Another Day, Another Crony Capitalist: Where Is The Republican Populist?

Managing Editor of the Journal Inquirer Chris Powell may be right. Even on their best day, Republicans running for office do not know how to frame an issue so that it will appeal to those not born to the purple.

A story written by Steve Collins of the Bristol Press provides a case in point.

Governor Dannel Malloy had just disbursed $10 million in urban tax credits to ESPN, a well-known and prosperous sports broadcasting network that very likely did not need a handout from Mr. Malloy.

Tucked within Mr. Collins' story, one finds this line: “It’s not clear, though, that the state money made much difference to the project’s completion, since ESPN had already said it would build the center before Malloy picked it to receive state financial aid.”

All the political honchos showed up for the ritualistic “cable cutting.” Cameras clicked, and the assembled politicians all smiled. Their smiles plainly said, “But for our generous contribution in tax credits, this miracle might not have happened at all.”

That message may not have reached Mr. Collins' desk. But it is plain from the line quoted above that, if such a message was pressed upon him by Mr. Malloy’s well-oiled communications machine, he was not convinced that the $175 million project easily might have gone forward without Mr. Malloy’s $10 million contribution.  ESPN is a big boy, not a bumbling upstart operation. We should all send up a rousing cheer in praise of media skepticism.

All the politicians present at the cable cutting were taking political campaign bows. Present at the opening of ESPN’s new “Digital Center-2, a 194,000 square foot, five-studio facility in Bristol, were  Bristol Mayor Ken Cockayne, ESPN president John Skipper of the SportsCenter, Governor Malloy, shown cutting the cable with a massive scissors, and U. S. Representative John Larson of the impregnable 1^st District.

Mr. Collins notes, “Malloy, whose ‘First Five’ program pumped $10 million in urban tax credits into the project, called it ‘a great day for us’ to see it completed. The stimulus money agreement between the state and ESPN, announced almost three years ago, was only signed last Friday after lawyers for both sides wrangled over details.”

The “great day” occurred, it will be noticed, within the context of an election period. The Democratic and Republican nominating conventions had been concluded days earlier. 

It is difficult to tell here who is putting the lipstick on which pig, but it looks like ESPN is doing Governor Dannel Malloy the favor. ESPN gets tax money the company did not need to open a facility that would have opened without Mr. Malloy’s unnecessary contribution, and Mr. Malloy takes a campaign bow freighted with meaning.

The meaning will be spun out by Democrats across the state in the upcoming elections: Democrats are doing things to maintain prosperity and jobs – don’t forget jobs –during the malingering Bush recession. 

What is the real meaning of the bow? Where does the money given by Mr. Malloy to ESPN come from? Who benefits from Mr. Malloy’s magnificent gesture? Would Mr. Larson, running in a district last won by a Republican in 1957, have been re-elected to office had he not participated in the ESPN festivities?

Will women owners of nail salons benefit from Mr. Malloy’s redundant generosity?

When Mr. Malloy imposed on Connecticut the largest tax increase in its history, Nail Salons appeared on a list produced by the Yankee Institute showing companies and people hit by Mr. Malloy’s new taxes. None of the companies or people represented on that list were present at the ESPN cable cutting. Indeed, no person or company represented on a Yankee Institute list showing Connecticut’s 371 sources of revenue was within camera range when Mr. Malloy took his campaign bow.  But this is where Mr. Malloy’s unnecessary $10 million tax giveaway to ESPN came from.

And every dollar Mr. Malloy and the Democratic dominated General Assembly has appropriated from one of the state’s 371 separate sources of revenue is a dollar that otherwise might have been used to expand a business or produce a job or increase a salary of someone in Connecticut who is not employed by ESPN.

So then, here we are: Big Government has given Big Business Big Tax dollars appropriated from the Little People.

And what do Republicans running for office this year say about it?

Where are the populist Republicans among us who might be able to mold a message from all the data laboriously assembled by the Yankee Institute that would appeal not to Fairfield based plutocrats – but to women who work in Nail Salons?

Really, where are they? Their state is in desperate need of them. What has made them swallow their tongues?

Malloy On The Stump

It should surprise no one that Governor Dannel Malloy is on the road again selling the usual product. This time, because elections are looming, he will be followed by Republican candidates for governor anxious to peddle their own prescriptions for what ails us.

Returning from a Middletown town hall meeting, though some in the audience objected to the format, Mr. Malloy sent around a sermon to the Hartford Courant. He began by noting that “Every budget is about setting priorities. That's true for every family in Connecticut, especially during tough economic times. It is equally true for state government.” Indeed, are we to suppose that President Barack Obama has set no priorities because he had presented no budget to Congress during his first term?

When middle class families in Connecticut encounter hard times, they cut back on spending, a remedy for budgetary red ink unknown in Washington and many states, including Connecticut. That is because workers in the private sector in Connecticut cannot force their employers to raise their wages. In this respect, private enterprise is qualitatively different than government. When a government runs into hard times, it may raise taxes and usually does. That is because governments find it painful to say “no” to those who use and provide their services. Independent Governor Lowell Weicker responded to a pre-income tax deficit by instituting a new income tax. Governor Dannel Malloy’s Democratic forebearers, Governors Ella Grasso and O’Neill resisted the effortless solution to which Mr. Weicker and Mr. Malloy so easily succumbed. Tax raisers in Connecticut are always careful to sugar their bitter pill with a bit of honey: “We don’t like taxes any more than you do, honey.” But they slather on the taxes anyway, heedless of predictable consequences. Connecticut’s present budget is three times larger than Mr. O’Neill’s last pre-income tax budget, and the bottom line increase in our budgets is a true measure of spending increases.

