Connecticut is not Wisconsin… Right? Right?

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

(As the Malloy Administration and Connecticut State Employee Unions prepare to meet today… )

Connecticut is not Wisconsin, right?  Right, Connecticut is not Wisconsin.  But let’s not fool ourselves – read on…

Unlike Wisconsin, Connecticut has a Democratic Governor who supports the right of people to join unions and collectively bargain and we have a Republican Party that is not following in the footsteps of the ultra-right, ultra-crazy tea-baggers and their post-modern Republican converts.

That is good news for Connecticut’s unions, their members and society as a whole.

But recognizing the American right to join unions is not a progressive or liberal position. 

As has been widely reported in recent days, when Ronald Reagan stood up for the people of Poland in 1991, he reminded that world that “one of the most elemental human rights [is] the right to belong to a free trade union”

American leaders across the political spectrum have recognized that the right to collectively bargain is truly a requirement for a civilized society.

So Governor Malloy does deserve credit for attending the recent State Capitol Rally in support of Wisconsin’s state employees.  He deserves credit for doing something that every reasonable American politician should be doing.

But before we think that Connecticut and Wisconsin have nothing in common when it comes to the rights of workers, let us remember that efforts to undercut unions and the rights of employees to join together for their common good come in a variety of forms.

Like bullying, anti-union efforts can be overt, covert or both. 

Bullying occurs when a “person intentionally inflicts injury or discomfort upon another person, through physical contact, through words or in other ways”.  It is behavior that seeks to intimidate, offend, denigrate or humiliate a person or group of persons. 

As we know, now more than ever, bullying is a form of abuse that is often perpetrated on another as a way to intimidate someone to take some particular action.

Governor Malloy’s entire budget is based on state employees agreeing to make $2 billion dollars in wage and benefit concessions. 

Anyone familiar with Connecticut’s state budget knows it is a number that literally cannot be achieved and the Governor purposely put out a number that is designed to fail.

Disguised as shared sacrifice, the Governor’s proposal is scapegoating of the worst kind since he has repeatedly connected his demands to the state employees with the warning that if the state employees fail to provide $1 billion in annual savings, he will be forced to shred the safety net and lay-off thousands of employees at a time the unemployment rate makes it clear that many of those laid off will not be able to find jobs. 

Malloy has been very clear. If state employees don’t come up with a billion dollars in concessions – this year – the most vulnerable and needy people among us will be hurt and the fault will lie squarely with the state employees and no one else.

Even today, as the Malloy Administration and the state employee unions prepare to officially sit down for the first time, Malloy’s chief political advisor said that the “governor hopes and expects the talks to be productive and will produce the money that’s necessary to help balance the budget,”

The money necessary to balance the budget?

The facts could not be clearer. 

Take away any and all pay raises for state employees.  Institute a dozen furlough days to cut their pay by 5 percent, blow their healthcare co-pays and deductions through the roof and the budget savings comes to about $388 million next year. 

Cut pay by 10% and you still don’t top $500 million in savings – far, far short of the $1 billion Malloy says he must have this year, yet alone the other $1 billion next year.

Saying that his budget is balanced when he knows it is not and then setting up Connecticut’s state employees to take the fall is more than a gimmick, it is nothing short of a mean-spirited form of bullying.

While Governor Malloy was speaking at a rally in support of Wisconsin’s state employees, the Malloy Administration was effectively setting up Connecticut’s state employees to become public enemy #1.

The definition of bullying is clear.  A person or group is being bullied when “exposed, repeatedly and over time, to actions that seek to intimidate, offend, denigrate or humiliate.  

Let’s face it, today the Connecticut’s Public Employee Unions will be sitting down with representatives of an Administration that would be expelled from school or fired from the workplace for the intentional bullying that they have perpetrated.

Now let’s ask the question again, is Connecticut really that different from Wisconsin?

Malloy moves to undermine public higher education’s most important law.

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

The Governor’s initiative is wrong and bad, but it is the deafening silence from those who know it that is really disturbing.

Inside Governor Malloy’s package of budget bills is a proposal to undo the single most important higher education law in Connecticut history

His completely unwarranted, inappropriate and misguided attack is on the 1991 bi-partisan effort that shifted Connecticut away from an out-dated higher education governance operation to a new, more modern system that successfully positioned our colleges and universities to compete in the 21st Century.

Following literally years of work, the Governor, the Office of Policy and Management, the Legislature, the Department of Higher Education and Connecticut’s institutions came together to develop and pass this historic reform.

The bill – An Act concerning Operational Responsibility and Accountability for Public institutions of Higher Education – become Public Act 91-256 on June 26, 1991.

