BREAKING NEWS – Capital Prep Steve Perry – Above the law and deserves it all

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As Wait, What? readers know, while employed as a full-time employee of the Hartford Board of Education, Capital Prep Magnet School Principal Steve Perry has been engaged in an on-going effort to build a lucrative charter school chain using the name Capital Preparatory Schools, Inc. and materials he and his senior staff developed while being paid with taxpayer funds by the City of Hartford.

Perry’s proposal is to open a chain of privately run, publically funded charter schools starting with a school in Bridgeport, Connecticut and one in Harlem, New York.

The proposals for both schools openly admitted that the plans were based on Capital Prep Magnet School in Hartford, that the materials used will be the same as those used at Capital Prep Magnet School and the management team that will run the Bridgeport and Harlem charter schools will be the same group of senior administrators and teachers that are presently running Capital Prep Magnet School in Hartford.

The proposals even included many of the written materials that can be found on Capital Prep Magnet School’s present website.

But of course, Steve Perry and his team know perfectly well that such a move is blatantly illegal.

The law is very clear, materials and concepts developed by public employees during the course of their work belong to their employer – the government that pays them and its citizens.

Steve Perry and his employees know the law because it is clearly defined in the written policies of the Hartford Board of Education which states,

Materials created by staff at the instigation and/or direction of superiors and/or during work-time shall be considered “work made for hire” under Sections 201(b) and 101 of the Copyright Act and shall be solely the property of the school district.

It is also understood that educational materials created by an employee during the employee’s leisure hours when the employee is not fulfilling his/her contractual duties to the school district are the property of the employee

But those laws haven’t stopped Steve Perry or the government officials who are supporting his effort to achieve financial success.

With the support of Governor Malloy’s Commissioner of Education, Stefan Pryor, the State Board of Education approved Perry’s plan to open a charter school in Bridgeport next fall.  The plan includes the fact that Perry’s private charter school company would start collecting a multi-million dollar “management fee.”

The State Board of Education approved Perry’s plan despite the fact that there is no money in the budget for any more privately run, but publically funded charter schools and the state of Connecticut is facing a massive deficit.

Last Friday, the pro-charter New York Board of Regents also approved a proposal allowing Steve Perry and his Capital Preparatory Schools, Inc. to open a charter school in Harlem next fall.

Neither the Connecticut State Board of Education nor the New York Board of Regents took note of the fact that Perry did not have the legal authority to use the materials or concepts outlined in his proposals.  According to that plan, Perry will collect a $2.5 million management fee per year, for the first five years.

While the initial issue is why officials are allowing Perry to break the law and steal materials and concepts that belong to the people of Hartford (it is called plagiarism), the second key question relates to how Perry’s ploy to open his charter school management chain would impact his role as head of Capital Prep Magnet School.

When the Connecticut State Board of Education was considering Perry plan to use his private company to open a charter school in Bridgeport, Perry said that he would be able to take on the task of opening and running a new school because he would be leaving Hartford.

However, in his proposal to open a charter school New York City, Perry told the New York Board of Regents that that he already owned the Hartford public school in which he work and revealed that his corporate business plan included making money from Hartford’s public school, as well as the yet to be opened Bridgeport charter school in the years to come.

Perry’s application explained:

“Surpluses are projected in each year beginning in 2015.   The annual ending cash balance per year for CPS will be just over $500,000 in management fees collected.  Conservative five- year estimates have our year end cash balance at $2 million by year five between Hartford, Bridgeport and our Harlem 6 to 12 school.”

For details about Perry’s New York charter school plan read the Wait, What? article entitled, “Steve Perry’s plan – Turn Hartford’s Capital Prep into a charter, open charters in Bridgeport and New York

So is Steve Perry leaving Hartford Prep as he told the Connecticut State Board of Education or is he going to own Hartford Prep as he reported to the New York Board of Regents

Well now the truth is finally coming out…

Despite telling Connecticut state officials that he’d be giving up his role at Hartford’s Capital Prep Magnet School, Perry’s plan appears to be that he will take over private control of Hartford’s public Capital Prep Magnet School

In a letter this week to parents, Steve Perry said that he intends to keep full control of Hartford Capital Prep, apparently by convincing the Hartford Board of Education to allow him to turn it into a charter school or allow his private charter school company to run the school.

Perry told parents to join him at a meeting on Monday, November 24, 6pm in the Sheff Center to continue the discussion about the future of Capital Prep.  He reported that, “joining us will be Jonathan Shaw and Oliver Barton who will meet with us on behalf of the Superintendent.”

At the same time, Perry wrote the following letter to parents,

From Dr. Perry:

Capital Prep is not going anywhere. We are simply expanding to two other cities. Neither students nor staff need to look for a new school, at all!

I have offered to continue to lead Capital Prep as we expand. We would oversee the daily operations, as we always have, as Capital Prep expands to Bridgeport and Harlem. The cost to Hartford for us, the founders of Capital Prep, to continue to operate our school would be $1.

Yes, for $1 our non profit has proposed to keep our school’s founders together but Hartford’s new superintendent Dr. Beth Narvaez and school board are not supporting our efforts to continue to run the school that we have made into one of the most successful in America. Their expectation is that at the end of this school year we walk away. At which time they will take responsibility for operating Capital Prep, starting with selecting a new principal.

Our parents, faculty and students have overwhelmingly supported our plan for continuity and expansion for years. Other Hartford schools have selected who and how their school will be operated. Yet the new superintendent, Dr. Beth Narvaez, and the board are saying Capital Prep will be treated differently. When we go to expand, they intend to take over our school.

The issue, therefore, is not if there will be a Capital Prep. It is who will run it? Either we, the family who have been doing so for over 10 years or they, the new superintendent and board. The question is not, should you look for a new school? The question is would you rather keep our family of educators together as we grow to include more children or would you rather be operated by Hartford Public Schools?

We are, and always will be, Capital Prep.

