Wednesday, June 29, 2011

Malloy Has Other Options

As of now, the Governor's entire plan is to tell his department heads to save $700 million. The legislature is supposed to OK that plan. He says he has to act now (he doesn't) and that it's his only alternative (it isn't).

Jon Pelto asks why lay-off so many - renegotiate with the unions or at least implement the "savings" agreed upon, even if they have no basis in reality:

The Concession Plan was scheduled to save Connecticut $700 million next year.

That means a “hole” of $700 million.

One option would be to fix the concession plan and get it adopted. 57% of state employees already voted for it but that would require a commitment to the fundamental principles of collective bargaining.

So back to the problem at hand. Although the wage and pension portion of the Malloy/SEBAC agreement can’t be implemented (at least not until there is a re-vote), the plan included $170 million in “savings” that both sides agreed to that can and should be implemented.

Governor Malloy and his budget director agreed that the state could save $90 million in FY12 “by reducing agency procurement costs, making operations more efficient and identifying other cost-saving measures throughout state government”. In addition, separate of the new proposed wellness and disease management programs, the two sides agreed that a health cost containment committee would save $40 million in FY12 and $35 million in FY13.

And finally, they agreed that by using new technologies and reducing the use of outside consultants that state could save another $40 million in FY12 and $50 million in FY13.

Are all of these savings truly achievable? Maybe not, but these savings were good enough a couple of weeks ago for Malloy to include in his plan for next year’s budget. (Oh and they were good enough for the editorial writers who are now calling for massive layoffs).

So why did Malloy throw them out now? He is the one who says he is committed to making government more efficient.

The $700 million would drop to $530 million.

In addition, there is at least $150 million surplus built into next year’s budget with revenues continuing to grow and up to another $100 million hidden in the line item that pays retiree health benefits.

Those would bring the shortfall down even further – to $280 million or even less.

Tuesday, June 28, 2011

Why The Budget Failed

Plan A failed because neither the Malloy administration nor SEBAC negotiators were able to sell their product to the union rank and file.

Lord knows they tried. But in the end, it was the health package that sunk the final vote. Almost half of the union rank and file voted against Plan A, considered by union negotiators, Malloy administration budget salesmen and a large chunk of Connecticut’s commentariat to be a plan irresistible to rational heads in much of the state.

Moises Padilla, vice president of AFSCME Local 387 at the Cheshire correctional complex, thought early on that Plan A was doomed and made attempts to contact shakers and movers within the Malloy administration to warn them of the impending crack-up, but his calls were not returned by Roy Occhiogrosso, Mr. Malloy’s major-domo.

Following the rank and file vote, which soundly rejected Plan A, union negotiators regrouped and decided the vote would not be formalized for thirty days, later pushing the thirty days out to infinity, a stratagem that can only strike rank and file members of the unions as a means of discounting their vote.

The sticking point, according to Mr. Padilla, is the health care package. Many rank and file members regard changes make by the Malloy administration as an intrusive nose of a universal health care camel, a “social experiment” inserted into a collective bargaining health care plan “in the hopes that it would eventually lead to universal health care, otherwise known as Obamacare or SustiNet, in our state."

“Remove the enhanced health care plan out of this agreement, and it will be ratified. It's as simple as that. I never saw so much anger generated as this enhanced health care agreement,” said Mr. Padilla, a union leader talking truth to power who likely will not be invited to high tea when Mr. Malloy and Mr. Occhiogrosso and Mr. Barnes and other architects of Plan A gather together, along with self anointed union leaders, to celebrate what may be a successful attempt to overthrow a rank and file union vote.

Of course, Mr. Occhigrosso, once a union operative himself, would not put it in such stark terms. Mr. Occhiogrosso was hired in the late 90’s as a union organizer by an AFLCIO group, AFT-Rocky Hill. The governor, Mr. Occhigrosso responded, is working within a tight time frame, and he must – really, MUST – deal with the projected $700 million deficit in the state's unbalanced budget. A budget is unbalanced when expenditures do not equal receipts. Connecticut’s tax receipts and expenditures have been out of balance ever since the budget was approved by the Democrat dominated General Assembly weeks ago. Perhaps someone should share Mr. Occhiogrosso’s anxiety with Superior Court Judge James Graham, who recently expressed doubts in oral argument that he could rule on a suit claiming the budget was unconstitutionally out of balance because the state legislature had neglected to define the term “expenditure.”

"All I would say,” Mr. Occhiogrosso said in response to Mr. Padilla, “is the governor has to proceed as if there is no agreement because, right now, there isn't. If it turns out that SEBAC, through its own internal process, can alter that, it's certainly something the governor would keep an open mind about. But today is June 27. … It's his responsibility to make sure a balanced budget is in place by Thursday."

Mr. Occhiogrosso pointed out that there was “a widow of time,” though the window is open but a sliver, for unions to resolve the situation. In non-politicalese, resolving the situation would mean negating the union vote to reject Plan A, camel objections and all.

Mr. Padilla’s beef, however, does not end with a protest that some union leaders seem a bit too anxious to throw a legitimate union vote into the sharp teeth of politicians who would benefit from the health care changes; it has been pointed out that some politicians eagerly hawking Plan A, such as Lieutenant Governor Nancy Wyman and State Comptroller Kevin Lembo were co-chairs of the SustiNet board when Ms. Wyman was State Comptroller and Mr. Lembo State Healthcare Advocate.

The union leaders who now seem prepared to suspend the union vote indefinitely insist there is no connection – none at all – between changes in union benefits that would facilitate an easy transition into a SustiNet plan and Mr. Malloy's Plan A, now gurgling beneath the waves.

Mr. Padilla’s union voted against Plan A because members were suspicious of the motives of both union negotiators and reformist Malloy administrators, but other troubling aspects affected the vote as well. Mr. Padilla’s own objections to Plan A are perhaps more comprehensive than Mr. Occhiogrosso would wish.

