Sullivan Laughs, McKinney Gags

Last Year the state – i.e. Governor Dannel Malloy and majority Democrats in Connecticut’s General Assembly -- decided to end its long-time practice of sending out paper checks for tax refunds. The state decided instead to use refund cards for a variety of purposes, including the refunding of tax over-payments.

When state Senate leader John McKinney, now a Republican gubernatorial hopeful, called for a hearing on the change, autocratic Democrats snickered that a public hearing was quite unnecessary. Indeed, the Republican Party, it would seem, was quite unnecessary. Go away.

It turns out that some data in the cards has now been exposed to possible identity theft. About 14,335 accounts have been breached, and State tax commissioner Kevin Sullivan, who once served in the state Senate with Mr. McKinney, is still snickering.

Mr. McKinney once again has called for a hearing, this time on the breach of private information, including social security numbers and other data that those affected by the breach would rather not share with potential criminals. Mr. Sullivan has responded, “Senator McKinney wants to have a hearing on everything, and I appreciate that his gubernatorial campaign needs [publicity]. His response to everything is to have a hearing.’’

Naturally, Democrats such as Mr. Sullivan, who now control all the levers of state government – including the governor’s office, both houses of the General Assembly, committee chairs and appreciative judges– are hearing shy, because public hearings tend to shine a spotlight in dark corners and prevent autocratic Democrats from hiding political dirt under their rugs. Progressive experts especially would rather banish from the halls of power taxpayers and other milch cows who do not understand that governing is best left to credentialed experts in government, provided they are progressive enthusiasts and not odious members of the Tea Party.

One understands; one sympathizes. In a one party state, the governing class can well afford to overlook such democratic measures in support of ethical government as public hearings and bi-partisan legislatures. The governing autocrat does not appreciate eyes – hostile eyes at that! – peering over his shoulder when he wants to slip one by alert members of the General Assembly, or reward with an unexamined contract someone who may contribute generously to his campaign, or stave off an annoying question put to him by a wide-awake reporter not yet in thrall to the prevailing regime.

Mr. Sullivan has advised Mr. McKinney that any problems arising from the selection of JP Morgan Chase as a business agent responsible for the hacked accounts will be settled, so to speak, in-house. The legislature, so far, has not been involved in crafting the public’s business; why complicate matters by insisting on a public hearing now?  

Following Mr. Sullivan’s too hasty rejection of Mr. McKinney’s call for a legislative investigation, Mr. McKinney noted he had sent a letter to Mr. Sullivan and state Treasurer Denise Nappier: “If Commissioner Sullivan is afraid to come before the legislature and answer questions, I would hope he would answer the questions I sent him in the letter. It is certainly not in keeping with an administration that claims to be open and transparent. The old cliché is if you have nothing to hide, why don’t you come out and talk about it?’’

Why indeed? A frank and unvarnished answer to Mr. McKinney’s question might run as follows: 1) Mr. Malloy has made it clear from the beginning of his administration that minority Republicans are not to play a significant role in the state’s new one party government, a message first pressed upon Republicans when Mr. Malloy shooed them from the room during budget negotiations with Connecticut’s fourth branch of government, public employee unions; 2) public hearings are unnecessary in any progressive government that relies chiefly upon “rule by a body of experts,” most of whom are engaged in refashioning the state along lines acceptable to enlightened progressives; 3) in case non-progressives in Connecticut’s new one party state are having some difficulty in deciphering the operative rule of the Malloy administration, it is this: Everything in the progressive state; nothing outside the progressive state; nothing above the progressive state. Is that clear enough?

But, of course, Mr. Sullivan and other Malloyalists may wish to dress up their messages in more acceptable rhetorical garb – furnished, as usual, by such experts as Mr. Roy Occhiogrosso, Vice President of Global Strategy and Mr. Malloy’s flack catcher in waiting.

Bonding, The Budget And Corporate Welfare

When Mark Twain said ““Never put off till tomorrow what may be done day after tomorrow just as well," he might easily have been talking about bonding.

Usually a state sells bonds to pay for long term capital projects. But like any political practice, the selling of bonds may be subject to abuse. The use of bonding to pay off current expenses that ought to be discharged through tax increases or spending decreases is considered a “no, no” among agencies that rate state bonding. The practice, however, is a “yes, yes” among politicians who want to avoid either the unpleasant option of raising taxes or the equally unpleasant option of cutting spending. The beauty of bonding for such politicians is that it allows them to escape the wrath of voters who understandably resent tax increases imposed to pay for current budget expenses and improvident spending. The downside to bonding abuse is that current expenses are carried into the future, a benefit for cowardly politicians charged to the future generation on a “buy now pay later” plan.

Bonding puts off until the day after tomorrow payment for obligations that ought to be met today by those responsible for incurring debts.

Bonding for current expenses was one of Mr. Malloy’s bêtes noire when he was running for the governor’s office, and a change from a modified cash basis system to a Generally Accepted Accounting Principles (GAAP) system was the candidate’s answer to budgetary skulduggery that had led to unmanageable budget deficits.

Pointing to the delinquencies of his two Republican predecessors, Mr. Malloy was compelled, he said, to institute the largest tax increase in Connecticut history, second only to the tax increase that followed Governor Lowell Weicker’s income tax. Requiring revenues under GAAP to be counted in the year they are received necessarily created a budget differential of some $1.2 billion. Initially, Mr. Malloy had planned to bridge the gap through budgetary savings. The recovery that Panglossian Democrats in the General Assembly hoped might flood the state’s treasury with sufficient funds to pay down the differential never materialized, and Mr. Malloy now has decided to pay down the $1.2 billion gap through bonding. The funds generated through bonding will be dedicated to this purpose unless, according to one news account, “there’s an emergency,” in which case the money may be used for some other purpose following a three-fifths vote in the Democratic dominated General Assembly. It is not unheard of for governors in Connecticut to declare budget emergencies. 

