Jackson Laboratory has found some important friends in high places in Connecticut. Among them are Governor Dannel Malloy and, almost certainly, the Democratic caucus in the General Assembly, which has tended thus far to march to the music of Mr. Malloy’s drum on all issues of importance. Here and there, critics of the deal privately arranged between the governor and Jackson have surfaced.
“Republicans,” one commentator wrote, “are right to question the deal and get as much information as possible. But by the experts’ accounts, this is a good risk for Connecticut. And as in so many other ways, Connecticut should not be like Florida.”
Jackson was considering a move to Florida, but the deal in that state was never consummated. It has become part of the narrative of Connecticut Democrats supporting the deal that the governor of Florida failed to engage in the negotiations and so the state lost out on a promising deal that a wide awake Connecticut governor thereafter snatched from Florida’s jaws.
Connecticut 1, Florida 0.
Mr. Malloy, an activist governor, has vowed to remake Connecticut. Previous governors have been content in improving the general business climate in the state so that all businesses large and small, relying upon a set of governmental laws and regulations that did not favor one business over another, could plot their futures and compete together on what former Attorney General Richard Blumenthal use to call “a level playing field.” In bygone days of yore, if a regulation or a law did not apply equally to the local barber shop and a large employer such as Pratt & Whitney, that law or regulation would die in utero, because in the glory days of the republic laws and regulations were general and equitable. In the modern period, brimful with lobbyists and crony capitalists, governors see fit to determine the economic future of states by remaking business environments -- while in the process rewarding their friends and punishing their enemies.
Oh, happy day.
The “deal” to which the commentator above referred is, of course, the “private arrangement” worked out between Mr. Malloy and Jackson Laboratory to move the Jackson’s research operations to the UConn Health Center (UCHC) in Farmington.
Prior to the deal, Mr. Malloy had awarded the health center nearly a billion dollars, presumably to improve its failing operations. The installation of Jackson at the reconfigured UCHC will cost Connecticut taxpayers an additional $291 million -- initially. UCHC, a failing enterprise before Mr. Malloy and the Democratic dominated General Assembly decided to douse it with money, has been a tax sponge for decades. Jackson Laboratories is a successful non-profit business, which means that, unlike other overtaxed businesses in Connecticut, the research laboratory will not be returning tax dollars to the state. As a general rule, non-profits are tax revenue losing operations because, among other reasons, they do not produce a taxable product. The tax revenue value of Jackson rests in its magnetic quality: It is supposed by eternally optimistic Democrats that a research complex involving Jackson and Connecticut’s educational institutions will in time attract to the state tax revenue producing businesses.
Unlike Jackson, Pfizer of New London, a large pharmaceutical company that also engages in research, is a tax revenue producer. Interestingly, Pfizer was given tax credits and loans by the state when it opened operations, but recently the company had moved jobs out of state after the deal between the company and the state had been fulfilled and tax reductions had disappeared.
As a former communications director for state Democrats, the commentator above may, at least emotionally and ideological, still have a dog in the fight, but he generously acknowledges that “Republicans are right to question the deal and get as much information as possible.”
And there is the rub.
Some Republicans, much to the annoyance of Mr. Malloy and Roy Occhiogrosso, the governor’s chief cook and bottle washer, are asking for information that has not been forthcoming. They want to see the agreement arranged between Mr. Malloy and Jackson before they vote to commit tax money to what may or may not be a promising project. Their request has sent the deal makers into a crouch position that revolves around trade secrets. The General Assembly, which will be asked to pony-up the tax money that will keep the UCHC afloat for the near future, appears to have swallowed this lame excuse; even top military secrets that the U.S. government is loath to share with Wikileaks are provided on demand to the relevant overview committees in the U.S. Congress, possibly because national congressmen still take seriously their constitutional obligation to represent the will of the people to both presidents and lobby infested businesses. On such occasions, damaging information, made available to the committees, is redacted before the committee reports to congress and the people.
In a recent hearing that will determine the fate of millions of tax dollars, state legislators were told they had less than two hours to question representatives from Jackson. The people’s representatives were limited to one question apiece, and when Senator Leonard Fasano, the second-ranking Senate Republican, said he wanted to see the written agreement signed between the governor and Jackson, he was told to go fish.
"Everybody understands the term 'trade secrets' - meaning they are pieces of information that you don't want your competitors to know about,” said gubernatorial mouthpiece Occhiogrosso. “The law says we can't release the document. What he asked for, he can't get by law.''