So then, the precipitous increase in budgets strongly suggests that the priorities of the governors who followed Mr. O’Neill lay in raising taxes rather than in cutting spending. Mr. Malloy’s tax increase was the largest in state history, and his spending cuts, to judge from the massive revenue increase in his first budget, were not commensurate with his tax increases -- which, come to think of it, is the very definition of “shared sacrifice,” Mr. Malloy’s campaign slogan when he first ran for governor.

In his latest sermon, Mr. Malloy notes that he has become an old hand at town hall meetings, having “done more than 30 of these town hall events since taking office.” He values such gatherings not only because they give him an opportunity to peddle his product from a bully pulpit, but more importantly because “they present the best opportunity for me to listen directly to the concerns of my fellow Connecticut residents.” And “Based on what I heard in Middletown, it is clearer to me than ever that many people share some simple, common-sense perspectives on what our state needs.”

Fortunately for Mr. Malloy, what he hears from citizens at these town meetings conforms precisely to his own prescriptions, which he is certain will bring prosperity and good fortune to the middle class in his state: “Connecticut's middle class doesn't need any more burdens. The middle class needs some breaks,” especially in these difficult days following “the worst recession since the Great Depression, and with a national economy that continues to grow too slowly.”

George Will’s definition of a “need” – a want that’s 24 hours old – is especially pertinent in the Malloy administration.

Surely in the course of 30 Connecticut town hall meetings, someone must have whispered in Mr. Malloy's ear that cuts in spending proportional to his tax increases might help middle class tax payers balance their own budgets. God, we are told, whispers to us in the whirlwind because He wishes us to attend to his message and wants us to learn how to listen. Perhaps Mr. Malloy has not been attentive to the whisperings of the state’s middle class: He is a very busy guy, and never busier than when he is telling the middle class to cough up a few more bucks he might distribute to Connecticut’s prosperous insurance companies, one of which is moving its in-state operations to South Carolina.

The simplest and truest way to give the middle class a break is to reduce their taxes – or, at the very least, not to raise their taxes –thus leaving them in command of their own salaries and futures. Mr. Malloy has done quite the opposite.

But never mind honey, here comes the honey: “That's why my budget contains no new taxes and puts us on a path to reinstating the sales tax exemption on clothing valued under $50. And that's why my budget would do away with the single most burdensome, most regressive and most unfair tax in our state — the car tax.”

Ah yes, the car tax. The car tax is a levy imposed by, collected by and spent by town governments. A short time after Mr. Malloy imposed upon Connecticut the largest tax increase in its history, the Yankee Institute, a right of center think tank, published a list of Mr. Malloy’s new taxes, many of which were regressive. Any imposition levied on a taxpayer who cannot comfortably pay the tax without depriving himself of necessary income is a regressive tax. Mr. Malloy’s revenueincreases spanned 25 categories of taxes and eliminated exemptions in about 37 different categories. The elimination of town property taxes on cars worth less than $28,571, which municipalities depend upon to finance their operations, is an invitation to municipal governments to either raise property taxes on middle class owners of houses or to cut town budgets. It takes little political courage for state politicians to eliminate someone else's tax. If Mr. Malloy wants to help the middle class by reducing state taxes, the list produced by the Yankee Institute presents some golden opportunities for him.

The Real State of the State

Governor Dannel Malloy’s State of the State message gave little indication of his plans for the future. From a budgetary or strategic planning point of view, there wasn’t much “there” there, but the speech evidently was framed for a national audience.

During his first term, Mr. Malloy raised taxes massively. The progressive wing of his party, those in Connecticut who have a stake in ever increasing spending, cheered him on from the sidelines. When deficits repeatedly appeared following his first union friendly budget, Mr. Malloy quite publically took the pledge: No new taxes. He said several times on the post-election stump he would not raise taxes to liquidate a deficit of about half a billion dollars during a special legislative session. He didn’t.

Mr. Malloy’s second budget is, so far, inscrutable. Money is moved around from pot to pot. Taxes that were to elapse have been resurrected. A promised tax due to elapse on bad energy – i.e. nuclear energy – has been reinstated. The governor has proposed, much to the dismay of the Connecticut Conference of Municipalities (CCM), that a large chunk of the property tax on cars should be abolished. It is significant that the putative tax “cut” proposed by the governor comes from the municipal rather than the state’s budget pie. The cataract of money awarded to UConn continues to flow like a mighty river, presumably on the assumption that money “invested” in the state’s premier educational institution will pay dividends in job production. It is more likely that graduating students will carry their expensive diplomas to other states where energy is cheaper, state legislatures are less in thrall to the pressure of union demands, and jobs are more plentiful.