I know, because as the legislator from the 54th House District, the district that includes the University of Connecticut, it was my professional life’s work to develop the bill and help shepherd it through the process.

By giving Connecticut’s constituent units of higher education the independence and authority to fill positions, pay its bills and manage its affairs, we ended an era in which bureaucratic micromanagement was destroying our public colleges and universities.

In its place, Connecticut adopted a system that ensured that our colleges and universities had the tools to make the most of scarce public funds.

Written by a team that included the Secretary of OPM Bill Cibes and his Deputy Secretary Lori Aronson, Senator Kevin Sullivan, Representatives Naomi Cohen and Nancy Wyman  (the leadership of the Education Committee) and myself along with Republican legislative leaders Bob Ward and Bob Farr and key staff from the constituent units of higher education, we put together legislation that passed the Education Committee, Government Administration and Elections Committee and Appropriations Committee before being unanimously adopted by the House of Representatives on May 21, 1991 and passed by the Senate on consent a week later.

As someone who considers himself to be one of UConn’s greatest supporters and fiercest critics,  I am very confident that I speak for everyone who was involved in that historic effort that the 1991 Higher Education Act  has been an extraordinary success and without it our colleges would not be what they are today.

Of the 68 provisions within the bill, the single most important change – by far – was the decision to shift position control from the Office of Policy and Management to the institutions themselves. 

Prior to that change Connecticut’s public colleges and universities had to fight with OPM staff every time they wanted to hire a faculty member, a librarian, a clerk for the registrar’s office, a  residential life director or a maintenance worker.   I remember going to OPM once to explain why UConn should be given authority to hire a philosophy professor (the staff person felt philosophy was a dying field) and another time when OPM was fighting with the state maintenance workers union so they rejected a request from UConn to fill maintenance positions even though the semester was about to start and the positions were going to be funded with tuition dollars and not state budget allocations.

Now 20 years later, Governor Malloy, who has more than enough on his plate already, is proposing to return to the era in which OPM must approve filling every single non-faculty position at UConn, CSU and the Community College System.  If he wanted policy changes to limit the number of administrators he could have proposed strengthening the Administrative Caps language that was developed by Senator Sullivan.  If he wanted to ensure senior administrators aren’t overpaid he could have proposed salary caps.  If he wanted to protect against the problems associated with UConn 2000 he could have checked and found out that the laws and policies were already changed thanks to action taken by the Legislature and University.  But his proposal isn’t about those important issues; instead it is the incredible demand to return to the dysfunctional era of the 1980s. 

When asked about the potential for problems, under Malloy’s proposal, Ben Barnes, Malloy’s OPM Secretary said “It’s all done electronically. It doesn’t sit for more than a day. We are not talking about a lot of time,” he said. “I don’t think it’s unreasonable for the governor and [the Office of Policy and Management] to ask for justification.”

New to OPM and without higher education experience, perhaps Mr. Barnes doesn’t understand the weeks it took to get OPM to review the “justification” documents let alone process the paperwork needed to hire someone.

But even more importantly, to suggest that the Governor doesn’t have oversight authority is shocking. 

At UConn for example, operational authority to manage the university is vested in the University of Connecticut’s Board of Trustees.  The Governor appoints 12 members of the Board including its chairperson.   In addition, the Governor’s Commissioners of Education and Agriculture serve on the Board and Connecticut law requires that the Governor himself is the President of the Board of Trustees and the Governor’s Office has always appointed a representative to speak for him at Board meetings.

Since the President of the University is selected by the Board and Board policies govern all hiring the Governor has incredible power to seek justification for the filling of positions.

In addition, the Governor proposes the budget for Connecticut’s colleges and universities and can use that process to ensure his goals are met.  Not to mention the Governor already has extraordinary rescission authority.  He can unilaterally remove up to 5% of a university or colleges block grant without anyone’s approval.  (A separate Malloy proposal is to increase his rescission authority from 5% to 10%).

Furthermore, it is impossible to believe that Governor Malloy was unaware of the present law and its history.  This landmark piece of legislation would not have passed without the help of Lt. Governor Nancy Wyman who was then a key legislator, Department of Revenue Services Commissioner Kevin Sullivan, Deputy OPM Secretary Mark Ojakian (who was serving as the Department of Higher Education’s legislative liaison in 1991) or Lori Aronson who is the Spouse of Malloy’s Chief of Staff Tim Bannon.  Aronson actually left OPM to work at UConn and served for nearly a decade as UConn’s Vice President and Chief Financial Officer and where she was responsible for the day-to-day management of the University including control of positions.