At least not before the shameless, representation averse, rubberstamping General Assembly votes in favor of the funding.
Showing posts with label Pfizer. Show all posts
Showing posts with label Pfizer. Show all posts
Sunday, October 23, 2011
Wednesday, July 13, 2011
Playing Job Roulette
How much should a job cost?
When jobs are purchased by the governors of states that over-regulate the so called free market, which becomes less free the more regulations are piled on regulations, using their tax structures to transfer money from tax payers and small businesses to larger more government savvy corporations too big to fail, the cost of a job can be very dear.
President Barack Obama’s stimulus package, a scheme to gather taxes from the voiceless masses and pass them along to favored businesses and union groups, has simulated only the appetite of those in the federal government who consider it their business to soften the sharp edges of problems they themselves have have had a hand in creating.
The inability of the Obama stimulus package to reduce the jobless rate in the United States is the surest indicator that the president’s plan has failed. When number crunchers toted up the amount of stimulus spent per job produced, they arrived at a figure of $278,000. In most places outside the Beltway loony bin, that figure would have suggested an abysmal failure. But Washington moves away from its failures at a snail’s pace.
According to the the White House Council of Economic Advisors’ seventh quarterly report on the impact of the “stimulus,” just under 2.4 million jobs, both private and public, were created at a cost to date of $666 billion, which represents a charge to taxpayers of $278,000 per job created.
Tax Lawyer’s blog puts the cost benefit ratio in perspective: “In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out $427 billion ahead.”
This is not the shape of success. A malingering jobless rate tilting towards 10 percent, two years into an administration that considered 8 percent to be intolerable, cannot be considered a vindication of a stimulus plan that was supposed to return the economy to normalcy.
Here in Connecticut, Governor Dannel Malloy recently announced he had arranged a “performance-based” economic development package worth between “$47 million and $71 million to grow and retain jobs at CIGNA Corp. as the health insurer declared Connecticut its corporate home,” according to a report in CTMirror.
The state, in other words, is going to confer a tax and loan benefit on an insurance company that has promised to move 200 jobs from Philadelphia to Connecticut to comply with a job incentive program that showers benefits on companies that produce a minimum of 200 new jobs in Connecticut. CIGNA came in just under the wire.
"’Our corporate headquarters, effective today, is Bloomfield, Conn.,’ said David Cordani, the chief executive officer of CIGNA, a Fortune 500 company with 30,000 global employees and $21.3 billion in annual revenues.”
CIGNA’s history in Philadelphia dates to 1792. The city of brotherly love is not sweating the loss of 200 jobs, provided it retains 1,100 CIGNA jobs at Liberty Plaza in Center City. CIGNA, it should be noted, is a well established company with a rather large footprint in Connecticut as well.
Mr. Cordani plans to “create at least 200 jobs in the next two years, retain its 3,883 jobs in the state and make a minimum of $100 million in investments in its technology and real-estate infrastructure in return for a package of tax credits, a loan and job-training grants” worth, on the low end of the scale, $47 million.
At $235,000 per new job in tax benefits and loans, the transaction appears to be a good deal for CIGNA, though Commissioner of Economic Development Cathrine Smith, a former top executive of ING, another insurance giant, believes that the deal will in the long run be “revenue positive” for beleaguered Connecticut.
Big Business – Pfizer is a case in point – tends to use such tax breaks and loans as opportunities to perfect their business operations. When the tax breaks and loans run out, they may reconsider their options and occasionally move jobs to more cost effective states. Philadelphia need not morn its loss forever. Times and circumstances change, and large mobile companies, like the mercurial Mercury of mythology, have wings on their ankles.
When jobs are purchased by the governors of states that over-regulate the so called free market, which becomes less free the more regulations are piled on regulations, using their tax structures to transfer money from tax payers and small businesses to larger more government savvy corporations too big to fail, the cost of a job can be very dear.
President Barack Obama’s stimulus package, a scheme to gather taxes from the voiceless masses and pass them along to favored businesses and union groups, has simulated only the appetite of those in the federal government who consider it their business to soften the sharp edges of problems they themselves have have had a hand in creating.
The inability of the Obama stimulus package to reduce the jobless rate in the United States is the surest indicator that the president’s plan has failed. When number crunchers toted up the amount of stimulus spent per job produced, they arrived at a figure of $278,000. In most places outside the Beltway loony bin, that figure would have suggested an abysmal failure. But Washington moves away from its failures at a snail’s pace.
