Malloy majors in fiction at press conference touting commitment to higher education

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“I am not talking about what happened in the past. I am talking about what needs to happen in the future.  (Governor Dannel Malloy 2-12-14)

The CT News Junkie headline reads “Commits To Higher Ed, Hopes Future Governors Will Too.”

Governor Malloy held a press conference at Manchester Community College on Wednesday in which he touted the “major investment” he was making in Connecticut’s institutions of public education.

As the article reports;

“Calling his recently announced higher education investments a good first step, Gov. Dannel P. Malloy said Wednesday he’s committed to additional funding increases even as he nears the end of his current term as governor.”

This “commitment” comes from the same Governor Malloy who has pushed through the deepest budget cuts in state history at Connecticut’s public colleges and universities.

At UConn, for example, before Malloy became governor, the Connecticut state budget accounted for 33% of the total cost required to operate the University of Connecticut.  Three years into his term and after his record budget cuts at UConn, Connecticut State University and at the State’s Community Colleges, the state now only provides 27.9% of the amount necessary to keep UConn operating.

As a direct result of Malloy’s budget cuts, the burden on students and their families have INCREASED by 17.3% with tuition and fees going up by double digits since Malloy became governor.

In 2010, candidate Dan Malloy promised to make Connecticut’s public college and universities a priority.  Since being sworn in as Dannel Malloy in 2011, Malloy has done exactly the opposite.

The reality is that it is getting harder and harder for middle class families to afford to send their children to college in Connecticut.  Since 2000, the cost of attending UConn has increased 118%.

And no Connecticut governor in living memory has done as much damage to higher education than Malloy.

But in what has now become typical fashion, Malloy failed to let the truth get in the way of a good press opportunity.

According to the CT News Junkie article, Malloy called his new funding initiative;

“Not a bad start” and added, “This is only a down payment, I’ve said it to members of the Regents Board. As this plan becomes further identified, there will in fact be increased investments in this system. That’s why this is really a celebration . . . of what is to come in the future.”

As Malloy put it, “I’m making a personal commitment and I hope future governors will make a personal commitment to make sure that this program continues…I want to be very clear, this is just the beginning of the investments we need to make in this system.”

However, the “new investment” that Malloy is making is based on an incredible budget gimmick and is not an ongoing effort to improve funding at Connecticut’s public colleges and universities.

As the CT Mirror explains, “Malloy is proposing to pay for this initiative using a budget loophole to get around the state’s constitutional spending limits.”

In a related budget story the CT Mirror laid out Malloy’s plan;

“…the $60 million Malloy would provide to cover the operating expenses…rely and the buy-one-get-one-free course for dropouts would come from a “one-time revenue transfer,” according to the administration.

What Malloy has proposed commonly is known in fiscal analyst circles as an “intercept” — a loophole used to move funds off budget and outside the purview of the constitutional spending cap.

After pledging for weeks that his new budget would comply with the cap, Malloy sent lawmakers a $19 billion plan that falls a razor-thin $8 million under the cap — and that’s before the Transform CSCU 2020 initiative is included.

The Democratic governor has been loathe to approve a legal exception to the cap – having criticized his GOP predecessors for frequently going that route. That option also is more complicated, requiring a 60 percent vote of approval in both the House and Senate.

Malloy instead turned to a loophole.

The cap system technically applies only to tax receipts and other revenues assigned to the state budget. Malloy will ask lawmakers to “intercept” $60 million of those revenues – which means that before the money “arrives” in the state treasury, it has been assigned to a new purpose outside of the budget.

Effectively, there would be no difference in how the money is spent in the fiscal year that begins July 1, but the expenditure wouldn’t be counted for spending cap purposes.

Traditionally though, state payments to cover higher education costs have been included within the budget.

Governor Malloy’s entire “commitment” to higher education has been a farce and his latest “commitment” is even more absurd than his previous ones.

School Bus Seat Belt Fund: A prime example of Connecticut’s budget gimmickry

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According to Governor Malloy and his administration, the State of Connecticut is on target to end this Fiscal Year (FY14) with a $506.1 million surplus.

Malloy administration officials are so excited about the notion of a budget surplus that they are talking about proposing a targeted election year tax cut to win over middle-class voters even though the state faces a projected $3.2 billion combined deficit over the three fiscal years following this year’s election.

Governor Malloy would have the public believe that this year’s developing surplus is a result of his good management of Connecticut’s state budget.

However, the way Governor Malloy and the Connecticut General Assembly played with State Account 35416 is a prime example of the type of budget gimmicks that were used to help create this year’s projected “surplus.”

Here is how it played out:

Just a month after the 2012 general election, the Governor called the outgoing members of the Connecticut General Assembly into a special session to address a projected budget deficit in the Fiscal Year 2013 State Budget.

With the passage of “AN ACT CONCERNING DEFICIT MITIGATION FOR THE FISCAL YEAR ENDING JUNE 30, 2013,” the General Assembly passed Malloy’s Deficit Reduction Plan.  The bill passed the State Senate 31-3 and passed the State House of Representatives 140-3.  Democrats and Republicans joined together to overwhelming pass the bill.

