Connecticut Commentary: Red Notes from a Blue State

Chris Davis -- CTNewsJunkie Xerox Corporation, headquartered in Norwalk, was not the first, nor will it be the last, of Connecticut’s anchor companies to take the money and run. The administration of former Governor Dannel Malloy, desperate as it was generous, lathered Xerox with $4.4 million in loans 2017, in return for which the company promised to keep 150 jobs create 40 more in four years, according to a piece in the a Hartford paper . The additional jobs would in turn produce additional taxpayers, who would as the years rolled by swell the state’s treasury with additional dollars. Malloy, a life-long politician rather than a businessman, at least got that part of the economic equation right: more taxpayers equal more tax revenue. Corollary 1: tax reduction – albeit only for targeted industries – increases revenue. Corollary 2: tax reduction good, tax increases bad.

The little Pink House in New London was moved to another location after a long, unsuccessful protest by its owner, property rights advocate Susette Kelo. The property upon which it rested was seized by eminent domain so that it could be made available to Pfizer Inc. It was a rare seizure. Usually, property seized under eminent domain is made available for some public purpose. In Kelo, the Fort Trumbull Property was transferred from one private owner to another private owner to further economic development . The property was seized by the state because New London wished to induce Pfizer to set up shop on the property. Pfizer moved on; nature soon reclaimed the vacant property. Kelo lost her battle when the US Supreme Court shamelessly decided in favor of the City of New London, Kelo v. City of New London , 545 U.S. 469 (2005). The case produced two notable dissents, one written by Justice O'Connor, joined by Chief Justice Rehnquist and Justices Scalia and Thomas, and...

Pfizer – now Pfizer-Allergen, once one of the pillars in Connecticut’s emergent and lucrative bio-science industry -- is moving its headquarters from New York to Ireland. Pfizer is merging with Allergan, which is headquartered in Dublin. The move and merger will save the conjoined company about $2 billion, not chump change in the competitive world of bio-science. When news of the move to Ireland reached the ears of U.S. House Representative Rosa DeLauro, she affected shock and then fumed, in chorus with Democratic presidential candidate Hillary Clinton, “We cannot continue to allow Pfizer and other corporations to pretend that they are American while reaping the benefits this country has to offer, yet claiming to be another nationality when the tax bill comes. Congress and the administration must do more to prevent these companies from moving their mailboxes abroad to avoid paying taxes in the United States."

It may be possible to trace the evolution of Eminent Domain from a U. S. Supreme Court Kelo vs. New London decision to its broader use by the Malloy administration. In Kelo vs. New London , the high court decided it was proper under the “just compensation” clause of the Fifth Amendment to the U.S. Constitution for a state to use eminent domain to transfer property from one private owner to another private owner in order to further economic development. The “just compensation” clause of the Fifth Amendment provides that no person may be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." In a 5–4 decision, the Court held that the general benefits a community enjoyed from economic growth qualified private redevelopment plans as a permissible "public use" under the “takings clause” of the Fifth Amendment.

The deficit is back. Like an aging coquette, it appears and disappears around corners, smiling fetchingly at us: Here today, gone tomorrow, back again the next day. It appears that the skeletons came out of the closet a few days after Governor Dannel Malloy, the seven members of  Connecticut’s all Democratic U.S. Congressional Delegation, members of the all-Democratic State Constitutional Offices and Democrat legislators who dominate the General Assembly were returned to office. Faced with an “unexpected” state deficit, Ben Barnes, the Head of Governor Malloy's Office of Policy Management, said that Connecticut should perhaps expect chronic deficits in the future, a thunderclap that caught the notice of some papers. Mr. Barnes may have been mistaken by some, if only for a moment, for Jonathan Gruber, an MIT Don dripping with ivy and one of the architects of President Barack Obama’s Health Care initiative. Mr. Gruber is on record as having said in various venues that Ob...

Jackson Laboratory has found some important friends in high places in Connecticut. Among them are Governor Dannel Malloy and, almost certainly, the Democratic caucus in the General Assembly, which has tended thus far to march to the music of Mr. Malloy’s drum on all issues of importance. Here and there, critics of the deal privately arranged between the governor and Jackson have surfaced. “Republicans,” one commentator wrote , “are right to question the deal and get as much information as possible. But by the experts’ accounts, this is a good risk for Connecticut. And as in so many other ways, Connecticut should not be like Florida.” Jackson was considering a move to Florida, but the deal in that state was never consummated. It has become part of the narrative of Connecticut Democrats supporting the deal that the governor of Florida failed to engage in the negotiations and so the state lost out on a promising deal that a wide awake Connecticut governor thereafter snatched from Flor...

How much should a job cost? When jobs are purchased by the governors of states that over-regulate the so called free market, which becomes less free the more regulations are piled on regulations, using their tax structures to transfer money from tax payers and small businesses to larger more government savvy corporations too big to fail, the cost of a job can be very dear. President Barack Obama’s stimulus package, a scheme to gather taxes from the voiceless masses and pass them along to favored businesses and union groups, has simulated only the appetite of those in the federal government who consider it their business to soften the sharp edges of problems they themselves have have had a hand in creating. The inability of the Obama stimulus package to reduce the jobless rate in the United States is the surest indicator that the president’s plan has failed. When number crunchers toted up the amount of stimulus spent per job produced, they arrived at a figure of $278,000. In most ...

Bill Curry, who twice ran for office as governor, has written for the Hartford Courant an op-ed titled “ Reinvented UConn Health Center Is A Plan To Build Our Future On .” The Curry effusion appeared in the paper’s Sunday edition just before the politically rumbustious long holiday weekend. Because Mr. Curry's prose tends to be both dense and sprightly at the same time, it occurs to me that the student of his set pieces might profit by the equivalent of political Cliffsnotes, and I have supplied some here at the risk of turning Mr. Curry’s poetic performance into stiff analytical prose. Mr. Curry has not been quite as active on the political scene in Connecticut as, say, Mr. Malloy – who, only months into his gubernatorial reign, threatens to approach former Attorney General Richard (now Dick) Blumenthal in ubiquity -- and the notes may be necessary.

There is no termination date on the tax increase contract between taxpayers and the Malloy administration – because there is no written contract. Some of the items in the contract to be signed by the State Employees Bargaining Agent Coalition (SEBAC), the state union coalition negotiating contracts with Governor Malloy, do have a termination date. For instance, the salaries of state union members, frozen for two years, will unfreeze thereafter and increase by 3% during the following three years. In such precarious times, it must be liberating for state workers to know that the “shared sacrifice” of salary givebacks has a termination date affixed to it. Actuaries hired by the Malloy administration tell us that the temporary salary freeze will save the state $ 448,402,275, according to a budget fact sheet given out to the state’s media. Because the freeze terminates after two years, the savings to the state is itself temporary, while the salary increase of 9% over three years will be...