According to the the White House Council of Economic Advisors’ seventh quarterly report on the impact of the “stimulus,” just under 2.4 million jobs, both private and public, were created at a cost to date of $666 billion, which represents a charge to taxpayers of $278,000 per job created.
Tax Lawyer’s blog puts the cost benefit ratio in perspective: “In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out $427 billion ahead.”
This is not the shape of success. A malingering jobless rate tilting towards 10 percent, two years into an administration that considered 8 percent to be intolerable, cannot be considered a vindication of a stimulus plan that was supposed to return the economy to normalcy.
Here in Connecticut, Governor Dannel Malloy recently announced he had arranged a “performance-based” economic development package worth between “$47 million and $71 million to grow and retain jobs at CIGNA Corp. as the health insurer declared Connecticut its corporate home,” according to a report in CTMirror.
The state, in other words, is going to confer a tax and loan benefit on an insurance company that has promised to move 200 jobs from Philadelphia to Connecticut to comply with a job incentive program that showers benefits on companies that produce a minimum of 200 new jobs in Connecticut. CIGNA came in just under the wire.
"’Our corporate headquarters, effective today, is Bloomfield, Conn.,’ said David Cordani, the chief executive officer of CIGNA, a Fortune 500 company with 30,000 global employees and $21.3 billion in annual revenues.”
CIGNA’s history in Philadelphia dates to 1792. The city of brotherly love is not sweating the loss of 200 jobs, provided it retains 1,100 CIGNA jobs at Liberty Plaza in Center City. CIGNA, it should be noted, is a well established company with a rather large footprint in Connecticut as well.
Mr. Cordani plans to “create at least 200 jobs in the next two years, retain its 3,883 jobs in the state and make a minimum of $100 million in investments in its technology and real-estate infrastructure in return for a package of tax credits, a loan and job-training grants” worth, on the low end of the scale, $47 million.
At $235,000 per new job in tax benefits and loans, the transaction appears to be a good deal for CIGNA, though Commissioner of Economic Development Cathrine Smith, a former top executive of ING, another insurance giant, believes that the deal will in the long run be “revenue positive” for beleaguered Connecticut.
Big Business – Pfizer is a case in point – tends to use such tax breaks and loans as opportunities to perfect their business operations. When the tax breaks and loans run out, they may reconsider their options and occasionally move jobs to more cost effective states. Philadelphia need not morn its loss forever. Times and circumstances change, and large mobile companies, like the mercurial Mercury of mythology, have wings on their ankles.
Tuesday, May 31, 2011
Cliffsnotes On Curry And The UConn Health Center
Bill Curry, who twice ran for office as governor, has written for the Hartford Courant an op-ed titled “Reinvented UConn Health Center Is A Plan To Build Our Future On.” The Curry effusion appeared in the paper’s Sunday edition just before the politically rumbustious long holiday weekend.
Because Mr. Curry's prose tends to be both dense and sprightly at the same time, it occurs to me that the student of his set pieces might profit by the equivalent of political Cliffsnotes, and I have supplied some here at the risk of turning Mr. Curry’s poetic performance into stiff analytical prose. Mr. Curry has not been quite as active on the political scene in Connecticut as, say, Mr. Malloy – who, only months into his gubernatorial reign, threatens to approach former Attorney General Richard (now Dick) Blumenthal in ubiquity -- and the notes may be necessary.
“As you may have heard,” Mr. Curry begins, “Gov. Dannel P. Malloy has big plans for the University of Connecticut Health Center [UCHC] in Farmington. He wants the state to ante up $254 million in new bond money, part of an $854 million public/private enterprise to renovate research facilities, construct a new patient tower and ambulatory care center and kick-start a program to incubate fledgling bioscience companies, among other things.”
The “As you may have heard” is a subtle touch. Mr. Malloy has not been in the habit of hiding his grand plans for the state under a bushel basket. But the UCHC announcement was an urgent surprise. In his 17 Town Hall visitations, Mr. Malloy had not mentioned his “bold” and expensive UCHC plan -- not once. The announcement clearly was a blow to Republican leader Larry Cafero’s solar plexis. Some conservative pests who constantly harry us about Connecticut’s alarming – so they say – debt obligation were astonished that the governor planned to “invest” nearly $1 billion in what appeared to many a failed enterprise. And when Mr. Curry wrote in his column, “Two things are instantly clear: It's a bold plan, and it's a lot of money,” a far off bell began to tinkle in more cautious minds.