As part of Malloy’s lengthy bill was the following language;

“Notwithstanding the provisions of section 14-50b of the general statutes, the sum of $ 4,700,000 shall be transferred from the school bus seat belt account established in said section 14-50b and credited to the resources of the General Fund for the fiscal year ending June 30, 2013.”

The money shifted $4.7 million from the School Bus Seat Belt Account to the General Fund.  (More on this fund in a moment).

As result of the deficit mitigation bill and some improved revenue, Fiscal Year 13 didn’t end with a deficit, it ended with a $398.79 million surplus.  Of that amount nearly $200 million was “re-defined” as “future revenue” and shows up in this year’s budget…helping to ensure a budget surplus.

Even though Fiscal Year 2013 ended with a surplus, the $4.7 million was never returned to the School Bus Seat Belt Account (#35416).  As of now, that fund has only about $1 million in it.

So what is the School Bus Seat Belt Account (#35416)?

Long time Wait, What? readers may remember a post when Malloy’s deficit mitigation bill passed in December 2012.  It was entitled, “Remember when school bus seatbelts were a big priority?

The December 20, 2012 Wait, What? post read something like this:

Remember when school bus seatbelts were a big priority?

Aka:  No that was then, this is now…

Following the January 2010 tragic school bus accident on Route 84 in Hartford that killed a Rocky Hill student who was attending one of the CREC magnet schools, the legislature kicked into action.

On May 1 of that year the General Assembly passed what was to become Public Act 10-83.

The law created the Connecticut School Bus Seat Belt account, “a separate non-lapsing account in the General Fund” and required that the funds be used to help school districts pay for the cost of equipping school buses with lap/shoulder (3-point) seat belts.

To pay for the program, the Legislature increased the cost associated with restoring a suspended driver’s license from $125 to $ 175.  The Office of Fiscal Analysis estimated the higher fee would raise about $2.1 million a year.

Fast forward two and a half years…and the fund now contains $4.7 million.

Yesterday, as part of the deficit mitigation bill, the Governor and General Assembly passed language overriding the previous law and transferring the $4,700,000 from the School Bus Seat Belt account into the General Fund…

Gone is the money for school seat belts.

That tragedy was yesterday’s news.

And besides, who would remember that the account in question grew out of the concern that elected officials had for the safety of our children.

The tale of how the government raided the fund that was supposed to be used to install seat belts on school buses is a sad and shocking reminder that while it may be true that state of Connecticut presently “enjoys” a surplus, things are not always what they seem.

Connecticut Fiscal Policy: Surplus First, Deficit Later

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According to Governor Malloy, Connecticut’s fiscal house is in order and thanks to “surging” revenue the state of Connecticut will have a significant budget surplus this year and a balanced state budget going into the 2014 gubernatorial campaign.  The Malloy administration is so excited about the news that it rumored to be contemplating an election year tax cut to try to bolster the Governor’s poor rating in the polls.

At the same time, Connecticut will be facing a combined deficit of approximately $3.2 billion in the three fiscal years following the November 2014 election.

So what is the real story about Connecticut’s fiscal health?

For those interested in the details, three recent articles provide a good explanation.

Read Keith Phaneuf’s CT Mirror article entitled “Will Malloy spend Connecticut’s shaky surplus on election-year tax cut?,” CPA Marcia Marien’s commentary piece in the Hartford Courant entitled, “State Is Broke — ‘Surplus’ Is Pocket Change” and the Wait,What? post from earlier in the month entitled, “Governor Malloy’s fake Connecticut Budget “Surplus”.

Together they paint a relatively clear picture of what is happening.

Thanks to years of irresponsible budget gimmicks, Governor Malloy inherited a budget deficit of about $3.7 billion.

That gap was filled with a $1.5 billion tax increase, a state employee concession package, some budget cuts and an impressive amount of borrowing and the use of one-time revenues including draining a number of special funds that were meant to address specific budget expenditures.

Over the past three years, leaving state positions unfilled, additional budget cuts – especially to Connecticut’s public college and universities, more raids to pull in one-time revenues, excessive borrowing for operating expenditures and some tax increases (i.e. the largest gas tax increase in state history) have allowed Governor Malloy to reach a point where the state does have a “surplus” and yet truly faces three years of budget deficits that will average over $1 billion a year.

What brought Connecticut to this precarious point is primarily the use of one-time revenues and the borrowing to pay for operating costs.

As Keith Phaneuf explains:

“Since the governor took office three years ago, close to $1 billion in operating costs have either been deferred or shifted onto the state’s credit card. Malloy criticized these very gimmicks when he was a candidate in 2010.

‘Too often over the past 16 years, and especially over the past two years, Hartford’s played a budget shell game; piles of money get moved around, erasers get used, and voila, there’s a ‘balanced budget,’ Malloy wrote in a 2010 campaign policy paper. ‘It fools only those who want to be fooled.’