According to one account, Mr. Padilla said in a statement that prison guards voted against the deal because of "the continued and insatiable appetite for spending; structural, institutional, programmatic or otherwise, including the perception of the ever-growing welfare state, a new state earned income tax credit, a magic bus to nowhere, an unprecedented expansion of UConn, a bloated and redundant bureaucracy, etc., by those in the legislature and the governor's office despite this so-called 'shared sacrifice,' which is being financed on our backs.''

Monday, June 27, 2011

Donovan’s Plan C?

General Assembly Democrats – i.e. Speaker of the House Chris Donovan and Senate President Don Williams – have not decided firmly to give Governor Dannel Malloy extraordinary rescission authority to remake the state budget after the collapse of Plan A.

Repeating his offer to dominant Democrats in the legislature, Mr. Malloy has said that he would be perfectly willing to implement the dreaded Plan B should the General Assembly confer upon him what amounts to plenipotentiary powers.

But a rift has occurred within the legislature. Mr. Williams is toying with the idea; but his confederate in the House, Mr. Donovan, pleased to have stepped out of the way of the cannons when Mr. Malloy was begging state workers to accept Plan A, now seems to be puffing out his chest, welcoming the bullets.

Mr. Donovan has reminded Mr. Malloy that the General Assembly never agreed to confer upon him an expanded rescissionary authority that would allow the governor to shape the new budget without bothersome legislative interference.

Plan A was hammered out in a sweet, untroubled darkness behind closed doors, without the pointless interference of Republicans in the General Assembly, a process that won Mr. Malloy no friends among Republicans in the legislature.

Surrounded by friendly Democratic faces, Mr. Malloy had no need to romance Republicans. Mr. Malloy and the Democratic caucus rolled Plan A through the legislature without effective resistance, but now the Malloy-Williams-Donovan juggernaut hit an impenetrable wall of resistance in the form of a resolute state union.

The question before the House now is: Who rules – the Donovan caucus, the Williams caucus or Mr. Malloy?

Beyond that question lies a darker question: In politics, things happen in a certain way because prime movers have directed events, either openly or surreptitiously. And occasionally things are not what they appear to be. Successful politicians are those who can see though the public mask to the reality it obscures.

Mr. Donovan’s reassertion of legislative preeminence comes at a most inconvenient time for the besieged Mr. Malloy, whose reputation as can-do shaker and mover has suffered what ancient tragedy writers used to call "a reversal of fortune."

As the fiscal year clock ticks towards its appointed end, Mr. Malloy’s Plan B budget may easily be thrown into German Chancellor Otto von Bismarck sausage maker – which would allow union friendly forces in the General Assembly to shape a Plan C.

The new hybrid plan, some suppose, may include a further shift of “shared sacrifice” from taxpayers to tax consumers. Before Plan A collapsed, the Malloy administration dipped into a surplus to relieve state unions of carrying their previously arranged “fair share,” and it certainly is no secret that progressives in the legislature wish to shift the tax burden through the legislatures relatively new progressive income tax to those earning more than $200,000 per year. It has also been suggested that the fair share born by tax consumers may be mitigated by circumventing the state’s spending cap through means of a declaration of fiscal "exigency.”

If the time frame within which Mr. Malloy is operating is pushed beyond the end of the fiscal year, the game changes, and progressives in the legislature, even those who severely reprimanded state unions for failing to accept a beneficial deal, simply are not used to thinking in terms of cost cuts. The ways of taxation, to misquote Henry David Thoreau, almost always lead downward, especially in an economy tossed on stormy seas. The past few months have convinced some political watchers that downward is the only way progressives are willing to travel. Mr. Donovan and others may have a stronger hand in the new game.

Thursday, June 23, 2011

The Aftermath

Following the rejection by state unions of a deal thought to be too good to be true, left of center columnists in the state were grievously disappointed

A columnist watching “Gov. Dannel P. Malloy's union concession plan fall into a death spiral” wondered “what decade some state employees think they live in,” and a Hartford paper mused that state union selfishness would cost unions “support in Connecticut.” Translation: The union’s resistance to a fait accompli firmly established by union leaders and Mr. Malloy will be noted in a few stinging editorials.

But there is something more amazing still than the rejection of Plan A, a budget scheme thought to be less painful for everyone than Mr. Malloy’s alternative Plan B: The state for some time has been permitting a few unelected union negotiators veto power over budgets passed by the legislature, and we have become so used to the ritual we hardly notice that extraordinary powers, constitutionally reserved for governors or legislators, has been delegated to a handful of union budget negotiators. Unions have become a fourth branch of government in Connecticut. And because the union vote is dispositive, it may be argued that unions are more powerful than any of the three branches.

It is through the thoughtless surrender of constitutional powers belonging by right to the three legitimate branches of government that states, at first obliging, ultimately become wards of unions.

So certain was the Malloy administration that Plan A -- pre-approved by dominant Democrats in the legislature -- would not be rejected by the union rank and file, that Mr. Malloy allowed himself to travel to Washington D.C. when the fatal vote was in process, an assurance that came crashing to the ground on bloody Friday when the final vote was tallied.

Just before the roof fell in on Plan A, one of the principle negotiators, sensing the need of a scapegoat, petitioned Attorney General George Jepsen to sink his teeth into the Yankee Institute. Jepsen adroitly passed that political poison pill to state auditors.

Plan A did not fail because its critics were shuttling incorrect assessments to rank and file union members. The union members who voted down Plan A had been fully propagandized by union leaders who, seemingly, wanted them to approve the lesser of two evils. They voted against the plan because they felt, implausible as it may seem, that the plan was not in their best interest. And in the end it was the interest of a narrow – one might almost say narrow-minded -- political faction that determined the general interest, a turn of events that will continue until the legislature reasserts its authority and finds some means of readjusting the horse and cart so that the horse leads and the cart is pulled in a direction that benefits the general interest of the whole state. The union voting system, badly in need of reform, is a Rube Goldberg contraption that only a rocket scientist could pretend to understand.