The figures cited by Mr. Curry are soft and, as always, subject to change. Prior to the long Holiday weekend, Governor Malloy said he would find a way to fill a $400 million gap in his budget. Having vowed not to increase the tax load, many supposed Mr. Malloy would wring $400 million from cost reductions. Instead, Mr. Malloy reached into an artificial “surplus,” lifting $325 million from taxpayer’s wallets to backfill the gap. Although the “surplus” – Mr. Malloy now scrupulously avoids using the term – was supposed to have watered Connecticut depleted “rainy day fund.” We now know that a good chuck of it was stuffed into a union piggybank to relieve Mr. Malloy and leaders of the Democratic dominated General Assembly from the necessity of demanding real cost saving measures from the people most responsible for electing him governor.
It is politically shrewd of Mr. Malloy to avoid using the term “surplus,” because his $1 billion surplus is not the result of an exuberant economy. Connecticut’s economy has been weak, and growing weaker the more government expands, ever since Gov. Lowell Weicker of blessed memory saved state government – NOT the state – by instituting an income tax. New Hampshire, which has maintained its non-income tax status, is flourishing, as are other non-income tax low regulatory states. The Malloy surplus is a superfluity artificially produced through the efforts of incompetent or bought accountants working in tandem with an administration that needed a $1 billion surplus to reward unions and offer bread and circuses to a bewitched public. The UConn Health Center is the circus.
“On Thursday,” Mr. Curry continues, “legislators listened as university officials and the governor's emissaries pitched the project. Questions were polite and well reasoned, centering mostly on project costs, a seemingly breakneck approval process and the impact on other communities, most notably Hartford. The answers were persuasive, but were they persuasive enough? We'll soon know; Malloy wants his answer by the time the session ends on June 8.”
Mr. Curry’s note on the tenor of the questions – “polite and well reasoned” – is perhaps unnecessary, because his audience was made up of university officials who would benefit from Mr. Malloy’s “bold” and costly UCHC plan. And the “governor’s emissaries” are, after all, the governor’s emissaries. Attendant lords can hardly be expected to offer up critical commentary. The same holds true with the unionized construction workers who appeared on command at an earlier public gathering to applaud Mr. Malloy’s public works project.
A critical review of Mr. Malloy’s bold and expensive venture is unnecessary, according to Mr. Curry. And were it necessary, it would be impossible, because Mr. Malloy wants approval from the General Assembly by June 8. Just as the administration of President Barrack Obama is determined never to let a crisis go to waste, the Malloy administration seems equally determine not to let a potentially wasteful crisis pass critical examination.
Indeed, Mr. Curry invites everyone to “pray the General Assembly says yes” to Mr. Malloy, though a prayer in this instance would seem to be superfluous, since Mr. Malloy and the Democratic dominated General Assembly are sitting not only in the same church but in the same pew. When has the General Assembly said “No” to boondoggly public works projects?
Hardly ever, according to Mr. Curry. Indeed, Mr. Curry tells us, he has in the past often warned against wasteful spending.
“For years,” Mr. Curry laments, “I have fought attempts to dump tax dollars into bloated projects that fly the flag of economic development. Best were the ones that never got off the ground; the Kraft stadium, Bridgeport casino and New Haven mall cost millions, but less than if they'd actually been built.
“New London tore itself apart over development, only to be left at the altar by the intended beneficiary, the Pfizer Corp. Hartford thought it hit the jackpot 16 years ago when the state bestowed $1 billion on Adriaen's Landing. If it makes it to a 20th anniversary without even a dress shop or diner on Front Street, someone should apologize.”
The example of Pfizer may even be worse than Mr. Curry supposes. Pfizer accepted tax credits given by a generous Republican governor and Democratic General Assembly, used the tax savings to develop its business, and then, when the credits ran out, packed part of its business off to Massachusetts, formerly and derisively called “Taxachusetts.” Mr. Curry, however, is not prepared to argue from the example he provides that tax credits should not be used by the Malloy administration to lure into the state portable businesses that will migrate out when the political favors disappear.
Mr. Curry distains this “long march of folly” which “casts a shadow now on Malloy” and his grand plan. He adamantly denies that the Malloy venture has not been properly vetted; it may have been over-vetted. The Malloy proposal “is the product of decades of professional analysis, regulatory review and legislative debate.”
To be sure, the analysis, regulatory review and legislative debate did not result in the positive action Mr. Malloy now proposes, which would seem to mean either: a) the exhaustive review was not exhaustive enough, b) the conclusion both Mr. Curry and Mr. Malloy would have preferred became politically waterlogged, or c) the plan had been tried and found wanting too often to resurrect it yet again. Mr. Curry is a proponent of view b): “Most of this plan has been before this legislature many times, only to be drowned each time in a gumbo of Capitol politics.”