During the fag end of the last legislative session, the Democratic dominated General Assembly ordered Connecticut State Treasurer Denise Nappier to borrow $750 million to facilitate the conversion to GAAP.  The decision to borrow rather than saving the money to pay down the differential will cost the state more than $200 million in interest over the life of the bonds.

The Malloy bonds naturally “improved” the state’s cash flow and, for the first time in many moons – prior to the elections too -- state Comptroller Kevin Lembo was able to predict a small budget surplus.  Cash flow is improved whenever taxes are increased or bonding is used to generate funds that are not made available in a depressed economy.

No political skullduggery here – just business as usual in a state addicted to chronic spending.

On the Republican side of the political barricades, Mr. Malloy’s decision to pay for the  differential by bonding rather than by the means he had first settled upon – save money in the state’s piggy bank and use it to convert to GAAP – produced  a forceful objection from Republican Party gubernatorial hopeful  John McKinney.

“Appropriating real dollars to reduce the state’s GAAP deficit,” Mr. McKinney said, “would have been an honest and direct way of dealing with the problem, and I would have supported those efforts. But that’s not what the governor is doing. Instead, he is borrowing in order to kick that commitment down the road another two years.”

For Democrats, GAAP has become the equivalent of a budget chastity belt. However, it is never an adjustable belt that assures chastity. A chastened big spender would understand that budget deficits are caused by the disposition to spend. And there is little or no acknowledgement among members of Connecticut’s spending class that spending must be curtailed or that excessive regulation – which always drives up business costs – must be pared back. Everywhere, big spenders await the “rising tide that will lift all the boats,” an expression employed by President John Kennedy in his well-known speech to the Economic Club of New York in 1962, in the course of which Mr. Kennedy said:

 “The final and best means of strengthening demands among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system – and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.”

Mr. Malloy has instead used what little money he found in Connecticut’s debt ridden budget to advance a destructive crony capitalist program, which involves giving rare tax dollars to companies he bribes for the pleasure of doing business in the state, including profitable mega-companies or smaller companies that use abused taxpayers to finance their moves from one town to another.

Lifting all the boats is not a progressive specialty, and it is doubtful that John Kennedy could be elected dog catcher circa 2014 anywhere in progressive, crony capitalist Connecticut.

Cooking The Books The Malloy Way

Charming how Connecticut, whenever the state dips its toes into a budget crisis, tends to cook the books.

During his first gubernatorial campaign in 2010, Governor Dannel Malloy campaigned on a platform to adopt real world accounting measures so that the accounting sins of preceding governors – two of them Republicans and the third a “Maverick”Republican – would not be visited on Mr. Malloy or succeeding governors, yea, even to the third generation.

That was what Generally Accepted Accounting Procedures (GAAP) was all about. Connecticut’s modified cash basis system, an accounting method full of blue smoke and mirrors, had played havoc with state budgets, the governor and his Malloyalists said. Adopting GAAP would end what one reporter at the time called “an array of accounting gimmicks that have pushed current expenses into future years.” No more budgetary sleight of hand, the governor strongly implied in his public statements.

When Mr. Malloy first presented his plan to transition to GAAP at a Connecticut Society of Certified Public Accountants gathering at the Aqua Turf in Southington in May, 2011, “Three hundred Certified Public Accountants applauded when Malloy described his first executive order which requires the state to transition to Generally Accepted Accounting Principles, or GAAP,” according to one account.

At the point when GAAP was ready for launching, it was discovered that Connecticut would need about $75 million to fuel the rocket. The state, then suffering a budget deficit of about $285 million, did not command sufficient surplus funds to get GAAP off the launching pad, and the project was put on the back burner for five months. The differential between GAAP and Connecticut’s modified cash basis system at the time was about $1.7 billion – not pocket change – and the state needed the $75 million to cover inflation and retain the deficit at $1.7 billion. The first budget bill signed by Mr. Malloy allowed for a 15-year plan to pay off the GAAP differential, starting in the 2013-14 fiscal year.

Connecticut could not afford the down payment on GAAP, the first payment tied to the GAAP conversion having been sacrificed to pay for a then current budget deficit and, for all practical purposes, the GAAP conversion was indefinitely postponed last May.

As the French say, plus ça change, plus c'est la même chose: the more things change, the more they remain the same.

A few weeks after recent elections had been concluded in Connecticut, some gremlin deep within the Malloy administration discovered that the state budget was out of balance by about a half billion dollars; this after Mr. Malloy had reached deeply into the pockets of Connecticut’s citizens -- who regularly vote Democratic in the state by a margin of two to one -- and pulled out about one and a half billion dollars in new taxes to defray his first deficit in his first unbalanced budget.

Not to worry: Democratic President Barack Obama was in charge, and it was felt that under his hand the national economy would once again bloom, following the Bush blight. Similarly, Connecticut’s economy would flower under the hand of Mr. Malloy, who pledged to re-invent the way state government does business.

Didn’t happen. A government that spends beyond its means is sooner or later slated for the poor house.

According to a recent report, “cascading financial problems,” a poetic analogue indicating the newly discovered $415 million state deficit and other distressing economic shortfalls,“became even more complicated when Republican members of the Assembly found that an additional $260 million borrowed for long-term capital projects had been moved to the monthly cash pool to pay for operating expenses.

