Nipocalypse! The State Continues Its War on Those Menacing Little Nips
General Assembly members are debating whether to allow towns to ban the sale of alcohol nips — mini alcohol bottles (50 or 100 ml) in the 2024 session, according to Stratford Rep. Joseph Gresko (D-121). The proposal was revealed during the public comment portion of the Bottle Bill Advisory Group meeting — on July 24 — when Dr. Bud McAllister stated that he was “sick and tired of picking up the little nip bottles.”
In discussions with the Environment Committee co-chair Sen. Rick Lopes (D-6), Rep. Gresko hinted the committee is entertaining “giving municipalities the ability to ban the sale of nips, if they choose to.”
Several communities in Massachusetts have banned the sale of the miniature bottles including Chelsea — which adopted the measure in 2018. According to Chelsea Police Chief Keith Houghton, the ban has reduced alcohol-related emergency calls and its downtown area has not only seen less panhandling, but also cleaner streets.
Results weren’t as great for Chelsea liquor stores where nip sales account for as much as 20 percent of all sales, according to the Massachusetts Package Stores Association. However, sales escalated in surrounding areas, including by 63% in East Boston, 25.8% in Revere and 13.8% in Everett after the Chelsea ban went into effect.
In 2021, the General Assembly thought they had solved the problem of lazy people littering the state with empty nips by imposing a five-cent surcharge on every nip sold in the state. Unlike bottles and cans where consumers are incentivized to return their “empties” for their five-cent deposit refund, the nip surcharge is nonrefundable, and the revenue goes to the state coffers.
Every April and October each municipality receives a payment of five cents for every nip sold in their respective town that is to “reduce the impact of litter caused by solid waste.”
Shockingly this turned into nothing more than another government money grab as towns received thousands of dollars in cash rewards but the litter still remained. Since the start of the program on Oct. 1, 2021, the state has divvied up over $6.6 million to Connecticut towns and cities.
The last round of checks totaled $2.4 million, making it the strongest six-month period to date.
Department of Economic and Community Development and its Fuzzy Math
The Department of Economic and Community Development (DECD) has once again either over or under-reported figures when it comes to reporting grant funding and state assets according to an Aug. 9 audit.
The audit report covering the financial reports from Fiscal Years 2020, 2021 and 2022, found three areas where DECD needs a bit of “extra attention.” Interestingly, these reporting inconsistencies are not new to the agency, as the same three areas were flagged in previous audits.
The most notable inconsistency involves the Small Business Express Program revenue in 2022. It turns out that DECD overreported state revenues by a staggering $22 million, which constitutes a substantial 18% of DECD’s total reported figures. The agency agreed with the auditors and promised to make corrections in its 2023 report. However, this same issue was found in fiscal years 2017-2019 (so hopefully they fulfill what they promised this time).
Furthermore, the report brings to light an overstatement of revenues from the state’s Film Infrastructure tax credits, exceeding $600,000 in the same year.
Another point of contention was DECD’s failure to report on the economic impact of incentives administered by Connecticut Innovations, Incorporated (CI). This oversight leaves a gap in evaluating whether these programs are achieving their intended objectives. DECD assured that “CI’s programs have a positive impact on Connecticut’s economy” and will include this information in future annual reports.
Another noteworthy discovery pertains to DECD’s exaggeration of Urban and Industrial Site Reinvestment tax credits over three consecutive years by $10 million.
Why does this matter?
According to its website, DECD is “the state’s lead agency responsible for strengthening Connecticut’s competitive position in the rapidly changing, knowledge-based global economy.”
These discrepancies in reporting place state legislators and program administrators in a dilemma, as they must make crucial decisions with incomplete information. This deficiency in data could impede the General Assembly’s ability to endorse, reject, or modify these programs in the future, potentially resulting in suboptimal choices.
For example, at the end of the 2023 legislative session the film industry tax credit was expanded when it was inserted into the budget bill at the last minute — skipping the legislative process. The Office of Fiscal Analysis calculated the cost to be $6.5 million over the next two fiscal years. Would Hollywood have received as much welfare if lawmakers had accurate information?
UConn Spending Like a Drunken Sailor
The Wall Street Journal (WSJ) reported Wednesday (Aug. 10) that the country’s public colleges have “been spending money like there is no tomorrow” paid in part by students and their loans.
WSJ took a deep dive into financial records dating back to 2002 from “50 universities know as flagships, typically the oldest public school in each state, and adjusted for inflation.” They found at the median flagship university spending rose 38%; however, the University of Connecticut (UConn) was almost double that.
Between 2002 and 2022, UConn experienced a staggering 73% increase in its spending, outpacing the growth in enrollment by a significant margin. A major factor behind this surge was the rise in personnel costs “with spending on benefits more than tripling.”
Reka Wrynn, associate vice president of budget, planning and institutional research at UConn, correctly pointed the finger at big labor for their part in this fiscal dumpster fire. She said that the school was on the hook for a growing share of the state’s unfunded pension liability. Additionally, Connecticut was obligated to pay for raises that unionized employees negotiated with the state.
UConn’s Board of Trustees revealed last August that contributions directed towards addressing the unfunded pensions of state employees total $1,000 for each student. This financial obligation coincides with the ongoing increase in the university’s tuition fees.
Taxpayers are also on the hook. In 2022, UConn was responsible for paying $147.8 million in unfunded fringe liabilities but ended up being reimbursed by the state $111.1 million. The balance — $36.7 million — was paid for out of their revenues like tuition.
The bleeding doesn’t stop there. Lawmakers slipped into a budget funding for a pilot program designed to reimburse eligible individuals for their student loan payments.
Each participant will have the chance to receive up to $5,000 per year, with a maximum of $20,000 over four years of being part of the program. The distribution of awards will be based on a first-come, first-served approach for eligible applicants.
To qualify, participants need to have lived in the state for at least five years; maintain an adjusted gross income below $125,000 for individual filers or $175,000 for joint filers; possess a student loan from a public or private college; hold a professional or occupational license; and have left college with good academic standing before completing their degree.
In exchange for this substantial sum of money provided by taxpayers (including those who didn’t pursue higher education), recipients will be required to commit to volunteering a grueling fifty unpaid hours for each year of participation.
This Week on Yankee’s Podcast Y CT Matters
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