With deepest love,

Dr. Steve Perry

As far as Perry’s plan is concerned, the only possible hindrance would be if Connecticut Governor Malloy, Hartford Mayor Pedro Segarra, the Connecticut Board of Education, the Hartford Board of Education, Connecticut’s Attorney General, Connecticut’s State Auditors or Connecticut’s Chief State’s Attorney decided to actually do their job and put an end to Perry’s outrageous game.

Of course, if they do… watch out…

Remember, Perry is the who, when he didn’t get his way last year, Tweeted,

  Dr. Steve Perry‏@DrStevePerry
“The only way to lose a fight is to stop fighting. All this did was piss me off. It’s so on. Strap up, there will be head injuries.

 

But of course, at the time, officials looked the other way and Perry got away with a Tweet that would have escorted any other school administrator, teacher or student to the door and into the hands of awaiting police officers.

Budget Cuts – Round #1, More to Come

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On Thursday, Governor Malloy’s budget director announced a series of significant budget cuts to existing state programs.  The problem is not only the damage the cuts will do but that they solve only a portion of this year’s growing state budget deficit which is now projected at about $100 million.  However, the magnitude of the budget deficit is closer to twice that number, a fact that Malloy can’t keep secret for more than another month or two.

Still Malloy’s initial cuts fly in the face of his repeated promises that Connecticut’s fiscal health is good and that we do not need to cut vital services if the voters of Connecticut granted him a second term in office.

But his actions tell a very different story.

Topping his list of budget cuts was, as expected, Connecticut’s public colleges and universities, along with critically important human services.

CT Mirror has the details at “Malloy’s emergency budget cuts fall on social services, education,” CTNewsJunkie at “Malloy Makes Cuts To DCF, Higher Ed,” and the Courant at “Malloy Makes $47.8M In Budget Cuts To Ease Deficit.”

The most revolting of Malloy’s budget cuts are aimed at Connecticut most vulnerable citizens, children facing severe challenges and those with developmental disabilities.

Malloy cut $9.2 million from the Department of Children and Families and $5.5 million from the Department of Developmental Disabilities.  Since there are only seven months left in the fiscal year, these cuts will hit key programs especially hard.

As reported by CT Mirror and others, Malloy has been limiting access to DCF’s residential treatment programs (group homes for extremely troubled children).   His latest cut will effectively close the door on new placements and lead the closure of even more DCF group homes.

While a Malloy official explained away the problem to the CT Mirror by saying that DCF was, “committed to maintaining youth in their communities in the least restrictive settings that can meet their needs,” the reality of the situation is that there are many parents and children that desperately need residential options.  In far too many cases, the failure to provide a residential placement puts the family and child in danger.

However, in what only can be described as an immoral move, the Malloy administration turns its back on these Connecticut families and children.  If Malloy’s action is not illegal, it should be.

In an equally inappropriate blow, Malloy is cutting the Department of Developmental Services including day services and employment programs for those with developmental disabilities.  Sad and ironic that Malloy reduces residential treatment options and then reduces options for those who need day treatment and employment services.

Malloy’s human service cuts also include $3.2 million cut from the Department of Mental Health and Addiction Services. The cuts to that agency will mean vitally important positions will go unfilled, leaving remaining employees unable to meet the present demand for services.

At the same time the governor is going after human services, he is also cutting an additional $6.5 from Connecticut’s public colleges and universities, this despite the fact that Malloy has already made the deepest cuts in state history to Connecticut’s system of public higher education.

Rather than speak out against these dramatic cuts, the spokespeople for the universities and colleges rolled over in appeasement, thereby assuring that Connecticut students and their parents will be paying even more and getting even less from UConn, CSU and the community colleges.

As Malloy pretends to claim that he is adhering to his “no new taxes” pledge, Connecticut college students and their parents will be paying higher tuition – which is nothing more than a user tax.

But perhaps the most offensive move of all is Malloy’s failure to come clean about the magnitude of the budget problem, even though the election is safely behind him.

While the present budget deficit is officially pegged at about $100 million, Malloy’s budget office is holding back evidence of additional budget problems.  The reality of the situation is that this round of cuts solves less than half of the documented budget deficit and more like 25 percent of the real budget problem facing the state.

Even in victory Malloy remains unable or unwilling to tell the people of Connecticut the truth.

The stench coming from the Board of Regents

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The October 9th Wait, What? post was entitled, “There is something very, very wrong going on at Connecticut’s Board of Regents.

But no, it was not a blog post about the growing controversy surrounding the effort to jam through the ill-conceived and damaging “Transform CSCU 2020” plan that is being pushed by Regent President Gregory Gray and the members of the Connecticut Board of Regents.

The Wait, What? blog with that title was posted more than two years ago (October 2012) and dealt with the myriad of problems that surfaced when the previous president of the Board of Regents, Robert Kennedy, illegally hand out nearly $300,000 in pay raises to employees in the central office despite state law and the SEBAC labor agreement that prevented such a maneuver.  Three days later, Kennedy submitted his resignation and was gone.

But the sad and shocking reality is that the notion that “there is something very, very wrong going on at Connecticut’s Board of Regents” is even truer today than it was two years ago.

In fact, the action being pursued by the Board of Regents and its current president may well be the worst proposal for public higher education in Connecticut history.

Rather than improve the quality and accessibility of a college education for tens of thousands of Connecticut students, their new plan, would leave Connecticut’s state universities and community colleges a sad empty shadow of what they once were and could be with the proper leadership and support.

To begin to understand the situation, all you have to do is read some of the recent news stories in the CT Mirror and Hartford Courant.

Faculty decry provost’s departure, president’s plan for CSCU’s future and ECSU faculty union gives president’s plans an F and Faculty push back on president’s plans for Connecticut State Universities and Regents Provost Resigns Abruptly After Less Than 8 Months and ECSU Faculty OK Organizing ‘No Confidence’ Vote On Regents President and Smart Classrooms Discussed At Board Of Regents Meeting

But the real problem behind the proposed “Transform CSCU 2020” is far more serious than the media coverage has yet explained.