Progressive Democrats are so easily stampeded that we sometimes forget the Democratic Party here in Connecticut does have a middle, which some political commentators used to call the “vital center.” Politics, national and state, is now driven by the epicenters of both parties. The previously vital center is easily forgotten – most especially in Connecticut’s one party state when, for the first time in more than 20 years, both houses of the General Assembly and the governor’s office have been captured by Democrats. Contrary to media opinion, the Republican Party in the state is all middle. Here and there, a conservative or two – there cannot be more than a fistful in the General Assembly – opposes a post-Keynesian piece of arrant foolishness, and immediately the entire party is denounced by the state’s left of center media as dangerously ideological.

The reality is nearly the opposite. The capture by Democrats of both houses of Connecticut tripartite government has given us the most progressive administration Connecticut has seen since former governor Wilber Cross hung up his spurs. It should be noted that the third branch of Connecticut’s government, the courts, always sensitive to political power, may be politically moved both through appointments and by means of a quite understandable disposition to defer to momentarily popular majorities. Only in comparison with the Malloy administration, acting in concert with dominant Democrats in the General Assembly, do middle of the road Republicans appear to be arch-conservatives.

The real state of the state is most accurately portrayed in a “list of lasts” supplied by the Yankee Institute, a glowing candle in Connecticut’s dark night. Following the governor’s state of the state address, the institute took out full page advertisements in four major Connecticut newspapers.

“We aren’t just doing worse than average, Executive Director of the Institute Fergus Cullen said, “We are doing the worst."

Here is the institute’s “list of lasts.”

• Barron's rated Connecticut's debt situation as the worst in the country in 2012
• TopRetirements.com ranked Connecticut as the 2012 worst state for retirement
• The Institute for Truth in Accounting ranked Connecticut's financial status as the worst in the nation with a debt burden of $49,000 per taxpayer
• Connecticut's credit quality was ranked 50th in the nation by Conning Inc.'s State of the States Municipal Credit Research Report in 2012
• Connecticut's Tax Freedom Day of May 5, 2012 was the latest in the nation according to the Tax Foundation
• Connecticut's Achievement Gap is the worst in the nation according to the Connecticut Council for Education Reform
• The Fiscal Policy Report Card on America's Governors by the Cato Institute gave Malloy an "F"

It really is becoming very difficult to keep the bad news under your hat.

The Real State of the State

Govern Dannel Malloy’s State of the State message gave little indication of his plans for the future. From a budgetary or strategic planning point of view, there wasn’t much “there” there, but the speech evidentially was framed for a national audience.

Everyone who has made a speech on any topic will tell you that the substance of a speech is determined in large part by the nature of your audience. One report indicated that the address was, compared with other state of the state addresses, a bit out of the box; other governors have used the occasion to map out a plan of governance for the new legislative session, and Mr. Malloy didn’t. On the other hand, he felt compelled to say something about Sandy Hook, a national and even international story. On Sandy Hook, he should be telling the legislature not to be precipitous; wait for the investigation to be completed. He may be doing that, but one never knows what goes on behind closed doors.

Does any of this indicate that Mr. Malloy is making himself available for a spot in Washington?

No one knows. My own crystal ball is in the shop for repairs, but there has been some speculation about Mr. Malloy’s political strategy during the current legislative session, which began on January 9.

During his first term, Mr. Malloy raised taxes massively. The progressive wing of his party, those in Connecticut who have a stake in ever increasing spending, cheered him on from the sidelines. When deficits repeatedly appeared, Mr. Malloy quite publically took the pledge: No new taxes. He said several times on the post-election stump he would not raise taxes to liquidate a deficit of about half a billion dollars. He didn’t.

During a special session called to address the deficit, renamed by Mr. Malloy “a shortfall, the governor reached out to Republican leaders he had earlier spurned when crafting his first budget. Together, along with majority Democrats in the General Assembly, across the board cuts were applied, but a much larger $2 billion deficit must be addressed this fiscal year. Additional cuts likely would not be possible without Republican support in the General Assembly. Some Republican leaders, following the special session cuts, appear to be quite willing to let bygones be bygones. Having been frozen out of the smoke filled back room during Mr. Malloy’s first term, Republican leaders in the general Assembly were exceedingly grateful the governor included them in the special session -- the chop, chop session. Democrats, most of whom would like to hold the line on spending cuts, appeared to be suffering from a pronounced case of agita. Did Mr. Malloy intend to stiff them in the new session, they may have wondered.

The Democrats whose nerves are frayed belong to the progressive wing of their party and are easily stampeded. We sometimes forget that the Democratic Party here in Connecticut does have a middle; it’s easy to forget --especially during the Malloy administration when, for the first time in more than 20 years, both houses of the General Assembly and the governor’s office have been claimed by Democrats. Contrary to media opinion, the Republican Party in the state is all middle. Here and there, a conservative or two – there cannot be more than a fist full in the General Assembly – opposes a post-Keynesian piece of foolishness and immediately the entire party is denounced by the state’s left of center media as dangerously ideological.

The reality is nearly the opposite. The capture by Democrats of the two houses of Connecticut tripartite government has given us the most progressive administration Connecticut has seen since former governor Wilber Cross hung up his spurs. It should be noted that the third branch of Connecticut’s government, the courts, always sensitive to political power, is also up for grabs. Only in comparison with the Malloy administration, acting in concert with dominant Democrats in the General Assembly, do middle of the road Republicans appear to be arch conservatives.

Since the modern conservative movement sprang pretty much fully grown from the brow of Bill Buckley, Connecticut has never elected to office a conservative governor or a conservative legislature. Indeed, the number of conservatives in the General Assembly can be counted on the fingers of one hand.