So the problem is this; Governor Malloy says that higher education and the maintenance of a well educated workforce is one of his highest priorities and yet he puts forward a proposal that would cripple the ability of Connecticut’s colleges and universities to succeed.  Worst of all, he is surrounded by people, including his governing partner, Nancy Wyman, who know how damaging this proposal could be and yet remain silent as Malloy seeks to destroy the accomplishments they helped to create.

Last but not least, when the Legislature passed the 1991 Act Concerning Responsibility and Accountability for Public Institutions of Higher Education we argued that with only 50% of the total UConn budget coming from the State’s General Fund it was particularly appropriate to grant the institutions flexibility since so much of the operating funds came from students and families whose resources should not be tied up by bureaucratic maneuvers.  Now, in 2011, the state’s General Fund accounts for less than 30% of UConn’s operating budget and yet OPM argues that it needs the authority to micromanage the 70% of dollars that don’t even come from state coffers.

If Governor Malloy wants control over whether UConn or any other college hires a maintenance worker rather than a librarian he should appoint good people to the Board of Trustees, appoint a good Chair of the Board to lead the Trustees and perhaps attend some meetings himself or at the very least send a representative who will ensure the Governor’s directives are heard.

Connecticut Republicans: When Rhetoric becomes more Real than Reality

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

Over the weekend, State Representative Lawrence Cafero, the Republican Leader of the House wrote a commentary piece in the Hartford Courant in which he claimed “Malloy’s Budget Undercuts His Tough Talk”.

The Republican leader offered Governor Malloy a backhanded compliment on his “no gimmick” budget and his plan to get huge givebacks from state employees and then blasted the Governor as a big spender and proponent of more government.

Cafero’s piece is a sad testament to why Legislative Republicans are such a useless force in Connecticut politics.

As an alternative, Cafero offers up a plan Connecticut’s Senate and House Republicans put forward back on January 2011 called “Common Sense: Commitment to Connecticut”, borrowing heavily from Newt Gingrich and his “Contract with America”.

According to the Connecticut Republicans theirs is a “comprehensive set of proposals and ideas to bridge the fiscal abyss the state faces, including billions in savings from all public employees, union and non-union. They also proposed merging 43 agencies into 11 to save millions more, privatizing inefficient state services, rolling back spending to previous levels and selling off assets such as airports and other operations that costs taxpayers more money every year than they bring in.”

Their plan can be found at http://www.cthouserules.com/wp-content/commonsensefinal.pdf.

The Republicans claim that by “rolling back spending to previous levels to save as much as $1.6 billion; a 5 percent reduction in the state’s workforce for $250 million in cuts; and state employee givebacks worth nearly $1.75 billion” will allow Connecticut to eliminate its $3.5 billion budget deficit.

In fact, the Republican say that their “no tax increases needed” budget would actually provide a surplus at the end of next year.

But here is the problem.

The numbers don’t add up. They don’t even come close. Their plan is an utter and complete fraud worthy of a Bernie Madoff scheme. Either they are purposely trying to mislead the public or they are so incredibly ignorant of the facts that they don’t even know the difference between an annual budget and a bi-annual budget.

FACTS about Connecticut’s Annual State Budget:

Debt Service: $1.9 billion (9.7% of the budget)

Grants to towns: $2.8 billion (14.2%)

Personal Services $3.3 billion (17%)

Fringe Benefits $3 billion (15%)

Medicaid/SAGA $4.7 billion (24%)

All Other Expenses $4 billion (20%)

Fact #1: Malloy is seeking $2 billion dollars in employee givebacks to balance his budget over two years. That is a reduction $1 billion for the coming fiscal year. The Republicans want to increase that amount to $1.75 billion – THIS YEAR. Malloy’s number cannot be achieved. His is 5 times greater than what Governor Rell saved in the last round of negotiations and that included a wage freeze, furlough days and NO pension payments.

The Republicans are suggesting savings of almost twice what Malloy can’t get. Not only can’t the Republican’s number be achieved, to suggest it can is an absolute fraud.

Fact #2: Malloy is proposing $400 million in cuts to programs and services.

The Republicans want to quadruple that amount to $1.6 billion. Review the chart above. Debt service cannot be cut. The Republicans, like Malloy, commit to preserving municipal aid. The Republicans, like Malloy, are seeking record concessions from the Personal Services and Fringe Benefits which removes those two items from the list of potential cuts. So that means the Republicans are proposing to cut $1.6 billion from the remainder of the budget – or $1.6 billion from the remaining $8.7 billion that pays for all hospitals, nursing homes, group homes, social services and all other expenses. Cutting that amount would destroy much of Connecticut’s most essential services and we can be sure that not a single Republican legislator would ever support such massive and destructive cuts.

