino Caucus and other legislators representing communities whose constituents will be especially hurt by the politics Malloy and Meotti are moving forward with?

Where are the more progressive legislators who claim to truly believe that everyone deserves an opportunity to succeed, not just those who have been born with opportunities dropped into their laps?

Where are the women legislators who understand the barriers that are in place for women trying to return to the job market and how some courses, even if they don’t end up in an Associate Degree, can be the difference between finding and not finding safe, quality work?

Where are those policy makers who were the first in their family to attend college or at least recognize that first time college attendees might very well need – and certainly deserve – some extra help as they work to change the course of their lives?

Where is Connecticut’s business community who complain so bitterly that they don’t have access to enough educated workers, even to the point of needing to import workers from other states and countries?  These economic times are hard enough for Connecticut’s businesses without having our state leaders implement policies that will ensure we don’t have an educated enough workforce as we move deeper into the 21st Century.

And where are the editorial writers whose job it is to speak out on important issues like this?

As Governor Malloy and the General Assembly careen toward the last day of the 2011 legislative session, Connecticut’s future doesn’t rest with how the FY12 budget drama plays out.  Connecticut’s future will depend on whether the Democratic Legislature has the vision, courage and wherewithal to put the brakes on Malloy’s disastrous higher education policies so that they can return next year with a plan that builds, not destroys Connecticut’s most important economic development tool – our colleges and universities.

Watch this issue carefully in the coming day.  How the General Assembly handles Malloy’s efforts to undermine Connecticut’s community colleges will say a lot about their character and dedication to Connecticut’s future.