There is no question that Mr. Malloy is pro-union; also no question that unions, especially the powerful teachers’ unions, are left of center political goads that push individual Democrats far to the left. Yet, Mr. Malloy, courageously in the view of some, proposed a few education reforms that left an ashen taste in their mouths. To be sure, his most important education efforts went down to dusty death: Mr. Malloy’s apparently outsized ambition was to link the salary and status of teachers with measurable performance. In private business, that linkage is universal; in state and federal government, it is little more than a consummation devoutly to be wished. But it does say something about Mr. Malloy that he entered the fray at all. The left wing of the Democratic Party may have some reason – not much -- to be edgy. Of course, progressives, ever on the hut for new means of establishing their utopias, are by nature “on the edge.”

On the other hand… Mr. Malloy has positioned himself in such a way that Republicans may easily be faulted for any cuts in the upcoming budget which, strategically, would be to Mr. Malloy’s benefit.

Some people may have noticed that what is beneficial to status quo politicians does not always contribute to the greater good. Progressive influence peddlers interested in moving politics in Connecticut ever further to the left do not always have the greater good in mind; they have their own parochial interests in mind. The opposite of an ideological government is not, some may be surprised to learn, a non-ideological government. There is no such animal. The opposite of an ideological government is an anarchy of special interests, and no special interest spends more than a minute a month contemplating the greater good. When we see a politician buck powerful interest groups that surround him, there is some reason to rejoice. This happens usually because the politician feels in his soul the pull of an idea. In the absence of ideas, politics is a madhouse of interests.

Now, what is the controlling interest of a free floating politician? Maintaining his status. Under the skin, all incumbent politicians are conservatives; everyone wants to continue being what he has been. To accomplish this aim, the run of the mill politician will pay court to whatever special interests help him maintain what Aristotle called his “quiddity,” his “whatness,”his own essence, as he perceives it. There is some indication – slight, but some – that Mr. Malloy may have an idea or two sloshing around in his head, which means that he may not be wholly the plaything of special interests –reason enough for us to rejoice, moderately. Just as dying men sometime slip in and out of consciousness, so politicians, especially the pragmatic variety, slip in and out of ideas as advantageous circumstances dictate.

Could Mr. Malloy benefit politically by inviting Republicans to take part in upcoming budget negotiations?

Republican leaders seem very eager to “have a place at the table,” as politicians sometimes say. There are two questions: Why involve Republicans in budget negotiations this time around? And why do Republicans want to be involved in budget negotiations? The non-cynical answer to the second question is pretty straightforward. Republicans want to be involved for the same reason they wanted to be involved in previous budget negotiations; they want to leave their mark on the budget. Previously, they were locked out; a tax and spending spree followed. A budget – the national government hasn’t had one for four years – is a destiny-plan that marks the boundaries of the future. It also marks the limits of political power. What politician elected to represent his constituents would not want to be involved in mapping their future? Mr. Malloy froze out Republicans when producing his first budget because he needed a sizable, broad based tax increase, and Republicans wanted spending cuts. Without Republicans in the room, it was an easy matter for Mr. Malloy in negotiations with unions to strike a deal that then Senator Edith Prague characterized as so favorable to unions they would be insane to reject it. To this day, Malloyalists insist that Malloy’s spending cuts were sufficient. In his state of the state address Mr. Malloy said, “We came together and passed a balanced budget. We cut more than we added in new revenue.”

Three misrepresentations in a 17 word self-congratulatory pat on the back may be a record in political dissimulation. How Republicans in the audience, shown the door when he budget was being assembled by Mr. Malloy in concert with union representatives,must have winced at that “we.” The governor’s first budget very likely has never been in balance, and the notion that the Malloy administration cut more than it added in revenue doesn’t pass the “Do you think I was born yesterday?” test.

“It’s not true – nor did they reduce salaries” of state employees, said Sen. Rob Kane, the ranking Senate Republican member of the budget-writing appropriations committee.

Some editorial boards appear to be catching on. Here is a whiff of grapeshot from the Day of New London:

“Yet the governor now finds himself boxed in by some of the deals he struck to address the $3.5 billion deficit projection he inherited when elected in November 2010. The Democratic governor did win concessions from state labor unions, but they came at a hefty price. Workers in place when the concession deal was signed have been assured they will not be laid off. After a two-year pay freeze, the deal also provides state workers substantial pay raises in each of the next three fiscal years.”

Mr. Kane and other Republicans should be viewed as Mr. Malloy’s spending speed bumps – the spending “firewall,” preceding Republican governors, has entirely disappeared -- which is why Mr. Malloy did not involve Republican leaders in the General Assembly in constructing his first perpetually imbalanced budget. Mr. Malloy wanted to raise taxes and did; Republicans wanted effective and proportionate cuts in spending. Someone had to leave the room.

Will things be different in the New Year?

We have Mr. Malloy’s repeated avowals that he has no intention of raising taxes further. He will need Republican support to realize savings in his next budget. At some point, Mr. Malloy either will or will not cross the Rubicon and march on Rome. There are some indications that Mr. Malloy will not spare Municipalities this time around. When the head of the governor’s Office of Policy Management, Ben Barns, said offhandedly that cuts to municipalities would not be taken off the table in upcoming budget plans, members of the Connecticut Conference of Municipalities (CCM), a body that represents the state’s municipal officials, began rending their garments and pouring ashes on their heads. That hint suggests the governor, this time around, might be serious about spending cuts. As they say in the news business– We’ll see.