When William Cibes served as the Chancellor of the Connecticut State University System and Mark Herzog served as the Chancellor of the Connecticut Community & Technical Colleges, the two not only worked to include faculty, staff, students, alumni and the greater community in the decision-making, but they stood as strong advocates for their institutions, rather than tools of any sitting governor.

When push came to shove, these higher education administrators understood that while they were part of the state government, their primary duty was to serve their institutions and their respective missions.

However, the focus of the leadership all changed when Governor Malloy decided to merge the two systems into one entity called the Board of Regents.

Malloy’s disastrous proposal would not have passed but for the lobbying effort of Lt. Governor Nancy Wyman who called Democratic members of the Education Committee to tell them to overrule their chairperson, State Representative Roberta Willis, who was rightly demanding significant changes to the legislation.

The merger of CSU and the Community Colleges was a bad idea to begin with and the situation has only gotten worse over the last three years.

Rather than recognize the importance of both systems, including the growing quality of the Connecticut State University System and the vital importance of the Community College System, the Malloy administration – through its state budgets and appointments to the Board of Regents – has consistently undermined the fundamental mission of those institutions.

The plan to “transform” CSU and the community colleges is but the latest and most profound reminder of Malloy’s disastrous approach to public higher education in Connecticut.

Instead of appointing people who appreciate and understand the vital role that the Connecticut State University and the Community Colleges play, the Malloy administration and the people appointed to the Board of Regents have been engaged in a full-scale effort to limit the institutions’ ability to succeed while transferring the costs of running these public institutions onto the backs of the students and their families.

The problem is that the “Transform CSCU 2020” plan was developed by people who don’t appreciate the role these colleges and universities play in the fabric of Connecticut.

Incredibly, the Board of Regents appears equally blind.

Faced with the need to develop a strategic plan for these public institutions, the Board decided to overlook the expertise here in Connecticut or properly include the input of the faculty, staff, students and alumni of the universities and colleges.

Instead, President Gray and the Board of Regents paid $1.8 million to a multi-national consulting company called the Boston Consulting Group.

The Boston Consulting Group is an entity dedicated to the notion of privatization and implementing “efficiencies.”

One of the Boston Consulting Group’s “claims to fame” is the recent plan to privatize Philadelphia’s public school system, a plan that was adopted by a right-wing governor and has led to the closure of public schools across that city and the rapid expansion of privately-owned, but publicly-funded charter schools.

Some are rightly focused on the question of why the Boston Consulting Group would be allowed to develop such a disastrous “Transform CSCU 2020” plan?

But an equally important question is why the Board of Regents would even hire the consulting group in the first place and whether the majority of the board even knew about the Boston Consulting Group’s history or the appearance of what could be considered serious conflicts of interests?

Insiders at the Board of Regents report that Boston Consulting Group came via the endorsement of President Gray and Nicholas M. Donofrio, the chairman of the Board of Regents for Higher Education.

When announcing their decision to hire the Boston Consulting Group to develop the plan to transform the state university and community college system in April 2014, Regent President Gray said he was confident that the private company with 81 offices in 45 countries had the credentials to do the job.

An Executive Steering Committee was also named to oversee the process, a group whose membership failed to include any faculty, staff, students or alumni members.  Instead the Executive Steering Committee consisted of Board of Regents Chairman Nicholas Donofrio; Board of Regents President Dr. Gregory Gray; J Puckett, Boston Consulting Group Partner and Managing Director; Catherine Smith, Commissioner of the Connecticut Department of Economic and Community Development; and John Rathgeber, President of the Connecticut Business and Industry Association.

As the controversy surrounding the Boston Consulting Group plan grows, the role of the Board of Regents, and especially its Chairman Nicholas Donofrio, become increasingly important.

The question now is whether the Board will stand up for what is in the best of the state and its citizens or will it continue to align itself with the corporate junk being delivered by the Boston Consulting Group.

The answer may very well rest with Nicholas Donofrio, the Chairman of the Board of Regents.

Governor Dannel P. Malloy nominated Nicholas Donofrio, a former high-ranking IBM executive, to the Board of Regents when the Board was created in 2011 and made him Chairman of the Board on December, 12, 2013.

Despite Connecticut’s Campaign Finance System that was supposed to keep pay-to-play and big money out of politics, Donofrio is what could best be described as one of Malloy’s “super donors.”

After Donofrio was put on the Board of Regents, he and his wife donated $20,000 to the Connecticut Democratic Party’s “federal account,” the entity that Malloy and his campaign operation used to funnel $4.6 million into his re-election campaign on top of the $6.5 million he got from the taxpayer funded State Elections Fund and the $15 million in out-of-state money that was spent to support Malloy’s candidacy this year.

After Donofrio was named chairman of the Board of Regents, he donated another $20,000 to the Connecticut Democratic State Central Committee’s “federal account,” making him one of Malloy’s largest donors.  During the same period, Donofrio and is wife also gave the Democratic National Committee more than $103,000.

At the time Malloy appointed Donofrio to serve as the Chairman of the Board of Regents, he praised him for his connections to the “business community” noting that “Donofrio consults and speaks nationally and internationally on a broad range of topics including innovation, technology and education for a broad range of clients and audiences.”

What Malloy didn’t explain was the depth of Donofrio’s real or potential conflicts of interests when it came to serving as the chair and as a guardian of Connecticut’s state universities and community colleges.

Some of those issues might explain how Boston Consulting Group got a lucrative $1.8 million contract to develop a plan that is counter to what is in the best interests of Connecticut and its citizens.

But the record fails to indicate whether Malloy or Donofrio even informed the Board of regents about the potential conflicts of interest.

It turns out that Nicholas Donofrio not only serves as Chairman of the Connecticut Board of Regents but he is a twenty-year veteran of the Rensselaer Polytechnic Institute’s Board of Trustees and a long-time member of Syracuse University’s Board of Trustees.   He also chaired a special committee that recommended that the University of Vermont have more private trustees and fewer appointed by public officials.