But God, or whoever it is Mr. Curry prays to, now has raised up a champion in Mr. Malloy, who will “foreshorten” the quite unnecessary deliberative process of the pettifogging General Assembly. Mr. Malloy has given the General Assembly only a little more than a week to answer Mr. Curry’s prayers.
Mr. Curry’s column ends on a very high note:
“What is ingenious in this plan is what's new in it. Unlike past plans, it doesn't just try to solve one institution's fiscal problems or even improve its quality. Malloy wants not just to redevelop the health center but to reorient and retool it. What he's trying to do in Farmington is a microcosm of what he knows he must do for an entire state: Help us to build from our known strengths, new strengths.
“This isn't just another casino, or ballpark or convention center. This could be a future.”
Or it could be the end of a future.
In either case, the matter ought to be fully deliberated in the light of such new circumstances as these: 1) Connecticut’s budget debt is about $4 billion and rising, because inflation is on the up tick. Bailouts from the national government seem improbable, because the national debt is $14 trillion, and rising. Connecticut is spending about $2 billion more a year than it should to regain solvency. Mr. Malloy’s funding plan for the heath center will be financed with $338 million in previously authorized bonds, $254 million in new bonding and $69 million from the health center. The outpatient center would be paid for with $203 in private financing. All these figures are soft, and Connecticut’s bond rating has been lowered because the rating agencies do not believe that the state has attacked its debt properly.
Finally, the most serious objection to Mr. Curry’s call for a hasty decision on nearly $1 billion in new spending was leveled by John Ray in his proverb collection of 1687:
“Haste makes waste, and waste makes want, and want makes strife between the good man and his wife."
Because Mr. Curry's prose tends to be both dense and sprightly at the same time, it occurs to me that the student of his set pieces might profit by the equivalent of political Cliffsnotes, and I have supplied some here at the risk of turning Mr. Curry’s poetic performance into stiff analytical prose. Mr. Curry has not been quite as active on the political scene in Connecticut as, say, Mr. Malloy – who, only months into his gubernatorial reign, threatens to approach former Attorney General Richard (now Dick) Blumenthal in ubiquity -- and the notes may be necessary.
“As you may have heard,” Mr. Curry begins, “Gov. Dannel P. Malloy has big plans for the University of Connecticut Health Center [UCHC] in Farmington. He wants the state to ante up $254 million in new bond money, part of an $854 million public/private enterprise to renovate research facilities, construct a new patient tower and ambulatory care center and kick-start a program to incubate fledgling bioscience companies, among other things.”
The “As you may have heard” is a subtle touch. Mr. Malloy has not been in the habit of hiding his grand plans for the state under a bushel basket. But the UCHC announcement was an urgent surprise. In his 17 Town Hall visitations, Mr. Malloy had not mentioned his “bold” and expensive UCHC plan -- not once. The announcement clearly was a blow to Republican leader Larry Cafero’s solar plexis. Some conservative pests who constantly harry us about Connecticut’s alarming – so they say – debt obligation were astonished that the governor planned to “invest” nearly $1 billion in what appeared to many a failed enterprise. And when Mr. Curry wrote in his column, “Two things are instantly clear: It's a bold plan, and it's a lot of money,” a far off bell began to tinkle in more cautious minds.
The figures cited by Mr. Curry are soft and, as always, subject to change. Prior to the long Holiday weekend, Governor Malloy said he would find a way to fill a $400 million gap in his budget. Having vowed not to increase the tax load, many supposed Mr. Malloy would wring $400 million from cost reductions. Instead, Mr. Malloy reached into an artificial “surplus,” lifting $325 million from taxpayer’s wallets to backfill the gap. Although the “surplus” – Mr. Malloy now scrupulously avoids using the term – was supposed to have watered Connecticut depleted “rainy day fund.” We now know that a good chuck of it was stuffed into a union piggybank to relieve Mr. Malloy and leaders of the Democratic dominated General Assembly from the necessity of demanding real cost saving measures from the people most responsible for electing him governor.
It is politically shrewd of Mr. Malloy to avoid using the term “surplus,” because his $1 billion surplus is not the result of an exuberant economy. Connecticut’s economy has been weak, and growing weaker the more government expands, ever since Gov. Lowell Weicker of blessed memory saved state government – NOT the state – by instituting an income tax. New Hampshire, which has maintained its non-income tax status, is flourishing, as are other non-income tax low regulatory states. The Malloy surplus is a superfluity artificially produced through the efforts of incompetent or bought accountants working in tandem with an administration that needed a $1 billion surplus to reward unions and offer bread and circuses to a bewitched public. The UConn Health Center is the circus.
