Tag: Connecticut

Can Baby Bonds Fight the Wealth Gap and Racial Inequality? Connecticut Aims to Find Out.

Mary Pat Campbell

Link: https://www.ineteconomics.org/perspectives/blog/can-baby-bonds-fight-the-wealth-gap-and-propel-racial-equality-connecticut-aims-to-find-out

Excerpt:

Connecticut has made history as the first state to implement a baby bonds program — fully funded for 12 years of babies.

The state will invest $3,200 for each baby covered by HUSKY, the state’s Medicaid program – that’s about 15,000 babies a year and a whopping 36% of the state’s children. Kids are automatically enrolled; no action is required. Upon reaching adulthood (18-30), participants can claim funds for specific wealth-and-opportunity-building purposes like higher education, a home purchase, or starting a business in the state. To receive the funds, they have to be Connecticut residents and need to complete a financial literacy course (hopefully not one funded by self-serving Wall Street firms). The initial $3,200 investment is anticipated to grow to $11,000 – $24,000, depending on when claims are filed.

Turning the idea of baby bonds into reality was a rocky road: the Democratic-led Connecticut General Assembly passed the bill in 2021, championed by former Democratic Treasurer Shawn Wooden. However, Governor Lamont and his team initially opposed the program’s funding, citing concerns over borrowing more than $50 million annually. Internal conflict heated up, as revealed in a January 2023 investigation by the Connecticut Mirror, exposing tensions between Wooden and the governor’s staff. Yet, following the publication, the situation took an unexpected turn. The program became a reality.

The sticking point of funding was solved by a plan to use a $393 million reserve fund established in 2019 during the restructuring of the state’s cash-strapped pension fund for municipal teachers. Originally designed to cover shortfalls in pension fund contributions, this reserve could be repurposed. To safeguard the pension system and meet ratings agencies’ requirements, a $12 million insurance policy was necessary, leaving approximately $381 million available for investment in the baby bonds program.

Author(s): Lynn Parramore

Publication Date: 27 Feb 2024

Publication Site: Institute for New Economic Thinking

Government Unions Target Fiscal Sanity in Connecticut

Mary Pat Campbell

Link: https://www.nationalreview.com/2024/02/government-unions-target-fiscal-sanity-in-connecticut/

Excerpt:

Connecticut taxpayers, saddled with a pension system for state workers and teachers marked by decades of underfunding, glimpsed a ray of hope in 2017 when legislators embarked on a path toward accountability and fiscal discipline by enacting “fiscal guardrails.”

Now, state unions under the umbrella of the State Employees Bargaining Agent Coalition are clamoring for the removal of the fiscal guardrails that were constructed to prevent the same unions from driving taxpayers over the cliff. The staggering state debt of more than $80 billion, including unfunded pension debt from the state workers’ and teachers’ pension funds, bonded debt, and health-care liabilities, was the result of years of irresponsibility and political horse-trading with state unions that were all too eager to negotiate benefits without a sustainable funding plan.

…..

Connecticut has long been a high-income per capita state and also imposes one of the country’s most burdensome tax systems. Yet it still managed to accumulate the highest state debt per resident. The 2017 bipartisan fiscal guardrails constituted a recognition that the previous decade’s cycle of budget shortfalls, followed by significant tax increases, was simply unsustainable.

The guardrails were codified in 2023, and the general assembly unanimously voted to extend them for another five years. Their very effectiveness in slowing spending growth has made them susceptible to attack from state unions.

Author(s): Frank Ricci and Bryce Chinault

Publication Date: 13 Feb 2024

Publication Site: National Review Online

Connecticut starts new year with better pension funding

Mary Pat Campbell

Link: https://insideinvestigator.org/connecticut-starts-new-year-with-better-pension-funding/

Excerpt:

According to the latest valuations, Connecticut’s State Employees Retirement System (SERS) increased its overall funded ratio from 48.5 percent in 2022 to 52 percent in 2023, and the Teachers Retirement System (TRS) increased its funded ratio from 57 percent to 59.8 percent.