And the real state of the state is?

Bordering on beggary. On the opening day of the legislative session, the Yankee Institute, a glowing candle in Connecticut’s dark night, took out full page advertisements in four major Connecticut newspapers. “We aren’t just doing worse than average, Executive Director of the Institute Fergus Cullen said, “We are doing theworst." Here is the Institute’s list of lasts.

Connecticut’s List of lasts

• Barron's rated Connecticut's debt situation as the worst in the country in 2012
• TopRetirements.com ranked Connecticut as the 2012 worst state for retirement
• The Institute for Truth in Accounting ranked Connecticut's financial status as the worst in the nation with a debt burden of $49,000 per taxpayer
• Connecticut's credit quality was ranked 50th in the nation by Conning Inc.'s State of the States Municipal Credit Research Report in 2012
• Connecticut's Tax Freedom Day of May 5, 2012 was the latest in the nation according to the Tax Foundation
• Connecticut's Achievement Gap is the worst in the nation according to the Connecticut Council for Education Reform
• The Fiscal Policy Report Card on America's Governors by the Cato Institute gave Malloy an "F"

"On the first day of the Legislative Session,” said Mr. Cullen, “we are calling on the General Assembly to address the state's financial challenges by reducing spending and adopting pro-growth tax policies to move Connecticut from last to first."

It really is becoming difficult to keep the bad news under your hat.

The Surplus State

Zach Janowski, the Yankee Institute investigative reporter singled out by incompetent SEBAC leaders in their baseless complaint to the attorney general’s office as a “so called” investigative reporter, has disclosed in his latest report that Connecticut has collected “$1.1 billion more taxes than expected last fiscal year, the same day that Gov. Dannel Malloy’s $900 million retroactive income tax increase went into effect.”

Although the Malloy administration failed to reach by some $400 million the $2 billion in cost savings measures it initially had demanded from SEBAC, the coalition of state unions authorized to negotiate contracts with the administration, the tax increases the administration imposed upon nearly everyone in the state as a part of its “shared sacrifice” effort has, perhaps unsurprisingly, yielded an “unexpected” surplus.

The Malloy surplus, made possible in part by an ex post facto income tax charge, should not astonish those commentators in the state who have previously reported on state budgets. Surpluses were common in the budget years following the imposition of the Lowell P. Weicker Jr. income tax.

The predictable announcements of surpluses during these years of plenty followed an almost religiously observed rite, beginning with an declaration of a possible deficit, followed by an agonizing appraisal of the likely damage done to Connecticut’s fragile social services net should the legislature be so unwise as to insure savings necessary to balance their budget through prudent cuts, followed by a last minute announcement that an unanticipated surplus had magically materialized, obviating the need for cuts and permitting legislators to return to their districts and there proceed to hand out state distributed goodies before their next election.

This budget year, the usual dance varied, but not much, from the usual formula.

Mr. Malloy, the first Democratic governor in more than 20 years, had been wafted into office on a promise that as governor he would not resort to the same discreditable budget persiflage as his predecessors – two Republican governors and another, Mr. Weicker, of indeterminate party status -- all of whom had produces surpluses to avoid raising taxes or cutting costs.

GAAP would be instituted, Mr. Malloy vowed during his campaign, to prevent wily politicians from drawing revenue from future budgets and dragging them into the current year, while at the same time pushing costs into succeeding budgets. The state’s current Comptroller, Kevin Lembo, recently advised that the state’s antique computer system is not prepared to handle such accounting changes; which is all very well and good -- because Mr. Malloy had postponed implementation of the new accounting procedures for a couple of years. And there is no need to fudge figures in any case, because wily Democratic legislators – Big surprise here! – had embedded into the Malloy budget an artificial surplus that would relieve the pressure put upon them to cut costs.

All this spelled frustration for Republicans and others who were trying unsuccessfully to force Democrats who control the legislature to cut costs by denying them revenues. The presence of red ink in a budget usually is a persuasive spending disincentive for rational legislators. But time-serving progressive ideologues committed to wealth transfers from productive workers in the private marketplace to unionized state workers are addicted to reflexive spending. So long as the General Assembly’s table sags with surpluses, crapulous senators and house members will continue to feast on fare taken from the more modest tables of productive workers. Surpluses, which are tax overcharges, are anti-stimulants for anyone who is not a tax consumer. While prudent tax cuts – a prospect far beyond the intention of the average spendthrift politician – stimulate the economy, wealth transfers stimulate the ungovernable appetite of spendthrift politicians who, unlike the fascists of a bygone day, lack in a functioning democracy the means of making the trains run on time.

A handful of legislators in the General Assembly, Sen. Joe Markley of Southington among them, get all this.

“The enormous tax hike,” said Sen. Joe Markley of Mr. Malloy’s tax boost, “was the sad result of our addiction to spending, which we still haven’t kicked. The bigger the tax increase, the more dire its affect will be on our state economy. I’d love to see Malloy call us back and undo some of the new taxes in light of this surplus, but I don’t expect it – big-government types generally celebrate such surpluses, rather than feel ashamed of them.”