“The $260 million was transferred by Treasurer Denise Nappier on Monday, the same day she announced that as of the end of November, $366 million in bonding funds had been transferred to the cash pool because of low balances driven mostly by the growing shortfall in the budget. That gap ranges from $365 million to $417 million.”

Not quite as eupeptic as some other Malloyalists, Ms. Nappier has also taken other necessary precautions: “Nappier also announced that because of a ‘significant decline’ in the cash pool, she was establishing lines of credit with banks totaling about $550 million -- in case more money was needed to float monthly expenses.”

Ms. Nappier evidently is not a student of Mr. Malloy’s early campaign speeches.

The lede in the report covering the smoke and mirrors pretty much says it all: “The state turned to some creative accounting Wednesday to help pay the bills, raising concerns among minority Republicans in the General Assembly.”

Ah yes, creative accounting is back.

Ms. Nappier’s announcement that she has transferred $366 million in bonding funds to an exhausted cash pool designed as a hedge to keep the state’s head above its red ink, a deficit of $415 million announced during the post-election period by Comptroller Kevin Lembo, has bestirred Republicans.

For seven months in the last year, Ms. Nappier has used capital accounts to pay monthly bills totaling $1.6 billion.

"We're going month-to-month, borrowing money out of bond proceeds, and it's just getting progressively worse," said Republican leader in the House Larry Cafero. "I don't understand how the governor can say it's not a big deal."

It’s a big deal.

Nappier Harpoons Malloy

State Treasurer Denise Nappier points out in a letter to the Journal Inquirer important differences between her view on expanded bonding authority and that of Governor Dannel Malloy.

In the course of her letter, Ms. Nappier shoves a boney finger in the governor’s chest and warns, “… when legislation is enacted that will result in unnecessary additional costs of issuing state bonds, and may jeopardize investor confidence in our bonds, it is my duty as state treasurer to speak out against the measure and urge corrective action."

Mr. Malloy wants expanded bonding authority for the Connecticut Health and Educational Facilities Authority. Ms. Nappier wrote that she had always supported the consolidation of two quasi-public authorities, the CHEFA and the Connecticut Higher Education Supplemental Loan Authority, and she heartily agreed with the governor that the consolidation would enhance efficiency. “However,” she writes, “CHEFA’s new authority to issue bonds for UConn is unnecessary, costly, and may confuse investors and undermine their confidence in existing UConn 2000 bonds.”

Apparently, Ms. Nappier had shared her misgivings with Mr. Malloy to no avail.

The new bill just signed into law establishing a new bonding process is, Ms. Nappier stresses, “duplicative of what has been in place for 17 years, and that will surely cost taxpayers much more than what the treasury, as the public financing arm of the state, has provided. Higher costs would result from CHEFA’s administrative fees, as well as likely higher interest costs. Based on comparisons we have done, this new duplicate process could result in additional expenses of more than $8 million on a typical $200 million financing.”

The original UConn 2000 program, Ms. Nappier notes, as initially proposed was a 10-year, $1.25 billion venture. However, the program had been extended a few times, ballooning the cost to $2.5 billion over 23 years. Partnering with the university, Ms. Nappier’s office has issued almost $1.9 billion in new money bonds to sustain the program.

Bonding legislation, Ms. Nappier points out, is exceedingly complex and subject to change. Mr. Malloy and the Democratic dominated General Assembly, Ms. Nappier asserts, ignored “serious implications for expanding CHEFA’s bond-issuing authority.

“This begs the question: Why did the treasury’s attempt to call attention to another ill-advised and poorly crafted provision to grant CHEFA new authority to see UConn bonds fall on deaf ears?

“Simply put, when legislation is enacted that will result in unnecessary additional costs of issuing state bonds, and may jeopardize investor confidence in our bonds, it is my duty as state treasurer to speak out against the measure and urge corrective action.”

Ms. Nappier had advised Mr. Malloy of the legislation’s shortcomings, which he and legislative gate keepers in the General Assembly chose to ignore.

In her letter, Ms. Nappier washes her hands of the predictable consequences: “That the governor chose to ignore my advice will be at his doorstep.”

Republicans are somewhat astonished – though delighted -- by Ms. Nappier’s very public quarrel with Mr. Malloy. Republicans, shooed unceremoniously out of the room when the governor’s office was hammering out its budget with Democratic Party leaders and union officials, have yet to suggest that the governor had loftily ignored the treasurer’s seemingly sound advice because he may have thought she was a Republican.

Vivian Rockwell Nasiatka Interview

This interview with Vivian Rockwell Nasiatka took place over a few days. As I was preparing to cast it into stone on Connecticut Commentary, the Washington Post ran a story on a Federal Reserve Bulletin that was profoundly discouraging.According to the report,“the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were back in 1992.” The recession has left its mark upon us all. It has lingered so long because the fire brigade that was supposed to douse the flames instead, in the immortal words of former Governor Lowell Wicker, “poured gas on the fire” by boosting taxes. Less spending certainly would have helped to boost Connecticut’s prosperity. Instinctively, we know that business, rather than government, is the best economic pump primer. Instinctively, we know that redistribution of wealth does not increase wealth. In moving money from the real economy to government coffers, we are taking a bucket of water from the low end of the pool and dumping it into the high end of the pool. It takes a gifted magician to convince people that the process increases the net amount of water – or wealth. Ms. Vivian Rockwell Nasiaka is, happily for all of us, instinctively wise in the ways of accounting, real estate and politics, a passion she hopes to turn into an vocation– with a little help from voters in the 64^th District who may prefer her good sense, as reflected in this interview, over the magic realism of Connecticut politicians who have, for reasons touched upon below, very nearly destroyed Connecticut. She is living proof that the Democrat’s war on Republican women (and men) ultimately will fail. Vivian's site is here.