Speaker of the House Chris Donovan’s political ambition was one of the temporary casualties of the collapse of Plan A.

Mr. Donovan, once a labor and community organizer, had intended to announce his intension to run for the U.S. House in the 5th District but patriotically put off the announcement when some units of AFSCME voted against Mr. Malloy’s attempt at shared sacrifice. When it was feared Plan A was doomed, Mr. Donovan said he felt his proper place was in the General Assembly. Until that moment, many suppose, Mr. Donovan had been careful to keep his fingerprints off union negotiations, a posture he likely will abandon in the near future.

Mr. Malloy’s “shared sacrifice” has taken an inordinate bite out of taxpayer wallets. The bite taken from state workers, mild by most accounts, has diminished during the negotiation process, relieved in part by an artificial “surplus” tucked into the budget. A re-negotiation led by Mr. Donovan in the House and Speaker of the Senate Don Williams, the unions may hope, will reduce it further.

Tuesday, June 21, 2011

Business to Malloy: Not Again?

Soon after Governor Dannel Malloy announced that he was to begin yet another “listening Tour,” this time among Connecticut businesses, accompanied by his new director of community and economic development, Catherine Smith, The Hartford Business Journal queried the governor:

“Smith gets a pass here. She’s just arriving on the scene. But Malloy should know he can’t play that card again so soon. He is just a matter of weeks removed from a 17-stop listening tour. He’s also been active in making plant tours. He’s heard all he needs to hear. He just chose not to process what he heard.

“Did he not hear that business thought the paid sick leave bill was a horrible signal of a climate that was unfriendly to business?
“Did he not hear that small business is concerned about the double whammy of increasing business taxes and increasing personal taxes for their business profits that run through individual tax filings?
“Did he not hear the frustration with the levels of state employee benefits and the stubborn refusal to roll back state spending?

“Word from the work floors is that Malloy lost his glib, engaging manner the more he didn’t like what he was hearing and turned downright rude at a couple of stops.

“Now we’re going to do it again?”
Listening is one thing; processing information you have gathered from listening and importing it into a future business plan – or, in the governor’s case, a plan for business in the state – is something altogether different.

If the business scheme has been settled before the listening tour, the listener will tend to discount any and all unsettling data that cannot be imported into the prearranged plan.

Unfortunately, this is the course Mr. Malloy followed – one might say religiously – during his last listening tour.” Mr. Malloy, during his tour, was determined that nothing he heard would interfere with Plan A.

During his previous 17 town listening tour, Mr. Malloy got an earful from citizens and groups who hoped to convince the governor that a massive tax increase during a recession would not spur business growth. But, on that occasion, Mr. Malloy had already settled on Plan A, from which was willing to deviate under only one condition: If state worker unions could not be bullied to submit to Plan A, Mr. Malloy then would have recourse to Plan B, a scheme far less favorable to unions and municipalities.

When an investigative reporter from the Yankee Institute volubly objected to to certain features of Plan A, a union negotiator promptly reported the reporter to Attorney General George Jepsen, much in the way some no account sub-thug among Joseph Stalin’s crowd of accolades puffed up with spite would report ideological deviants to the NKVD.

Mr. Malloy’s plummet in recent polling data marks his distance from those he did not hear during his last listening tour. It is a measure of the governor’s drift from the ideas of others he might more profitably have adopted.

In celebrating Mr. Malloy’s steadfastness in pursuit of Plan A, political commentators in Connecticut were remarking on the governor’s political acuity rather than his sharp business sense. The Hartford Business Journal, unfortunately for Mr. Malloy, is less interested in Democratic Party politics than business. And Mr. Malloy’s dip in the polls is a telling commentary on what he calls Plan A, little more than a scheme to sustain the advantages unions have over taxpayers.

The governor’s communication people are advertising the new “listening tour” as “less structured” than his last spin around the political block, which may mean one of two things: either the governor’s “plan” to boost business activity in Connecticut is not fully formed, in which case their may be room in his new scheme for genuinely creative suggestions – such as the repeal of burdensome business taxes and regulations, the equivalent in the business world of the unfunded mandates so dreaded by municipalities – or the tour is yet another propaganda move to convince naive business people that a government can spur business activity by impositions that create market uncertainty and business flight to states that think less like politicians and more like the editors of the Hartford Business Journal.’

Wednesday, June 15, 2011

William Aniskovich Next CT GOP Chair?


Connecticut Republicans are preparing to elect a new party chair in the wake of Chairman Chris Healy’s decision not to seek reelection, and insiders are saying that the heir-apparent is, in fact, former corrupt state senator and John Rowland crony William Aniskovich.

“If there are any moderate, common-sense Republicans left in Connecticut, they ought to be up in arms about this coup Aniskovich is about to pull off,” said Democratic State Party Chair Nancy DiNardo. “While Chris Healy couldn't win an election, he wasn't corrupt. Bill Aniskovich lost his Senate seat in what was considered a safe Republican district over his questionable dealings.

“Republicans have continued to struggle to make inroads with the people of Connecticut. Now they’re preparing to anoint a Rowland apologist to help save them. I'm curious to see just how much farther out of touch Connecticut Republicans intend to go.”

The GOP’s apparent white knight—the leader who will bring them back from resounding Republican defeat in the 2010 general elections as well as special elections and municipal races held this spring—has a checkered  history in Connecticut politics.

First elected in 1990, Aniskovich was reprimanded by state election officials for accepting improper campaign donations and was forced to return or forfeit more than $5,700 from his campaign in 1999. He had a total of $8,615 in fines the very next year to settle more election law violations.

While serving as the second-ranking leader in the state Senate, he was one of Governor John Rowland’s last legislative supporters during the corruption crisis that erupted in 2003 and eventually sent the disgraced governor to federal prison. Aniskovich refused to call for Rowland’s resignation and opposed early efforts to form a legislative impeachment committee.

