May 2014 - The Capitol Update: 2014 Session - Connecticut General Assembly
"The Best-Laid Schemes O’Mice An’ Men Gang Aft A-Gely"
(Often Go Awry)
- From Robert Burns’ Poem "To a Mouse" (1786)
Fresh from unparalleled state economic development programs which poured millions of dollars of financing and loan guarantees into companies and businesses across the state and the infusion of new revenues into the state’s coffer, together with a warming state economy, Governor Dannel Malloy, in February, touted these collective successes in his opening address to the 2014 Connecticut General Assembly. He highlighted a projected surplus of $500 million as evidence that our economy has turned a corner and that we are now “seeing real progress” in our state.
To compensate Connecticut taxpayers for past “shared sacrifices” and to encourage responsible government, Malloy proposed to send refund checks of $55 to most Connecticut residents, deposit $250 million into the Rainy Day Fund and make an extra $100 million payment toward state pension obligations. The Republican members of the General Assembly countered with their own $500 million finance and tax cut proposals.
But on April 30, the budget bomb went off. Budget officials reported anticipated tax receipts fell by $300 million and the expected $500 million surplus experienced a spectacular free fall to $43 million. Available data suggests state officials and legislators significantly overestimated personal income and corporate revenues for Fiscal Year (FY) ‘14. Additionally, economists believe tax revenues dropped due to a combination of the fiscal cliff created by Congress at the end of 2012, the impact of bad weather on consumer purchases and a housing market that has not fully recovered from the recession.
Faced with shrinking revenue projections, Governor Malloy and the legislature jettisoned his “refund check” initiative, delayed tax breaks and sales tax exemptions for retired teachers, nonprescription drugs, and clothing costing less than $50 and swept $200 million from miscellaneous state accounts, together with adding an anticipated $75 million in new revenue from delinquent taxpayers, to rebalance the budget for FY ‘15. Despite Republican objections to what they termed “gimmicks that threatened the state’s future,” the budget was approved in May by a vote of 21-15 in the Senate and 99-55 in the House.
Major Bills Approved
Observers who enjoy witnessing the mad rush to pass legislation at the end of legislative session were not disappointed this year. Collectively, the House and Senate approved 162 bills on the last day of the session. One was a 300 plus page bill that covered everything from the creation of a new state administered retirement plan for the private sector, to transparency for hospital facility fees, to restructuring the pension system for judges, a comprehensive study of the state’s tax system and the creation of a new 529 program to encourage savings to pay future higher education costs.
Other issues dealt with by the legislature include a massive agreement between United Technologies and the state to allow the aerospace company to utilize $400 million of unused tax credits in return for up to $500 million in company investments in Connecticut and guarantees of continued corporate presence in the state. Combined with $40 million in bonding for the Connecticut Manufacturing Innovation Fund and $40 million in bonding for the Regenerative Medicine Research Fund, the Governor and legislative leaders moved to expand Connecticut’s research and development capacity over the next five years.
This year’s legislature passed a measure which places Connecticut in the forefront of the thirty-four states considering increases in minimum wages. By January 1, 2017, most employers in Connecticut will be required to pay an hourly minimum wage of $10.10. The federal minimum wage is $7.75 per hour. President Obama has asked Congress to increase the federal minimum wage to $10.10 over a three-year period. Congressional Republicans are not expected to act on his measure.
After years of aggressive lobbying by Advance Practice Registered Nurses (APRNs), Connecticut will join seventeen other states allowing APRNs to practice independently. Such nurses must be licensed and have practiced in collaboration with a physician for at least three years and 2,000 hours. The new law does not apply to Certified Registered Nurse Anesthetists.
To resolve a festering public policy issue, a last minute agreement was patched together allowing for-profit hospitals and health systems to become medical foundations and purchase nonprofit hospitals following a hearing process and approval by the Commissioner of Public Health and the state’s Attorney General.
On the last day of the session, the legislature established a moratorium on the receipt of waste produced by hydraulic fracturing (fracking). No moratorium was applied to the import and use of natural gas produced through the fracking process. The legislature also approved an administration bill to transfer the powers of the Connecticut Resources Recovery Authority to a new Materials Innovation and Recycling Authority with an emphasis on recycling, reuse, energy and fuel recovery. Two new state laws were approved to give both the Department of Energy and Environmental Protection and the Department of Agriculture the authority to place conservation and preservation restrictions on department-owned land and one to require the state’s Water Planning Council to prepare a state water plan by July 1, 2017.