Fact #3: The Republicans call for cutting 5% of the state workforce to save $250 million. As the numbers above reveal, to save $250 million from the Personal Service line would be a cut of more than 10% of state personnel.

So what is the bottom line?

The Republican’s are blasting Malloy for not cutting enough and then put forward a plan that is so absurd that not a single one of them would actually vote for such a document.

But, while their plan is absurd and impossible to achieve it makes good rhetoric and as long as they aren’t called out on it… their Rhetoric becomes more Real than Reality.

Heck, Let’s Just Save Money And Get Rid of the Legislature

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

Another Wait, What? Moment as Malloy makes budget power grab 

About a month ago I blogged Proposed Bill #87 An Act Granting Power to the Governor to Balance the Budget  that sought to grant the Governor unprecedented powers by allowing him to make deep cuts to the state budget without legislative approval.

Noting the words of Thomas Jefferson who said “If the three powers maintain their mutual independence of each other our Government may last long, but not so if either can assume the authorities of the others.”, I wrote that concepts like the line item veto or granting the governor greater ability to refuse to follow a budget that has been passed and duly signed into law was a bad idea – regardless of who served as Governor (or President). 

At the time, Governor Malloy’s spokesperson said the Governor “appreciated the offer but it was not needed.”

That was good news since it’s simply not appropriate for the Legislative Branch of Government to grant the Executive Branch this additional authority.  In fact, it is the very concept of “checks and balances” that is perhaps the single most important part of our Federal and State Constitutional system.

My post can be found here: Senators offer Malloy more power to cut budget…

Now, fast forward to today for an article in the CTMirror “Malloy seeks authority…”  that reports that Malloy’s proposed budget not only includes a provision to allow him to cut up to 10 percent of the budget without legislative approval but includes, for the first time, authority to cut municipal aid by that amount as well.

Connecticut’s current state law already gives the Governor the ability to reduce most accounts by up to five percent without legislative approval and the present statute excludes certain areas of the budget for which the Governor would have to get legislative approval such as debt payments, state employee salaries and benefits and municipal aid.

In Connecticut, the Governor has ample authority since he or she proposes the budget and has the ability to veto any budget deemed inappropriate.  Having limited authority to make emergency cuts in that approved budget is one thing, but in a representative democracy, no executive authority, Democrat or Republican, should be able to unilaterally cut 10 percent from a budget without a check and balance by the Legislative Branch of Government.

One question that comes to mind is why Governor Malloy rejected this inappropriate idea just a couple of weeks before he included it in his proposed budget?  Also, if he really feels this exceptional authority is really needed to get Connecticut out of this crisis why not ask for this authority only for duration of this budget cycle – two years – and not undermine Connecticut’s Constitutional process?

No more gimmicks – well okay, one more, but then no more after that!

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

The gubernatorial campaign of 2010 was marked by a universal condemnation of the budget gimmicks and irresponsible fiscal maneuvering that got Connecticut into its present fiscal disaster.

Candidate Malloy was probably the most outspoken critic of the fiscal shenanigans that had become the norm in Connecticut state government and earned praise across the board for his commitment to put an end to governance by gimmick.

So although many were shocked by the magnitude of Governor Malloy’s proposed tax increases and budget cuts, newspaper editorial writers have showered the Governor with accolades for having the courage and conviction to put an end to fiscal gimmicks and finally provide the state with a balanced budget.

And the new Governor’s commitment to balancing the budget is, indeed, impressive but there is one huge problem with the picture.

Although Malloy’s budget contains hundreds of millions in new income taxes and hundreds of millions in program cuts, the single biggest change in the entire state budget is his decision to include $1 billion dollars in concessions by Connecticut’s state employees. 

The number the Malloy Administration has used to “balance” the budget is not achievable and everyone “in the know” knows that. 

Without this faulty number, the Governor’s proposed budget is more than a half a billion out of balance.  To address that massive hole up front would have required even more taxes and program cuts.  From the anger and frustration that is presently sweeping Connecticut as a result of the size of the taxes increases and program cuts he did propose, one can certainly understand why the Governor and his people would do everything possible to postpone the understanding that even more taxes and cuts will be needed.

So instead of providing a true balanced budget, Governor Malloy made it very clear.  If the state employees fail to provide $1,000,000,000 this year – and another $1 billion next year – he would be forced to shred the state’s human and social service safety net and lay off thousands of people.

So a billion dollars from the state employees or else all Hell breaks loose.  Let’s examine the facts:

The economy is bad, most people aren’t getting increases or bonuses (unless you work on Wall Street) so let’s start by cutting out the money that would be needed to give state employees a raise of 3% or so.  Easy to defend, easy to do and saves the State $160 million dollars. 