In addition to his relationship with other universities that recruit students from Connecticut,  Donofrio serves on a long list of corporate boards including of The Bank of New York, Wigix, Inc., The MITRE Corporation, Advanced Micro Devices, Inc., Liberty Mutual Holding Company, Inc., TopCoder, Inc., Sproxil, Inc. and Delphi Automotive PLC.  He also serves on the boards of StarVest Partners, L.P, Atlas Research LLC., and O’Brien & Gere Limited.

Interestingly, this year State Treasurer Denise Nappier used her voting authority as head of the state pension fund to cast votes for Donofrio for the lucrative board positions on Delphi Automotive plc, The Bank of New York Mellon Corporation and Advanced Micro Devices, Inc.  The State Treasurer did the same thing in 2012.

Donofrio also served as one of the members of the Bush administration’s Commission on the Future of Higher Education, thanks to the appointment he received from Secretary of Education Margaret Spellings.

Thanks to a number of these positions, Donofrio has had extensive contact with Boston Consulting Group and those associated with the company.

For example, after leaving her position as Secretary of Education, Margaret Spellings formed an education consulting firm and now serves as a senior adviser to the Boston Consulting Group.

Donofrio’s role on the board of The MITRE Corporation also puts him in contact with another senior Boston Consulting Group adviser, Michèle Flournoy.

And other companies Donofrio is affiliated with have retained the services of the Boston Consulting Group, including Advanced Micro Devices, Inc. who brought in the Boston Consulting Group to advise the company on strategy when it decided to restructure and lay off thousands of employees.

While these connections may or may not rise to a conflict of interest, the decision to hire the Boston Consulting Group to “transform” CSU and the Community Colleges is extremely troubling.

And the decision is made worse because of the unlikelihood that Regent President Gray or Regent Chairman Donofrio will do the right thing and throw out this flawed proposal so that a proper plan can be developed with the true input from faculty, staff, students, alumni and the community.

Perhaps even more troubling is Malloy’s conflict of interest.

For someone who claims to be right even when he is wrong, there is ample reason to believe that he won’t demand that the Board of Regents do the right thing when one of his biggest donors is Nicholas Donofrio, who as Chairman of the Board of Regents appears committed to the flawed “Transform CSCU 2020” plan.

Lesson NOT learned!

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The headline in today’s Hartford Courant – Malloy: No ‘Meaningful’ Cuts In Business Aid.

FACT:   As the CT Mirror’s Keith Phaneuf has consistently explained in his news articles, Connecticut faces a $1.4 billion budget deficit in next year’s state budget and the projected state deficit over the next three years exceeds $4.5 billion.  [Compare that to the $3.7 billion deficit that Malloy “inherited” when he took office in 2011…a deficit that led to a record breaking $1.5 billion tax increase.]

But instead of telling the truth about Connecticut’s growing fiscal crisis during his recent re-election campaign, Malloy claimed that there was no deficit, that he would not propose or accept any tax increases in his second term, that he would actually implement more than $260 million in targeted tax cuts for certain groups, that he would preserve the level of funding to cities and towns, that he would not make cuts to “vital” state programs and that he would not need to talk to the state employee unions about concessions.

And now, after the election, when even his own budget office is finally telling the truth about this year’s $100 budget deficit, Malloy continues to deny the reality of the fiscal crisis that is facing the state and its residents.

As the Hartford Courant is reporting, Malloy went before the MetroHartford Alliance (chamber of commerce) yesterday to proclaim that the “State budget shortfall won’t hit business aid “in any meaningful way.”

When the Courant’s Dan Haar asked Malloy how his massive corporate welfare program could go unscathed in the face of the upcoming budget deficits, Malloy explained that “One reason is that most of the economic development spending is “capital-based,” meaning it is financed with borrowed money. ‘We’ll be in good shape with respect to the business programs,’ Malloy explained.

Translated to English, Malloy was telling the Hartford Courant that since his Corporate Welfare Program is put on the State’s credit card, he has no intention of cutting back on its largess.

Apparently in Malloy’s mind, his ongoing and excessive taxpayer funded program to give successful corporations large financial gifts isn’t made with “real” money.  It is simply borrowed money that only adds to Connecticut’s long-term debt.

But what about the fact that Connecticut’s state debt and obligations already exceed $68.4 billion, an incredible sum of money that Connecticut taxpayers will have to pay back over the next twenty to twenty-five years –  in addition to their regular federal, state and local tax payments?    (See yesterday’s Wait, What? post entitled, “WARNING!  WARNING! The state of Connecticut’s Fiscal Health”)

For Malloy’s answer to that, we need only turn to headline #2: Commission Poised To Exceed Malloy’s Self-Imposed Bonding Cap (CTNewsJunkie)

“The state Bond Commission is expected to borrow $267 million in general obligation bonds Wednesday during its first meeting since July. The amount will exceed Gov. Dannel P. Malloy’s voluntary bonding cap by about $167 million.

The governor, who controls the Bond Commission’s agenda, has set a “soft” annual borrowing limit of $1.8 billion for the last two years. Although he stayed under the soft cap in 2013, he is poised to exceed it after Wednesday’s agenda, which puts state borrowing at about $1.97 billion for 2014.

‘Governor Malloy has prioritized projects that were long overdue because they improve our quality of life and create jobs. The agenda reflects both the readiness of current projects and the importance of making these investments in infrastructure, public education and job creation right now,’ Malloy’s spokesman Andrew Doba said in a statement Tuesday.”

Among the bond items that will be voted on today…

  • $25 million more in borrowing for Connecticut Innovations, Inc. to support more venture capital “investments” in companies
  • And another $19 million for the Manufacturing Assistance Act program, the largest beneficiary being a $10 million gift to Electric Boat/General Dynamics, a multi-billion dollar company that paid its new CEO $18.8 million last year.