A few more Markleys in the General Assembly may save Connecticut the embarrassment of a rapid decline, followed by default.

Yankee Institute vs SEBAC, Final Round

Attorney General George Jepsen having investigated a charge made to his office by SEBAC, a coalition of unions the membership of which soon will be voting either to adopt or reject Plan A 2, that the Yankee Institute had used state the state’s e-mail system to communicate with union workers, the attorney general found that the charges against the institute were false. The comprehensive investigation by two state agencies, the attorney general’s office and the state Auditors of Public Account, Mr. Jepsen wrote in his finding, “did not show that the state e-mail system was improperly accessed or compromised in violation of state laws or policies.”

“As part of our inquiry,” Mr. Jepsen wrote, “we reviewed the e-mails sent to state employees and provided by SEBAC. The first e-mail, containing the subject line 'VOTE No twice on concessions… pass it on' was sent on May 24, 2011 at 8:07 pm from 'Lawrence Jones' to a state employee. The second e-mail, containing the subject line ‘http//votenotoconcessions.com,’ was sent to a state employee on June 13, 2011 at 8:07 pm from 'Daniel Luciano.' Neither Lawrence Jones nor Daniel Luciano is listed on the state’s central financial and administrative computer system (CORE-CT) as a state employee. Neither of these two e-mails originated from State of Connecticut internet protocol (IP) addresses. Each originated outside the state e-mail system and reflected a Yahoo e-mail address. The e-mails were sent to IP addresses leased by the State of Connecticut. State information systems security personnel informed us that the e-mails were not sent from within the state system, and there was no evidence that the safeguards in place to protect the state’s network from hackers or other intrusions were compromised or altered to permit or facilitate the transmission of these e-mails.”

Mr. Jepsen is to be lauded for not having allowed the leaders of SEBAC to use his office as a political tool for the purpose of discrediting the institute on false charges that, had they been sustained, might have succeeded in drawing public attention away from SEBAC’s botched attempt to convince rank and file union members to vote in favor of Governor Dannel Malloy’s doomed Plan A.

The same union leaders who falsely accused the institute of illegalities recently unilaterally changed union by-laws so that a previous vote on Plan A would once again be voted upon under circumstances more favorable both to Mr. Malloy and SEBAC negotiators, causing one commentator – yours truly – to note that SEBAC, having found it impossible under the old by-laws to fix a vote, had discovered a way to fix the voting process to its advantage. This kind of transparent attempt to fix a vote could only succeed if union leaders were to spew out a cloud of skunk scent to distract public attention from their own dramatic failings. The Yankee Institute, and more especially Zach Janowski, the institute’s investigative reporter, were convenient scapegoats upon which SEBAC leaders sought unsuccessfully to pin their own too obvious failings.

SEBAC’s objections to Mr. Jepsen’s finding were amusingly predictable. Leaping over the results of Mr. Jepsen’s exhautive examination, SEBAC lamented that the architecture of the state’s e-mail system “is apparently arranged so that outside groups can get around inadequate software restrictions and distribute emails through the system without being in violation of computer hacking laws -- and apparently without even being subject to detection” – and never mind that Mr. Jepsen found no instance of the state’s email having been hacked by the institute. SEBAC then noted that the institute’s political interests include “producing painful job cuts and ‘downsizing’ state government, which is really just code for privatizing public services.” In fact, Mr. Cullen has noted that the institute favored Plan A  – the very same plan promoted by SEBAC union leaders – over Plan B, which recently has been implemented by Mr. Malloy and includes painful cuts. No doubt the institute, along with many governors and legislators, favors the privatizing of public services as a means of controlling unsustainable costs. SEBAC’s objection to the institute’s view on privatization might have been more justly urged in a letter to the editor; SEBAC thought it rose to the level of a crime and engaged the attorney general as an instrument to harass and punish an organization for having taken advantage of its constitutional right disagree with the leaders of SEBAC.

Yankee Institute Director Fergus Cullen commented following Mr. Jepsen’s finding, “Making reckless accusations without a shred of evidence damaged the union's credibility. Rank-and-file state employees deserve better for their dues than the stunning incompetence of union staff throughout the concessions ratification process."

Mr. Cullen made his comment but a few hours before he had been told by Trinity College that the institute was being given the boot or, as Mr. Cullen, whose sense of humor is unfailing even in trying circumstances, preferred to put it – being expelled – from the Trinity College campus in Hartford where, for the past 13 years, the institute has stoutly defended educational institutions, private enterprise and constitutional rights more often miss-cited than observed by its detractors. It is not known what part SEBAC or union friendly legislators may have played in the institute’s unexpected expulsion from Trinity.

SEBAC Says News Media, Managers Sources Of Inaccurate Information

In a message to all its rank and file members, SEBAC, the coalition of union leaders authorized to dicker with the Malloy administration on contractual matters, reported:

“At the request of State Employees Bargaining Agent Coalition (SEBAC) union leaders, the Malloy Administration has moved to address conflicting information disseminated to some workers who recently received notice of layoff.”

Some members, according to the notice, have received inaccurate information spread – not by the Yankee Institute, which SEBAC reported to the attorney general’s office for having compromised it’s e-mail system – but “by news media sources and by some agency managers.” Attorney General George Jepsen a few days ago released a report finding that the SEBAC complaint was without merit.
“The directive was necessary,” SEBAC reported on its propaganda site, “because not only have some state managers disseminated inaccuracies about rescinding layoffs, many in the news media have reported myths and distortions about state employees and the tentative agreement.”

