Posts published in “Columns”

Recent public announcements concerning Connecticut’s fiscal condition have come out in separate disjointed fashion. Taken together, they spell impending crisis.

It is no surprise that the state is facing an enormous deficit this year (and into the future), due, in part, to the sudden economic shutdown occasioned by the pandemic.

However, in larger part, the crisis has been long coming and widely anticipated. It is a function of the bill coming due for decades of paying state employees massively overgenerous, yet woefully underfunded, compensation. It is unlikely that Connecticut will have money both to continue state operations and to fund employee retirement benefits.

On the first of this month, Governor Lamont released his official deficit mitigation plan, as required after Comptroller Kevin Lembo made the obvious official, namely that the state faces a deficit of $1.8 billion in the current year’s budget of approximately $21 billion.

No one really knows where the state and the country are headed economically. The good news is that the state’s rainy day fund has grown to $3 billion since 2017. Lamont said he would use most of the fund to close the budget gap, leaving little for the next fiscal year and beyond.

Just days before, the governor announced his hiring of Boston Consulting Group to find $500 million in annual state savings, primarily from workforce attrition. The goal is to automate or eliminate many job functions, so that the expected retirement before mid-year 2022 of an estimated one-third of the state’s 49,000-person workforce will require the fewest possible replacements.

Of course, Lamont could have saved one-quarter of BCG's savings target by using his emergency powers to cancel the $135 million state employee pay raise last July 1^st.

That would have caused employees little pain, as demonstrated by a recently released Yankee Institute study, which found that Connecticut’s state and municipal employees (excluding teachers) are paid about $20,000 per year more than their private sector counterparts. That translates into an aggregate annual premium of almost $1 billion for 49,000 state employees, assuming they and municipal employees enjoy equivalent pay.

Governor Lamont has extended his emergency powers through February 9 of next year, despite his disastrous results so far in wielding those powers. Connecticut has sustained the fourth highest state death rate from coronavirus (126 per 100,000 citizens, according to Statista).

Does this record justify the longest extension of emergency powers in the nation? According to the National Governors Association, no other state governor has emergency powers extending into 2021 and only two are empowered even into December.

The challenge in exercising extraordinary executive authority is to limit the spread of coronavirus while inflicting the least possible economic damage.

Lamont has achieved a particularly poor balance. He has overseen an extremely high death rate, while imposing one of the strictest business shutdowns in the nation, undoubtedly with ultimately dire economic impact.

Lamont does not have the excuse of the three states with deadlier outcomes, New York, New Jersey and Massachusetts with their large densely populated urban centers. Connecticut is a suburban and rural state.

In his nomination acceptance speech, Democrat Joe Biden cited “systemic racism” as an established fact, despite that the evidence does not support that sweeping notion -- most significantly, not in policing. Such loose talk is incendiary.

This summer, the same talk raged inside The Wall Street Journal, eventually spilling into public view. Almost three hundred members of the News division signed a letter to Journal CEO Almar Latour alleging “lack of fact-checking and transparency and apparent disregard of evidence” in the Opinion division, primarily concerning the early June publication of an op-ed by Heather Mac Donald entitled The Myth of Systemic Police Racism.

In the interest of full disclosure, The Journal’s Opinion section has published several of my opinion columns.

Each word in the headline of Mac Donald’s op-ed is important. The title does not call police racism a myth, just systemic police racism. It does not say there are no racial differences, or disparities, in policing.

The headline frames assertively, but fairly and accurately, the column’s central statement that “a solid body of evidence finds no structural bias.”

The News department accused Mac Donald of “cherry picking” a study by Harvard economist Roland G. Fryer, Jr. by referencing only Fryer’s finding of no racial disparities in fatal officer-involved shootings (FOIS) while making no mention of Fryer’s finding of substantial racial disparities in police use of non-lethal force.

Well, in mid-June, Opinion published an op-ed by Fryer, giving him the opportunity to outline his differing findings on FOIS versus use of non-lethal force and to say “People who invoke our work to argue that systemic racism is a myth conveniently ignore these statistics [on non-lethal force].”