Among the steps taken by Malloy and the legislature’s Democratic majority were:

  • Canceling an early $222 million debt payment in June 2012. Instead they used $138 million to close a year-end operating deficit and put $94 million into the Rainy Day Fund.

  • Refinancing debt to push $392 million in payments owed now until after the election.

  • Bonding $173 million in new municipal aid over this fiscal year and next.

  • Bonding $57 million for pollution abatement and stem cell research grants that previously were paid for out of the operating budget.

  • Borrowing an extra $39 million so that debt payments tied to converting state finances to Generally Accepted Accounting Principles could be deferred until after the election.”

You can read more about how gimmicks have been used to create the surplus in the Wait, What post – Governor Malloy’s fake Connecticut Budget “Surplus”

In the meantime, the answer is yes – Connecticut presently has a surplus but whoever wins the governor’s race in November 2014 will be facing the challenges associated with enormous budget deficits.

Governor Malloy’s fake Connecticut Budget “Surplus”

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If you’ve listened to Governor Malloy lately or checked out some of the media reports recently you’d think Connecticut was on the road to economic recovery, that the state had a budget surplus and it was “Morning in Connecticut.”

Putting aside the continued high unemployment rates, Governor Malloy’s failed economic development strategies and the growing amount of poverty in Connecticut, there is a much more immediate problem with Malloy’s claim that Connecticut’s fiscal health is back on track.

Malloy’s Budget Director Ben Barnes recently released his monthly report to the State Comptroller on the status of Connecticut’s State Budget.  Barnes wrote, “This month’s estimate reflects a positive $273.3 million balance from operations, an increase of $137.4 million from last month’s letter.”

If taken at his word, it would appear that Connecticut has a $273.4 million budget surplus so far this year.

But when it comes to Malloy, Barnes and their budgeting strategies, things aren’t exactly as they appear.

Any reasonable person would assume that you determine the health of a state budget by comparing the level of tax revenues to the level of government expenditures.  If they are equal you have a balanced budget.  If expenses are greater than revenues you have a budget deficit and if revenues are greater than expenses you have a budget surplus.

But looking back at some of the gimmicks used by the Malloy administration this year corrupts the entire notion of what a balanced budget actually is…let alone what is should be called a budget surplus.

When examining how the Malloy administration put this year’s budget together one need only look at the following fiscal gimmicks.

And these are only the tip of the iceberg when it comes to the way revenue and expenditures were defined to make it appear that Connecticut is on stronger fiscal footing.

Here are a just a few of the ways in which this year’s Connecticut State Budget was “balanced.”  This year’s state budget:

  • Diverts $190.8 million from last year’s surplus to pay costs this year to make this year’s budget look more balanced and diverts another $30 million to do the same thing in next year’s budget. 
  • Diverts $115,000 for the Stem Cell Research Fund (SCRF) to pay for regular costs at Department of Health. 
  • Although the budget provided the DCF-funded private residential treatment centers with $11.5 million in maintain services, budget takes those funds away. 
  • Rather than use the $20.2 million in surplus from collective bargaining costs in last year’s budget as required to increase the raining day fund or reduce debt, Malloy’s budget dumped the money into the General Fund and Transportation Fund make the budget look more balanced. 
  • Diverts $1.4 million from the Tobacco and Health Trust Fund (THTF) to pay for expenses at the UConn Health Center. 
  • Diverts $1.1 million from the Tobacco and Health Trust Fund (THTF) to pay for expenses at the Department of Public Health. 
  • Diverts $3.4 million from Tobacco and Health Trust Fund (THTF) to pay for expenses at the Department of Public Health and Department of Social Services. 
  • Diverts $1.3 million from Tobacco and Health Trust Fund (THTF) to pay for expenses at the Department of Developmental Services and the Public Health. 
  • Further underfunds the Teachers Retirement Retiree Health Services Program by $22 million by reducing the reducing the state’s share costs to 25% and municipal health subsidy to 25%. 
  • Diverts $2.2 from the Pre-Trial Alcohol Substance Abuse Program to fund expenses in the Department of Mental Health and Addiction Services (Regional Action Councils). 
  • Diverts $1 million from Pre-Trial Alcohol Substance Abuse Program to fund expenses in the Department of Mental Health and Addiction Services (Governor’s Partnership to Protect CT’s Workforce). 
  • Diverts $500,000 in UConn funding to pay for CT Center for Advanced Technology Inc. 
  • Diverts $875,000 from the Student Protection Account to pay for expenses at the Office of Higher Education.  The Student Protection Account is supposed to be used to refund tuition when for-trade schools go of business. 
  • Diverts $1 million from the Systems Benefit Account to Operation Fuel and allows up $100,000 of that money to be used for administrative costs. 
  • Diverts over $2 million from various accounts within the Office of Policy and Management and transfers these funds to the Litigation/Settlement account in FY 14 to fund ongoing “litigation expenses.” 
  • Diverts $10 million from last year’s Transportation “Pay-As-You-Go” account to expenses this year including Rail Operations ($4. 2 million); Personal Services ($1. 5 million), Transit Improvement Program ($200,000), and Pay-As-You-Go ($4. 1 million). 
  • Directs the Office of Policy and Management to cut $10 million to municipal aid but the cut would not be announced until next fiscal year. 
  • Diverts $2.8 million in Magnet School fun from last fiscal year to pay $2.3 million for this year’s Sheff programming, $330,000 for the Sound School $160,000 for the Neighborhood Youth Centers for the New Haven YMCA. (Remember Appropriations Chair Toni Harp was planning to run the mayor of New Haven this year.  She did…and won). 
  • Diverts any balance of the Probate Court Administration Fund in excess of 15% of the total expenditures authorized to the fund to the State’s General Fund. 

