Connecticut Commentary: Red Notes from a Blue State

Politically, Governor Dannel Malloy could not afford yet another union “No” vote on his revised budget plan and, accordingly, the leaders of state unions have been more or less laying down the law to rank and file union members. Some pro-union Democrats, Jonathan Pelto among them thought the governor had been wielding his big stick a bit too exuberantly. Mr. Malloy’s Plan A, rejected by the union rank and file, was generally regarded as being soft on sacrifice, a point emphasized by union leaders in a memo to rank and file workers sent out prior to the vote affirming Plan A2. Mr. Malloy’s “clarified” plan following the disappointing union vote is, according to the memo, an agreement that guarantees union members security: “We would receive four years of job security, an extension of our health care and pension plans to 2022, an irrevocable trust fund to insure there will always be retiree health care, three years of wage increases, a reaffirmation of the independence of the sta...

“ There are three kinds of lies: lies, damned lies, and statistics ” – Benjamin Disraeli Actuarial figures supporting claimed budget savings in Plan A2 -- son of Plan A, a slightly revised budget that Governor Dannel Malloy months ago submitted to the General Assembly for approval -- have been called into doubt for some time. The Malloy budget approved by the Democratic controlled General Assembly early in May, for instance, contained a savings line that could not be actuarially verified. The Malloy budget simply assumes a savings of $270 million arising from a commitment from state workers to devise ways of saving money. When Republican leaders -- who have been successfully cut out of the budget negotiation process by Mr. Malloy and Democratic leaders in the General Assembly – questioned the assumptions that underpinned the projected savings, Malloy communications director Colleen Flanagan intemperately responded that the figures had been verified by their actuaries and they we...

Democratic governors, Jim O'Sullivan of National Journal writes, “argue that their approach is easier for their constituents, as both taxpayers and consumers of government services, to stomach,” largely because they are simpatico with unions. “In most cases, with cozier relationships with unions, they’ve approached the labor contract legislation as a collective-bargaining exercise, bringing union leaders into the process.” Governor Malloy figures prominently in the National Journal story. Mr. Malloy, “repulsed” by budget cutting tactics in Wisconsin and New Jersey, has charged other governors with “scorched-earth, unilateral governing,” according to the National Journal. The news story does not mention Democratic Governor Mario Cuomo as one of the scorchers, and one assumes Mr. Malloy has not identified him as such, although the New York governor managed to put his budget to bed without raising taxes, for reasons of Democratic comity.

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 l...

Even before the votes are cast by state union members on Governor Malloy’s slightly vevised Plan A, Lisa Herskowitz, a senior assistant state's attorney in Manchester, has issued a complait to the state Board of Labor Relations questioning the proposed agreemment, according to a story in the Connecticut Post : “Herskowitz in her complaint to the labor board alleges SEBAC violated its own bylaws by agreeing to a two-year wage freeze, arguing the coalition's negotiating authority is limited to pensions and health care. “She further argues SEBAC should not have reopened the existing pension and health-care agreement, which expires in 2017, without allowing union members to first vote to authorize SEBAC to renegotiate the deal. Rank-and-file approval should also have been sought in early July when SEBAC approached Malloy about reopening talks, Herskowitz said.” The board has agreed to address the matter on August 3.

Governor Malloy’s “shared sacrifice” was never evenly – some might say “fairly” -- distributed. Progressive Democrats, in fact, do not believe in shared sacrifice. Their credo includes, on the tax side, a progressive income tax in which the “rich,” defined as anyone making more than $200,000 per year, pay the lion’s share of governmental “investments.” SEBAC negotiator Dan Livingston is typical of the genus. In a progressive regime, the majority of people “invest” relatively little in their government and prudently vote for Democrats, who collect little from them in tax payments (AKA “investments”) while showering them with benefits. Whatever name one chooses to put to this lopsided getting and spending process, it is not “shared sacrifice.” Nationally, the wealthiest 1 percent of the population earns 19 percent of all income and pays 37 percent of the federal income tax , a figure that excludes payroll taxes for Social Security and Medicare. The top ten percent pay 68 percent of ...

Two reliable economic forecasters, Goldman Sachs and Macroeconomic Advisors, have downgraded their previous economic forecasts, according to The New York Times : “Two months ago, Goldman Sachs projected that the economy would grow at a 4 percent annual rate in the quarter ending in June. The company now expects the government to report no more than 2 percent growth when data for the second quarter is released in a few weeks. “Macroeconomic Advisers, a research firm, projected 3.5 percent growth back in April and is now down to just 2.1 percent for this quarter.” Chief United States economist at Goldman Sachs Jan Hatzius, peering through clouded skies, said he could not rule out yet another recession: “We’re still a reasonable way off from that,” he said. “But I’m not as confident as I would like to be.” Connecticut is in the grip of a long hard recession. During the state’s last soft recession, it took about ten years to recover jobs lost, and this was at a time when the fede...

Plan A failed because neither the Malloy administration nor SEBAC negotiators were able to sell their product to the union rank and file. Lord knows they tried. But in the end, it was the health package that sunk the final vote. Almost half of the union rank and file voted against Plan A, considered by union negotiators, Malloy administration budget salesmen and a large chunk of Connecticut’s commentariat to be a plan irresistible to rational heads in much of the state. Moises Padilla, vice president of AFSCME Local 387 at the Cheshire correctional complex, thought early on that Plan A was doomed and made attempts to contact shakers and movers within the Malloy administration to warn them of the impending crack-up, but his calls were not returned by Roy Occhiogrosso, Mr. Malloy’s major-domo. Following the rank and file vote, which soundly rejected Plan A, union negotiators regrouped and decided the vote would not be formalized for thirty days, later pushing the thirty days out to...

The most recent poll from the Yankee Institute shows Governor Dannel “The Vozhd” Malloy blowing bubbles below the water line. “Voters oppose by wide margins every Malloy administration initiative tested in the survey: • On the budget deal, 57% of voters say the new state budget agreement ‘spends too much and raises taxes too much,’ while 39% describe it as ‘about as good as could be expected given a weak economy.’ • On the labor union concessions, 49% of voters say state employee unions ‘did not give up enough and should have been asked for more,’ while 36% say ‘the unions did give up a lot.’ • By a margin of 60-30%, voters describe the $572 million New Britain busway project as ‘a bad use of taxpayer money.’ • By a margin of 56-25%, voters describe the $864 million UConn Health Center expansion as ‘a bad use of taxpayer money.’” During the next legislative season, Mr. Malloy plans to travel about the state attempting to convince easily duped businessmen that Plan A, which ...