A legacy of debt: As cuts get ugly, legislators forfeit power, transparency


A legacy of debt / Fourth in a series

As cuts get ugly, legislators forfeit power, transparency

by Keith M. Phaneuf

As retirement benefit and other debt costs continue to surge, some officials say there’s more at risk than higher taxes and deep cuts to key programs.

As budget choices turn ugly and voter frustration mounts, they say, legislators have been willing to forfeit some of their power and accept less public transparency, sometimes in exchange for greater political cover.

Rep. Vincent Candelora, R-North Branford

“I know that the only way we’re going to get out of this is to make a lot of difficult decisions, which is a little bit scary,” said Rep. Vincent Candelora, R-North Branford, a veteran member of the Finance, Revenue and Bonding Committee. “But I think we have to remember that the budget is one of our core obligations. Instead we look for excuses to absolve ourselves of our responsibilities.”

Leaving tough choices up to the governor

One path that legislatures historically have taken to cut spending from a safe distance involves “lapses” — somewhat nebulously defined savings targets that the governor must achieve.

Rather than order a precise dollar reduction to a specific line item, lawmakers will tell the governor that state agencies are expected to save a certain amount of money which will “lapse” into reserve at year’s end.

Sometimes these lapses are aimed at a broad expenditure area, such as “general employee” costs. Other times they will be imposed as an omnibus savings target upon an entire branch of government.

Not surprisingly, when times are good, lapses are limited. And when times are bad, the demand to save is much more aggressive.

For example, between the 2005 and 2009 fiscal years, General Fund lapse targets averaged $112.8 million. Between 2010 and 2012 — a three-year span that included huge assumed savings tied to a major union concessions deal — lapses averaged nearly $515 million per year.

Over this fiscal year and last, as the demand to avoid tax hikes and accelerated spending cuts has grown, lapse targets have averaged $205 million.

But what that means is that special interest groups, the public in general, and even legislators, don’t really know the full ramifications of these savings targets until after the new budget is approved and underway.

Sen. Cathy Osten of Sprague, the Senate Democratic chair of the Appropriations Committee, said legislators need to get more comfortable ordering specific spending cuts themselves – particularly those lawmakers who grumble at how Malloy trims programs absent a clear plan from the General Assembly.

“We can’t say ‘yes’ to everybody… and we need to be forthright about what we can afford.”

— Cathy Osten
Senate Democratic chair of the Appropriations Committee

“We can’t say ‘yes’ to everybody,” she said, “and we need to be forthright about what we can afford.”

But Osten, who also is first selectwoman of Sprague, said there are times when the governor is better suited to the task of cutting costs. “There are some decisions that need to be made at the executive level,” she said.

The current budget includes $209.3 million in General Fund savings targets, about $190 million of which must come from executive branch agencies.

Though that budget was enacted on May 13, the administration wouldn’t begin dividing responsibility for achieving those savings among the agencies until June 30, when it apportioned about $130 million of the overall lapse.

And it wouldn’t be until Aug. 16 that the public learned privatizing 40 group homes for people with intellectual and developmental disabilities in order to save $70 million per year would mean eliminating 605 jobs at the Department on Developmental Services.

Most worker raises approved without a vote

The legislature also has long avoided voting on state employee contracts, many of which provide some form of salary increase.

Under current rules, legislators can endorse a contract by default, simply by not voting to reject a deal within 30 days of its filing with House and Senate clerks.

Neither the House nor the Senate has rejected an arbitrated pay increase since a contract with unionized Department of Correction officers was rejected in 1997, though the University of Connecticut and its Professional Employees Union did withdraw a five-year deal last spring that would have provided average raises of 3 percent in the first year and 4.5 percent in each the next four.

Malloy and legislative leaders from both parties argued the deal was unaffordable.

Still, majority Democrats in the House and Senate repeatedly have blocked proposals in recent years to require a vote on all contracts. Most of those came from Republican legislators, though Malloy recommended such a change in his 2011 budget plan.

“I’ve seen an abdication of the budget process from the committee level to leadership,” Candelora said. “And now we’re seeing that transcend from leadership to the governor’s office.”

“They have given carte blanche authority to the governor to make decisions”

— Rep. Vincent Candelora
R-North Branford

It’s easy for legislators to express shock and dismay about spending cuts back in their districts or on the campaign trail “because they have given carte blanche authority to the governor to make decisions,” Candelora said.

A ‘gag order’ on commissioners

Malloy hasn’t hidden his frustration with legislators’ unwillingness to cut more deeply in tough times.

Meeting with reporters last April 29 — five days before the regular 2016 session’s adjournment deadline — the governor said budget talks had “hit a wall” because of lawmakers’ reluctance to make tough choices

“This is a post-recession recovery that is unlike any other,” Malloy said. “I’m trying to lead them to understand that this is not a short-term problem.”

Ten days earlier, Malloy expressed similar frustrations mixed with understanding.

“I don’t feel jilted,” he said. “I think it’s really hard – adjusting to a new economic reality of slow growth is very, very hard. And they have big constituencies.”

“I think it’s really hard – adjusting to a new economic reality of slow growth is very, very hard”

— Dannel P. Malloy
Democratic governor of Connecticut

Legislative leaders reminded reporters that lawmakers’ terms run just two years — unlike four years for the governor — meaning legislative campaigns virtually never cease.