These are just a few of literally dozens and dozens of examples of budget gimmicks that were used to make this year’s budget look “balanced.”

So when you hear that Connecticut has a “budget surplus” just remember that the so-called “surplus” is built upon a fiscal house of cards that will eventually collapse and Connecticut’s taxpayers and those who need and deserve vital state services will be the ones asked to pay the real cost for this political folly.

Kicking the can down the road….Governor Malloy style

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As the end of 2013 approaches we are reminded that unlike Gepetto’s wooden puppet, many politicians have taken lying and misrepresenting the truth to unprecedented levels, without suffering the ignominious consequences that affected Pinocchio.

If that wasn’t the case, Connecticut’s Governor Dannel Malloy would be having an extremely hard time getting in and out of the Capital this holiday season.

The 2010 Gubernatorial candidate “Dan” Malloy campaigned on a platform that unlike Gov. M. Jodi Rell, he would never “kick the can down the road.”

The definition of the idiom being, of course, that “If you kick the can down the road, you delay a decision in hopes that the problem or issue will go away or somebody else will make the decision later.”

Upon taking office Malloy’s initial budget speech to Connecticut legislators included the phrase, “This is our time to do what we were elected to do, to fix what’s broken once and for all.”

Malloy added, “We will borrow not one penny for operating expenses…Too much borrowing over the years for ongoing expenses is one of the reasons we’re in the bad shape we’re in.”

His $1.5 billion dollar tax plan was sold as part of his system of “shared sacrifice;” tax increases, program cuts and state employee concessions all publicized as the best mechanism to set fix the state’s finances.

Malloy’s style is to remind people that he inherited — not created — the largest budget deficit in state history.  Then, in nearly every speech Malloy has given, he works to convince voters that Connecticut’s finances are stable once again.   That done he then spends the rest of the speech bragging about the success of his effort.

This year, as Governor Dannel P. Malloy provided the closing remarks to the Connecticut General Assembly on June 6, 2013, he said – before uttering the words – “May God bless you, may God bless the great State of Connecticut, and may God bless the United States of America, that “This [year’s] budget refuses to kick the can down the road…”

In order to make his point Malloy skipped over the use of one-time revenues, the largest gas tax in state history, maintaining certain taxes that were supposed to come to end, barrowing record amounts of money to fund on-going operating services and continuing to shift the burden to anyone he could, such as local property tax payers and students attending Connecticut’s public colleges and universities..

He also conveniently failed to explain that while the state budget is “balanced” through the 2014 gubernatorial election, Connecticut’s non-partisan Office of Fiscal Analysis projects that Malloy’s irresponsible kicking the can down the road budget will leave the state with a budget deficit of $1.1 billion in Fiscal Year 2016, $1.2 billion in Fiscal Year 2017 and an incredible $1.4 billion deficit in Fiscal Year 2018.

Using what can only be described as truly unparalleled fiscal gimmicks, Governor Malloy has not only gone back on his campaign promises about being fiscally responsible – time and time again – but he has set up a scenario in which the State of Connecticut and its taxpayers will be facing a budget crisis of over about $3.7 billion over the next four fiscal years – a fiscal disaster that rivals the historic deficit that Malloy inherited in the first place.

While it is still the holiday season and the more in-depth debate about the 2014 gubernatorial campaign won’t really begin until after the New Year, the Pinocchio analogy seems particularly appropriate as we brace ourselves for the coming political year.

And on Education Funding… Malloy misleads audience… again…

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According to an article published in the CT Mirror and entitled,Malloy makes no promises to increase school funding further,” when speaking to the right-wing American Enterprise Institute yesterday, Governor Malloy wasnoncommittal Monday when asked during a forum in Washington, D.C., if he would further increase education funding again next year.”

In what has now become typical fashion, Malloy failed to tell the audience the whole truth.

In fact, what little funding Governor Malloy has provided for Connecticut public schools over the past three years has come with such extensive strings that it failed to provide local towns with real or meaningful options.