Q: You are running on the Republican ticket for the 64th House District, which has undergone a redistricting change. The District, which used to include Salisbury, Sharon, Cornwall, Goshen, Canaan (Falls Village) and about half of Torrington, now includes all of Kent, about 1/3 of Goshen and a smaller chunk of Torrington. How will the changes affect Republican prospects in the District?

A. On the surface, it should help as Kent, Norfolk, Canaan and North Canaan are currently represented by Republican Representatives Richard Smith and John Rigby. Representative Willis is not an unknown name within those towns and being an incumbent is always an advantage. However, those towns have also been long-time supporters of fiscal conservative State Senator Andrew Roraback who has a voting record for fiscal responsibility that is a standard to which Rep. Willis doesn’t come close. And she can’t hide from the fact that she has supported every single bill and act that Gov. Malloy and her Party has passed that increased taxes and state debt. I am clearly more in Senator’s Roraback’s mold when it comes to fiscal responsibility, which will give the voters in these towns a very clear choice this November.

Q: The District has been represented for five terms by Roberta Willis, a Democrat much taken with Governor Dannel Malloy’s agenda for the state. As you know, she is the host of Capitol Connections. In a recent broadcast, Ms. Willis praised Mr. Malloy on his budget – now balanced, she says, after years of accounting trickery. Do you agree?

A. Emphatically no. Do they give F’s anymore for failure? Actually I’ll be a little more generous and give the Governor a D for taking a harder stand with the CT Teachers Union. However, there’s little to substantiate that the Governor has turned the CT economy around, and he has repeatedly broken his campaign promise to not steal from Specific Funds for the General Fund to cover operating expenses. Winston Churchill believed there were two desirable traits for a politician. The first was to have the ability to foretell what is going to happen tomorrow, next week, next month, and next year. So in Malloy’s run for Governor, we heard a lot of good old Irish blarney filled with promises that can’t be met simply because the Democrat one party system refuses to address the problems that plague the state.

Democrat state Treasurer Denise Nappier’s June report to the Finance, Revenue and Bonding Committee reveals why Malloy gets an F on the economy. Despite Malloy’s more than $1.5 billion in state tax and fee increases ordered in May 2010, plus the Democrats’ May 2012 budget amendment increasing taxes by $2.6 billion, revenues are not coming in at the pace that was anticipated, and thus the Democrat administration is failing to achieve the budget blarney (savings) Malloy promised. Worse, Nappier stated Connecticut can expect $234 million less in tax and other revenue next fiscal year than originally forecast, and $311 million less in 2013-14. Why does it take a fiscally responsible Republican candidate to ask the question: If the economy has turned around and Connecticut is back on the road to recovery, why do Governor Dannel Malloy’s historic tax increases fail to generate as much revenue as forecast? And how long will Connecticut voters continue to allow the Democrats to keep siphoning off other state funds to keep the budget balanced?

Q: A very good question. I invite you to answer it. There is a point of diminishing returns with tax increases. As taxes increase, money that might be used by the private economy to create jobs or provide salary increases – both real job stimulants –are transferred to government coffers and made available to politicians to promote schemes some would say are unproductive. Crony capitalists love this sort of thing.

A: Sadly, too many people don’t want to see the reality of a problem that is staring them square in the face. It’s akin to the substance abuser who say’s they don’t have a problem as they continue sinking and drowning in ever increasing self-inflicted abuse. As we know, only when the addict hits rock bottom can the process of recovery and rehabilitation begin. I hope it won’t be like this for CT, but given the way people vote and give passes to the politicians would indicate this may ultimately be CT’s fate. If this is the case, then the answer to my own question is this: the Democrats will keep siphoning off funds until there are no more funds available.

It’s not unlike British Prime Minister Margaret Thatcher saying how socialists will keep spending other people’s money until there isn’t any more to spend. I think our unrestrained politicians in CT will keep taxing until there’s no longer a sufficient tax base to tax; they will have departed to friendlier states. Or they will keep properties here, pay their real estate taxes but live outside CT for 6 months and a day to avoid CT’s onerous retirement and estate taxes. I hear and see this right here in the affluent NW Corner; it’s the reality the voters and politicians won’t recognize until it’s too late.

And you’re right Don, there is definitely a point of diminishing return with taxes. Why is it the more CT’s politicians increase taxes the more taxes our state government needs to operate? Taxes are our legislators’ addiction; they more they take the more they need to feed their spending habits. And far too much of those taxes are going to fund far too many state employees. This is partially due to the influence of urban and city legislators that believe the solution to any social problem is always to throw more money at it, increase regulation and build a bigger bureaucracy to manage it. And far too many of our legislators have become professional career politicians who retain office by spreading the wealth of CT around to their constituents and union pals.

I believe there are 151 representatives and 36 senators in the state legislature. Now think about this. How do 187 legislators generate over a thousand proposed bills and acts and vote on over 550 of them during a single term? And the vast majority of these acts and bills have to do with more regulations, increasing taxes, adding more debt and giving our money away; too often to curry favor and influence with specific groups and organizations. As one of my legislator friends said, there was a time when the Legislature knew to close down and go home; most of them had dairy cows to milk. Today CT’s unrestrained Democrat legislators are milking the tax payers.