Yet, in the next sentence, Fryer said “Racism may explain the findings, but statistical evidence doesn’t prove it. As economists, we don’t get to label unexplained racial disparities ‘racism.’” Sure sounds like Mac Donald’s argument, which Fryer had just criticized.

The News department also complained that Mac Donald mischaracterized a 2019 study (Johnson and Cesario) which found that minority victims were not more likely to have been shot by White officers.

In April 2020, the authors reconfirmed their findings but corrected an overreaching sentence in the study’s “significance statement,” changing “White officers are not more likely to shoot minority civilians…” to say a White officer’s victim “was not more likely to be of a racial minority.”

The change was necessary to recognize that “likelihood,” or probability, of being shot must include data about shots and “non-shots,” just as coin toss probability requires data for both heads and tails, and, since the study’s database was comprised only of fatal “shots” (not even including non-fatal shots) they couldn’t speak to probability of possible future FOIS outcomes, but only about the characteristics of actual FOIS outcomes.

Nevertheless, this more accurate and limited portrayal of their findings did not alter the fact that the authors did not find racial bias. Confoundingly, the authors “retracted” their study (whatever that means) in July, because “our work has continued to be cited as providing support for the idea that there are no racial biases in fatal shootings, or in policing in general.”

Except that, as a study that attempted to find racial bias in FOIS and did not, their work does support previous evidence (including Fryer’s) not finding racial biases in FOIS.  

Ever since former Governor Dannel Malloy announced famously to a state employee union rally in 2014 that “I am your servant,” the general public in Connecticut has grown increasing aware and upset about excessive state employee compensation.

Late last month, I wrote a column calling upon Governor Lamont to use his emergency powers to cancel, suspend or delay a large pay raise that all state employees were about to receive on July 1^st, a pay hike that Lamont himself had called unfair in the context of massive private sector job losses. State employees are protected from job losses by a contractual no-layoff guarantee they have enjoyed since 2011.

The state employee unions pushed back against my column, including in a letter to the editor by Ronald Nelson, President of AFSCME Local 749 representing 1,500 state judicial and criminal justice employees, most of whom have to have been idle during recent months because state courts have been closed.

Nelson identified an error in my column while making one of his own. We’ll get to that.

Of far greater significance, Nelson repeated an astounding claim made by Dan Malloy in 2017. Malloy claimed a whopping $24 billion in “real savings” over 20 years from concessions allegedly made by state employees in the 2017 agreement that he negotiated with the State Employees Bargaining Alliance Coalition (SEBAC).

This outlandish claim has gone largely unchallenged. Indeed, Democrats codified it in a state law requiring Comptroller Kevin Lembo to prepare an annual report on the actual savings achieved.

The largest portion of Malloy’s $24 billion claim were wage savings, which cumulated to $9.6 billion through 2037, according to Malloy and his Office of Policy and Management.

The falsity in Malloy’s claim is not buried in complex numbers. It rests upon an outrageous assumption, namely that state employees are entitled to raises each and every year as if annual raises are the virtual equivalent of a birthright. If employees don’t actually get a raise, the raise they don’t get is called a “saving.”  

So, who established the amount of the “raise they didn’t get” in 2017? Malloy did. In his budget proposal, he proposed hundreds of millions of raises. Then, he negotiated wage freezes and called the difference “savings.”

How do we know this? From the documentation that OPM published in support of Malloy’s claimed savings. On page 1, entitled “Source of SEBAC Agreement Savings Estimates,” under a sub-header of “Wage Estimates were developed by OPM,” it states “Elimination of potential FY 2017, 2018, and 2019 increases: Removes all of the proposed RSA increase in the Governor’s recommended budget: $300.6 million in FY18 and $486.2 million in FY 2019.”  [Emphasis added.]

The raises which state workers “didn’t get” were simply figments of Dan Malloy’s imagination – they were “potential,” “proposed” and “recommended.” There was no existing wage contract between the state and state employees under which workers were legally entitled to actual raises that, then, they gave up in negotiations with Malloy.