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Carol’s Column: 2021 – A Year for Freedom and Opportunity

Carol's Column, Featured Columns , 0 Comments

Welcome to 2021! I’ve always believed it’s just human nature to welcome the new – it is, after all, a fresh start, limited only by the imagination’s boundaries. Perhaps for that reason, I found myself once again engaged in an annual ritual of formulating a resolution with my family at brunch last weekend. Of course, this exercise represents the triumph of hope over experience, but let’s be honest: one needs to be an optimist to thrive in Connecticut these days.

Fortunately, I am one. And along with the rest of the Yankee Institute team, I’m refreshed, recharged, and ready to take on whatever the governor and the legislature has in store for the people of our state this year.

Make no mistake – they’ve already been busy. While many of us were about our business preparing for the holidays, Governor Lamont quietly signed Connecticut on to the highly regrettable Transportation Climate Initiative (TCI), a regional plan that originally included 12 states and DC (now boasting only CT, MA, RI and DC). It includes all the extortionate features of tolls without any their benefits to our transportation system, or, indeed, to our state at all.

The TCI establishes an emissions cap, forcing gasoline distributors and producers to purchase carbon allowances. The emissions cap would decrease annually, with the money extracted from the sale of carbon allowances being sent to DC before being redistributed to participating states, both to fund electric vehicles and to allow politicians to posture about securing “climate justice.” So far, even Governor Lamont’s two counterparts in the Northeastern Wearisome Threesome – Governors Cuomo of New York and Murphy of New Jersey – have declined to sign on to a deal this terrible.

Count me confused. Connecticut is facing massive unemployment with an epidemic of small businesses closing in the wake of a pandemic – yet our governor’s priority is “climate justice”? When Connecticut’s people already pay the 15th highest gas tax in the country, and the second-highest electricity costs? Can Governor Lamont be unaware that the TCI will raise the price of gas by up to 17 cents per gallon in only the first year, costing the average Connecticut family up to $450 per year in additional fuel costs?

What a difference a year makes! Recall that as they attempted to jam tolls through, the governor and the legislative majority repeatedly told us it was essential to fix roads and bridges. But now we’re supposed to pay more to drive to work in order to fund a socialite’s new Tesla. Huh.

That’s not all the politicians have in mind. Just yesterday, a dozen legislators stood shoulder-to-shoulder with government union activists from SEIU 1199; CSEA; the Congress of CT Community Colleges, and the CT Working Families Party. Predictably (oh, so predictably!), they were calling for higher taxes to fund a supposed “people’s recovery.” Under their plan, our state’s highest income tax rate, at nine percent, would match New York’s, or worse, New Jersey’s, destroying any competitive advantage Connecticut still has over two neighbors with some of the highest tax rates in the nation.  As we’ve seen since massive tax hikes began in 2011, with each new increase, more affluent people leave the state, eroding the tax base and diminishing the revenues available for funding government programs.  There’s little “recovery” for anyone – least of all the poor — in such a scenario.

If Connecticut’s left really wanted to ease the financial burden on struggling state residents, they’d advocate for repealing or delaying the newly-imposed Paid Family and Medical Leave tax – which is being deducted through a mandatory payroll deduction, even though no leave will be available for a year. As always, only the elite are exempted; state employees (who get paid leave in any case, along with generous pay increases), won’t be chipping in.

It’s maddening – and almost enough to shatter one’s shiny New Year optimism. But not quite. There’s reason for hope.

If 2020 taught us anything, it’s that more of us are paying attention than we ever realized. And together, we can make an impact. But we need to work together. This year, we are counting on you. Please stay connected – check the news on our revamped web site, follow us on Twitter (@YankeeInstitute), friend us on Facebook (Yankee Institute).

When the time is right, we will ask for your help. Your participation — your voice — makes a difference.

As always, we will remain vigilant, serving as your eyes, ears – and voice – in Hartford. And we’re particularly excited to have added a new member to our ranks: Our new Director of Policy and Research, Ken Girardin. A Connecticut native, Ken joins us from the Empire Center, where he served as fellow and director of strategic initiatives. Among other publications, Ken co-produced the first independent analysis of New York’s property tax cap – facilitating efforts to make it permanent – and a quantitative analysis of the outsized influence of government unions over state policy. He holds both a bachelor’s and a master’s degree in materials engineering from Rensselaer Polytechnic Institute (RPI) in Troy, New York and worked in the New York State Legislature.

Keep the faith! It’s a New Year. A new future lies before us. Together, we can make it one of freedom and opportunity – for all of us.