“On Thursday,” Mr. Curry continues, “legislators listened as university officials and the governor's emissaries pitched the project. Questions were polite and well reasoned, centering mostly on project costs, a seemingly breakneck approval process and the impact on other communities, most notably Hartford. The answers were persuasive, but were they persuasive enough? We'll soon know; Malloy wants his answer by the time the session ends on June 8.”
Mr. Curry’s note on the tenor of the questions – “polite and well reasoned” – is perhaps unnecessary, because his audience was made up of university officials who would benefit from Mr. Malloy’s “bold” and costly UCHC plan. And the “governor’s emissaries” are, after all, the governor’s emissaries. Attendant lords can hardly be expected to offer up critical commentary. The same holds true with the unionized construction workers who appeared on command at an earlier public gathering to applaud Mr. Malloy’s public works project.
A critical review of Mr. Malloy’s bold and expensive venture is unnecessary, according to Mr. Curry. And were it necessary, it would be impossible, because Mr. Malloy wants approval from the General Assembly by June 8. Just as the administration of President Barrack Obama is determined never to let a crisis go to waste, the Malloy administration seems equally determine not to let a potentially wasteful crisis pass critical examination.
Indeed, Mr. Curry invites everyone to “pray the General Assembly says yes” to Mr. Malloy, though a prayer in this instance would seem to be superfluous, since Mr. Malloy and the Democratic dominated General Assembly are sitting not only in the same church but in the same pew. When has the General Assembly said “No” to boondoggly public works projects?
Hardly ever, according to Mr. Curry. Indeed, Mr. Curry tells us, he has in the past often warned against wasteful spending.
“For years,” Mr. Curry laments, “I have fought attempts to dump tax dollars into bloated projects that fly the flag of economic development. Best were the ones that never got off the ground; the Kraft stadium, Bridgeport casino and New Haven mall cost millions, but less than if they'd actually been built.
“New London tore itself apart over development, only to be left at the altar by the intended beneficiary, the Pfizer Corp. Hartford thought it hit the jackpot 16 years ago when the state bestowed $1 billion on Adriaen's Landing. If it makes it to a 20th anniversary without even a dress shop or diner on Front Street, someone should apologize.”
The example of Pfizer may even be worse than Mr. Curry supposes. Pfizer accepted tax credits given by a generous Republican governor and Democratic General Assembly, used the tax savings to develop its business, and then, when the credits ran out, packed part of its business off to Massachusetts, formerly and derisively called “Taxachusetts.” Mr. Curry, however, is not prepared to argue from the example he provides that tax credits should not be used by the Malloy administration to lure into the state portable businesses that will migrate out when the political favors disappear.
Mr. Curry distains this “long march of folly” which “casts a shadow now on Malloy” and his grand plan. He adamantly denies that the Malloy venture has not been properly vetted; it may have been over-vetted. The Malloy proposal “is the product of decades of professional analysis, regulatory review and legislative debate.”
To be sure, the analysis, regulatory review and legislative debate did not result in the positive action Mr. Malloy now proposes, which would seem to mean either: a) the exhaustive review was not exhaustive enough, b) the conclusion both Mr. Curry and Mr. Malloy would have preferred became politically waterlogged, or c) the plan had been tried and found wanting too often to resurrect it yet again. Mr. Curry is a proponent of view b): “Most of this plan has been before this legislature many times, only to be drowned each time in a gumbo of Capitol politics.”
But God, or whoever it is Mr. Curry prays to, now has raised up a champion in Mr. Malloy, who will “foreshorten” the quite unnecessary deliberative process of the pettifogging General Assembly. Mr. Malloy has given the General Assembly only a little more than a week to answer Mr. Curry’s prayers.
Mr. Curry’s column ends on a very high note:
“What is ingenious in this plan is what's new in it. Unlike past plans, it doesn't just try to solve one institution's fiscal problems or even improve its quality. Malloy wants not just to redevelop the health center but to reorient and retool it. What he's trying to do in Farmington is a microcosm of what he knows he must do for an entire state: Help us to build from our known strengths, new strengths.
“This isn't just another casino, or ballpark or convention center. This could be a future.”
Or it could be the end of a future.
