Growth in spending 400% ahead of personal income
ROCKY HILL — Public spending so far outpaces Connecticut’s economic growth, says the Connecticut Regional Institute for the 21st Century, that over the past dozen years the cost of delivering state and local public services has grown 405-percent faster than median personal income.
But while government costs have risen, performance hasn’t.
In its new report, “Improving the Delivery of Public Services,” the Institute says taxpayers are tapped out and policymakers should not increase state spending until they do a much more efficient job of managing public resources.
Changing how local governments operate and how the state interacts with them can “free up scarce resources to meet our state’s pressing priorities, saving taxpayer dollars and getting better results,” says the Institute.
The problem is, Connecticut is overpopulated with state and local government “silos” that don’t work well together but drive up taxpayer costs.
“Connecticut has an ineffective myriad of state, local, and education structures that are excessive, overlapped, non-aligned, and competing for the same precious dollars,” says the Rocky Hill-based non-profit, in the fourth of a series of reports focusing on reforming state spending.
There has to be a better way to deliver public services—in fact, there are many, says the Institute.
It recommends more efficient purchasing of goods and services, sharing services among municipalities (such as information technology, and pre-K education), reforming public education, creating uniform charts of accounting to provide transparency in public data, and “redefining” regional organizations to make them stronger and more effective.
Perhaps most of all, Connecticut needs to break down the “silos” of state agencies that work independently of one another, block regional cooperation and hinder the maximization of state investments.
Taking down these independent silos will require “new attitudes by state agencies on how they work,” says the Institute.
“The state cannot expect to improve its metropolitan regions and its prosperity without intentional, aligned, cross-agency efforts that target unified community outcomes,” says the Institute’s report.
CEO’s arrest spurs TicketNetwork’s exit from incentive program
SOUTH WINDSOR — TicketNetwork CEO Don Vaccaro's February 27 arrest has cost the ticket resale company a cool $8 million after the South Windsor firm announced two days later that would withdraw from the Gov. Dannel P. Malloy’s "First Five" program designed to offer generous incentives to companies that create or bring jobs to Connecticut.
The company said in a statement, "Due to the personal incident involving our CEO Don Vaccaro, we feel that it is necessary to respectfully withdraw from the First Five program in an earnest attempt at preserving our future relationship with the state.
"We believe the First Five program remains a commendable government initiative that will help Connecticut's economy grow,” the statement added. “We were honored to have been chosen."
The 49-year-old Vaccaro, who lives in Glastonbury, was attending an Academy Awards party in Hartford the evening of February 26. According to police reports, an apparently drunken Vaccaro allegedly groped a woman and shouted racial epithets at a bouncer trying to evict him from the party.
He was charged with second-degree hate crime, second-degree threatening, breach of peace, first-degree criminal trespass and interfering with police, according to Hartford police. Vaccaro is scheduled to appear in court March 7.
Last July TicketNetwork was designated to receive $8 million from the First Five program in exchange for adding 200 jobs in Connecticut over the ensuing two years. The state's incentive package included a $4.5 million loan at two-percent interest with $1 million forgivable, a $1.8 million loan at 3.5 percent and a $250,000 training grant for software engineering.
However, in a February 28 statement following Vaccaro’s arrest, Malloy said the state and TicketNetwork needed to “re-examine” their relationship. A day later the company announced its withdrawal from the program.
Following Vaccaro’s arrest, TicketNetwork executives Doug Kruse and Jeff Scheman assumed responsibility for running the company as co-CEOs.
Malloy, Lembo see state budget through very different lenses
HARTFORD — For the first time since they took office 14 months ago, Comptroller Kevin P. Lembo and Gov. Dannel P. Malloy don't see eye-to-eye when it comes to state finances.
The governor's budget office says the state is on pace to finish with a $35.9 million surplus.
Both agencies had agreed on a $1.4 million surplus projection one month ago.
Why does Lembo see the fiscal outlook getting worse when his fellow Democrat, Malloy, still reports Connecticut's finances in the black?
State tax data show the new earned income tax credit is generating refunds that are about 20 percent above the level built into the state budget. "If this refund experience continues through the remainder of the fiscal year," Lembo wrote, "refunds will exceed budget expectations by $22 million."
Lembo also declined to accept a new administration estimate that cost-cutting efforts would save another $34.5 million before the fiscal year ends June 30. Over the past four fiscal years, nearly 60 percent of the general fund has been expended through January, the comptroller wrote. "If this trend continues into Fiscal Year 2012, the additional [savings] will be difficult to realize," Lembo wrote.