Although neither is considered healthy in terms of pension funding, it does mark a turnaround following years of increasing unfunded liabilities and, therefore, increasing annual payments toward the debt, increased taxes and contract negotiations with state employees that increased their contributions and lowered benefits to make up the difference.

Former Gov. Dannel Malloy had stated that Connecticut’s tax increases in 2011 and 2015 went entirely to pay for the escalating cost of state employee and teacher pensions.

While the year-over-year change seems somewhat small, the change in funding ratio over the past eight years is much more substantial. In 2016, SERS was only 36 percent funded with $20.3 billion in unfunded liabilities. While SERS continues to have roughly $20 billion in unfunded liabilities, its assets have grown by $10 billion during that period, significantly increasing the funding ratio.

Meanwhile, the unfunded liability for TRS has increased by $3.3 billion over that same time frame, but assets increased by nearly $8 billion, increasing the funded ratio from 56 percent to nearly 60 percent. The total unfunded debt for TRS currently stands at $16.4 billion.

Author(s): Marc E. Fitch

Publication Date: 2 Jan 2024

Publication Site: CT Inside Investigator

How methadone, other meds are helping to lower CT opioid deaths

Mary Pat Campbell

Link: https://ctmirror.org/2023/12/03/ct-opioid-epidemic-methadone-buprenorphine/

Excerpt:

Even more, the health professionals who administer methadone — and another commonly used treatment drug called buprenorphine — say the medications enable people to find new jobs, to regain custody of their children and to more easily recover from the mind-altering effects of opioids.

Lugo is just one of the tens of thousands of people who benefitted from a methadone treatment program in Connecticut in recent years, but state officials want to see that number increase even more to combat the state’s ongoing epidemic.

A special advisory committee, set up to manage roughly $600 million in opioid settlement funds for Connecticut, published a report earlier this year that laid out several key strategies for curtailing opioid overdoes in the state, and it argued that increasing the accessibility and use of methadone and buprenorphine would be the most effective approach to stemming the mounting death toll.

….

Sharfstein, who also cowrote a book titled “The Opioid Epidemic: What Everyone Needs to Know,” said treatment programs that incorporate methadone and buprenorphine meet both of those principles.

The effectiveness of medication-assisted treatment, Sharfstein said, has been reviewed by the American Medical Association, the American Psychiatric Association and the National Academies of Sciences, Engineering, and Medicine.

And research has suggested that the use of methadone and buprenorphine in treating opioid use disorders can substantially reduce people’s chances of fatally overdosing — some studies suggest by up to 50%.

“For a disease that is killing many Americans, that is a significant reduction in mortality that you can get with appropriate treatment that includes medications,”  Sharfstein said. “And that I think is just an incredibly important point to keep in mind as officials are thinking about expanding access to treatment.” 

Author(s): Andrew Brown

Publication Date: 3 Dec 2023

Publication Site: CT Mirror

A State Tax War

Mary Pat Campbell

Link: https://www.city-journal.org/remote-work-and-the-state-tax-war

Excerpt:

The Supreme Court’s unwillingness to intervene in a fight among states over taxing income from remote work may spark a jurisdictional revenue war. In August, the Court refused to take up a lawsuit by New Hampshire against Massachusetts’ practice of levying income taxes on Granite State residents employed by Bay State companies but working from home during the Covid lockdowns. Now New Jersey officials, who filed an amicus brief in the case because the state’s telecommuting residents are similarly taxed by New York, have proposed a law that would let the state tax telecommuters, including possibly tens of thousands of Empire State residents now working from home but employed by Garden State companies. The in-your-face legislation also provides incentives for Jersey residents to challenge New York’s law in tax court—one of the only venues left to residents after the Supreme Court decision. Given that several hundred thousand New Yorkers once commuted to other states to work and may now be staying home to telecommute, Albany risks losing revenues. 