Q. Governor Malloy has an educational reform plan, a major portion of which involves an expansion of pre-kindergarten classes. Based on that recent Capital Connections video, do you agree with Rep. Willis and Cook in their plans for education and their reservations about charter schools in Connecticut?

A. It was painful to watch the video of Reps Willis& amp; Cook—two perpetuators of Connecticut's serious economic problems—pontificate about solutions; especially when it was difficult to really understand what they were trying to sell. What did come through is that they are both caught up in the liberal vortex of excessive government control in the private lives of citizens is the best solution to Connecticut's woes.

I understand the need for many parents to have childcare support in order to be able to work and make a living, but I do not believe that turning our adolescent children over to the state is better than an actively involved stay at home mom or dad. But the tragic fact is the cost to live in Connecticut today—with the highest gasoline tax and 2^ndhighest utility rate in the nation, which are just two examples of Connecticut's overtaxed citizens—require both parents to work. Too many parents can’t afford not to work, especially since Connecticut is # 1 in the Nation for Tax Freedom Day—May 5^ththis year—which is the day Connecticut’s taxpayers have finally earned enough money to pay off their total tax bill for the year. Far too many parents are forced to work for Uncle Sam and Father Malloy and then reply upon the state to raise their children. This is another reason why young people are leaving Connecticut to raise their families in other states.

Willis & Cook’s reservations about Charter schools are pure bureaucratic thinking. The facts are that between 1999 to 2009 the number of students enrolled in public charter schools more than tripled from 340,000 to 1.4 million students and the percentage of all public schools that were charter schools increased from 2 to 5 percent, comprising over 4,700 schools in 2009. This upward trend is due to success.

America also has a recent historic example in New Orleans of what Charter schools can achieve, particularly with inner city poverty level schools. After Hurricane Katrina, more than 85% that city’s schools—over 110 of them—were literally destroyed. But rather than rebuild them to old bureaucratic standards, New Orleans took the opportunity to do things differently. Today, over half of New Orleans city schools are Charter schools that are publicly authorized, funded, and evaluated, but independently operated. One benefit has been the drop from 67 percent to 34 percent of New Orleans students attending a low-performing school.

While this could be an example of a solution to Connecticut's underperforming schools, particularly in Connecticut's urban and inner cities, both Willis & Cook express serious reservations about Connecticut investing in independent Charter schools. Furthermore, they believe that Connecticut Charter school teachers who are not wholly required to be as certified their counterparts in the traditional bureaucratically run public schools, must be forced to meet all of the same certification requirements. This is a prime example of the liberal bureaucratic mindset; forced government control and more regulation and certification. Willis & Cook can’t help being what they are– controlling bureaucrats. They should take off their blinders, look at the success of independent Charter schools in New Orleans and take a long hard look to see if this is needed in Connecticut.

Q. What do you think of the Governor’s efforts to spur business activity in the state through tax credits targeted at preferred industries, grants and his“First Five” program?

A. It would have been interesting to hear the floor debate on Public Act No. 11-86, which created the Governor’s “First Five” program and learn why Senator Roraback voted NO and Willis& amp; Cook voted Yes. But again, Willis & Cook are pretty much straight party line voters for whatever the Governor wants.

Anytime a company can bring or create new jobs in Connecticut should be applauded, but the question remains to be answered - at what cost to Connecticut's tax payers? The Act requires the recipient company—and I quote the Act—“to(A) create not less than two hundred new jobs within twenty-four months from the date such application is approved; or (B) invest not less than twenty-five million dollars and create not less than two hundred new jobs within five years from the date such application is approved.” The Act doesn’t address what the penalty is if the company doesn’t invest the $25 million and then fails to create the required jobs. Furthermore, the 4^thcompany to take advantage of this program, the NBC Sports Group, received a $20 million dollar loan from the state. So if they didn’t pony up $25 million and they received $20 million there’s a net capital difference of $45 million on the backs of the Connecticut taxpayers. Hopefully in the long run the state will be revenue positive in this program. Let’s hope a watchdog tax group like Connecticut's Yankee Institute or The Federation of Connecticut Taxpayer Organizationsfollows this program’s performance.

But tax payers also need to recognize that the “First Five”program is designed to attract large-scale business employers. As far as spurring on business, it’s Connecticut's small business person or employer, which employs almost three quarters of a million workers, who needs relief from taxes and too much government regulation. According to the 2010 U.S. Small Business Administration, Office of Advocacy report, and again I quote, “Small businesses totaled 318,230 in Connecticut in 2009. They represent 97.2 percent of all employers and employ 50 percent of the private-sector workforce. Being such a large part of the state’s economy, these businesses are central to Connecticut’s health and well-being.”

If Connecticut is to ever get back on the path to prosperity, the Governor and his Democrat legislature have to stop pursuing the big media attention deals and focus on fixing what ails the state; the plight of Connecticut's real employers–small businesses. But don’t hold your breath. Until there is real change in Hartford, both small and large employers will continue to leave and our young people will follow. In fact, the Partnership for Strong Communities confirms this harsh reality reporting that Connecticut has lost a higher percentage of its 25-34-year-old population since 1990 than any other state with the exception of Maine and New Hampshire. To lose close connections between children and parents is a tragedy for Connecticut families.

Q. The governor also has claimed he intends to “reinvent” Connecticut. How is he doing so far?

A. As for reinventing Connecticut , I believe the citizens recently got to see the Governor’s true colors. The Governor’s $27 million marketing and branding campaign for the state, “Connecticut—Still Revolutionary,” recently lived up to its name when the Yankee Institute exposed Malloy and friends’ plan to borrow another $300,000 to repair the HQ building of the Connecticut Communist Party and The Worker’s weekly newspaper People's World. Imagine using our tax dollars to shelter communism right here in Connecticut!