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Connecticut saw more high-income people on the move in 2020, according to United Van Lines study

Yankee News , , , 1 Comment

United Van Lines released its National Migration Study on Monday and, despite the pandemic and a hot real estate market, Connecticut was once again in the top five states that saw more people moving out.

According to the study, 63.5 percent of the state’s migration was outbound, compared to 36.5 percent inbound. Connecticut had the fourth-highest outbound rate in the country, with New York, New Jersey and Illinois all faring worse.

The rate might come as a surprise to many, as New Yorkers have reportedly been leaving the city and flocking to Connecticut, but 2020 appeared to be business as usual for Connecticut with the outbound rate very similar to 2019’s study.

United Van Lines, however, also tracked age, the reason for moving and income levels, which showed the majority of moves both in and out of the state were by those in higher income brackets.

According to the study, 48.51 percent of people moving out of the state earned more than $150,000 per year and 25.37 percent of movers earned between $100,000 and $149,999 per year.

Similarly, those moving into the state were also on the high end of the income spectrum, with 52.56 percent earning more than $150,000 per year and 21.79 percent earning between $100,000 and $149,999.

The primary reason for moving out of Connecticut was almost evenly split between those retiring and those moving for job-related reasons. The largest cohort of people moving into the state did so to be near family, followed by those moving for a job. 

Previous years’ data from the Internal Revenue Service has shown Connecticut tends to see a net loss of high income earners who have the resources to be highly mobile. 

If United Van Lines’ data holds true, it means that even with an influx of New Yorkers paying top dollar for Connecticut real estate, Connecticut could once again see a net out-migration of wealth from the state. 

IRS data for 2020 will not be available for at least another year. The most recent data from the U.S. Census Bureau showed Connecticut lost roughly 22,000 people to other states in 2019.

Connecticut has seen eight straight years of migration loss since the state’s population topped out in 2013, with southern states like Florida reaping the benefits from not only Connecticut but other Northeastern states.

Michael A. Stoll, economist and professor in the Department of Public Policy at the University of California, Los Angeles, said the pandemic may have accelerated migration trends.  

“United Van Lines’ data makes it clear that migration to western and southern states, a prevalent pattern for the past several years, persisted in 2020,” Stoll said in United Van Lines’ press release. “However, we’re seeing that the COVID-19 pandemic has without a doubt accelerated broader moving trends, including retirement driving top inbound regions as the Baby Boomer generation continues to reach that next phase of life.”

The study did find differences in the reason people moved during the pandemic, however, with fewer people moving for job-related reasons and more moving to be closer to family.

While Connecticut neighbors New York and Massachusetts also saw more outbound migration, Rhode Island saw more people moving into the state by 10 percentage points.

Idaho was the top inbound state with 70 percent of moves coming into the state, followed by South Carolina, Oregon, South Dakota and Arizona.

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House Republicans call on Lamont to suspend state employee raises, FMLA payroll deduction

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The new year will bring another round of wage increases for state employees and a new payroll deduction for everyone else, and House Republicans are calling of Gov. Ned Lamont to suspend both in light of the pandemic.

“Main street businesses are struggling under the weight of this pandemic, and their employees even more so. Meanwhile, state government chugs along unaffected—those non-frontline workers still have their jobs, they’re still collecting paychecks,” said House Minority Leader-elect Vincent Candelora, R-North Branford. “Letting these scheduled increases go through right now sends an awful message to Connecticut’s lowest wage workers and those hit hardest in this pandemic.” 

The state employee wage increases in January are estimated to cost $34 million, part of an overall two-year $350 million wage increase set in place by the 2017 SEBAC agreement made between the State Employee Bargaining Agent Coalition and Gov. Dannel Malloy.

The agreement offered two general wage increases of 3.5 percent that went into effect on July 1 of 2019 and 2020, along with two step increases generally valued at 2 percent on January 1, 2020 and 2021.

In the lead up to the last general wage increase in July of 2020, Republicans called for Gov. Ned Lamont to suspend the wage increases. Lamont, at the time, said that he supported suspending the raises for non-frontline state employees but that the unions refused and there was nothing he could do because of the SEBAC contract.

Similarly, when the University of Connecticut asked unionized professors to delay their pay raises in order to save some the university’s sports programming, the union likewise refused saying they had sacrificed enough already after years of wage freezes.

The July wage increases came at a time when hundreds of thousands of Connecticut residents were put out of work due to Lamont’s executive order closing all non-essential businesses. The closures primarily affected low-wage workers in the restaurant and hospitality industry.

January will also see a new .5 percent payroll deduction for employees in Connecticut to support the state’s paid Family and Medical Leave program, although the benefits of the program won’t be available until 2022.