As we sit on the deck of this ship with no lifeboats, perhaps the most serious question is whether the Democrats will stand up to Malloy and finally use their authority to turn this ship of state away from the iceberg field that lies ahead?

Sadly the answer to that question is almost definitely a big NO!

Watch the Democratic Constitutional Officers and the Democratic Legislators on the State Bond Commission vote in favor of Malloy’s plan today to speed up rather than turn away from the extreme financial danger that lies straight ahead.

By noon, Connecticut taxpayers will be in debt another $297 million, an amount that includes the $10 million so that Malloy can send that check to Electric Boat/General Dynamics, a company that had $32 billion in revenue last year.

$32 billion in revenue last year —-  Connecticut’s entire annual state budget …. $20 billion.

Lesson NOT learned!

 

Update:  The State Bonding Commission “swiftly and unanimously approved borrowing nearly $267 million to fund dozens of new capital projects.”   So there you go, after criticizing the practice of excessive borrowing, even the Republican members of the Bond Commission voted to borrow more.

WARNING!  WARNING! The state of Connecticut’s Fiscal Health

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WARNING!  WARNING! The state of Connecticut’s Fiscal Health

Last Friday, the Connecticut General Assembly’s Office of Fiscal Analysis issued its annual Fiscal Accountability Report.  The report serves as the definitive independent assessment of the fiscal health of the state of Connecticut.

Unlike the “projections” produced by the Office of Policy and Management, which are designed to protect a sitting governor from criticism, the work done by the Office of Fiscal Analysis is widely respected and noted for its accuracy.

Those truly interested in understanding the Connecticut state budget and the issues surrounding taxes and spending in Connecticut should begin by reading OFA’s Fiscal annual Accountability Report.  The OFA report not only provides a review of the status of this year’s state budget but they also provide a detailed assessment of what will occur over the next three fiscal years.

Unlike the rosy picture painted by Dannel Malloy during the recent gubernatorial campaign, OFA’s report is stark and disturbing.

The Office of Fiscal Analysis reports;

  • This year’s state budget (FY15) is running at least an $89.1 million deficit. (Although Malloy repeatedly claimed, up until Election Day, that there will be NO state deficit, his budget director has finally admitted that this year’s state budget deficit is closing in on $100 million.)
  • The projected state deficit for FY16 (next year) is $1.3 billion.
  • The projected state deficit for FY17 is $1.4 billion.
  • And the projected state deficit for FY18 is $1.7 billion.

The single most important factor to understand when reviewing the OFA projections is that they take into account the expected growth in the economy.

For example, this year the state of Connecticut was expecting an additional $350 million in revenue due to growth in the economy.   However, one of the reasons the state is now facing a deficit is that Connecticut’s economy is not growing as quickly as the experts expected.

According to OFA, the factors driving this year’s growing state deficit is that state revenues are $59.1 million lower than originally budgeted and state spending is $30.4 million higher than originally budgeted.

The increased spending is due, in part, to the Malloy administration’s failure to allocate sufficient funds to pay the healthcare costs for state employees retiring from the Department of Corrections and Malloy’s decision to intentionally underfund Connecticut’s magnet schools.

The harsh reality is that Connecticut is short about $4.5 billion in revenue from what it will need to maintain “current services” over the next three and a half years and that this number already takes into consideration an on-going improvement in the economy.

While OFA’s Fiscal Accountability Report is immediately relevant because of its projections about revenue and spending over the next three fiscal years, the report also covers Connecticut’s long-term “obligations” or “liabilities,” otherwise known as the money that taxpayers will need to come up with in order to make the state’s debt payments and fund the state’s other obligations, such as pensions.

It is in this area that the news is even more troubling.

The following chart highlights Connecticut’s Unfunded Liabilities.

Liability Amount in Billions
Debt Outstanding $21.3 Billion
State Employee Retirement System (SERS) $12.3
Teachers’ Retirement System $10.8
State Post Employment Health and Life $19.5
Teachers’ Post Employment Health $2.4
Generally Accepted Accounting Principles Deficit $1.1
TOTAL $68.4 Billion

 

The total amount in long-term obligations means that Connecticut taxpayers will need to come up with $68.4 billion over the twenty to thirty years, in addition to their federal, state and local tax payments for existing governmental expenses.

In essence, the state’s long-term debt saddles taxpayers with an annual payment in addition to any payments they have for a home mortgage, student loan debts or consumer debts.

With about 1.2 million taxpayer households in Connecticut, the state’s extraordinary level of debt and long-term obligations means that each taxpayer family or household, on average, will be responsible for paying in about $57,000 in addition to their regular tax payments over the next twenty years or so.

And unlike debt at the Federal level which can be easily pushed off, Connecticut MUST pay these obligations during the next two decades or so.  This means that the burden to make these payments will fall on the state’s existing taxpayers and those that are already born but have yet to become taxpayers.

You can read more about the latest budget news at CT Mirror -Budget chief: Some tax cuts may have to wait; CT colleges likely to face cuts and NewsJunkie Gov’s Budget Office, Nonpartisan Analysts Project Deficit.

The reports include confirmation that Governor Malloy will be announcing budget cuts soon and that those cuts will probably be disproportionately aimed at Connecticut’s public colleges and universities.

The CT Mirror story also reports that the Governor’s operation is already backpedaling on nearly $220 million in tax cuts that Malloy pushed through before the election and another $40 million in tax cuts that he promised to put into law if he were re-elected.

The list of new and proposed tax cuts that Malloy promoted during his campaign are now in  jeopardy include;

  • Restoring the sales tax exemptions on clothing and non-prescription medications.
  • A new income tax credit for retired teachers.
  • Returning the Earned Income Tax Credit for working poor families to its original level.
  • And putting an end to the corporation tax surcharge.
  • Plus new tax cuts, including a special tax break for urban businesses and an income tax credit for those who are paying interest on their student loans.

Breaking News – Watch for Malloy to announce cuts to vital services by end of day!

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[Putting aside myself-imposed break from blogging for a moment]….