Mr. Malloy obliged by supplying a clarifying statement sent by SEBAC to rank and file members who will shortly be voting on Plan A2.

Although the SEBAC site still carries the item reporting its request to the attorney general that the Yankee Institute be prosecuted for having illegally commandeered the state’s e-mail system in order to ventilate its views, the site does not include in full Attorney General George Jepsen’s finding, but then propaganda sheets are not bound by the constraints of responsible journalism.

Attorney General Clears Yankee Institute of SEBAC Charges

Attorney General George Jepsen’s statement concerning a complaint filed with his office claiming falsely that the Yankee Institute obtained improper access to the state e-mail system to disseminate false information related to the tentative SEBAC agreement is here printed in full:

STATEMENT BY ATTORNEY GENERAL GEORGE JEPSEN

REGARDING SEBAC COMPLAINT ABOUT E MAILS

By letter dated June 17, 2011, representatives of the State Employees Bargaining Agent Coalition (SEBAC) requested that my office investigate possible violations of state law by the Yankee Institute. The letter alleged that the Yankee Institute obtained improper access to the state e-mail system to disseminate false information related to the tentative SEBAC agreement. We have now, in conjunction with the Auditors of Public Accounts, concluded our inquiry of this matter. We have found no evidence that the state e-mail system was improperly accessed or hacked.

As part of the inquiry, we met twice with representatives of SEBAC. We reviewed the e-mails brought to our attention by SEBAC, and certain other e-mails critical of the proposed settlement brought to our attention by others. We also worked with the former state Department of Information Technology (now a part of the Department of Administrative Services) to determine whether any of these e-mails had been transmitted to the state e-mail system through a breach or violation of that system, and whether there was any other evidence of a breach of the state e-mail system in connection with communications to state employees regarding the proposed settlement.

As part of our inquiry, we reviewed the e-mails sent to state employees and provided by SEBAC. The first e-mail, containing the subject line “VOTE No twice on concessions..pass it on” was sent on May 24, 2011 at 8:07 pm from “Lawrence Jones” to a state employee. The second e-mail, containing the subject line “http//votenotoconcessions.com,” was sent to a state employee on June 13, 2011 at 8:07 pm from “Daniel Luciano.” Neither Lawrence Jones nor Daniel Luciano is listed on the state’s central financial and administrative computer system (CORE-CT) as a state employee. Neither of these two e-mails originated from State of Connecticut internet protocol (IP) addresses. Each originated outside the state e-mail system and reflected a Yahoo e-mail address. The e-mails were sent to IP addresses leased by the State of Connecticut. State information systems security personnel informed us that the e-mails were not sent from within the state system, and there was no evidence that the safeguards in place to protect the state’s network from hackers or other intrusions were compromised or altered to permit or facilitate the transmission of these e-mails.

In the course of the investigation, we uncovered information about additional e-mails that were critical of the proposed union agreement and sent to state employees. Some of these e-mails originated from IP addresses outside the State of Connecticut system; other e-mails were sent by state employees from their state computers and addressed to other state employees. We found no evidence that these e-mails were transmitted in circumvention of the safeguards in place to protect the integrity of the state e-mail system.

SEBAC complained that negative information about the tentative agreement was sent to state employees through “blast” e-mails, suggesting state software settings were circumvented. State information systems security personnel found no evidence that anyone sent “blast” e-mails concerning the tentative SEBAC agreement from outside the state e-mail system to hundreds or thousands of state employees in a single mailing and no evidence that security measures were bypassed.

With some limitations, individuals outside state government have the right to e-mail state employees. Here, because there was no evidence that state laws or policies were violated, i.e., no evidence to substantiate that the state e-mail system was compromised, hacked, or used without authority, we did not pursue the investigation further to attempt to determine the identity of the outside senders or consider the allegations that the e-mails contained false information.

In the course of our investigation, we noted that some individual state employees had used the state e-mail system to broadcast opinions about the proposed settlement in possible violation of state and agency policies about acceptable use of the state e-mail system. The relevant state agencies promptly addressed the conduct. Generally, state agencies, in accordance with their personnel policies, can and should continue to address any alleged misuse of the state e-mail system by state employees.

Our review of the e-mails provided by SEBAC, and other selected e-mails that originated from IP addresses outside the state system, did not show that the state e-mail system was improperly accessed or compromised in violation of state laws or policies. Therefore, based on the evidence to date, and with the agreement of the State Auditors, I am closing the investigation.

###

(Note: The Attorney General will not be commenting beyond the statement.)

Three Notes On The Current Crisis

The unilateral changes in by-laws


It may be noted that what has been done unilaterally by the union leadership may be undone unilaterally by a different leadership.

Despite a desperate attempt by SEBAC negotiators Dan Livingston and Matt O’Connor to pin on such convenient scapegoats as the Yankee Institute  their dramatic failure to sell plan A to union rank and file members, some unions, dissatisfied with SEBAC representation, are now shopping around for other unions with which they might affiliate. In mid-June SEBAC leaders charged the Yankee Institute had improperly used the state’s e-mail system to communicate with union members and referred their dark suspicions to Attorney General George Jepsen, Connecticut’s version, under the state’s previous Attorney General Richard Blumenthal, of poet Francis Thompson’s “The Hound Of Heaven.”