To overcome legislators’ resistance to spending cuts, the governor has taken a larger share of the heat — but it has come at a price.

In most cases, legislators have to accept less information, such as the impact of potential cuts on programs or the severity of future projected deficits.

Some members of the Appropriations Committee balked in 2015 when Office of Policy and Management Secretary Benjamin Barnes, Malloy’s budget director, sent agency heads a memo restricting what they could tell legislators about the governor’s annual budget proposal.

Commissioners were free to provide “facts and data” to legislators, Barnes wrote.

But if legislators were looking to add back programs, or cut further, commissioners were instructed to let Barnes and his staff respond.

“Requests for new ideas, alternative reduction proposals, or for the agency’s priorities in restoring or cutting funds should be referred to OPM,” Barnes wrote. “Agencies are expected to support the Governor’s budget rather than providing alternatives to that budget.”

Rep. Melissa Ziobron, R-East Haddam

Rep. Melissa Ziobron of East Haddam, ranking GOP representative on the committee, called it a “politically correct gag order.”

And Rep. Toni E. Walker, D-New Haven, longtime co-chair of the committee, said “Our job is to negotiate and evaluate and build the best budget possible for the 3.5 million people of Connecticut. Denying us the ability to do that is denying us our responsibility and our authority as the legislature.”

Not surprisingly, the Democrat-controlled Appropriations Committee did not force a showdown with the Democratic governor’s administration by issuing subpoenas to force agency heads to testify.

But similarly, some legislators questioned whether a Republican governor would have restricted what commissioners could say to a Democrat-controlled panel.

Sacrificing transparency

Some legislators also protested, but the General Assembly ultimately complied last year when Malloy sought to restrict what nonpartisan legislative budget staff could report publicly when it came to likely cost increases in future budgets.

Frustrated with projections that estimate the future costs of “current services” — including those in discretionary spending areas — the governor argued legislative analysts should not be permitted to publish these in their Fiscal Accountability report, an omnibus report on budget trends due to lawmakers each Nov. 15.

But critics noted that since 2012, those “current services” projections have been a thorn in Malloy’s side. Specifically, they have shown state finances are not sustainable, and are heading for a deficit in upcoming budget cycles.

“It’s putting a cloak over the budget process and taking away another piece of transparency.”

— Rep. Vincent Candelora
R-North Branford

“It’s not a cap or something that puts the brakes on spending” Candelora said, adding legislators agreed to censor their own nonpartisan analysts to keep deficit projections out of the headlines. “It’s putting a cloak over the budget process and taking away another piece of transparency. This is a conversation most legislators don’t want to have.”

Walker noted that getting “current services” estimates from analysts only offers information, and is not a directive. It didn’t stop legislators last May from adopting a $19.76 billion budget for 2016-17 that spends $1 billion less than the level needed to maintain current services.

Still, the full legislature approved the new forecasting methodology when they adopted the budget last spring.

Governing magazine, a nationally respected public policy journal, cited this switch as an example of how states are accused of hindering transparency in an article titled “Bad Budget News? Some States Just Bury It.”

Stripping staff from program review panel

The rush to avoid tough budget choices also has led the legislature to make some choices that are penny wise and pound foolish, according to the longest-serving member of the House of Representatives.

Rep. Mary Mushinsky, D-Wallingford

Rep. Mary Mushinsky, D-Wallingford, who has represented the 85th District since 1981, was stunned this fall when Democratic legislative leaders decided to reassign all support staff away from the Program Review and Investigations Committee.

Having cut $830 million from the level needed to maintain existing programs in the 2016-17 state budget, legislators decided to trim $750,000 from their own operating budget.

One of the chief means to achieve that cut was to reduce the 12 staff positions supporting the Program Review and Investigations Committee to 10, and then to reassign all remaining workers to fill vacancies in other legislative offices.

Outgoing House Speaker J. Brendan Sharkey, D-Hamden, defended the move back in September, saying legislators were trying to lead by example, sacrificing just as they were asking various agencies and programs to make due with less.

“We are dealing with budget reductions across state government, and the legislative branch is no exception,” he said, adding that many program review staff members would get to perform similar work while being reassigned to the state auditors’ office.

“It still makes no sense to me,” Mushinksy said, adding that legislators preferred to retain partisan staff — who help lawmakers get media coverage and otherwise build name recognition with constituents. “I can’t really explain it. Long-term program analysis is good for a sustainable budget.”

She noted, for example, that program review staff recommended changes involving prescription drug purchasing and transitioning more nursing home patients into home care that saved just over $200 million in 2010 and 2011 combined, according to the nonpartisan Office of Fiscal Analysis.

While the current generation of legislators might take for granted their ability to look into any aspect of state government, Mushinsky added, they should realize this information wasn’t always readily available.

Lawmakers had to override a 1972 veto by then-Gov. Thomas J. Meskill to create a professional research team to enable the General Assembly to review the effectiveness of state services and programs.

“A standing committee with the responsibility of monitoring any or all of the activities of state government would merely be establishing another layer of legislative review,” Meskill wrote in his veto message 44 years ago, adding that the “close working relationship” between his department heads and legislative committees was all that was needed. “For one branch to expand its authority would frustrate the effective system of checks and balances now in existence.”

Tomorrow: Crafting a positive political message amidst big debt and deficits.

Comments

comments