The primary refrain from Governor Malloy and his political campaign was that there was no state deficit this year nor would there be one next year or the year after.

Malloy stuck to this false claim despite the fact that the Connecticut Office of Fiscal Analysis, the State of Connecticut’s independent fiscal operation had identified areas where the Malloy administration intentionally underestimated this year’s budget in order to make it appear balanced and went on to project that the state of Connecticut would be facing a $1.4 billion projected budget deficit next year and a budget deficit in the range of $5 million over the next three years.

Throughout the campaign, Malloy and his team mocked the Office of Fiscal Analysis’ projections.

Even in the last gubernatorial candidate debate, forty-eight hours before the polls opened, Malloy continued to claim that there was no deficit, there would be no deficit and that, if re-elected, he promised that he would not cut state services, raise taxes or need to engage in talks with the state employee unions about concessions.

To bolster Malloy’s false claims about the state budget, on October 20th, just days before Election Day, Malloy’s budget director even wrote,

“Revenue and expenditure trends remain consistent with the budget plan, and we continue to project a $0.3 million balance from operations.  [Translated to English that mean that the Malloy administration reported that the state was on track to have a $300,000 surplus for this fiscal year]

Considering that Malloy’s budget director knew his statement was a lie, if Connecticut was a corporation with stocks, the Securities and Exchange Commissioner (SEC) would have had the right to take action against the state for intentionally and fraudulently lying to stockholders.

But the harsh legacy of Malloy’s 2014 campaign is that the governor and his political operatives managed to make it through the campaign without having to tell Connecticut’s voters the truth about the state’s fiscal situation.

The truth then – and now – is that lower than expected revenues and additional spending due to Malloy’s decision to intentionally underfund certain programs meant this year’s Connecticut state budget contained a $100 million deficit.

Sadly, the truth was available to voters but in the blur of the final weeks of the campaign, few voters were aware of Malloy’s underhanded tactic to mislead the electorate about the growing budget deficit.

Now, ten days after the campaign is over, the Malloy administration is scrambling to put together a series of budget cuts.

Since these cuts will fly in the face of Malloy’s campaign statements watch for Malloy’s people to announce the cuts late today.

Traditionally politicians like to announce bad news late on Friday afternoons believing that most reporters have closed up their computers for the week, and that even more importantly, the public won’t be paying attention to state news on the weekend.

The true irony is that Malloy’s cuts are likely to disproportionately hit Connecticut’s state employees and programs that Malloy promised to protect.

During his first term in office, Dan Malloy made the deepest cuts in state history to Connecticut public colleges and universities.  In an attempt to win back the support of college students and their parents, along with faculty and staff at Connecticut’s colleges, Malloy repeated promised to make higher education a top priority.

But Connecticut’s college students will likely be among those who are most hurt by Malloy’s impending budget cuts, as will other state and unionized employees.

This after the union leaders spent millions urging their members to support Malloy’s re-election bid.

Those interested in knowing the truth about Connecticut’s budget situation should take the time to read the news articles written by CT Mirror’s Keith Phaneuf.

Nonpartisan analysts tracking $84M in potential cost overruns in state budget (Oct 31)

CT budget again faces red ink as federal grants, gaming revenues shrink (Nov 10)

Malloy to order emergency cuts, restrict hires to counter impending deficit (Nov 13)

Then watch for coverage tonight and over the weekend about Malloy’s budget plan.

A final 2014 campaign shout-out to Connecticut teachers and their supporters

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First and foremost, I want to thank the thousands of teachers, parents and public school advocates who have taken the time to read Wait, What? over the past few years.

Your camaraderie and participation in this endeavor has been a primary reason I stuck with the task of trying to educate, persuade and mobilize people to stand up and speak out on behalf of our public education system.

The last three years have been truly extraordinary as we have watched the corporate education reform industry set its money and political muscle on working to undermine Connecticut’s teachers, parents, students and public schools.

As we know all too well, driven by his devotion to the corporate education industry, in February 2012, Governor Dannel “Dan” Malloy became the only Democratic governor in the nation to propose eliminating tenure for all public school teachers in Connecticut and repealing collective bargaining for teachers working in the poorest school districts.

No other Democratic governor in the country proposed such an anti-teacher, anti-union, anti-public education initiative.

With Election Day finally upon us, one of the greatest mysteries of our time is why Malloy has been completely and totally unwilling or unable to apologize for his inappropriate, unfair and outrageous attack on Connecticut’s educators.

Over the last few months, Malloy’s supporters have tried every excuse under the Sun to explain away Malloy’s outrageous behavior…but Malloy himself has refused to step up and publicly admit or correct his statements and actions.

In fact, when Malloy tried to clarify his position this fall he actually managed to make it worse.

Asked about his statement that teachers need only show up for four years and they’ll get tenure, Malloy explained,

“I should admit that was bad language. It wasn’t about them. It was about tenure…”

Wait, What?  the problem is really tenure?

Fair due process for teachers is the problem??

Considering Malloy’s policies, it is fair to say that one of the more bizarre moments of the 2014 campaign was when the New Haven Register reported that, “Randi Weingarten, the national president of the American Federation of Teachers, told an enthusiastic group of union members Tuesday that the only way to stop the reach of the conservative Koch brothers and the new restrictions on labor is to re-elect Dannel P. Malloy as governor of Connecticut, and not vote for her friend Jonathan Pelto.

Strange considering Malloy’s anti-tenure, anti-collective bargaining proposal was right out of the Koch Brother’s anti-teacher, anti-public education playbook.

Not far behind the AFT leadership’s approach was that of the leadership of  the Connecticut Education Association who endorsed Malloy claiming that Malloy was the “First governor in Connecticut’s history to annually fully fund teacher pensions during his term in office and guarantee full funding in the future.”

However, as we know, Malloy had absolutely no role in ensuring that the Connecticut Teacher Retirement Pension Fund is being fully funded.  The credit for that goes to Governor Rell and the members of the 2007 Connecticut General Assembly who guaranteed that the teacher pension fund would be given the proper funds for 25 years starting in 2008.