The deduction will apply to any employee working for a company with 2 or more employees, estimated at 1.7 million workers in Connecticut, but state employees are exempt from the payroll deduction. Lamont recently dismissed calls for delaying the FMLA payroll tax.

“It’s made worse by the fact that workers scheduled to receive the pay raises, such as unionized state lawyers, are exempt from the new payroll tax that’ll be paid by those in the private sector who worry every day about their job security,” Candelora said.

Connecticut’s job recovery from the pandemic shutdown has slowed and even slid backwards, with the last jobs report noting a loss of 1,600 jobs after months of gains.

Connecticut’s budget, on the other hand, is not quite as dire as original projections warned. Connecticut current fiscal year budget deficit declined to $640 million, bolstered, in part, by gains on Wall Street for Connecticut’s financial sector and the state’s tax on corporations.

However, the budget deficits for the future fiscal years remain hovering around $2 billion per year with Connecticut’s Rainy Day Fund balance at $3 billion.

That Rainy Day Fund balance has allowed Lamont continue to operate the state without making dramatic cuts or suspending scheduled state employee wage increases.

But the optics of state employees receiving wage increases and a new payroll tax during a time of high unemployment, business closures and the lingering threat of further business restrictions could linger for Lamont.

“Governor Lamont punted on the chance to delay pay raises in June as employers and workers came to grips with the financial impact of mandated business closures, guidelines, and restrictions,” Candelora said. “So many residents, and low wage workers in particular, need every dollar in their paycheck. We have to demonstrate to our business community and critical nonprofit providers that we grasp the gravity of the challenges faced by their employees and clients. This is an opportunity to do that—he should delay the raises and payroll tax.”

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New Haven Local 884 union president canned by AFSMCE International

Labor , , , , 1 Comment

AFSCME International removed New Haven Local 884 President Doreen Rhodes and Treasurer Carl Alford from their positions in the union and issued them two-year suspensions after AFSCME’s Judicial Panel determined they had knowingly withheld up to $90,000 in dues payments and tried to interfere with AFSCME Council 4’s attempts to collect the money owed.

According to the Judicial Panel’s decision issued on October 26, Local 884 had failed to remit $90,000 in dues to AFSCME Council 4 over the course of 2018 and 2019. 

When Council 4 Executive Director Jody Barr attempted to place Local 884 on centralized dues collection – meaning members’ dues payments would go directly to Council 4 and then be remitted to Local 884 – Rhodes allegedly intercepted the letter to the City of New Haven so that nothing was changed.

“This was not an example of innocent oversight,” wrote Richard Abelson, the Judicial Panel Chairperson of AFSCME International, AFL-CIO. “This represents a systemic failure to meet the basic obligation of Local 884 to pay its per capita payments in accordance with the Local 884 Constitution, the Council 4 Constitution and the International Constitution.”

Local 884’s officials defended themselves by saying that the arrearages were due to the treasurer battling illness and that all the money was eventually paid back. They argued that the complaint filed by Council 4 and Local 884 member Justin Augustine was a matter of retaliation. 

They also accused Barr of intimidation, sexism and racism, accusations the Judicial Panel labeled “completely unproven and, on their face, absurd.”

Other allegations against Local 884 leadership included collusion with management to not represent a member properly and improper salary compensation of the elected officers. The Judicial Panel dismissed these additional charges, saying it was beyond their jurisdiction.

However, the panel found Local 884’s officers were guilty of failing to remit dues payments to Council 4 in a timely manner, providing accurate financial reports to membership, filing false per capita reports and “the refusal or deliberate failure to carry out legally authorized decisions and the interference with an official of a subordinate body in his discharge of his lawful duties,” stemming from Rhodes’ attempt to block centralized dues collection.

Issues at Local 884 in New Haven were first brought to light in a February 2020 article published by Yankee Institute, as the New Haven 911 dispatchers voiced displeasure with Local 884 and wanted to break away to form their own union.

At that point in time, according to the AFSCME decision, the Local owed $90,000 in dues to Council 4, but Local 884 elected leaders were continuing to receive their stipends from Council 4

Local 884 member Justin Augustine who filed the complaints with AFSCME International said at the time Local 884 was not representing him and his fellow 911 dispatchers properly and was receiving push-back from Local 884’s leadership. 

The Local is comprised of over 400 members in a range of services, from 911 dispatchers to librarians.

Augustine wasn’t the only member with complaints about how leadership was representing. AFSCME’s Judicial Panel briefly examined some of the other issues but could not make a definitive ruling because they involved local collective bargaining agreements and memorandums of understanding.