In the midst of the Rowland corruption scandal, Aniskovich’s wife was appointed to a six-figure position leading the state’s culture and tourism industry, an appointment that the New Haven Register called “an embarrassment.”

Aniskovich lost his Senate reelection bid in 2004 when reports surfaced that he used his political position to influence the process by which Universal Health Services, Inc. sought to purchase the Stonington Institute, the mental health and substance abuse facility that Aniskovich still heads. The institute made millions through state contracts after Aniskovich joined the company in 1995, earning 73 percent of its revenue from the state; prior to that, the institute did no business with the state of Connecticut.

Aniskovich can keep his CEO position at the Stonington Institute if elected GOP chairman.

Polls Spank Malloy

The most recent poll from the Yankee Institute shows Governor Dannel “The Vozhd” Malloy blowing bubbles below the water line.

“Voters oppose by wide margins every Malloy administration initiative tested in the survey:
• On the budget deal, 57% of voters say the new state budget agreement ‘spends too much and raises taxes too much,’ while 39% describe it as ‘about as good as could be expected given a weak economy.’
• On the labor union concessions, 49% of voters say state employee unions ‘did not give up enough and should have been asked for more,’ while 36% say ‘the unions did give up a lot.’
• By a margin of 60-30%, voters describe the $572 million New Britain busway project as ‘a bad use of taxpayer money.’
• By a margin of 56-25%, voters describe the $864 million UConn Health Center expansion as ‘a bad use of taxpayer money.’”
During the next legislative season, Mr. Malloy plans to travel about the state attempting to convince easily duped businessmen that Plan A, which includes a doubling of the corporate surcharge tax and the largest tax increases in Connecticut’s history, are good for business.

Mr. Malloy’s assault on business in Connecticut is old news to those who follow Connecticut Commentary.

The numbers on the latest Quinnipiac poll will not lighten the hearts of Malloy accolades:

Connecticut voters give Gov. Dannel Malloy a negative 38 - 44 percent approval rating, apparently driven by 43 percent who are "dissatisfied" with the new state budget and another 16 percent who are "angry" with the budget, according to a Quinnipiac University poll released today. Only 36 percent described themselves as ‘enthusiastic’ or ‘satisfied’ with the budget.

“Today's results compare with a negative 35 - 40 percent approval rating for Gov. Malloy in a March 9 survey by the independent Quinnipiac (KWIN-uh-pe-ack) University poll.”

According to a CTMirror report, poll director Doug Schwartz said the low numbers are a reflection of how voters perceive the Malloy budget:

"'His low approval rating is a reflection of how voters feel about his budget,' said Douglas Schwartz, the poll's director. 'Many voters are dissatisfied and some even say they are angry. They think the budget relies too much on tax increases and not enough on spending cuts. They also think the middle class is paying more than its fair share while those with higher incomes aren't paying their fair share.'

"Only 17 percent say the new budget fairly spreads taxes across income groups, while 67 percent say Malloy should have sought higher taxes from people with higher incomes, a view that eroded support in his Democratic base. His tax package is viewed as fair by more Republicans (27 percent) than Democrats (10 percent) or independents (19 percent.)

"'Gov. Dannel Malloy should be doing better in a blue state like Connecticut, but he gets only a 52 percent approval rating among his base of Democrats,' Schwartz said.”
The Republican-Democratic divide may signal the beginning of a class warfare struggle between progressive Democrats and center right elements in both parties.

Having accomplished at the tail end of the flaccid administration of Governor Jodi Rell their aim of adding a progressive feature to the relatively flat Weicker income tax, progressive Democrats in the legislature such as Speaker of the House Chris Donovan and President of the Senate Don Williams have been signaling their eagerness to make the rates tax more steeply progressive. Mr. Malloy’s resistance to the effort is rooted in prudential rather than ideological predilections. But his soft resistance, moderate Democrats and Republicans fear, may easily be overcome.

Mr. Malloy’s effort's in accommodating unions has been much more energetic than his efforts to accommodate, say, Republicans, who are now being cited by Mr. Donovan for their obduracy. Even a slight resistance on the part of Republicans to the Malloy-Williams-Donovan juggernaut is bound to be characterized by Connecticut's new one party state as "extreme", a useful derogation borrowed from Sen. Charles Schumer of New York.

Of course, the Republican objections to a budget that even the left of center New York Times has characterized as “the most liberal in living memory” are hardly extreme. Since Democrats clearly have decided to use their numbers in the General Assembly to establish a progressive regime, the objections, however apposite, will most certainly fall on deaf ears. It is a considerable understatement to say of those who are willfully deaf that they do not care about objections and polls they choose to discount.

Why Republicans Are Irrelevant in Connecticut


Republicans railed against the Democrat's "left-wing" agenda, including tax increases on the rich,
tuition breaks for the children of undocumented immigrants, marijuana decriminalization, and transgender rights: Then there was the "birther bill," which would have required anyone running for president to provide an original copy of his or her birth certificate.

What do the voters of Connecticut think about these issues? Today's Quinnipiac University poll:

Connecticut voters support 72 - 25 percent a new law that requires large companies to offer five days of paid sick leave per year to employees. Support is 84 - 14 percent among Democrats, 50 - 44 percent among Republicans and 72 - 26 percent among independent voters. Men support the measure 63 - 34 percent while women back it 79 - 17 percent.

Voters also support 66 - 31 percent a law to de-criminalize possession of small amounts of marijuana. Support is 77 - 21 percent among Democrats, 49 - 45 percent among Republicans and 66 - 31 percent among independent voters. Support is slightly stronger among men, 69 - 28 percent, than among women, 64 - 33 percent.

Only 17 percent of voters say the new state budget spreads tax increases fairly across income groups while 67 percent say taxes should be higher on those with higher income.

Monday, June 13, 2011

The Vozhd

The budget submitted by Governor Dannel Malloy to the Democratic dominated General Assembly and approved by the legislature – although a pending deal between Mr. Malloy and state union workers requiring union givebacks of $1.6 billion had not been affirmed by the unions at its passage – is best seen as the inevitable political end piece of the first Weicker budget.