SEBAC leaders, working in tandem with Plan A salesmen in the administration of Governor Dannel Malloy, unilaterally changed union by-laws to reduce to 50 percent the votes necessary to pass Plan A after it had been rejected under previous inconvenient by-laws.

This change, since it entailed a re-do of a previous vote rejecting Plan A, has not gone down well with many rank and file union members. The re-do vote under altered by-laws rankled the 43 percent of union members who initially voted against Plan A.

Passage of Plan A is virtually assured under the new by-laws unilaterally adopted by SEBAC leaders following the first unsuccessful vote. The re-do vote and by-laws change also have alienated the affections of some union members who initially voted affirmatively to adopt Plan A and regard the by-laws change as an undemocratic attempt to void a legitimate voting process without seeking to affirm the changes though a rank and file membership vote. If you can’t fix a vote, the next best thing is to fix the process that governs the vote. The unilateral change in by laws is viewed by many union members as an attempt to fix a vote by other means and, as such, it is likely to have lasting repercussions.

In the next three weeks, according to a story in the Hartford Courant, members of the 15 unions comprising SEBAC will be voting on re-drafted barely revised Plan A. But just as some pigs are more equal than other pigs in George Orwell’s Animal Farm, so here some votes are more equal than others.

While the new tentative agreement will be presented to the full membership of some unions, some union leaders, Mr. O’Connor wrote on the union’s website, “are planning to have elected leadership cast their union’s vote because there are no negative changes in the revised TA as compared to the previous agreement.” In this tortured sentence, Mr. O’Connor appears to be saying that if a union voted to affirm Plan A, individual members of such unions will not, on a redo vote, be given the opportunity to change their vote from affirmative to negative.


The Closed Doors Of A Putative “Transparent” Administration

Candidate for Governor Dan Malloy promised voters a transparent administration. The budget process this year falls far short of transparency. In previous administrations, the budget shuttle cock was batted in public between two parties, one of which, the Republican Party, controlled the executive office first under Governor John Rowland and later under Governor Jodi Rell.

The political tension between Republican governors and the Democratic controlled General Assembly insured a certain degree of transparency. While it is true that Republican governors often stiffed Republican leaders in the General Assembly while making private deals behind closed doors with Democratic leaders, the party bifurcation nevertheless allowed budget negotiations between the two parties to be ventilated in Connecticut’s left of center media.

With the election of Dannel Malloy as governor, the crack in the door was permanently sealed shut. When reporters during the current budget negotiations asked their usual sources within Republican Party ranks what was going on behind the caucus closed doors, they replied, truthfully, that they knew no more than had been reported in the press. And the press knew nothing.

Negotiations between Malloy administration officials and SEBAC were just as impenetrable. Following Mr. Malloy’s elevation to the governor’s office, an iron curtain had been rung down on what the media in other administrations had denominated “the public’s business.” But this is how the one party state operates; closed doors give the current administration an insuperable propaganda advantage.

Union resistance to the autocratic rule of the union-administration-media-complex is but a crack in the concrete through which, given time enough, a blade of grass may sprout. The blade, one may be certain, will be reported to the attorney general’s office.

Malloy As Prometheus

Prometheus was the god in Greek mythology punished by Zeus for having brought the gift of enlightenment to men. Similarly, Mr. Malloy brought the gift of Plan A to state unions – breathes there a commentator who has not said, multiple times, that Plan A was a boon to unions? – and this gift was rejected, Mr. Malloy having been stretched on a rock outside the portals of heaven, his liver to be torn by the sharp beaks of eagles. Now he has been saved. Mankind’s tears have been turned to shouts of joy. Such is the narrative we can expect to see piped by successfully propagandized media adepts in the next few weeks – when, in fact, it is the state itself stretched on the rock waiting for a ravenous eagle to drink its wise blood.

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.

A Map Of State Politics

Heath Fahle, associated with the Yankee Institute, has done a splendid job mapping the possibilities for Republican gains in the General Assembly. If you want to climb the mountain, you have to map the terrain. This is the map. Have a Look.

Under the watchful eye of Christine Stuart of Connecticut News Junkie, some good reporting may still be found in a state in which newspapers have reduced staffs to dangerously low levels.

OMG, Yankee Did It

The Yankee Institute, the premier conservative-libertarian think tank in Connecticut, has provided a new tool – a web Sherlock Holmes that allows political watchdogs to monitor spending in the state – that will make it less possible for entrenched politicians to fool all the people all the time.

The website, titled appropriately CTSunlight.org, is “an electronic tool constructed by the Yankee Institute for Public Policy – so that the citizens of Connecticut can look at every line item of state government spending and discover how OUR tax dollars are being spent by the people in Hartford.”

The site provides three windows – Payroll, Pensions, and Checks to Businesses & People – that allows concerned citizens, reporters and politicians to view every dollar spent by state taxing authorities in Connecticut.




And, yes, you can find out how much Joe Blow, now retired from Three Rivers Community College, makes per year in his retirement pension, or how much Jim Amann (“position not disclosed”) makes in annual salary.

Happy hunting, and have fun. They're YOUR tax dollars.