Even more importantly, Malloy’s new unfunded state mandates for far more standardized testing and the warped teacher evaluation program will cost Connecticut communities tens of millions of dollars.  Since the state is not reimbursing towns for most of these new costs, Malloy’s proposals will actually force most Connecticut towns to increase local property taxes and reduce existing education programs as they divert scarce resources to pay for Malloy’s untested and inappropriate programs.

But like so many other things associated with the Malloy tenure, the Malloy administration has refused to provide the public with honest information about its proposals.

As Connecticut taxpayers may recall, Malloy’ mantra of “shared sacrifice” was associated with a $1.5 billion tax proposal that included higher income tax rates for everyone EXCEPT those making more than $1 million.  However, Malloy’s successful effort to coddle the super-rich was never openly discussed by policymakers.

And yesterday, following the standard script, when he was asked about additional school funding Malloy responded with, “I think that it’s a little early to tell.”

What Governor Malloy failed to do was provide Connecticut voters with an honest assessment of the fiscal disaster that his administration has already created and will become increasingly apparent… especially after the next gubernatorial election.

According to the non-partisan Connecticut Office of Fiscal Analysis, Malloy’s tax and spending programs have created a situation in which Connecticut will face:

  • A $1.1 billion budget deficit in the fiscal year that ends on June 30, 2015,
  • A $1.2 billion budget deficit in the fiscal year that ends on June 30, 2016,
  • And a $1.4 billion budget deficit in the fiscal year that ends on June 30, 2017.

Equally appalling is the fact that even this year’s state budget is balanced by using one-time revenues and budget gimmicks that Malloy promised he would not utilize when he was running for governor.

By refusing to lay out the true nature of Connecticut’s financial problems, Connecticut citizens won’t have the information necessary to engage in an honest and thoughtful discussion about the challenges and issues facing the state.

Yesterday’s speech reminds us that the Malloy administration’s consistent lack of honesty and transparency will prove to be its most notable legacy.

You can read the CT Mirror story here: http://www.ctmirror.org/political-mirror/2013/12/02/malloy-makes-no-promises-increase-school-funding-further

The Malloy administration’s approach to financial planning in 2013

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“Aware that the city school board was prepared Monday to pass a resolution demanding the funds, Barnes said he felt the time was right to make the deal.”  – CT Post 11/26/13

You heard him right… “The time was right to make the deal.”

The deal being that the City of Bridgeport would get a giant pass on having to allocate the legally required minimum funding that Connecticut towns must make in order to get state education funds.

The deal being between Governor Malloy and Mayor Bill Finch – WITHOUT THE INVOLVEMENT OF THE BRIDGEPORT BOARD OF EDUCATION – the elected officials who are legally responsible for running Bridgeport’s School and who had already adopted a budget based on getting the additional $3.3 million that the City of Bridgeport won’t have to provide.

Just last year, when Bridgeport was facing a $3.5 million budget deficit in its school budget, Malloy, with the approval of the Connecticut General Assembly, gave Bridgeport a $3.5 million “forgivable loan.”

As a condition for getting the money, Bridgeport had to agree to allow Malloy’s Commissioner of Education to approve any replacement for Paul Vallas, who was serving as Bridgeport’s Acting Superintendent at the time.

Now one year later another deal pops up, this time allowing Bridgeport to renege on its legal responsibility to provide its local schools with the minimum budget allocation of local taxpayer funds.

In what will certainly go down as one of the more absurd political statements of the year, the Connecticut Post reported today that “Benjamin Barnes, secretary of the state Office of Policy and Management, who helped broker a budget deal reached over the weekend, said he doesn’t want this to be an annual bailout program for Bridgeport, and is looking for assurances the city will finally fully fund its Minimum Budget Requirement going forward.”

According to the Connecticut Post article, Mayor Bill Finch and the City of Bridgeport’s local contribution for their schools should be $3.3 million higher than what it has actually allocated for this year.

Rather than require that Bridgeport fulfill its legal responsibility, as all other towns must do, Governor Malloy is proposing a deal to “rectify the problem” by allowing about $1.2 million worth of in-kind services to the school board, allow the city to shave $1.1 million off the school board’s workers’ compensation contribution and have the state make an additional $1.2 million contribution to the city by the end of the fiscal year.

While neither the Malloy administration nor Mayor Finch consulted with the Bridgeport Board of Education, their “deal” will actually create an immediate budget deficit in this year’s Bridgeport school budget, a budget deficit that require mid-year cuts to school programs.

As reported in the Connecticut Post, at last night’s Bridgeport Board of Education meeting, the Bridgeport Board of Education adopted a resolution, on a vote of 6 -1, to demand the city come into full compliance with the Minimum Budget Requirement law.

But the fact is that the Malloy/Finch deal with leave the Bridgeport Board of Education twisting slowly in the wind.