The presumptions underlying Governor Lowell Weicker’s 1991 budget parallel Mr. Malloy’s. Indeed, the two budgets, as well as the political maneuvering involved in passing them, are nearly mirror images.

Mr. Weicker’s campaign for governor featured rather dramatic suggestions that he would not resort to an income tax to liquidate a large state debt. Similarly, Mr. Malloy several times during his campaign with Republican gubernatorial nominee Tom Foley suggested that an increase in taxes would be a last resort for him.

Instituting an income tax, Mr. Weicker said at the time, “would be like pouring gas on a fire.”

Upon being elected governor, Mr. Weicker chose as his Office of Policy Management chief Bill Cibes, a pro-income tax proponent who had run for governor on an income tax platform. Mr. Cibes had been soundly defeated. Before anyone could cry “Fire” in Connecticut’s crowded political theatre, Mr. Weicker, breaking arms and shoving pencils into the eyes of wavering anti-income tax legislators, set Connecticut ablaze with a new, relatively flat income tax. Mr. Malloy did not deign to allow Republicans to shape his budget, and his tax increase was larger than Weicker’s.

Spendthrifts in the General Assembly, most but not all of them Democrats, then and there pledged to make Mr. Weicker’s income tax more progressive. A progressive feature, finally added in the waning days of the Rell administration, has been improved by the Malloy administration. Governor Jodi Rell, the last Republican governor before the advent of Mr. Malloy, lampooned as “Snow White” by her Democratic opponents and the usual cheering section of Connecticut’s left of center media, was never a match for Machiavellian Democrats in the General Assembly. Looking backward from the vantage point of the Malloy administration, Mrs. Rell may be viewed as the last Republican cork in the bottle of a once fissiparous but now united Democratic Party. Mr. Malloy is the first Democratic governor elected in the Connecticut since former Governor William O’Neill departed the state more than 20 years ago, leaving in his wake a deficit of about $1 billion. In the post income tax era, the deficit has tripled, the budget has tripled, and the total liability straddling the state is about $68 billion. All of this is the result of the inability of the Democratic Party’s progressive wing to cut spending.

“We all want progress,” C.S. Lewis said. “but of you’re on the wrong road, progress means doing an about turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.”

Asked some time ago whether he feared the consequences of a one party state, Don Williams, the progressive state Senate President, retorted that such fears were overblown; the one party state gets things done.

It is not known whether Mr. Williams is a student of Italian fascism, but he clearly admires the oomph behind it as expressed in Mussolini’s definition of fascism: “Everything in the state; nothing outside the state; nothing above the state. And by “the state,” of course, the guy who made the trains run on time meant a one party governing power.

For all practical purposes, Connecticut is now a one party, progressive state – with a progressive income tax, a means of passing on the tax burden, rather than sharing it, to anyone who makes over $200,000 a year. Republicans this year exercised no influence in shaping Mr. Malloy’s union driven budget.

Following the passage of Connecticut’s budget, the New York Times, the editorial board of which is simpatico with Mr. Malloy, modestly pronounced Connecticut’s budget session “the most activist, liberal legislative session in memory.” As tokens of Mr. Malloy’s abundant liberalism, the Times mentioned that the governor worked with the General Assembly to “enact the largest tax increase in state history and approved the nation’s first law to mandate paid sick leave for some workers. The legislators voted to extend protections for transgender people, to charge in-state college tuition rates to illegal immigrants, to extend an early-release program for prisoners and to decriminalize possession of small amounts of marijuana.”

The Sunday following the adoption of Mr. Malloy’s budget by the Democratic controlled General Assembly, The Hartford Courant, Connecticut’s only state wide newspaper, tooted the governor’s horn in an editorial, “Going The Governor's Way: One-Party Rule Empowers Malloy.”

The paper clearly admires Mr. Malloy’s force and focus, even as it admired, without much attention to the direction of such force and focus, the same qualities in Mr. Weicker. It declares that if unions agree to the rather inconsequential, temporary sacrifices Mr. Malloy has asked of them in his budget plan, the governor will have “fixed the biggest budget deficit the state ever faced,” a doubtful proposition. Connecticut’s continuing budget deficits are the result of overspending, and spending has not been aggressively attacked in the Malloy budget, which freezes the wages of state union members for two years, thereafter increasing wages by three percent for the following four years. The Malloy budget contractually forestalls layoffs for four years and restricts “shared sacrifice” only to state union members. The shared sacrifice of taxpayers under the Malloy budget will be permanent; spending giveback from unions will be temporary. The state’s largest budget deficit in history has been “fixed” mostly by relying upon the state’s biggest tax increase in history, larger even than the increase that followed Mr. Weicker’s imposition of an income tax.

Republican gubernatorial candidate Tom Foley, who lost to Mr. Malloy, has not entirely disappeared. And, as might be expected, his assessment of Mr. Malloy’s “shared sacrifice,” differs markedly from the state’s left of center media. “The facts are clear and simple,” said Mr. Foley. “Spending in the general fund is budgeted to go up next fiscal year by over $450 million, an increase of 2.5 percent over this year. The governor's ‘deal’ with state workers' unions includes no reduction in either the number of state workers or the overall cost of the state workforce. Gov. Malloy and the Democratic majority are closing this entire budget deficit with increased taxes amounting to more than $2.5 billion.”

The Courant admires Mr. Malloy’s audacity:

“He's rammed through audacious projects, including a nearly $900 million expansion of the University of Connecticut Health Center that could make the state a powerhouse in bioscience research and production.”
The operative word in that last sentence is “could.” Pouring nearly a billion dollars into such a doubtful proposition as the UConn Heath Center could, as easily, be throwing good money after bad, and the health center’s record in this respect suggests that the institution may not be salvageable at any price; its had been bailed out numerous times in the past, and throwing money in its direction has been an exercise in futility.