But the most remarkable development is not that the AFT and CEA would endorse Malloy but that Malloy would make no meaningful effort to pivot back and address the concerns being voiced by Connecticut’s teachers, parents and public school advocates.

As if to prove his unwillingness to listen to Connecticut’s public school proponents, Malloy has told two newspaper editorial boards, in recent weeks, that he intends to “stay the course” on his corporate education reform agenda.

And last week, when asked if there was anything he would have done different over the past four years, if he was given the chance, he said there was nothing he would have done differently.

Nothing he would have done differently?

Nothing he would have changed over the last four years?

Putting aside his decision to skip the perfect opportunity to set the record straight on his attitude toward Connecticut teachers, what kind of person says that – given the chance – there is  absolutely nothing he would have done differently over a period of four years?

I understand that there are plenty of reasons for someone to cast their vote for Malloy or Foley tomorrow, but as a proud graduate of Connecticut’s public schools and now being a public school parent, I will not support any candidate who so callously denigrates and belittles the people who devote their lives to providing our children with the knowledge and skills they will need to deal with our increasingly complex and difficult world.

Malloy’s approach has not only been an embarrassment but it is a sad commentary on how far some of our Democratic officials have strayed from the most fundamental principles and values of our society.

Breaking News: Visconti Drops Out, Endorses Foley

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With Malloy and Foley having now spent in excess of $30 million to destroy each other and mislead voters, the crushing weight of the corrupt, entrenched and out-of-touch political system has claimed another victim.  Earlier today, petitioning candidate Joe Visconti has dropped out of the race of governor and endorsed Tom Foley. If you feel comfortable with the major party candidates, I urge you to vote accordingly on Tuesday, Election Day. However, for those who believe we deserve better or want to send a message to the power elite, I invite you to darken in the bubble that says Write-in Candidate for Governor and then write in the name Pelto or Pelto/Murphy.

“Always vote for principle, though you may vote alone,
you will cherish the sweetest reflection that your vote is never lost.” 
                                                                         — John Quincy Adams

When assessing the last four years and examining the positions taken by Malloy and Foley during this year’s gubernatorial campaign, the truth is that no matter who wins on Tuesday, the burden to do what is right for the people of Connecticut will rest in the hands of a Democratic legislature.  They will either rise to the occasion or they will not. So for those mulling over whom to vote for… If you believe that our elected officials need to stop their unwarranted assault on teachers and the teaching profession, feel free to write in the name Pelto. If you believe the state must derail the Common Core and its unfair, expensive and discriminatory Common Core Standardized Testing Scheme, feel free to write in the name Pelto. If you believe we must push back the corporate education reform industry that seeks to privatize our public schools and replace them with unaccountable charter schools that refuse to educate their fair share of Latinos, students who face language barriers and children who require special education assistance, feel free to write in the name Pelto. If you believe our government must stop coddling the rich and reduce the tax burden on the middle class by requiring the wealthy to pay their fair share of taxes, feel free to write in the name Pelto. If you believe our state must put an end to the outrageous use of corporate welfare and stop giving our scarce taxpayer resources to wealthy corporations, feel free to write in the name Pelto. If you believe that those elected to office must settle the critically important CCEJF v. Rell school funding lawsuit and develop a fair and constitutional school funding formula that will end the pressure on local property taxpayers, feel free to write in the name Pelto. If you believe the time has come to demand that those in office must stop using budget gimmicks and adopt a fair, honest and effective state budget that truly reduces the long-term debt that will destroy our children’s opportunities, feel free to write in the name Pelto. If you feel that we must rid the political system of tainted campaign money and hold those who have violated the spirit and law of Connecticut’s campaign finance laws accountable for their actions, feel free to write in the name Pelto. If you believe our citizens deserve access to an affordable system of public colleges and universities and you oppose what have been the deepest cuts in history to UConn, CSU and our community colleges over the past four years, feel free to write in the name Pelto. Or if you simply feel that enough is enough and that our political leaders have lost their way, feel free to write in the name Pelto for Governor. Because sometimes standing up and being counted is what is most important. And if you intend to write in the name Pelto, please take a moment over the next 48 hours to urge your friends, families, colleagues and neighbors to do the same.

WRITE- IN V1

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto

Another Big Week for Corporate Welfare in Connecticut

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With Election Day almost upon us, Governor Dannel “Dan” Malloy used the past week to continue his massive “Corporate Welfare” Program.

On Wednesday, Malloy delivered a $10 million dollar Corporate Welfare Check, on behalf of Connecticut’s taxpayers, to General Dynamic’s Electric Boat division to help the company renovate a building in Groton that had been vacated by Pfizer.

While most Connecticut taxpayers are still struggling under the weight of the Great Recession, General Dynamics is on track to pull in another $32 billion in revenue this year.  Thanks to the nation’s never-ending war effort, the defense giant has generated revenues in excess of $294 billion over the past ten years.  The company is doing well enough that they even paid their new CEO $18.8 million last year.  (For those that are keeping track, that would be nearly double what Connecticut taxpayers handed the company this week.)

On Thursday, the company receiving Malloy’s taxpayer funded largess was Fuel Cell Energy Inc. Fuel Cell Energy only collected $188 million in revenues last year, but that was up from just $70 million in 2010.  Malloy is giving the company $20 million in taxpayer funds so that they can expand their Torrington facility rather than have to rely on private investors.

And on Friday, Malloy was in Danbury, this time with a Corporate Welfare Check for $32.5 million to help Praxair fund their new corporate headquarters.

Praxair’s revenue last year was about $12 billion, enough to pay their CEO a salary and compensation package of 26.5 million, “earning” him the #33 spot on Forbes list of highest paid executives.    Praxair’s CEO has been paid more than $70.1 million over the past five years.

Of note is the fact that while Malloy was giving away taxpayer funds, Connecticut’s Office of Fiscal Analysis announced that the Malloy administration is overspending this year’s state budget allocation by at least $88 million.  It is grim news and reflects the reality that Connecticut will be facing a major budget deficit next year.