And as to the long-held notion that it is the Legislative Branch of Government that approves the state budget and only the Legislative Branch that can allocate additional funding for Bridgeport, Ben Barnes, who served as Bridgeport’s interim director of finance before he became Malloy’s Budget Chief, told the Connecticut Post that “he had some contact with the Legislature’s appropriations committee chairs over the matter, but believes the administration has broad authority within existing education reform dollars to make the additional payment to Bridgeport…“

Media requests from Wait,What? to the Governor’s Office, the Education Commissioner’s Office and the Office of Policy and Management asking for what statutory authority Barnes believes gives him the ability to give Bridgeport another $1.2 million in education funding without legislative approval have gone unanswered.

As if the Malloy/Finch deal wasn’t already difficult enough for the dozens of other Connecticut communities that are also suffering from inadequate funding to hear about, the Malloy administration managed to rub additional salt in the wound via a letter Stefan Pryor, Malloy’s Commissioner of Education sent to Bridgeport Mayor Bill Finch.

Pryor calls the Malloy/Finch deal less than ideal but adds that it is “sufficient to allow all parties to turn their attention from past conflicts to our aspirations for the future.”

Hello?

Commissioner Pryor?

Will allow all parties to turn their attention from past conflicts to our aspirations for the future?

By allocating state money without legislative approval, leaving the Bridgeport Board of Education with a new deficit for this school year and blowing off the financial problems faced by Connecticut’s other communities.

Yup, file this one under:  The Malloy administration’s approach to financial planning in 2013

You can read the full Connecticut Post article here:  http://www.ctpost.com/local/article/City-has-a-deal-but-board-not-satisfied-5011160.php

Is that your credit card? Why yes, yes it is….

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[Or perhaps a better title would be:  Didn’t that sign back there say… “Bridge Out” to which the elected official responded…what sign?]

Earlier this week, the CT Mirror ran a story entitled “Debate intensifies over CT’s credit card,“ while CT Newsjunkie’s story was State On Pace to Exceed Malloy’s Self-Imposed Debt Limit.

Since the stories contained quotes from State Senator John McKinney, a potential candidate for governor and rather defensive statements from Governor Malloy’s media operation, some readers may have misinterpreted the issue as being primarily political in nature.

However, the truth is far from that.

If you skipped over the stories about the state’s bonding and tomorrow’s state Bond Commissioner meeting, go back and read them very, very carefully.

They highlight what is surely one of the most important fiscal issues facing Connecticut and the failure of our elected officials to take the matter seriously.  The course they are on will literally destroy Connecticut’s economic future.

The short version of the issue is as follows;

Tomorrow morning the Connecticut state Bond Commission will meet to borrow an additional $395.5 million in general obligation bonds.

With two more Bond Commission meetings left in the year, this new borrowing will “put Gov. Dannel P. Malloy within $20 million of his self-imposed $1.8 billion bonding limit.”

As CT Newsjunkie reported, at the first Bond Commission meeting this year Malloy said, “I can’t imagine that we would exceed $1.8 [billion], but we may be substantially less than that.”

But here we are…. At $1.8 billion and counting.

The $1.78 billion number actually exceeds last year’s amount of borrowing by nearly $400 million.

As State Senator John McKinney observed, “The governor, who two years ago set the record for the largest tax increase in state history, has today set a new record for the highest amount of borrowing in state history…This level of borrowing and these broken promises show a lack of leadership, a lack of fiscal responsibility, and a lack of consideration for the taxpaying public.”

McKinney’s statement was brushed aside by the Malloy administration who went on to claim that borrowing more money is not a drag on the state’s economy.

But that attitude overlooks a far more serious issue.

The drag on the economy is not so much a concern today, but the $19 billion in bonds the state must be off over the next twenty years will have significant and far-reaching ramifications.

Across the country, the average state per capita debt burden for state funded bonds is about $1,400.  In Connecticut, the state per capita debt burden is just about $5,100.

And that is just the amount owed for bonds.

According to the state of Connecticut’s own numbers, over the next few decades, Connecticut taxpayers will have to come up with nearly $64 billion in addition to the funds necessary to pay for the State’s annual expenditures.

Besides the $19 billion in existing outstanding debt, Taxpayers will have to deal with the following obligations;

State Employee Retirement System (SERS) $ 11 billion

Teachers’ Retirement System $ 11 billion

State Post Employment Health and Life Benefits $18 billion

Teachers’ Post Employment Health Benefits $3.0

Generally Accepted Accounting Principles Deficit $1.5 billion (a major portion of which the state intends to borrow)

Like having to use a bigger and bigger portion of one’s salary to pay off the minimum balance on their credit cards, the state’s extraordinary debt is requiring more and more of the state budget to be diverted from services to debt payment.

Ten years ago, about 8.5 percent of the state budget went for debt service.  Today that figure is over 10 percent and growing.  In this year’s state budget, about $2.2 billion is going for debt service.

Compare that $2.2 billion to Governor Malloy’s claim that he improved education funding by providing about $50 million in new funds for Connecticut’s Education Cost Sharing Formula.

