The Red Line

This is a column about a column.

On November 4, 2019, the Wall Street Journal published a column entitled “The Truth About Income Inequality,” by Phil Gramm, former U.S. Senator from Texas, and John Early, twice Assistant Commissioner of the U.S. Bureau of Labor Statistics.

The column makes a convincing case that the U.S. enjoys remarkable income equality –  not inequality.

This reality flies in the face of the almost universal belief that the U.S. suffers from gross income inequality, which notion serves as the foundation of all the extravagant proposals from one side of the political spectrum, ranging from free college and Medicare for All to the wealth tax that Elizabeth Warren and Bernie Sanders advocate.

Gov. Ned Lamont is poised to re-launch his highly unpopular tolls plan, revised to reduce tolling to a rumored 16 to 18 gantries located only on bridges in need of repair. So what happened to the governor’s concern with traffic congestion? Repairing bridges, however necessary, won’t relieve congestion.

It could be that Lamont is holding a Tolls 2.0 plan at the ready, including the remainder of his original 59 gantries and his trademark congestion pricing scheme, ready to be sprung on the public once he’s established his 16-18 gantry beach head.

In anticipation of Tolls 2.0, it’s worth reminding our wealthy governor of the obvious: Most people on congested rush hour roads are driving to work. So, tolls are effectively a payroll tax. Moreover, congestion pricing wouldn’t reduce congestion, because people can’t be late to work — they can’t wait for lower toll rates later on.

Ironically, there’s a simple tax-free way to reduce congestion, and it is already in use across the state. School districts employ staggered “school bell times.” Preschools start at one time, elementary schools at another, and middle schools and high schools at yet other times. This avoids local traffic jams and optimizes bus utilization

The state could follow the same approach, mandating that municipalities and major employers collaborate to devise staggered work days. In Hartford, Aetna could begin its day at 8:15 a.m., while CIGNA in neighboring Bloomfield could start at 9 a.m. and most state employees might be required to show up at 7:30 a.m.

If local school boards can accomplish this kind of system planning, why can’t local governments and major employers?

Once widely used, the now arcane term “featherbedding” describes perfectly the modus operandi of public sector unions in the state of Connecticut.

Webster’s dictionary defines featherbedding as “the requiring of an employer, usually under union rule or safety statute, to hire more employees than are needed or to limit production.” Wikipedia offers the same definition, elaborating that featherbedding involves “work procedures which appear pointless, complex and time-consuming merely to employ additional workers.”

A recent CT Mirror article on staffing in one of the state’s 15 prisons reported “According to figures provided by DOC [Department of Corrections], there were 139 corrections officers and supervisors for 78 inmates one day last month. That does not include medical or mental health staff assigned to the facility [Northern Correctional Institution].”

An isolated aberration? No.

There’s a strange ongoing media fascination with former Democratic Gov. Dannel P. Malloy, including a Sept. 5 article “State employee OT is up, but salary costs are lower than a decade ago,” focusing upon his efforts to downsize the state labor force and negotiate wage concessions from state unions.

It’s a marvel that anyone is interested in someone who left office as the least-popular governor in the country.

But that’s the point. The recent article implies that Malloy’s unpopularity reflects an unfair assessment of his performance and that he deserves a resurrection. He doesn’t. He mismanaged the state labor force, achieving insignificant downsizing and perpetuating overgenerous wages.

First, it was diversion. Now it’s “interception.”

First, Gov. Ned Lamont diverted car sales tax revenue that his predecessor Democrat Dannel Malloy committed to the Special Transportation Fund (STF). Lamont’s diversion completely undermined public confidence in the “lockbox” that is supposed to protect transportation funds in the STF and destroyed any possibility for tolls.

At the very beginning of the budget process, Lamont announced that he would divert $1.2 billion of car sales taxes over five years, but, in face of a huge public outcry, he backed down, diverted only the $58 million in the current budget and promised not to divert funds from the STF in future budgets, Scout’s Honor.

Yet, now, we discover that Lamont is “intercepting” (diverting) revenue that is supposed to go into the General Fund and redirecting it to fund his off-budget, public-private partnership with billionaire Ray Dalio.

What if every smoker in Connecticut stopped smoking? What a boon to the health of the citizenry! However, the state would be out about $365 million in annual cigarette tax revenue.

Virtually the same thing just happened. The state’s largest retailers stopped offering disposable plastic check-out bags to customers Thursday, rather than begin paying Governor Lamont’s new 10-cent tax on each bag. The new state budget includes $55 million in plastic bag-tax revenue over the next two years. With the state’s retailers going cold turkey, that revenue is unlikely to materialize.

Gov. Ned Lamont made much of delivering a budget on time this year. It may have been on time, but it wasn’t balanced, and still isn’t. And tolls wouldn’t balance future budgets, either.

Connecticut citizens may recall that Gov. Lamont promised hundreds of millions in current budgetary savings from a reduction of the state’s current contribution to the State Employees Retirement fund (SERS), without much mentioning that this entails even greater overall pension contributions over the 30-year span of amortization.

This scheme is a classic case of kicking the can down the road, with the can getting bigger in the process. Nevertheless, this past Thursday the governor announced triumphantly that he had union approval of the scheme, which “saves” roughly $2 billion through 2032 (about $270 million in the current two-year budget), but increases costs by almost $5 billion from 2032 to 2047.

Gov. Ned Lamont is threatening to implement Republicans’ debt-financed transportation proposal, “Prioritize Progress,” if General Assembly Democrats don’t approve his tolls-funded transportation initiative. So the team captain tells his squad that, if they don’t follow his lead, he’ll defect to the opposing team? Strange.

On June 26th, The CT Mirror online newspaper reported that Lamont is threatening to reduce non-transportation borrowing and increase transportation borrowing, if the General Assembly doesn’t approve tolls.

To all Republicans and many Democrats in the Assembly and to the legions of Connecticut residents opposed to tolls, that’s a “make-my-day” threat, as in Clint Eastwood’s famous words in the movie “Dirty Harry.”

Gov. Ned. Lamont is being dishonest, although he may not realize it. Tolls won’t fund our transportation needs. The condition of Connecticut finances is so dire that it is inevitable that toll receipts will be diverted from transportation to cover ever-increasing state budget deficits.

Tolls revenue will merely replace current transportation funding, yielding no net increase in funding for roads and rails. In reality, tolls are just another funding source.