In a time of scarce tax resources – not even the audacious Mr. Malloy can press water from stones – Mr. Malloy has proposed a budget in which the problems he has temporarily settled by a shared sacrifice that weighs heavily on tax payers and lightly on tax consumers will almost certainly recur in a more virulent form later.

One of the most glaring, unaddressed political problems facing this and preceding governors is centered in the schedules that determine contract negotiations between Connecticut’s governors and bargaining units. Union contracts expire at different dates, which shifts the negotiation advantage from the governor’s office to union negotiators. Like the weather, all Connecticut governors have complained about it, but complaints do not change the weather.

Suppose, just to suppose, that an audacious governor and an enlightened General Assembly were to arrange matters so that all state contracts were to expire on the same date and hour. In that circumstance, contract negotiations between the executive department and unions could conclude in a more timely manner, which would give to the executive and legislative departments an advantage in negotiations they do not presently enjoy. The arrangement would more easily make shared sacrifice politically possible. Under the present arrangement – this year, the Malloy administration, working in concert with Democrats in the General assembly, pre-approved the budget without the certainty of union give backs -- both the governor and the General Assembly are held hostage to a process that gives union negotiators the upper hand in determining the final shape of the state’s budget.

The telling consequences of Mr. Malloy’s focused and forceful approach to government all lie in the future. And the preeminence of legislators and governors in a democracy over union negotiators may merit serious attention as Connecticut drifts effortlessly toward Mr. William’s utopian one party state.

Friday, June 10, 2011

Idiot “Comedian” Apologizes To Palin, Sort Of

Former Governor of Alaska and Republican nominee for Vice President Sarah Palin snaked her way into Massachusetts through Connecticut with minimal notice. But when she arrived in the Patriot State, she was besieged by ill-wishers after she had “mangled” a historical reference to Paul Revere’s ride.

In a 2’fer, an assassination “joke” by “comedian” Christopher Titus targeted both Sarah Palin and the Kennedy family.

Mr. Titus joked that if Sarah Palin became president, he would “hang out on the grassy knoll all the time, just loaded and ready," after which he offered an apology:
“While sitting in a comedy club with another comedian doing a podcast after listening to Sarah Palin’s stupid comments about Paul Revere -- something we all learned about in the first grade -- I popped off. More than anything, I made a joke about a horrible tragedy that befell a great President. To the Kennedy family, my heartfelt apologies. To Ms. Palin’s family, this would infuriate me if it were said about my family. Apologies to you as well.”
Sadly, Mr. Titus’ remarks, which drew a few laughs, followed an assassination attempt upon Arizona Rep. Gabrielle Giffords, immediately after which the country was treated to charges that Tea Party Patriots had in some sense been responsible for the atmosphere of incivility that possibly had motivated the assassin, Jared Lee Loughner, a nut whose political predispositions certainly had not been drawn from the abused Tea Party Patriots.

Mr. Titus then proceeded to chip away at his generous Palin apology:
“The comment was based on the fact that America has set the bar so low with what we accept as a possible leader. Just imagine Sarah Palin sitting in a negotiation with Putin, Ahmadinejad or Hu Jin Tao. Let’s all take a deep breath."
However, it turns out that Paul Revere did warn the British that the Americans were armed against them, according to the Boston Herald:

“In fact, Revere’s own account of the ride in a 1798 letter seems to back up Palin’s claim. Revere describes how after his capture by British officers, he warned them “there would be five hundred Americans there in a short time for I had alarmed the Country all the way up.”
Wes Pruden of the Washington Times, with some help from Brendan McConville, a history professor at Boston University, here sets the historical record straight:

Only now it turns out that she was right about Paul Revere’s midnight ride and the press claque was wrong. Even the professors say so, though they’re grudging to the point of churlishness. “Basically,” says Brendan McConville, a history professor at Boston University, “when Paul Revere was stopped by the British, he did say to them, ‘Look, there is a mobilization going on that you’ll be confronting.’” Revere, an honest tradesman, probably didn’t employ “professor-speak” in the heat of the moment, with words like “mobilization” and “confronting,” but we can take the point. In the account of the most famous midnight ride in American history, the professor says, “the British are aware as they’re marching down the countryside they hear church bells ringing—she was right about that—and warning shots being fired. That’s accurate.”

Mr. Titus offered no apology to Mr. Revere or to his first grade history teacher, who must at some point have told Mr. Titus that everyone warned by Mr. Revere during his ride was British, the separation from Britain having occurred years after Mr. Revere’s much celebrated ride.

Wednesday, June 8, 2011

Office Of Fiscal Analysis To Malloy: Your Budget Doesn’t Compute

The guys and gals who work at the Office of Fiscal Analysis (OFA) are the “go to” people for legislators who do not carry an Encyclopedia Britannica around in their heads. Throw some number on the floor before them and they can tell you if the numbers are accurate or fictional. Even on a bad day, they can tell you how many angels fit on the head of a pin. And in our statistical age, when every “non-partisan” agency is connected at the hip to fiercely partisan politicians, the OFA is genuinely non-partisan -- in the way that math or water is non-partisan.

Having examined the estimated savings in the Governor Dannel Malloy-SEBAC budget, the OFA has found that 60% of the savings claims made therein are UNVERIFIABLE.

The bad news was brought to the attention of the general public by Keith Phaneuf of CTMirror:

“Nonpartisan legislative analysts say they can vouch for less than 40 percent of the $1.6 billion in labor savings figured into the next biennial budget, and are unable to assess the rest--more than $1 billion--because of unanswered questions or insufficient data, according to a memo submitted late Monday to the General Assembly.”

Not to worry, say the epigones of transparency in the Malloy administration and their Democratic chorus in the General Assembly, the savings are real. The Malloy administration paid a good chunk of cash to an actuarial consulting firm outside of state government – perhaps the first and last time the Malloy administration will outsource state business – to produce the figures they needed to show a balanced budget.