Next, furlough days are another good way to save money.  Many states and even some private employers are using them.  Employees are told to stay home a certain number of days and that way the employer doesn’t have to pay them for that day. For each furlough day, Connecticut saves $14 million dollars.  Each of the past two years state employees have been given 3 ½ furlough days for a savings of about $48 million a year.  Let’s double or triple or even quadruple the number of furlough days.  We’ll tell state employees to stay home 1 day each month.  True some critical work may not get done, but budget cuts are needed and the net effect of 12 furlough days is cutting pay by 5%.  The good news is we save another $168 million. 

 So we’ve frozen pay and effectively cut wages by 5% with furlough days and we have saved a grand total of $328 million.  We only have $672 million to go to meet the $1 billion dollar mark.

We can increase the amount of money that state employees must contribute to their pensions.  Over the long run that will help put the State Employee Retirement System (SERS) on better footing but unfortunately it will have not save the taxpayers any money now.  Why? Because when Governor Rell and the Democrats decided not to make the required payments to the Pension Fund over the last three years, the fund became so underfunded that we now have to make those payments just to ensure the Fund stays afloat.  That said, if we require state employees to contribute 3% more of their salary, it will get an extra $96 million into the Fund.  A worthy step perhaps but doesn’t count toward the $1 billion Malloy has demanded.

Connecticut state pensions, like Social Security and most other public pension funds have a Cost of Living Adjustment that is tied to inflation.  That said, Connecticut could cap or even eliminate COLAs for future Tier II and Tier IIA retirees.  Again, it wouldn’t save any tax money now but would save the Pension Fund almost $50 million a year going forward.

There has also been talk of basing a retiree’s pension on their average salary over a five-year period rather than the present 3 year system.  This change would make “gaming” the system more difficult.  Again, it wouldn’t save taxpayers now but would mean a savings to the Pension Fund of about $22 million a year going forward.

Finally, increasing medical premiums for active state employees is definitely an option.  Increasing employee premiums by $350 might save as much as $18 million.  If we really want to dump on state employees, lets demand something really outlandish and see if we can jack up their premiums by $1,000.  That will teach them and at that level we might even save $60 million a year.

So where does that leave us.  No pay increase, a dozen furlough days and blowing their co-pays through the roof and we save taxpayers a total of about $388 million next year. 

It’s an impressive amount.  The problem is, if the Malloy Administration is successful in actually bringing state employees to their knees and wins all of those concessions, the budget will still have a $612 million deficit.

And that, in turn, brings us back to Malloy’s pronouncement that if the state employees fail to provide $1 billion in savings, the budget will be out of balance and the fault will lie squarely with the state employees and no one else.

Saying the budget is balanced when it is not is, in short, a gimmick to beat all gimmicks. 

Malloy gets the credit for proposing a balanced budget despite knowing that it isn’t balanced and when Connecticut discovers the budget isn’t balanced after all, the fault is not the Governor’s but those good–for-nothing state employees.

The very state employees, who, as we all know, are already public enemy #1. 

It is a brilliant strategy. 

The Malloy Administration and the state employee unions engage in hard negotiations.  The state employees know that if they don’t give enough they will be laid off.  Then, when they do give, the Administration is “forced” to regrettably announce that the budget is fatally in deficit and the Governor has no choice but to make additional cuts and propose additional tax increases (but at no fault of his own).

 So the era of budget gimmicks is over – just as soon as we get through this last one.

Just Look at them – The Damn State Employees and their Damn Pensions

(cross-posted from Pelto’s Point – New Haven Advocate)

Listening to the Governor and some elected officials, one of Connecticut’s most significant problems are the excessive pensions state employees receive.   Governor Malloy has called for a billion dollars in state employee concessions and one of the items he has highlighted is the need to reform Connecticut’s state employee pension program.  Other politicians and newspaper editorials have hailed his tough talk.

So let’s explore some of these issues – starting with state employee pensions.

Today’s question is – What is the Average Annual State Employee Pension?
(a)  $26,900
(b)  $31,900
(c)  $36,900
(d)  $41,900
(e)  $46,900
(f)  $51,900

The correct answer is (b).  Of the nearly 40,000 retired state employees who collect pensions, the average pension amount is $31,900 per year.

Let’s be clear, that is not to say that there aren’t individual state employees who were able to “game” the system prior to retiring and now receive larger than average pensions, but the truth is the average retired state employee receives a state pension of about $32,000 a year.