The out-pouring of citizen outrage stopped the insanity this time, but as long as unrestrained Democrats remain in control of the legislature, and it’s been over 30 years, citizens must expect more taxes and debt. In fact, House Bill 5557 that was passed in the last legislative session, on which Roraback voted NO and yet again true blue to Malloy Rep. Willis voted YES, is a prime example of the on-going Democrat spending spree. For example, $20,000 granted to the West Indian Foundation, Inc. for a parade. $100,000 for the city of Norwich to cast a “Freedom Bell” so it can be rung on Emancipation day, and $600,000 to the Spanish-American Merchants Association of New Haven.

The Democrats believe money grows on trees in Connecticut's small towns, which is why for every tax dollar sent to Hartford, Kent for example gets back 6 cents, Salisbury gets 7 and Sharon gets just 3. Meanwhile, small town roads deteriorate and aren’t maintained as legislators like Rep. Willis & Cook, like drunken sailors, throw money for parades and bronze bells. This is the insanity the Connecticut tax payer faces. Connecticut's citizens must realize this unrestrained spending goes on in the face of massively underfunded pensions and continual increased borrowing as the state’s debt rating is downgraded.

Q. During this interview several times you have made reference to Rep. Willis’s voting in lockstep with the Democrat Party line. Can you expand on that and explain why you are against Party loyalty?

A. I am not against Party loyalty; it’s what makes for a vibrant party. But what I am against is one party rule like we have in the state legislature where partisan politics is the rule at the expense of the tax payer and employers. Let me give you an example.

CT Mirror,in a 2011 profile of Rep. Willis, reported that she cast herself as a defender of higher education against the newly elected administration of Gov. Dannel P. Malloy, who proposed and ultimately won legislation consolidating the community colleges and state university system. In March 2011, Rep. Willis said “she was lobbied by a number of administration officials, including Lt. Gov. Nancy Wyman, to approve Malloy's bill as written.” As a peace offering, Willis had her committee approve the governor's bill saying, “I am being very nice. If it was a Republican governor, I would have given the proposal a hearing, but it wouldn't have come out of committee.” That’s a pretty clear statement of partisan prejudice.

Thirty years of unrestrained one party Democrat rule that continues to spend money we don’t have is the vicious cycle destroying Connecticut. Until the voters break this cycle and stop sending people like Willis & Cook back to Hartford, Connecticut will continue to spiral down.

Q. You paint a picture that would seem to discourage people like yourself from running for office, especially against long-term incumbents such as Willis. Why are you taking up this challenge?

A. You’re right. On the surface it would seem to be an uphill battle against the Democrats that have owned both the Senate and the House for over 30 years with virtually no off-setting opposition. With no restraint, legislators like Willis &Cook have corrupted Connecticut’s once proud reputation as the “Land of Steady Habits” and made it the “Land of Steady Tax & Debt Increases.” But in fact there is light at the end of the tunnel. You probably know that Republican voter registration in Connecticut is at an all time historic low of 20%. But in the 2010 election just two years after going deep blue for Obama, the Republican Party won 15 additional seats in the 151 seat General Assembly. This significant 10% gain was the direct result of disillusioned Democrat and Unaffiliated voters deciding to restore fiscal common sense and accountability to our struggling State. Connecticut voters aren’t stupid. Once they understand the fiscal and economic facts that define Connecticut as one of the worst states in the nation, they will vote for fiscal responsibility, which typically means voting for a Republican candidate. I am that candidate.

I’m taking up this challenge because I love Connecticut. From our mountains to our shoreline, Connecticut is abundantly blessed with resources that offer the promise for a rich quality of life. As the gateway to New England with easy access to Boston and Manhattan, we should be a state that attracts businesses from across the nation. But the reality is we are failing to deliver this promise as our one party legislature squanders Connecticut's resources. We were once one of the greatest states in the nation and we can be again. But there needs to be real change in how we go about doing this.

Q. What makes you believe this transformation can happen in Connecticut, which remains a highly unionized non right-to-work state where the unions and Democrat party have a close working and mutually supportive relationship?

A. Again, you have to dig below the surface to see what could be for Connecticut. But you’re right, the Democrat Party and unions—over 32 in Connecticut—have a far too cozy relationship. This was exemplified in Gov. Malloy’s recent coercive executive order that paved the way for the forced unionization of Connecticut's in-home health care workers, most of whom are woman. Because these in-home caregivers are paid, in part, through a subsidized state program, some of the union dues these workers are forced to pay will undoubtedly be funneled back as political contributions to union friends in the Connecticut legislature that made this scheme possible. For the record—yet again—Representatives Willis & Cook voted YES to this forced unionization scheme while Senator Roraback voted No.

But don’t believe that everyone in a union wants to be there. In fact, the recent Wisconsin recall vote proved otherwise. Once Wisconsin’s union members were free to choose to remain or leave their union, over 50% of them left! In some unions, it's been even higher. There is no doubt in my mind that given the same choice in Connecticut something similar would happen. While Union bosses can tell their members how to vote, in the privacy of the ballot booth those members have free choice and they are voting differently. This is why the Card Check process in union votes where union bosses get to see how the worker voted is so corrupt. To reiterate, the voters aren’t stupid. This is why the Republicans increased their seats in the General Assembly by 10% and I expect this trend to continue in 2012.

Q. You say that Connecticut government has gotten too big. How do you define that and what could you do as a legislator to reduce the size of government?