Then the massive budget documentation was dumped on the doorstep of the ladies and gents at the OFA for verification. No dice, said the OFA: “Please note that at this time we are unable to determine or verify the levels that are contained in these estimates in many cases," OFA Director Alan Calandro wrote in a memo to Republican House leader Larry Cafero.

No actuarial analysis had been offered to OFA to support a contention that $67 million would be saved by increasing penalties for senior employees who retire earlier than the normal age; OFA could not determine from the figures provided to them how much would be saved by a new hybrid retirement plan for higher education employees; the Malloy administration had not provided to OFA their assumptions in support of a claim that health care provision would save the state $245.9 million in two years; the OFA lacked documentation to support a claim made by the Malloy administration that a new Health Enhancement Program would reduce health care claims by 4 percent in the first year and 10 percent in the second; OFA intimated that the new health care plan, which relies on preventative services, might increase costs, figures not provided in the administration’s savings estimates. The OFA Memo to Cafero goes on and on, piling up doubtful “savings.”.

The OFA’s aspersions are regarded by Office of Policy and Management Secretary Benjamin Barnes as a “delaying tactic” to prevent speedy approval of the Malloy-Williams-Donovan-SEBAC budget. Mr. Barnes has acknowledged that some savings targets amounting to $345 million were of necessity poorly defined. The OFA could not affirm such savings because “information as to how savings were estimated has not been provided."

The OFA’s inability to verify the cost savings in the Malloy budget has not disturbed the  equanimity of Senior Malloy advisor Roy Occhiogrosso, who said, despite the OFA’s misgivings, that the Malloy administration and the unions were “confident in the numbers.” But then Mr. Occhiogrosso’s confidence is unbounded – even when he is told by Mr. Malloy’s OPM Director that $345 million of the reputed savings boosting his confidence is questionable.

The budget itself rests upon $1.6 billion in union givebacks that will not be given back until the budget has been passed by the union dependent Democratic Party cohort in the General Assembly, whose confidence matches that of Mr. Occhiogrosso.

This year’s $40 billion two year budget has a novel twist to it: The budget is pre-approved, which means the General Assembly will pass a bill that rests on unassured, assumed savings: Union have not yet approved contracts that include expected givebacks of $1.6 billion.

Following seven hours of debate, Republican Senator Andrew Roraback, a 17 year veteran of the General Assembly, offered an amendment requiring the Democratic dominated legislature to return in special session to vote on the SEBAC agreement. Addressing Lieutenant governor Nancy Wyman, Mr. Roraback said:

“It doesn't feel right, Madam President. If this bill passes, we will all drive blindly into the night, asking ourselves, 'What was it that we just did?'… I can't ever remember a time in the history of this body when we have pre-approved a contract change. ... Yet, we're ratifying something that is in the ether. ... I have never before seen anything that remotely resembles the process of this bill. ... It is customary for the horse to come first and then the cart.''

Mr. Roraback’s amendment was defeated, and confident majority Democrats in the legislature promptly voted in favor of putting the cart before the horse.

Tuesday, June 7, 2011

Weiner And The Etiquette Of Admission

The first rule is this: If you are going to put yourself through the trouble of admission, no qualifiers will be allowed. You cannot say, “Yes, it is true that I allowed my bachelor’s pad in Washington D.C. to be used by an acquaintance as a bordello servicing both gay and straight clients, but…

A “but” is a backdoor exit to your national humiliation and will not escape the notice of the usually soporific mainstream media, which tends to be more forgiving of so called “sins of the flesh” committed by Democrats such as U.S. Rep. Barney Frank, an out of the closet gay guy who, several years ago, provided one of his friends the opportunity to frolic with his clients in his Washington D.C. bordello. Mr. Frank was exposed by the frothing right wing media. The exposure, however, put no serious dent in the congressman’s bumper; and, after a few months, Mr. Frank was permitted to get along with his congressional business, joining former U.S. Senator Chris Dodd, now a Hollywood mogul, in imposing strangling regulations on American businesses during a recession that Democrats had hoped would elide into a mini-depression, the better to save the country through FDR-like public works programs.

The second rule is this: Don’t weep, don’t cringe, and don’t drag your long suffering wife – or, in Mr. Frank’s case, partner – into your sordid affairs. If your wife, partner, paramour refuses to stand by you in your hour of trial, try to accept the rebuff with a tortured but understanding smile.

The third rule is this: If you plead guilty publicly to untoward behavior – fetchingly kicking a foot in the next stall in a men’s room, little realizing that the gent sitting on the toilet beside you is a vice cop; or producing a child out of wedlock with your mistress while running as Vice President of the United States; or confessing, better late than never, to your faithful wife that you had produced a child ten years earlier with one of the servants; or, as in the case with the much humiliated Anthony Weiner of New York, sending erotic twitters here and there, accompanied with graphic pictures – inflict upon yourself a suitable penance.

And the fourth and final rule is this: So behave in life and with others that your mom and dad, diseased or living, may not be embarrassed by your self indulgent stupidity, in this life or the next.

Mr. Weiner violated all these rules, as well as the overarching rule stressed by Mark Twain, humorist and social philosopher: A man, said Mr. Twain, may commit numerous breaches of the law and yet get away with all these, particularly if he is a politician or person of means who has in hand a good lawyer; but let a man commit one offense against convention – and he is a goner. There is no hope for him.

Proceeding backwards through the rules:

1) Considering Mr. Weiner’s public confession, it is likely that he is incapable of making the proper distinction between illegalities that may be got round and conventions that cannot be hurtled. It is true that modernity has thrown to the dogs many of the conventions that might have inhibited our parents; a certain amount of confusion may therefore be tolerated. On the other hand, Mr. Weiner is not a man easily confused and, at least in respect to conservative conventions, he has been pointedly intolerant.