In either case, the matter ought to be fully deliberated in the light of such new circumstances as these: 1) Connecticut’s budget debt is about $4 billion and rising, because inflation is on the up tick. Bailouts from the national government seem improbable, because the national debt is $14 trillion, and rising. Connecticut is spending about $2 billion more a year than it should to regain solvency. Mr. Malloy’s funding plan for the heath center will be financed with $338 million in previously authorized bonds, $254 million in new bonding and $69 million from the health center. The outpatient center would be paid for with $203 in private financing. All these figures are soft, and Connecticut’s bond rating has been lowered because the rating agencies do not believe that the state has attacked its debt properly.
Finally, the most serious objection to Mr. Curry’s call for a hasty decision on nearly $1 billion in new spending was leveled by John Ray in his proverb collection of 1687:
“Haste makes waste, and waste makes want, and want makes strife between the good man and his wife."
Tuesday, May 24, 2011
The Dannel Malloy State Employees Bargaining Agent Coalition Complex
There is no termination date on the tax increase contract between taxpayers and the Malloy administration – because there is no written contract.
Some of the items in the contract to be signed by the State Employees Bargaining Agent Coalition (SEBAC), the state union coalition negotiating contracts with Governor Malloy, do have a termination date. For instance, the salaries of state union members, frozen for two years, will unfreeze thereafter and increase by 3% during the following three years.
In such precarious times, it must be liberating for state workers to know that the “shared sacrifice” of salary givebacks has a termination date affixed to it. Actuaries hired by the Malloy administration tell us that the temporary salary freeze will save the state $ 448,402,275, according to a budget fact sheet given out to the state’s media. Because the freeze terminates after two years, the savings to the state is itself temporary, while the salary increase of 9% over three years will be permanent. Other actuarial figures supplied by the Malloy administration may be soft because the times in which we live are a’ changing -- almost daily.
Not so with the tax increase portion of Mr. Malloy’s “shared sacrifice.” The $1.8 billion tax increase, the largest in Connecticut’s history, will permanently dredge dollars from taxpayer’s increasingly depleted resources. There is no such thing within the living memory of any member of the General Assembly, including the long memory of the 86 year old Sen. Edith Prague, as a temporary tax or a temporary tax increase, and it certainly is cold comfort to reflect that the federal income tax at its inception was a two percent levy on millionaires – real millionaires. The income tax now is paid by proletarian waitresses at the local diner.
And, of course, other taxes have gone up. Connecticut’s new budget reduces the threshold on estate and gift taxes; raises the income tax retroactively to January 1, 2011 on individuals with taxable income over $50,000 and joint filers whose income exceeds $100,000; slaps an Amazon tax on internet sales, increases the number of tax brackets from 3 to 6 and imposes a 20% surcharge on corporations for 2012 and 2013.
While Mr. Malloy has suggested that unions accept his budget and blame him for the sacrifices he is asking unions members to make, not all the members of unions presently negotiating contracts with the Malloy administration are sanguine, according to a recent Associated Press report:
“Despite the promise of no layoffs for four years, three years of wage increases following a two-year freeze and the continuation of coveted benefits such as pensions, retiree health care and longevity bonuses, there's skepticism and leeriness about the deal among many of the state's 45,000 unionized workers. Some want promises that big businesses and wealthy taxpayers will be asked to pay more if they agree to givebacks. Some simply want to see the details.”
An attempt by the Malloy administration to unveil the details of the Malloy-SEBAC deal to Connecticut’s media at Rentschler Field in East Hartford met with mixed success. Noting that the budget falls about $400 million short of projected expenditures, editorial departments of some newspapers wanted to see the actual rabbit drawn from the hat at the conclusion of union negotiations before they bestowed their blessing upon a tax increase even larger than that imposed in the 1991 Weicker budget, which featured Connecticut’s new state income tax.
Almost no one but committed leftists and boilerplate union demagogues are encouraging Mr. Malloy to conduct further raids on the profits of Connecticut businesses, some of which already have picked up stakes and moved all or part of their operations to more business friendly environments elsewhere. It turns out that “elsewhere” – at least in the case of Precision Camera And Video, Pfizer and Yardley Technical Products http://donpesci.blogspot.com/2011/05/dannel-in-wonderland.html is across the border into nearby states. As an additional bump out the door, Connecticut has slapped a corporation surcharge on homegrown businesses that have not yet explored alternative sites in, say, New Hampshire, a state that – lacking a Weicker or a Bill Cibes to jam an income tax proposal through its legislature – maintains its low tax, low regulatory status. Of the nine states without income taxes, all but one, Alaska, saw more people migrating in than out from 2000 to 2008. Connecticut has been losing population to other states ever since it adopted its income tax.