As Keith Phaneuf wrote in his CT Mirror article earlier this week,

“Financing for state government’s capital program basically follows a three-stage process:

  • The legislature has sole authority to “authorize” bonding. Every two years lawmakers adopt a schedule of projects that may be financed with long-term borrowing.
  • The bond commission — a 10-member panel of administration officials and legislators chaired by the governor — has sole authority to pick which projects will be financed.
  • And when a state agency or some other entity is ready to actually carry out a project, the state treasurer’s office is empowered to issue bonds on Wall Street to raise the funds needed to cover expenses.

So while bond commission action doesn’t necessarily mean money will be spent right away, it does represent the state’s intention to move forward at some point with a project.

And given that Connecticut has one of the largest bonded debts, per capita, of any state in the nation, McKinney said Malloy should be more restrained about assigning projects to the credit card.”

To that, Malloy’s press operation shot back at McKinney saying, “The work supported by the bond commission creates jobs for Connecticut residents. It also allows the state to invest in local projects like schools, parks and senior centers. Senator McKinney should explain which important investment in job creation and quality of life improvements for residents in all of our towns and cities he does not support.”

While investment in “shovel” ready projects to create jobs is undoubtedly an important priority, the rather flippant response from the Malloy administration reveals the same lack of appreciation that previous governors have shown – Democrat, Republican and Independent – all of whom have pushed up the state’s indebtedness and undermined the long-term health of Connecticut’s economy.

The underlining problem is that many of today’s politicians will be long gone when the children of today’s taxpayers are given a bill that they can’t possibly pay.

For more about this issue, start by reading the CT Mirror story here: http://www.ctmirror.org/story/2013/09/23/debate-intensifies-over-cts-credit-card and then the CT Newsjunkie story here:  http://www.ctnewsjunkie.com/ctnj.php/archives/entry/state_on_pace_to_exceed_malloys_self-imposed_debt_limit/#more.

Then when you have your courage, go check the General Assembly’s Fiscal Accountability Report which you can find here:  (Especially look at pages 26-32): http://www.cga.ct.gov/ofa/Documents/year/FF/2013FF-20121115_Fiscal%20Accountability%20Report%20FY%2013%20-%20FY%2016.pdf

Special Master Steven Adamowski’s wild spending spree with Connecticut’s tax dollars

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Since the Malloy administration gave Steven Adamowski his no-bid contract to serve as “Special Master” for Windham and New London, Adamowski has collected a salary of about $450,000 for himself and another $168,000 for his staff.  Add in over $140,000 more for health and insurance benefits, $17,000 for travel and $29,000 for equipment and it starts to become clear just how much Connecticut’s taxpayers are “investing” in Adamowski and his “management style.”

Equally troublesome is Adamowski’s free hand with the state’s check book.

According to documents collected from a series of recent Freedom of Information requests, over the past two years, Adamowski has been on a massive spending spree of public funds in his capacity as “Special Master.”

In addition to ordering local officials in Windham and New London about how they should be spending their funds, Adamowski has his own stash of state funds to play with.

Over the past two years Adamowski has spent $132,000 on engineering projects and studies with a company called Friar Associations (There was no competitive bidding conducted related to those projects).  Another engineering company, Gale Associates out of Weymouth, Massachusetts picked up another $15,250 courtesy of Adamowski.

The Center for Reform of School Systems, a consulting group out of Houston, Texas was given $39,000 in a no-bid contract to “provide 6 additional days of service for New London Special Master Grant Program.”

And the National SAM Innovation Project, a consulting operation out of the Jefferson County Public School System in Louisville, Kentucky collected $12,700 in another no-bid contract for services.

The law firm of Shipman & Goodwin received $34,000 (no-bid contract) and Adamowski dropped $12,370 on a company called Telogis for some refurbished computers, which came on top of his $29,000 equipment budget.

The organization called Leadership Greater Hartford was paid $34,000 to train Windham’s local school governance councils which is particularly ironic since Adamowski has consistently refused to include the school governance councils in key decision making, despite a Connecticut law that requires these local councils of parents, teachers and citizens to be consulted.

Another direct beneficiary of Adamowski’s spending has been CompassLearning, the Dallas based corporate entity that owns the rights to sell site licenses for the so-called Renzulli Academy.  Despite very strong opposition to Adamowski’s push to open Renzulli Gifted and Talented schools in Windham and New London, CompassLearning was paid $22,500 in public funds for Renzulli Annual Site Licenses for ALL Windham schools.

The Connecticut Science Center, the publicly funded science museum in Hartford, which was supposed to “partner” with Windham’s new STEM Magnet School, was paid more than $90,000.

And Teach for America collected a finder’s fee of at least $35,000 from Adamowski, on top of the $33,000 that Teach for America received from the Windham School System.  Wait, What? readers may recall that while TFA charges most cities $2,500 to $3,000 for each TFA recruit they place in a local school, Adamowski signed a deal with Teach for America that guaranteed them $4,000 per TFA recruit.