Average Connecticut State Pensions by Department or Agency

State Police $48,500
DOC – Central Office $39,732
Environmental Protection $38,700
Transportation $38,300
Criminal Justice $38,000
Corrections $36,400
Labor Department $36,300
Mental Health $35,700
Revenue Services $32,100
Social Services $30,500
Judicial $29,700
Vo-Tech High Schools $29,200
Mental Retardation $27,600
Motor Vehicle $25,400
Public Safety – Civilian $25,200
    
The real problem is not the number of retirees or the average pension employees receive but the fact that elected officials failed to set aside the funds necessary to pay state pensions and now the bill is coming due.

Imagine that instead of paying your full mortgage you only paid the bank 40% of what you owed each month and then at the end of 5 years you received a bill from the bank that you need to pay all the back money you owed.

Sure you would be upset about getting the bill, who wouldn’t?  But would you be angry at the bank?  Would you be angry at the house?  Would you be angry at the real estate agent who sold you the house?

Or would you admit that you really should have paid the amount due each month so that this day wouldn’t come.  
 
Listening to some of Connecticut’s elected officials – it is the state employees who are at fault for doing the work and getting the pensions or it is the fault of the employee unions for negotiating the contracts.

Of course, when one examines what occurred, the fault lies squarely with the elected officials who failed to make the required payments and now stand around shocked and dismayed that the bill has arrived.

Over the last three years, Governor Rell and the Legislature failed to make nearly $300 million in required payments to the pension fund and that was after two decades of underfunding the state pension fund (along with the huge losses in the value of the fund due to the stock market decline of the last few years).
 
The Governor and Legislators can call for pension reform all they want, they can seek to punish the state employees who have followed the rules and earned their pensions or they can stand up and take responsibility for their actions, pay the bills that need to be paid and discuss whether changes, if any, are appropriate moving forward.

As we learn more about the proposed state budget (2-18-11 edition)

Cross posted from Pelto’s Point at New Haven Advocate

As the details of Governor Malloy’s proposed budget are better understood; the positive and negative elements of the budget plan will continue to surface.

Overall, Malloy’s General Fund budget only increases the level of state spending by 1.8 percent, an extraordinary achievement considering the many pressures and challenges that face the state.  The budget also includes some major transportation initiatives that mean when the Transportation Fund portion of the budget is added in to the total the overall state budget is proposed to grow by 2.4 percent.

Malloy resolves the $3.4 billion dollar hole in next year’s budget with about $1.9 billion in new net revenue (including additional federal aid), $420 million in net budget cuts and $1 billion in state employee concessions.

Putting aside the very real problems associated with trying to cut $1 billion from what the state spends on its employees (without massive layoffs), some portions of the proposed budget are increased while others face relatively minor to major cuts.

Over the coming weeks more of these increases and decreases will be highlighted but here are a few of the more interesting additions and cuts.

Although most municipal aid is preserved at present levels, the budget cuts $48 million by eliminating the Payment –in-Lieu of Taxes (PILOT) for Manufacturing Machinery and Equipment.  This funding was provided  to towns to reimburse them for a portion of the taxes they lose since businesses don’t have to pay property tax on certain machinery and equipment.  It is a relatively small hit but does shift the cost of subsidizing the investment in manufacturing from the state to the local property tax payers in those towns with manufacturing companies.

At the same time, the budget adds $15 million for Tourism marketing for the state.

Among the cuts is $6 million due to the anticipated consolidation of campus settings at Southbury Training School and the closure of 5 public group homes for the developmentally disabled.

One cut that is likely to generate a lot of agitation is a proposal to cut $2 million from the monthly personal needs allowance for Medicaid residents of nursing homes, chronic disease hospitals and long term care facilities.  As the law now applies, all social security payments and pension payments must be turned over to pay for their care except for $69 a month so that they can buy necessary items.  The Malloy budget would change the law so that residents and patients can keep no more than $60.

Eliminating non-emergency dental services and reducing vision care services for poor adults (those who receive Medicaid) would save another $12 million

While Public Higher Education gets cut for about $70 million dollars in cuts, funding for primary and secondary education expands including $3 million more to expand enrollment at charter schools and $42 million to expand enrollment at magnet schools.

A number of changes are also made to the prison system including what appears to be the closure of another prison and an interesting $10 million reduction that the Governor’s budget describes as resulting from an “unspecified schedule change for Correction Officers and Correctional Lieutenants.”

A good detailed budget summary can be found at the Office of Fiscal Analysis – Malloy Budget Proposal.

In addition, for an alternative view of budget issues, check out a new blog by Heath Fahle at The Wonk Blog.

If you have specific questions about the budget plan, please send them along or post them in the comment section.

