The Red Line

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.

Continue Reading:

• Read and comment here on The Red Line
  
• CT Examiner
• Republican American
• Journal Inquirer
• CT Hearst newspapers

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.

Continue Reading:

• Read and comment here on The Red Line
  
• Read in CT Examiner
  
• Read in Republican American
  
• Read in CT Hearst newspapers
  

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.  

Continue Reading:

• Read and comment here on The Red Line
• Read in Republican American
• Read in Real Clear Politics
• Read in The Day
• Read in Hearst CT Media Group Newspapers
• Read in Microsoft News

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.

Continue Reading:

• Read and comment here on The Red Line
• Read in Republican American
• Read in CT Examiner
• Read in Journal Inquirer
• Read in CT Hearst Media newspapers

 

Hartford Courant, June 26, 2020; CT Examiner, June27. 2020; Journal Inquirer, June 30, 2020 -- Connecticut Governor Ned Lamont, a Democrat, sees the unfairness of about 50,000 state employees getting a $350 million pay raise next week (on July 1st) while almost 600,000 private sector workers in Connecticut have lost their jobs. He said as much at a mid-June food bank give-away.

It’s not just pay: the state workforce enjoys a contractual no-layoff guarantee through 2021 as well as gold plate health care and pension benefits.

Yet Lamont can’t bring himself to cancel, suspend or even delay the raise, which follows a raise of roughly similar amount a year ago.

As a result of the pandemic, Lamont has the emergency power to override any and all state laws -- even provisions of the U.S. constitution such as freedom of assembly, including the right to gather in houses of worship. Yet he says he lacks the power to do more than ask the unions to forgo the raise? Talk about fecklessness.

The Yankee Institute reports that Democrat governors in New York, Pennsylvania and Virginia have temporarily suspended raises or frozen pay for state employees. Without emergency power, President Obama reminded everyone that “I have a pen and a phone.” One wonders what Lamont has – or hasn’t.

This issue of fair pay is not new. The gap between the compensation of Connecticut state employees and the state’s private sector workers is enormous and has been for at least a decade and a half, despite the whining of state employees, union bosses and union negotiators about all the “sacrifices” they’ve supposedly made. In 2010, the state conducted its own study of total compensation, finding average state employee compensation of $105,000 versus an average of $74,000 in the state’s private sector. That’s a whopping 42 percent compensation premium in favor of state employees.

In 2014, a study by the American Enterprise Institute (AEI) found the same 42 percent compensation premium – the biggest of all 50 states. It wasn’t just benefits. Connecticut was the only state where average state employee wages were higher than average private sector wages. Note, this was a 50 state study, so the AEI researchers couldn’t “cook the books” to make Connecticut, or any state, look good or bad.

In 2019, AEI conducted another 50 state study, this time comparing all public sector employees (state and municipal) to private sector workers. Based upon the latest data (2017), Connecticut's pay gap had widened to 51 percent. Notably, the 2017 data predates the 5.5 percent raise last year and the 5.5 percent wage increase next week, which will propel state workers even further ahead of the state’s beleaguered private sector workers.

This compensation disparity is unfair no matter how or when you look at it. And Lamont won’t act, and the unions won’t concede?

Instead of offering concessions, the unions have mounted a campaign to deflect attention from their upcoming wage hike. SEIU 1199 is running a TV advertising campaign highlighting the heroic work of essential state workers in fighting coronavirus. The ad overlooks all the non-essential state workers still drawing pay checks while idle at home, albeit through no fault of their own. The ad forgets that the overwhelming majority of frontline workers are municipal employees (police, fire and EMTs) and private sector employees (doctors and nurses).

Legislatively, the unions and their apologists are campaigning for the state to raise taxes on “the rich” That doesn’t address unfairness. Raising taxes on the rich won’t close the gap between state and private sector compensation.

Moreover, the unions forget that the rich are included in the compensation numbers. State employees out-earn the average of all private sector workers, including those high earners, which just dramatizes how much more state employees earn than “99 percent” of private sector workers.

Continue Reading:

• Read and comment here on The Red Line
  
• Read in Hartford Courant
  
• Read in CT Examiner
  
• Read in Journal Inquirer
  

The nation and Connecticut are reopening fitfully and unevenly from a shutdown that many think should not have happened – many including Pulitzer-Prize-winning columnist Thomas Friedman of the left-leaning New York Times and Dr. David L. Katz, a Connecticut MD and an expert with a public health degree from Yale.

Our “one-size-fits-all” shutdown policy is strange in the face of a virus which afflicts different population segments in such wildly different ways. For those over age 65, who comprise only 16 percent of the country’s population, the virus has been devastating. This age group has sustained about 80 percent of nationwide deaths – 94 percent of Connecticut fatalities have hit people over 60.

Additionally, it is just plain common sense that people with serious prior conditions would be at greater risk, and that transmission would be greatest in densely populated urban areas and in communal residential settings for seniors. An estimated one-third of national fatalities occurred in nursing homes, and almost 70 percent of Connecticut deaths occurred in nursing homes and assisted living communities.

To have imposed a uniform stay-home-shutdown policy was like a shoe store selling only size-8 shoes.

Before the U.S. shutdown began, data out of China and Italy were unambiguous that the virus attacked the elderly and spared those younger. Moreover, the first U.S. outbreak occurred at a nursing home in Washington State.

Tragically, the attempt to protect everyone left the most vulnerable nakedly exposed. A central precept of medicine in the context of scarce resources is triage. God knows, we had scarce resources as the pandemic broke out. When everyone can’t be saved, triage means focusing policy, effort and resources in a manner designed to maximize survivors – in the case of this virus, that means protecting those most clearly vulnerable.

Instead, nursing homes were overlooked at best, and, even worse, in New York and some states, governors forced them to admit infected seniors. Will these governors be held to account?

From the start, many saw a targeted approach without a total economic shutdown as a better approach. Unfortunately, partisanship has developed, with most Democrats supporting the universal stay-home-shutdown policy and many Republicans the targeted alternative. So, looking at the targeted alternative through the eyes of Thomas Friedman may help.

Continue Reading:

• Read and comment here on The Red Line
  
• CT Examiner
  
• Read in Republican American
  
• Read in CT Hearst newspapers