Add in another $72,000 for computer based “MAP Assessment testing” and tens of thousands of dollars that are simply listed as “teacher stipends” or “professional development” and we start to get a clearer picture of how the “Special Master” is spending taxpayer funds in a “special way.”

Perhaps the oddest expense of all are two checks totaling $125,000 that were written as part of Adamowski’s on-going effort to “persuade” the Town of Windham to purchase the propriety municipal finance software called MUNIS.  Adamowski has been engaged in a similar effort to force New London to choose MUNIS as their software vendor.

It all bring us back to the key question of why Connecticut’s legislators or Connecticut’s auditors haven’t stepped in to put a stop to Adamowski and his no-bid, no-rules spending spree of our scarce public funds.

Hello? It’s the 2nd week of August…where is the State’s Alliance District Funding?

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Although the amount of money was relatively small, Governor Malloy and the Connecticut General Assembly made a big deal this year trying to persuade towns, schools, teachers, parents and the general public that they were increasing funding for Connecticut’s under-funded public schools.

While about $50 million was added to Connecticut’s Education Cost Sharing Formula for distribution to the state’s local public schools, the vast majority of those funds were targeted to a select group of the 30 poorest towns that are called “Alliance Districts” under Malloy’s education reform initiative.  These are the towns with the greatest poverty and have the largest number of students who face language barriers or need special education services.

But there was a huge catch.  Rather than give the towns flexibility to spend the money where it was needed most, in order for Alliance Districts to receive their funds, they were required to submit detailed “Year 2 Alliance District Plans” by Friday, June 28, at 5 p.m.

The promise was that the State Department of Education would quickly review those plans and release the funds so that towns could ramp-up their programs in time for the beginning of the school year.

But here we are, five weeks later, the new school year begins in just weeks and towns have not heard whether or when they will get any of the promised new money.

Without the funds, people can’t be hired, programs can’t be started and children won’t be getting the additional academic services they need.

The fundamental problem is that Malloy’s Commissioner of Education, Stefan Pryor, has decimated the capabilities of the State Department of Education and has turned over much of the day to day operation of the agency to high-priced consultants who don’t know Connecticut, don’t have the expertise to do the jobs they’ve been assigned and are sucking scarce taxpayer dollars away from vital services.

Just this spring Stefan Pryor and his inner circle of advisors let go seven key experts in the State Department of Education who were helping Alliance Districts to develop and implement effective programs to improve academic performance.  Then, to make matters even worse, Pryor transferred the three key people who worked on improving English as a Second Language programs, provided technical support for towns so that they could do a better job developing culturally appropriate programing and also removed the staff expert in-charge of developing programs to reduce bullying and improve school climate.

Instead of relying on the dedicated, Connecticut based experts; Pryor hired an out-of-state company for nearly a million dollars.  That company, in turn, sent in five people with virtually no educational experience what-so-ever.

Now, with Year 2 Alliance District plans filed, the chickens are coming home to roost.

Thirty plans need to be reviewed and approved before the towns can get the money they were promised but Commissioner Pryor is either unwilling or unable to get the job done in a timely, efficient and effective way.

Left twisting in the wind —- the students, teachers and taxpayers of Ansonia, Bloomfield, Bridgeport, Bristol, Danbury, Derby, East Hartford, East Haven, East Windsor, Hamden, Hartford, Killingly, Manchester, Meriden, Middletown, Naugatuck, New Britain, New Haven, New London, Norwalk, Norwich, Putnam, Stamford, Vernon, Waterbury, West Haven, Winchester, Windham, Windsor and Windsor Locks.

While Pryor’s operation has put together “teams” to review the plans, the majority of team members lack the experience necessary to get the job done right.

Although a few remaining Department of Education professional staff have been assigned to help with the review process, the bulk of the work is being done by the out-of-state consultants from Mass Insight.

One Mass Insight consultant’s real world experience was working with a major charter school chain and another worked for the corporate funded reform organization called New Visions for Public Schools.  A third worked for yet another corporate funded education reform entity called BELL (Building Educated Leaders for Life.)  None of them have any experience working in Connecticut.

Of course, there is also the Mass Insight “project manager” whose experience was working in a non-classroom, management position for Commissioner Pryor’s charter school management company, Achievement First. Inc.  This is not the first consultant to have direct ties to the company Pryor set up and helped manage before coming Malloy’s commissioner of education.

Perhaps the most incredible development of all is that teams reviewing the Year 2 Alliance District Plans include Pryor’s two law school interns, who despite no experience at all, are helping to play a pivotal role in allocating tens of millions in taxpayer funds.

And meanwhile;

Thirty towns…

Thirty board of educations…

Thirty school superintendents…

Hundreds of schools…

And tens of thousands of students are all waiting for the Commissioner of Education and his operation to get their act together so students can actually access the programs and services they were promised.

Such incompetence would never, ever be deemed acceptable in any other setting.

It is sad and unsettling commentary that with only weeks to go until the new school year begins, the Malloy administration can’t even tell Connecticut towns and school districts how much money they will be getting this year.

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