The Democratic dominated General Assembly approved Governor Dannel Malloy’s then unbalanced budget the first week of May. And although it took two and a half months to finalize a budget that some still consider out of balance, the Malloy administration was never-the-less able to find nearly $1 billion to invest in a UCHC building program, not the first time the state has thrown money into the black hole in Farmington.
This year’s tax and spending budget allowed the administration to reap an artificial surplus of about $1 billion. Call it a make work for unions slush fund or a political hedge fund, the extra billion may be used much in the way that Tammany Hall of blessed memory used “walking around money” to purchase affection and votes.
Agents of the Malloy administration dickered for months with SEBAC, a coalition of unions authorized to negotiate contracts with the state, in an attempt to realize temporary savings. A goodly portion of the savings will be temporary, because the two year wage freeze imposed on unions will give rise at its terminus to wage increases of three percent for the next three years, after which the governor will find himself in much the same union contract negotiation tar patch from which he has just now extricated himself, particularly if he feels the need to cut spending further as the state and country lopes in the direction of a double dip recession.
Mr. Malloy’s final budget plan let out the back door a series of pestilential problems that soon will be begging admittance at the front door.
All the indicators suggest that Connecticut’s debt will grow. The nation may be in even worse shape. The national government is spending nearly twice as much in excess of its revenue: Projected expenditure in 2011 is 3.77 trillion, while revenue is 2.15 trillion. The interest paid on national debt to creditors, mostly China, is enough to fund that nation’s entire military budget.
Here in Connecticut, debt cannot be diminished through tax increases paid out in expenditures and not applied to liquidating the state’s permanent debt. The nearly $1 billion artificial surplus built into the budget has given the Malloy administration the opportunity to engage in a much heralded jobs program. Much of the tax overcharge – that is what a surplus is – will be used to justify boondoggles like the UConn Health Center and the costly and destructive $573 million, $952 per inch busway make-work project from New Britain to Hartford.
The state also is laying itself open to bribery by Big Business. The money supplied by the Malloy administration to UBS and other Connecticut industries too large to be permitted to migrate to other states represents dollars taken from Main Street to support Wall Street. We may wait in vain for Republicans to characterize these giveaways as welfare for Big Business and Wall Street. One might ordinarily expect progressive Democrats to raise a howl about all this, but Governor Jodi Rell has left the building, and Mr. Malloy is considerably more progressive than “Snow White,” a name applied derisively to the governor’s presumed ineffective predecessor.
The UCHC has been given money to burn: $338 million in previously authorized bonds, $254 million in new bonding and $69 million from the health center. And even now, the bonfire crackles. Several months ago, the center was awarded what should have been a contract worth almost $1 billion. On a memorandum of understanding, rather than a solid contract, the center was selected to perform health services for the state’s prison system. Had the job been put out to bid, the medical work might have been done at a lesser cost. But the Malloy administration, as well as union facilitators in the General Assembly, is averse to privatization.
The latest scandal involves a union featherbedding arrangement facilitated by Karen Duffy Wallace, director of labor relations at the UConn Health Center, who sent to personnel at York an e-mail specifying that more cost effective per-diem nurses "should not exceed 2 shift[s] per week averaged over a 3 month period. This is so they do not replace a permanent bargaining unit employee and is something the Union traditionally wants. We get questioned periodically by 1199 when we are using per diems too much as it takes away from permanent bargaining unit members." Ms. Wallace’s salary, according to the Transparency.CT.Gov web site, was listed at $149,044 for the 2009-10 fiscal year, perhaps too much for someone who so readily falls into lockstep with union officials.
Republican leaders in the General Assembly – and, astoundingly, state Senator Edith Prague, considered friendly to union interests – have called for a congressional investigation.
The state Senate, with Mr. Malloy’s declared approval, earlier had passed a bill that would have cut costs considerably by excluding acquired overtime in pension calculations. Alas, “labor's trusted friend and lackey, Speaker Chris Donovan, refused to take up the bill in the House,” accordingto a Hartford Courant editorial, after which Mr. Malloy’s support of the bill collapsed. The new administration-labor agreement, Mr. Malloy now says, has supplanted the proposed legislative fix because pensions under the new agreement will be based on the last five years of earnings rather than, as before, on the top three years. That leaves, the paper noted, “45,000 employees whose pensions are calculated under the old system.”
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