But the fiscal problems facing that state didn’t deter Governor Malloy from giving away $62.5 million more in corporate welfare, and that doesn’t even count the tens of millions of dollars in other checks he handed out this week to private corporations.

In return for all this money, Malloy says that Electric Boat and Praxair have promised to create a total of 330 jobs over the next five years, while Fuel Cell Energy has agreed to create 160 new positions and keep those jobs in place for at least 4 years.

Meanwhile, on the campaign finance front, it is undoubtedly a coincidence that all three of these financially successful companies have generously donated to the Connecticut Democratic Party’s “federal account.”

The campaign contributions from General Dynamics, Praxair and Fuel Cell Energy are just a tiny fraction of the $4.3 million that Malloy and his political operation have raised from state contractors, people who have benefited directly from Malloy’s corporate welfare program, federal Political Action Committees and other wealthy individuals.

While many believe that state law clearly prohibits these funds from being spent to benefit a state-level campaign, Malloy and his campaign have been using the Democratic Party’s “federal account” to pay for his campaign mailings and other campaign expenses, allowing him to augment the $6.5 million Malloy received in public funds from the Connecticut Public Financing Program.

It all leaves one wondering what the “True Capitalists” would think of this world in which public funds are used to subsidize private activities that help ensure corporate officers and investors can get a better return on their private investments?

Of course, as Haruki Murakami, one of my favorite authors has observed,

“Waste is the highest virtue one can achieve in advanced capitalist society.”

The “Malloy Factor” in Connecticut’s 2014 race for governor

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In March 2013, 43 percent of Connecticut voters reported that Governor Dannel “Dan” Malloy deserved to be re-elected, according to the Quinnipiac poll.

Nearly twenty months later, after Malloy, Foley and their supporters have spent about $30 million promoting their candidate and attacking their opponent, the Q-poll reports that 43% of Connecticut votes intend to vote for Dannel Malloy next Tuesday.

Over all of this time, Malloy has never exceeded 43 percent of the vote, despite spending the past year and a half as Connecticut’s Chief Executive Officer and having spent approximately $16 million on his re-election campaign, ($6.5 of which came in the form of a grant in taxpayer funds from the State Elections Enforcement Commission.)

Over the same period, Malloy’s Republican opponent, Tom Foley, has spent almost as much.  (Including his own $6.5 million grant in public funds.)

What will go down as Connecticut’s most expensive and nastiest campaign for governor has had no statistical impact on the level of Malloy’s support among Connecticut voters.

While Tom Foley may get the award for snatching defeat out of the jaws of victory, the real credit for Malloy’s predicament is Malloy himself.

The most accurate thing may be called the primary issue in Connecticut’s 2014 race for governor the “Malloy Factor.”

In April of this year, I published a Wait, What? blog entitled, “The growing list of reasons to vote against Dannel “Dan” Malloy’s re-election.” The article highlighted the issues in which Governor Malloy was failing the vast majority of Connecticut voters.  It focused on Malloy’s record of support for corporate education reform and his anti-teacher agenda, on his decision to make the deepest cuts in state history to our colleges and universities, on the issue of tax fairness, on the massive amount of corporate welfare, on the growing level of government secrecy, on his failure to engage in honest and sound budget practices and on his inappropriate treatment of Connecticut’s front-line state employees.

Five months later, I published a more focused list that was titled, “Why Connecticut Teachers SHOULD NOT VOTE for Governor Malloy.  This Wait, What? commentary piece outlined the most important areas in which Malloy has failed Connecticut’s teachers, parents and public school advocates, including his 2012 proposal to repeal tenure for all public school teachers and collective bargaining rights for teachers working in Connecticut’s poorest schools, his unwillingness to de-couple the teacher evaluation program from the use of unfair and inappropriate standardized testing, his  failure to settle the critically important CCEJF v. Rell school funding lawsuit, his excessive support for unaccountable charter schools and his ongoing commitment to the Common Core and the related Common Core testing scheme.

With Election Day 2014 in sight, Malloy and his political operatives have done a particularly good job of demonizing Tom Foley, although, as noted, the credit for that probably goes as much to Foley as it does to the Malloy campaign.

While it appears increasingly likely that Malloy will win re-election in an environment in which more than 50 percent of voters have a negative opinion of him, it is particularly incredible that he has been completely and totally unable to increase his level of support among voters beyond that 43 percent mark.

And the credit for that rests exclusively with Dan Malloy and his advisers.

Although Malloy has known for his entire term in office that far less than 50% of Connecticut voters have ever felt he deserved re-election, he and his administration have continually failed to successfully address the very issues that are of most concern to the majority of Connecticut voters.

Whether driven by utter arrogance or a total inability to listen to the people, a review of the issues laid out in the two blogs ­– “The growing list of reasons to vote against Dannel “Dan” Malloy’s re-electionand “Why Connecticut Teachers SHOULD NOT VOTE for Governor Malloy” show that Malloy has steadfastly refused to address a single one of those issues.

Many Democrat and unaffiliated voters remain extremely put off by Malloy’s support of the corporate education reform industry and his anti-teacher agenda, his decision to make the deepest cuts in state history to our public colleges and universities, his tax policies that coddle the rich at the expense of the middle class, his on-going commitment to give scarce public funds to extremely successful corporate entities, his disdain and disregard for Connecticut’s campaign finance laws, as well as for the state’s Freedom of Information and Ethics policies, his failure to engage in honest and sound budget and his inappropriate treatment of Connecticut’s front-line state employees.

Malloy’s problem with what should be his base is so severe that according to this week’s Quinnipiac survey, 1 in 5 Democrats are not even voting for him and only one in three unaffiliated voters say they will be voting for Malloy on Election Day.

As the 2014 campaign comes to an end, the real question is whether the Malloy Factor will be enough to keep Malloy from winning a second term as Connecticut’s governor.

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