2) Mr. Weiner, having confessed to his sins, refrained from imposing a suitable penance upon himself. He will not give up his office. And he has challenged such moral adepts as Nancy Pelosi to bring on the Grand Inquisitors. Go ahead, set the dogs of the House Ethics Committee upon me – just go ahead. One prominent Democrat suggested that former President Bill Clinton, who had in the past an unfortunate brush with White House convention, might have a word with Mr. Weiner and encourage his speedy exit.

3) Mr. Weiner wept, cringed and brought his innocent wife into the affair.

4) Mr. Weiner’s apology was decorated with “buts,” some subtly implied. For instance, Mr. Weiner said he had sent to a complete stranger a picture showing a bulge below his pelvis “… as a joke.” One commentator groused that he wondered whether Mr. Weiner’s wife would have considered that twitter funny. Possibly not.

Andrew Brietbart, the Publisher of Big Government who outed Mr. Weiner’s frat house behavior, has now said he possesses a picture sent by Mr. Weiner to yet another female stranger showing Mr. Weiner showing off his wiener. From delicacy and pity, Mr. Brietbart has said, he would not release the picture. But in these days of twitter and facebooks, there are WikiLeakers crouching behind every bush, waiting to waylay unconventional congressmen such as Mr. Weiner with promises of blackmail: “Halt there Weiner – your favors or your life!”

A final reason why Mr. Weiner should leave politics behind, repair his bruised marriage, and get a real job in the real world – like Mr. Dodd.

Saturday, June 4, 2011

Malloy s GAAP Falls Through The Gap: Trouble In Paradise

Much fuss was made during the gubernatorial campaign by former Mayor of Stamford Dannel (then Dan) Malloy concerning the adoption of Generally Accepted Accounting Principles (GAAP), the subject of Governor Malloy’s very first Executive Order.

The old way of accounting, which had given rise to budget finagling that allowed governors and legislators less scrupulous than Mr. Malloy to fudge budget figures, was supposed to give way to GAAP, an accounting process that would scrub politics of distasteful gimmickry.

“An implementer bill passed Tuesday by the House,” according to a story in CTNewsJunkie, “postpones the full implementation of GAAP until 2014 and eliminates the $1.5 billion deficit a transition to GAAP would create. But it also promises to spend about $100 million a year over the next 15 years starting in 2014 to pay down the $1.5 billion GAAP deficit and in order to ensure that deficit doesn’t grow it allocates about $75 million in fiscal year 2013 and $50 million in 2014.”

Zach Janowski, an investigative reporter for the Yankee Institute, has reported that if GAAP were operative right now, Mr. Malloy’s projected two year surplus would disappear altogether and be replaced by yet another wearisome deficit.

So, its rather a good thing – from the point of view of politicians less scrupulous than Mr. Malloy, that GAAP has, so to speak, fallen through a legislative gap.

Ben Barns, Mr. Malloy’s budget director, adamantly denies that GAAP is being delayed: “We’re not delaying the implementation of GAAP, we’re beginning to amortize the cumulative unfunded GAAP liability starting in two years. We are moving as quickly as practical to implement GAAP. We’re intending our budget be balanced on a GAAP basis from inception through final audit starting with 2012. So I think the notion that we’re delaying GAAP is completely unfounded. It’s not the case.”

House Minority Leader Lawrence Cafero begs to differ. GAAP was Mr. Malloy’s “cause celeb” in January when he took office; he signed an executive order that said “I’ll try to do my best to implement GAAP”; in February, Mr. Malloy made GAAP a conspicuous part of his budget proposal, vowing that a portion of the surplus would be used to cover the cost of the transition to GAAP, Mr. Cafero said. Following the postponement of the transition until the next biennium, “All we know now,” Mr. Cafero said, “is that we have a governor who says one thing and does another.”

The General Assembly has put forward a 15-year plan to eliminate the accumulated GAAP deficit of $100 million. That reform is bound to collide with a General Assembly that has over the years grown comfortable with a smoke and mirrors budgeting that allows politicians to hide dying bodies under the rug.

And Connecticut itself may be a dying body, according to a report recently issued by the Institute for Truth in Accounting and the Comeback America Initiative.

The fundamental accounting difference between GAAP and Connecticut’s current modified cash accounting (MCA) is that revenue is recorded when earned in GAAP; Connecticut, utilizing MCA records revenue when cash is received.

“What they try to do under this political math,” said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting, is push any revenues into a current year budget and push any expenses out of it. “It’s just manipulation of the numbers. That’s what got the corporations in trouble. A lot of corporate leaders are sitting in jail just for games like this.”

The number fudging merely obscures but does not settle underlying problems.

“While Connecticut reported total assets of $29.7 billion,” Connecticut Budget Watch reported, “the Institute’s review of the state’s 2010 financial report revealed that there are $44 billion of off-balance sheet retirement obligations. More than $18.7 billion of the State’s assets cannot be easily converted to cash to pay state bills of $74.5 billion as they come due. These assets consist of capital assets, including infrastructure, buildings and land, and assets the use of which is restricted by law or contract. The State does not have the funds needed to pay for $63.5 billion of state obligations.

Each taxpayer’s share of this financial burden equals $49,000.

To put it in simple terms, Connecticut has spent far more than it has collected in tax revenue. As a result, every taxpayer in the state now owes the state $49,000. When state assets are sufficient to pay off the obligations – and not before – the Connecticut’s books will be in balance. In addition, one of the methods the Malloy administration has settled upon to partially redress the imbalance, retroactive tax collections, may be unconstitutional, according to former Comptroller General of the United States David Walker, the founder and CEO of the Comeback America Initiative.

“It is not normal or advisable to have retroactive tax increases,” Walker said. “Retroactive increases have been successfully challenged in court. If such an increase is challenged legally, there will be both budget and accounting implications.”

Mr. Malloy’s spokesman, Juliet Manalan, said, “The Governor is not concerned that the budget will be challenged on Constitutional grounds.”

The state’s asset shortfall and $63.5 billion in state obligations ought to be an issue of greater concern.