Any lesson that may be gleaned from such data is certain to be lost on a Democratic controlled General Assembly and governor poised to push through the legislature a bill fervently supported by the redundant Connecticut Working Party, little more than an annex of the Democratic Party,
that would require companies with more than 50 workers to provide up to five sick days a year for employees and new hires who had put in 520 hours on the job.
Nice work -- if you can get it.
Some of the items in the contract to be signed by the State Employees Bargaining Agent Coalition (SEBAC), the state union coalition negotiating contracts with Governor Malloy, do have a termination date. For instance, the salaries of state union members, frozen for two years, will unfreeze thereafter and increase by 3% during the following three years.
In such precarious times, it must be liberating for state workers to know that the “shared sacrifice” of salary givebacks has a termination date affixed to it. Actuaries hired by the Malloy administration tell us that the temporary salary freeze will save the state $ 448,402,275, according to a budget fact sheet given out to the state’s media. Because the freeze terminates after two years, the savings to the state is itself temporary, while the salary increase of 9% over three years will be permanent. Other actuarial figures supplied by the Malloy administration may be soft because the times in which we live are a’ changing -- almost daily.
Not so with the tax increase portion of Mr. Malloy’s “shared sacrifice.” The $1.8 billion tax increase, the largest in Connecticut’s history, will permanently dredge dollars from taxpayer’s increasingly depleted resources. There is no such thing within the living memory of any member of the General Assembly, including the long memory of the 86 year old Sen. Edith Prague, as a temporary tax or a temporary tax increase, and it certainly is cold comfort to reflect that the federal income tax at its inception was a two percent levy on millionaires – real millionaires. The income tax now is paid by proletarian waitresses at the local diner.
And, of course, other taxes have gone up. Connecticut’s new budget reduces the threshold on estate and gift taxes; raises the income tax retroactively to January 1, 2011 on individuals with taxable income over $50,000 and joint filers whose income exceeds $100,000; slaps an Amazon tax on internet sales, increases the number of tax brackets from 3 to 6 and imposes a 20% surcharge on corporations for 2012 and 2013.
While Mr. Malloy has suggested that unions accept his budget and blame him for the sacrifices he is asking unions members to make, not all the members of unions presently negotiating contracts with the Malloy administration are sanguine, according to a recent Associated Press report:
“Despite the promise of no layoffs for four years, three years of wage increases following a two-year freeze and the continuation of coveted benefits such as pensions, retiree health care and longevity bonuses, there's skepticism and leeriness about the deal among many of the state's 45,000 unionized workers. Some want promises that big businesses and wealthy taxpayers will be asked to pay more if they agree to givebacks. Some simply want to see the details.”
An attempt by the Malloy administration to unveil the details of the Malloy-SEBAC deal to Connecticut’s media at Rentschler Field in East Hartford met with mixed success. Noting that the budget falls about $400 million short of projected expenditures, editorial departments of some newspapers wanted to see the actual rabbit drawn from the hat at the conclusion of union negotiations before they bestowed their blessing upon a tax increase even larger than that imposed in the 1991 Weicker budget, which featured Connecticut’s new state income tax.
Almost no one but committed leftists and boilerplate union demagogues are encouraging Mr. Malloy to conduct further raids on the profits of Connecticut businesses, some of which already have picked up stakes and moved all or part of their operations to more business friendly environments elsewhere. It turns out that “elsewhere” – at least in the case of Precision Camera And Video, Pfizer and Yardley Technical Products http://donpesci.blogspot.com/2011/05/dannel-in-wonderland.html is across the border into nearby states. As an additional bump out the door, Connecticut has slapped a corporation surcharge on homegrown businesses that have not yet explored alternative sites in, say, New Hampshire, a state that – lacking a Weicker or a Bill Cibes to jam an income tax proposal through its legislature – maintains its low tax, low regulatory status. Of the nine states without income taxes, all but one, Alaska, saw more people migrating in than out from 2000 to 2008. Connecticut has been losing population to other states ever since it adopted its income tax.
Any lesson that may be gleaned from such data is certain to be lost on a Democratic controlled General Assembly and governor poised to push through the legislature a bill fervently supported by the redundant Connecticut Working Party, little more than an annex of the Democratic Party,
that would require companies with more than 50 workers to provide up to five sick days a year for employees and new hires who had put in 520 hours on the job.
Nice work -- if you can get it.
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