The comptroller also warned that "spending pressures to support state services are growing." Between December and January, spending from the "other expenses" accounts — a line item covering a multitude of contractual, equipment and other miscellaneous costs in most agencies — grew by more than 20 percent. "Based on these trends, caution prohibits the inclusion of the additional [savings] into my estimate," he added.
Malloy's budget chief, Office of Policy & Management Secretary Benjamin Barnes, said February 29 that "I think our projections are remarkably close.” Both agency forecasts represent less than one-quarter of one percent of the general fund. At $18.7 billion, the general fund covers the bulk of the operating costs in this fiscal year's overall $20.14 billion budget.
Barnes also noted that the $34.5 million in cost-cutting efforts in his projection stem from emergency budget cuts Malloy ordered more than one month ago. "I don't have any reason to believe we won't fully achieve that," Barnes said.
The Malloy administration seems to be cooling on Keno, a game the Connecticut Lottery had endorsed as a way to boost revenues. Malloy has no intention of proposing Keno or any other significant expansion of gambling in his budget, senior advisor Roy Occhiogrosso told CTMirror.com.
Occhiogrosso declined to call Malloy's position a change of heart, although the governor said in December that he wanted a "more aggressive lottery," and the Connecticut Lottery was working on Keno. Malloy told reporters on December 28 that the Connecticut Lottery was exploring Keno, an electronic drawing game that other states allow in bars, restaurants and Keno parlors.
$9-an-hour baseline would be second-highest in nation
HARTFORD — Minimum wage workers in Connecticut could be getting a bigger weekly paycheck starting this summer if State Rep. Christopher G. Donovan (D-84) of Meriden gets his way.
The House Speaker is proposing a 75-cent increase to the state’s minimum wage, from the current $8.25 to $9 per hour, starting July 1. He plans to propose the legislation during the next legislative session, which commences February 8 and runs through May 9.
His proposal would call for the wage to be raised to $9.75 next year, and indexed each subsequent year, which would automatically adjust the wage annually to keep up with rising costs of living.
“More families than ever are relying on low-wage and minimum-wage jobs to make ends meet,” Donovan says. “That leaves them struggling. While most job losses in the recession hit higher-wage sectors like construction, manufacturing and finance hard, much of the new job growth has been concentrated disproportionately in low-wage industries.”
He says an higher minimum wage will lead to increased consumer spending, which will foster job growth at local businesses, and thereby stimulate the economy.
The representative is getting support from colleagues such as Bridgeport State Rep. Ezequiel Santiago (D-130), vice-chair of the Labor Committee; and State Rep. Bruce Zalaski (D-81) of Southington, House chair of the Labor Committee.
Some are critical of the proposal in that the higher wages could keep businesses from hiring more employees, especially young and entry-level workers. Gov. Dannel P. Malloy has done little more than acknowledge Donovan’s proposal without commenting for or against it.
Andrew Markowski, state director of the National Federation of Independent Business, called the proposal a “bad idea wrapped in a good intention.
“Small businesses that pay the minimum wage do so because they can’t afford to pay more,” Markowski says. “They’re already on the edge and this proposal will push them over.”
The state of Connecticut last raised its minimum wage in January 2010 from $8 to $8.25 per hour.
The state’s $8.25 wage is higher than the federal minimum of $7.25, and is one of the highest in the nation. Washington is highest, at $9.04 per hour, followed by Oregon ($8.80), and Vermont ($8.46), according to the most recent numbers from the U.S. Department of Labor.
HAMDEN — Internal Revenue Service-certified student volunteers from Quinnipiac University will offer free tax preparation assistance to qualified taxpayers on Saturdays from 10 a.m. to 2 p.m., starting February 11 in the Lender School of Business Center on campus.
Students from the School of Business will offer free tax preparation assistance to people with an annual income of less than $50,000. The students will inform taxpayers about special tax credits for which they may qualify including Earned Income Tax Credit, Child Tax Credit and Credit for the Elderly or the Disabled.
The Quinnpiac students involved in the Volunteer Income Tax Assistant (VITA) Program use TAXWISE, the IRS-approved software package for the VITA program for state and federal returns.
The tax assistance will be offered each Saturday through April 15 with the exception of March 10 and 17, when the university will be closed for spring break.