Residential electric customers gained some additional protections in contracts with electric suppliers through contract transparency requirements and proposed regulatory activity by the state Public Utilities Regulatory Authority. With regard to nursing homes, the legislature also stepped in to require new reports to the Department of Social Services on annual profit and loss statements from any related party (i.e., a relationship by birth, marriage, or domestic partnership or through common ownership, control, or business association with any of the owners, operators, or officials of the nursing home) if the related party receives $50,000 or more for providing goods, fees and services to the nursing home.
Additionally, in the three-month legislative session, the members of the General Assembly passed a new law to create the legal framework for social benefit corporations. Twenty-one other states now permit such entities which can consider social benefits as part of their activities in addition to shareholder value. The legislature also expanded the scope and policies required of public and private institutions of higher education with regard to sexual assault, intimate partner violence and community awareness campaigns. And to encourage the development and use of three of Connecticut’s under-utilized deep water ports in Bridgeport, New Haven and New London, the legislature authored a new law creating a Connecticut Port Authority with extensive powers and duties over these transportation entities.
Of the more than 1,000 bills considered this year, some significant measures died on the “legislative operating table.” Primary among these were a measure to permit physician-assisted suicide in this state for terminally ill patients, a bill to limit property tax exemptions for colleges, hospitals and other nonprofit institutions, juvenile justice reform, Keno, a bill banning the sale of genetically modified grass seed, additional funding for community health centers, and post-traumatic stress disorder benefits for on-the-job trauma.
The Next Six Months
State government and its activities in the next six months will be clouded by the haze of pre-election politics. Conventions during the third weekend in May produced the major candidates for state-wide political office. The Democratic party endorsed all its incumbent candidates, while the Republican party endorsed a host of new candidates, most of whom will face a primary on August 12. Ambassador Tom Foley, the endorsed Republican gubernatorial candidate, will be challenged by Danbury Mayor Mark Boughton and Senate Minority Leader John McKinney. The winner of this primary will face Governor Malloy in the general election on November 4, 2014.
Recent reports suggest that former Democrat insider Jonathan Pelto is considering a third-party run for governor. Pelto will need signatures from 7,500 registered voters to get on the November ballot. Finding the funding, however, to run a credible campaign would be much more difficult. Democratic apparatchiks have been putting out a “spoiler” alert in an attempt to extinguish the Pelto flame to protect Governor Malloy.
The campaign for governor will be decided by two very critical issues to voters – trust and the economy. Currently, according to a recent Gallup poll, Connecticut residents are tied with the citizens of Florida and Nevada in holding a general distrust of their state governments. This places Connecticut in the bottom eight of the fifty states surveyed. Not surprisingly the economy also tops Americans’ concerns when asked about the most important problems facing the U.S. This may explain why in a recent poll almost one-half the residents of Connecticut want to leave this state for greener pastures.
Governor Malloy is given high marks for his energy and is generally viewed as trustworthy (Quinnipiac Poll- May 9, 2014). Citizens like his leadership capabilities in crises and support his efforts to craft responsible legislation. On the downside, the Governor continues to be haunted by the $1.3 billion tax increase he pushed through the legislature in 2011 to balance the state’s budget. It also is clear he continues to bear the burden of Connecticut’s economy which is still suffering from the recession that dramatically impacted this country between March 2008 and February 2010. Connecticut’s unemployment rate stands at 6.9% versus the national rate of 6.3%. The housing market continues to be soft and weather-related disruptions this winter held back consumer spending. On the plus side, a majority of Connecticut’s industry sectors have added jobs in the last year.
Undoubtedly, the three prospective Republican gubernatorial candidates will challenge Malloy’s economic and progressive record. Pocketbook politics has a long and well-established record in Connecticut. Ratings of governors have soared and fallen on the strength of the economy. Malloy will trumpet his efforts in assisting over 1,000 companies create more than 11,000 new jobs and a record of retaining 30,000 jobs that might have moved out of state. Foley, Boughton and McKinney will say his efforts were not enough and that the imposition of higher minimum wages, looming budget deficits and the high cost of energy threatened the future of the state’s economy. Get ready for Connecticut’s own version of a political Roller Derby as we move closer to Election Day.
State-Wide Democratic Candidates
- Dannel P. Malloy – Governor 1
- Nancy Wyman – Lieutenant Governor 1
- Denise W. Merrill – Secretary of State 1
- Denise L. Nappier – State Treasurer 1
- Kevin Lembo – State Comptroller 1
- George Jepsen – Attorney General 1
State-Wide Republican Candidates
Tom Foley – Governor 1
Penny Bacchiochi – Lieutenant Governor 1
Heather Bond Somers
Peter Lumaj – Secretary of State 1
Timothy Herbst – State Treasurer 1
Sharon McLaughlin – State Comptroller 1
Angel Cadena Jr.
Kie Westby – Attorney General 1
1 Indicates party endorsed candidate
* Seeking to qualify by petition