Challenging the “Prescribed Path” is not disloyalty

The importance of debate:  Even (no especially) in times of great strife and turmoil

Following the extension of the Bush Tax Cuts, President Obama this week released his $3.7 Trillion dollar Federal budget, a budget that lowers domestic spending to Eisenhower levels by cutting hundreds of vital programs;  basically maintains defense spending unaltered and includes a $1.7 Trillion dollar deficit.

Republicans reacted by blasting him and the Democrats as “big spenders” – despite the fact that while their proposals cut different programs had virtually the exact same bottom line.  Watch last night’s Daily Show for a funny, yet shockingly accurate assessment of the Republican’s reaction. (http://www.thedailyshow.com/#tool_tip_1)

Meanwhile, here in Connecticut Governor Malloy proposes a budget that has the deepest budgets in Connecticut history, along with an unattainable demand from Connecticut’s public employees and record tax increases.

 The response:   Republicans react by blasting him and the Democrats as big spenders – but in this case they don’t even have the willingness to put forward any ideas except to complain that more taxes are not the answer.

Meanwhile, both in Washington and here at home, the response from the Democrats has ranged from accolades for the courage to cut spending, acceptance of the inevitability that we are headed into an extended or permanent period in which we recognize “government is the enemy” or quiet desperation that the political environment gives the Democrats no other options.

There is no question that reasonable people can certainly disagree on the best course of action for the nation and state, as well as, what will or won’t work when it comes to re-energizing the economy.  However, I fundamentally reject the notion that the path laid out by President Obama or Governor Malloy is necessarily the best path and I’m even more certain that raising questions, concerns and objections is not only allowable but a healthy and necessary part of the process.

In some ways, the reaction to the concerns and objections that I and others have raised is even more surprising than the path our leaders have laid out for their respective jurisdictions.  One Courant columnist opined that Malloy must be on the right path because “liberals” like myself were unhappy with some of his proposals.  On a more micro-level, my Facebook posts on the budget have generated numerous responses that suggest we Democrats should give the new Governor our support by refraining from being critical.  Some have even suggested that my complaints and concerns are not only disloyal but serve to undermine the Governor and the good work he is doing and will lead to even further damage to the programs that we care so deeply about.

The importance of teamwork should never be denigrated and facing the reality of the situation Connecticut faces is of paramount importance, but criticism, concern,  and debate is not, in and of itself, an act of disloyalty.  In fact, I would argue that it is exactly the opposite.

Neither the President nor the Governor has cornered the market on determining what is the best course of action.  In this case, the President was wrong to support the Bush Tax Cuts and the Governor is wrong to back off the need to get Connecticut’s wealthy to pay their fair share.

In addition, some of the proposed cuts in Washington and Harford should be rejected flat out and others modified to reduce some of the negative consequences.

The time has come – in Washington and in Hartford – to face the ramifications of failed tax and spending policies.  A new age is upon us that requires a significant transformation in the way government works and what government should and should not do. 

But only through real, fact-based and sometimes difficult and uncomfortable discussion can we hope to find the best paths forward.

Pointing out where the President and the Governor are going wrong is not an act of disloyalty, but exactly the opposite.

Priority #1 – Telling the Truth – Budget Cuts Have Impacts

One more look at the new budget and higher education;

As the state of Connecticut finally steps up to deal with the financial crisis that threatens to derail it, one of the most serious challenges is to discern the difference between truth and political spin.

As we all know, all too often political spin has replaced virtually all honest dialogue about governmental issues at the Federal, state and local level. Here in Connecticut, the “political spin” began even before Governor Malloy delivered his Budget Address as the Governor and his team expertly created and maintained the mantra of “Shared Sacrifice”, along with a pledge to maintain funding for municipalities and not to destroy Connecticut’s Safety Net.

The importance of speaking honestly with the people of Connecticut about the reality of tax increases and budget cuts is perhaps nowhere more evident than when it comes to the reality facing those who attend or seek to attend one of Connecticut’s public institutions of higher education.

Despite the rhetoric, the undisputed truth is that as Connecticut state government makes cuts to its public colleges and universities, the cost of providing a high quality education is shifted more and more to students and their families.

That is not to say that our colleges should be exempt from cuts or that, like the rest of government, greater efficiency and effectiveness should not be demanded, but the truth is, it costs a lot of money to provide the type of education students need to succeed in the 21st Century.

In Connecticut, the overall level of state support has been decreasing over the past two decades.