A. Remember that Connecticut government—and its employees—produce little to nothing tangible that contributes to Connecticut’s Gross Domestic [State] Product. Their primary role is to collect 378 taxes and fees to pay government workers, fund pension plans, cover operating expenses and wisely re-allocate the surplus for the benefit of the people. With our taxes, State government has grown to be one of the largest employers in Connecticut. There are a lot of differing numbers thrown around by the Malloy administration as to the number of state employees, so I rely upon theConnecticut Department of Administrative Services’ 2010-2011 Report (see pg 25).

In 1975, Connecticut had 45,000 state employed workers. According to the Department of Administrative Services, today it takes 87,761 full-time and 13,291 part-time employees—that’s over 100 thousand state paid workers for a population of just 3.5 million. Why does Connecticut need 27 public employees per thousand residents when Florida—with a population 5 times that of Connecticut, an older aging population, a bigger minority population and more infrastructure—needs just 10? The national state average is only 15.

Rather than helping Connecticut's smaller businesses and entrepreneurs create jobs, Connecticut has essentially become an employment agency to increase the size of government. As a minority party legislator, the only thing I can do is be vocal about the problems and vote like Senator Roraback did against increasing the size of government, taxes and debt. I will actively pursue a pro-business agenda.

Q. Aren’t taxes a necessary evil to running government?

A. Of course they are, and there isn’t a state in the union that doesn’t collect some form of tax to fund itself. However, the degree to which they tax is one criterion that separates states that are doing well from states—like Connecticut—that are becoming fiscal disasters.

Out-of-control taxes are like a cancer that eats away at the heart of a state. Connecticut levies more than 378 taxes and fees generating over 20 BILLION dollars annually and it’s still not enough for our unrestrained Democrat legislature. Governor Malloy increased taxes by 2.6 billion dollars. The sales tax was increased and expanded. Taxes on certain alcoholic beverages increased twenty percent. The real estate conveyance tax increased fifty percent. They even put new taxes on nursing homes and care facilities for the mentally retarded, and started a Patient Revenue Tax on hospitals which, with the exception of Sharon Hospital, are Non-Profit operations. For the Party that claims to look after the welfare of the people, how do the Democrats justify taxing Connecticut's vital service providers thus making it more difficult for them to deliver their services to our most vulnerable citizens?

Q. You keep referring to Connecticut as a fiscal disaster when in fact it remains one of wealthiest state in America, if not the # 1 wealthiest. How do you justify that statement?

A. For too long Connecticut's legislators have gotten a free pass simply because Connecticut remains one of the wealthiest states in America with some of the highest per capita incomes. Greenwich, for example, is America’s # 1 wealthiest city amongst those with populations over 50,000, and is home to 8 of Connecticut's 11 billionaires who have a combined net worth in excess of 35 billion dollars. Connecticut's wealth is the GOLDEN GOOSE that our unrestrained tax and spend legislators seem intent upon driving out. But Connecticut residents—especially the wealthy—have options and they are leaving. Between 2000 and 2010, nearly 98 thousand people abandoned Connecticut going to states like Florida, which has no state income tax, no retirement income tax, no inheritance tax and a limited estate tax.

In the face of reality—and despite the fact that Connecticut’s Department of Revenue Services supports the elimination of the estate tax—Governor Malloy lowered the estate and gift tax thresholds from $3.5 million to $2 million and kept the rate at 12 percent. This guarantees Connecticut will remain uncompetitive to America’s fastest growing tax friendly states.

Q. Is there any specific legislation you would want to propose if you are elected to the State Legislature?

A. Absolutely. I will tell you about one on which Rep. Willis would vote NO.

I support a right which Connecticut citizens do not have, but to date is the law in thirty one states. That is the right for citizens’ballot initiative, referendum and recall. This citizen right—direct democracy—gives voters the power to make laws, repeal laws and remove elected officials from office.

In the 2010 state elections, gubernatorial candidates Republican Tom Foley and Independent Tom Marsh and the Green and Libertarian Parties endorsed Connecticut having this right. In the 2010 election debate between Rep. Willis and Republican challenger Lauretano, despite the fact that a Rasmussen Poll of Connecticut voters found that 65 percent were in favor of this right, Willis emphatically stated she was against the citizens of Connecticut having it. More than half the Republican legislative candidates endorsed it as the entire Democratic establishment—including Rep. Willis—ignored it.

A good example of why Connecticut citizens needs it enacted is the recent GMO labeling bill HB 5117 - An Act Concerning Genetically Engineered Food, which over 90% of Connecticut’s residents favored. According to the Institute for Responsible Technology, “before the bill had a chance to make it to the floor for debate and a vote, in a closed door meeting, Governor Malloy and his attorneys interfered in the legislative process by removing Section 2 of the bill. Section 2 was the heart of the bill, the section that called for mandatory labeling of all products produced with the process of genetic engineering, leaving HB 5117 meaningless.”

Need I say more?

Q. I think you have given the voters of the 64^th District -- and perhaps many others -- a pretty clear idea of where you stand versus your Democrat opponent. Is there anything you want to say in closing this interview?

A. I really appreciate you giving me the opportunity to delineate some of the differences between me and Representative Willis. I will close by asking the 64th’s new towns—Norfolk, Canaan, North Canaan and Kent—to stay their course by electing a Republican to carry on in place of Republican Representatives Richard Smith and John Rigby who, because of redistricting into the 64^th District, will no longer be representing them.