AFSCME’s Judicial Panel, however, said Augustine “acted outside the lines when he contacted and interviewed with the Yankee Institution [sic], an anti-union, right-wing organization,” but noted it had “nothing to do with the legitimacy of the charges he has brought against the leadership of Local 884.”

Local 884 President Rhodes and Treasurer Alford were removed from their offices and are on suspension from holding any union office within the AFSCME Federation for two years.

The other seven officers and board members of Local 884 were also found guilty of failing to remit dues, interfering with Council 4 and filing false per capita dues reports and were given severe reprimands “and an order not to repeat the circumstances which gave rise to the charges,” according to the decision.

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Governor Lamont Agrees to New, Regressive Tax

Press Release, Yankee Institute Statement 10 Comments

Today, Governor Lamont joined governors in the Northeast region in signing onto the newly-released Transportation Climate Initiative (TCI) Memorandum of Understanding. The initiative would result in $388.6 million per year in increased gasoline costs across the state. 

Connecticut is already struggling amid an economic downturn. Imposing a significant tax increase simply chops any chance of recovery off at the knees and harms working families with a regressive tax at a time when few can afford it. 

Moreover, the TCI has a particularly impact on Connecticut, as our state already has the 15th highest gasoline taxes in the country, and the  second highest cost for electricity in the continental United States. By agreeing to this MOU, Governor Lamont agrees to: 

  1. $388.6 million in additional burdens on the poor and working classes during a time of underemployment and fiscal uncertainty;
  2. Additional layers of bureaucracy (with all their accompanying costs); and
  3. A non-governmental, multi-state agency with no public oversight that will determine how to spend the money with limited legislative oversight. Connecticut, as only one participant in a twelve-state program, is likely to have little say in these decisions.

Yankee Institute president Carol Platt Liebau said, “This new tax is regressive, opaque, and offensive to hardworking Connecticut residents and small business owners who deserve better from a state government that is supposed to care about them and represent their interests – not the interests of an activist group bent on making it too expensive for the average family to drive to work.”

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Gov. Lamont signs on to regional gasoline tax

Energy , , , , 50 Comments

Gov. Ned Lamont today signed onto a regional cap and invest program called the Transportation and Climate Initiative that will raise the price of gasoline by upwards of 17 cents per gallon.

Massachusetts Gov. Charlie Baker sent out a press release of the final Memorandum of Understanding between TCI and other Northeastern states including Connecticut and Rhode Island.

“Participating in the TCI-P will help grow our economy through a fresh injection of capital to provide for jobs and new infrastructure,” Lamont said in the press release. “This collaboration will cut our greenhouse gas emissions, and it will make our urban centers healthier, after decades of being adversely impacted by the emissions being released by traffic every day. Connecticut has always taken pride in our leadership role when it comes to climate, and when we can combine that with a stronger economy, fast transit systems, and regional cooperation, that’s a win for all of us.”

Gov. Dannel Malloy originally signed on to the plan, but Gov. Ned Lamont has wavered on saying whether or not Connecticut would continue its commitment. 

Lamont had also said he would leave it to the legislature to decide whether or not to commit to the regional initiative as Malloy did with the Regional Greenhouse Gas Initiative.

Republican House Minority Leader Vincent Candelora, R-North Branford, said the TCI proposal “will have to come to the legislature.”

“Gov. Lamont can sign on in concept but the details will have to come before the legislature,” Candelora said. “I’d hate to see the legislature defer any of its taxing authority to a regional entity.”

The TCI plan would place a cap on emissions for gasoline producers and distributors, requiring them to purchase carbon allowances. The funds generated – estimated by TCI to be upwards of $7 billion per year – would then be distributed to participating states to invest in electric cars, buses, bike paths and “climate justice” initiatives. 

However, the gasoline producers and distributors would likely pass the additional costs onto drivers, increasing the price at the pump by upwards of 17 cents in the first year alone, according to TCI.

The cap on emissions would be lowered annually, thereby increasing the cost to drivers on a yearly basis.

TCI says the cap and invest system will create jobs and reduce pollution-related illness in affected populations, resulting in $10 billion worth of public health benefits.

Critics, on the other hand, liken the policy to a regional gasoline tax and say that it will hurt working families trying to earn a living commuting to work, particularly in light of the economic suffering caused by the COVID-19 pandemic. 

“TCI is just another gas tax that will disproportionally hurt low and middle-income families who cannot afford an electric vehicle,” said Chris Herb, president of the Connecticut Energy Marketers Association. 

“It is sad that Connecticut would even consider increasing the cost of driving to work, bringing their children to school, and going to church only to advantage people who can already afford to buy an EV,” Herb continued.

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