For example, in 1991 the state provided 50 percent of the costs of running the University of Connecticut, today that percentage is below one third. As the overall budgets for UConn, Connecticut State University and the Community Colleges grew by well over 200% over the past two decades, the level of funding from state government increased by only about 80% Since funding for higher education comes from primarily two sources, the state and the students, without adequate increases in state funding, tuition and fees have been forced up in increasing amounts.

At UConn, tuition over the past two decades has gone up 284 percent, and well over 350 percent at CSU. The data are clear, the evidence is profound, the truth is that as the state makes cuts, costs are shifted to students and their families.

As a direct result of the state’s decision to remove money from UConn’s Operating Fund, tuition is already scheduled to jump 7%.

Yesterday, Governor Malloy proposed cutting Connecticut’s public colleges by about $70 million.

Malloy’s Secretary of the Office of Policy and Management, Ben Barnes said the 10 percent cut was really 2 to 3 percent cut because the schools have “significant resources beyond their general fund block grants,”

When asked about the impact, Malloy’s Commissioner of Higher Education, Mike Meotti said “We just can’t project what this is going to mean on tuition yet…But you can’t really say ‘Ahhha, this is going to lead to tuition increases.

Ben Barnes and Mike Meotti are two the smartest, most capable people in state government or, for that matter, anywhere.

The fact is, the previously approved 7% tuition increase (needed to make up for last year’s cut) will mean an increase of about $700 for every student.

Cutting $21 million more, as Governor Malloy proposes will force tuition up even further. Can reductions and efficiencies reduce UConn’s need to come up with the $21 million?

Of course, savings can and will be found, but considering the primary costs of a university are faculty and staff, as well as energy and other necessary expenditures, the vast amount of the cut will need to be made up.  That is the simple truth.  Why?  Because higher education is an expensive endeavor to provide and a variety of factors including the by-laws and contracts that Connecticut’s public institutions must legally follow make it impossible for these institutions to cut $21 million in a single year.

The Commissioner of Higher Education knows that, the Secretary of the Office and Policy Management knows that and Governor knows that.

Spin is no replacement for the facts.

To make up for this additional cut, UConn would need to raise tuition by a total of 17 percent or about $1,700 per student. Equally significant impacts will be felt at Connecticut State University and the Community Colleges. To suggest otherwise is simply not being honest about the impact budget cuts have.

And if Connecticut is to successfully deal with this financial crisis, real, direct honesty on the part of our elected officials must be the number one priority.

Its Budget Day in Connecticut! Malloy to speak at noon

The debate will rest on the definition of “shared sacrifice” and “preserving the safety net”

Since Monday, Gov. Dannel Malloy’s strategy on raising taxes has become clear. Yes to building some degree of progressivity into the state’s income tax system by creating more tax (8 instead of three)brackets and adding an Earned Income Tax Credit for low-income working families.

Connecticut’s 10,000 millionaires, who won big after President Obama’s extended President Bush’s tax cuts, will be taxed at a rate of 6.7 percent, a modest rise of about 3 percent from the former top rate of 6.5 percent of income.

The Malloy administration’s argument is that if Connecticut taxes the wealthy any more, they will sell their homes, pull their kids out of school, turn their backs on their communities and move out of state.

The Malloy budget also eliminates the all-important local property-tax credit, a big hit for middle-class families who will also be burdened with an income tax hike.

As for state employees, they are now listed as Public Enemy No. 1.  The governor calls for $2 billion in concessions (starting with $1 billion this coming year.).  As noted, Malloy’s demand is for a “give-back” that is five times the amount Governor Rell got two years ago.

The single most incredible development in the entire process is the OPM official within the Malloy administration’s who threatened that if the state employees don’t roll over and provide the $1 billion in give-backs, the “alternate route to a balanced budget” will be far deeper spending cuts that will leave the social service safety net in “tatters and core services decimated.”

Thus, if services are decimated, it’s the state employee’s fault.

Meanwhile today, Malloy will be calling for $750 million in spending cuts – the vast majority hitting higher education and social services.

While Malloy pledged during the campaign to “preserve the state’s social service safety net,” his new budget leaves Medicaid $176 million short of what is needed to maintain the current level of services and nothing new to address the growing demand for services. 

Among his proposed cuts is to phase out prescription drug subsidies for the elderly and reduce dental and vision services for the poor.

He will also be laying out an agency consolidation plan that won’t save money this coming year, but will in the future.

The new budget will also attract more federal aid by creating a new “health care provider fee” that will be charged every time one gets health care – the benefit is that the federal government will reimburse 50 percent of that tax for the poor.  (It is a rather complex way of getting additional revenue, but it has certainly worked in the past.).

Overall, the governor will be proposing a $19.74 billion budget for the coming year – an increase of 2.4 percent.