Electing Democrat Representative Willis is not in their best interest if they want to see Connecticut return to its past prominence as one of the nation’s great states in which to work, live and raise a family. We need to continue the trend of electing more Republicans who believe in fiscal responsibility while administering the right amount of government—not more government and taxes—to restore prosperity.

By the way, getting back to that Churchill statement about politicians, he said the second desirable trait in a politician was having the ability afterwards to explain why it didn't happen.

Governor Malloy won’t balance the budget before year end without more trickery and broken promises. He can’t stop increasing debt because the Democrats won’t reduce spending. No doubt in the next election he’ll have plenty of reasons why he couldn’t do it in his first term as promised, but will do it in his next term; and that’s a promise!

I hope the voters of the 64^thDistrict will remember: Fool you once, shame on Danno. Fool you twice, shame on yourself for being so gullible.

Lastly, the political cronyism that frankly has afflicted both political parties started immediately with Malloy when right after the 2010 elections several Democrat legislators resigned to take positions with his administration. It was the old political game of substantially increasing your last few years of salary to receive a substantial life time pension paid for by the tax payer. Talk about right in your face political stink!

Every town affected by these post-election resignations had to organize and fund another costly special election almost immediately following the general election. Too many of these career politicians have no scruples when it comes to putting themselves above those who pay their salaries. So it should also come as no surprise that most of the funds this administration is spending on developing business and jobs are going to larger corporations that frankly don’t need it, but take it because it’s there for the taking. And in too many cases the executives and owner of these large corporations have influence with the politicians that CT’s hundreds of thousands of small business owner’s lack. Is it any wonder that the productive tax payer and the small business person or company is looking at greener pastures in far friendlier states?

Markley, The Fly In The Ointment

Newly elected State Sen. Joe Markley has now officially become a fly in the ointment.

"For a guy who has got a $3.3 billion [deficit] in next year's [budget], $647 [million] in this year's would be a concern, I can assure you. I am well aware of it," said Governor Dannel Malloy of himself while making his rounds of towns on his listening tour.

Mr. Markley’s suit, which is centered on a tax/fee Connecticut has attached to electric bills, is holding up bonding money and, for this reason, the state has asked Connecticut’s Supreme Court to expedite its decision.

State Treasurer Denise Nappier has delayed issuing bonds to cover the deficit in the current fiscal year until the matter before the court is decided. It would be necessary to disclose pending litigation in any official statement sent to potential bond investors, and this is the sort of ash sprinkled on a dessert that would discourage bond buyers from scooping up the delicacies.

Mr. Markley’s suit is somewhat embarrassing because the charge on electric bills, a disguised tax, is somewhat embarrassing to an administration that has promised Connecticut taxpayers that budget sleight of hand would not be tolerated in an honest and transparent government.

Initially, the charge on electric bills was levied as a “fee” that would serve as surety for bonds issued to pay for the cost of energy deregulation. Deregulation has been marginally successful in reducing energy costs, but the effort to deregulate the energy market in Connecticut would pay more impressive dividends to energy users if the state were more serious in eliminating energy regulations – which is what deregulation really means. So far, the state has sought to lower energy prices on the demand side through energy conservation. The quicker and more efficient way to lower energy costs is to increase the energy supply and reduce unnecessary regulations that serve as a bar preventing energy suppliers from peddling their wares in Connecticut.

The “fee” was to elapse after the bond money had refreshed state coffers and the costs associated with deregulation had been discharged. But in the meantime the state had accumulated a massive deficit, and it was decided to extend the so called fee indefinitely. Since the now altered fee was designed expressly as a vehicle to transfer money from electric ratepayer’s pockets into the state treasury, the form of the attachment had become, in Mr. Markley’s estimation, an undisguised tax. His suit questioned the authority of the Department of Public Utility Control to collect a tax, and the same suit claimed the tax was inequitable since some rate payers, depending upon which suppliers they had chosen, never paid the fee assessment and would not be charged a tax.

The energy tax would amount to about $100 a year for the average family, but the tax would run into thousands of dollars for businesses and municipalities, which would be recovered by municipalities in the form of higher taxes and by businesses in the from of higher prices for their products and services.

Mr. Malloy has said the Markley suit, if successful, will punch a hole in this year’s $19.2 billion budget of $647 million, the amount of money the state hopes to realize through its surreptitious tax. It is also possible that the suit, provided it is not speedily settled at the Supreme Court level, will be dragged through the courts much in the way Hector was dragged by Achilles around the doomed wall of Troy, making it more difficult for State Treasurer Denise Nappier to issue bonds that will cover the current fiscal year’s deficit.

Mr. Malloy, who railed against the use of bonds to pay off budget deficits in his successful gubernatorial campaign, has said, “I think the fee was fair. I think it was misguided. It's not a public policy I would have otherwise promoted or supported. If you're asking do I believe it to be legal? The answer is yes.”

Mr. Markley – who believes an honest government should approach its debts honorably through its constitutionally authorized taxing powers – admits that his suit would not permit the state to meet its debts dishonorably through fees designed to dupe the electorate; and he acknowledges that his suit, if successful, will open a hole in the budget. Tough love is always tough.

"I feel about it,” Mr. Markley says, as “I would watching a friend, who had been drinking all evening, go back to the ATM one more time to take more money out of the bank. Yes, you might think this is a good idea right now, but when you wake up in the morning, you're going to wish you hadn't taken out any more money."

Connecticut’s highly politicized State Supreme Court, for ill or good, may decide the question of law presented by Mr. Markley’s suit. It can not, and ought not, to decide the political question embedded in it: How crooked and irresponsible do we want the taxing authority in the state of Connecticut to be? That question can be decided only by an awakened citizenry.