Beginning in March 2020, Covid restrictions brought a sharp rise in telecommuting, or working remotely from home. Studies have suggested that, during the pandemic’s initial phases, up to 36 percent of all private-sector employees, or about 43 million people, worked at home at least one day a week, and 15 percent, or about 18 million, telecommuted full-time. Census data before the pandemic found that as many as 6 million workers regularly cross state lines to go to their jobs. So it’s likely that several million current telecommuters have jobs with firms in another state. In New Hampshire, about 15 percent of residents with jobs—some 84,000 workers—commuted to Massachusetts pre-pandemic.

Author(s): Steven Malanga

Publication Date: 26 Sept 2022

Publication Site: City Journal

Report: CT’s pension debt remains high despite residents’ personal wealth

Mary Pat Campbell

Link: https://ctmirror.org/2022/08/02/report-ct-pension-debt-personal-income-high-eighth-worst-us/

Graphic:

Excerpt:

When Connecticut deposits roughly $4.1 billion into its pension funds this fall, it will mark the third consecutive year the state used its budget surplus to whittle down the massive pension debt accrued over more than seven decades.

But a recent analysis from The Pew Charitable Trusts provided a sobering reminder of just how far Connecticut still has to go — even considering its great wealth — to overcome decades of fiscal irresponsibility.

Connecticut had reported more than $41 billion in combined debt among its pensions for state employees and for teachers following the 2019 fiscal year. According to Pew, that represented 14.8% of Connecticut’s personal income at the time — more than double the national average of 6.8%.

Connecticut was one of just 10 states that topped the 10% mark, and ranked eighth-worst overall. New Jersey finished at the bottom with pension debt equal to 20.2% of statewide personal income.

Author(s): Keith Phaneuf

Publication Date: 2 Aug 2022

Publication Site: CT Mirror

CT poised to pay down $3.6 billion in pension debt

Mary Pat Campbell

Link: https://ctmirror.org/2022/05/20/ct-poised-to-pay-down-3-6-billion-in-pension-debt/

Excerpt:

Connecticut is poised to deposit an extra $3.6 billion in its cash-starved pension funds when the fiscal year closes in June, after tax revenues surged yet again on Friday.

Those supplemental payments would be on top of the $2.9 billion in required contributions Connecticut made this fiscal year to pensions for state employees and municipal teachers. 

Those projections were included Friday in the latest monthly budget estimates from Gov. Ned Lamont’s administration, which also forecast a $3.8 billion surplus for the current fiscal year.

Author(s): Keith Phaneuf

Publication Date: 20 May 2022

Publication Site: CT Mirror

Education advocates: Pension savings system reinforces inequities in CT’s schools

Mary Pat Campbell

Link:https://ctmirror.org/2021/12/16/education-advocates-pension-savings-system-reinforces-inequities-in-cts-schools/

Graphic:

Excerpt:

Two Connecticut governors have tried — and failed — to shift some of the massive cost of teacher pensions onto municipalities, arguing it’s inherently unfair for the state to foot the entire bill.
Education equity advocates hope to resurrect that debate this year — with a big twist.
Rather than trying to bolster the state’s coffers, the Connecticut chapter of Education Reform Now (ERN) wants the state to bill the wealthiest school districts and use at least some of those resources to help the poorest communities.

….

Connecticut’s second-largest education-related expenditure  — about 7% of the General Fund or $1.44 billion this fiscal year — is the required annual contribution to the teachers’ pension fund. That hefty pension contribution consumes resources that normally would be spent on school operations or other core programs in the state budget.
For most states, this pension expense is much less. According to ERN, Connecticut is one of only seven states that spare towns from contributing toward teacher pension costs.

Author(s): Keith Phaneuf

Publication Date: 16 Dec 2021

Publication Site: CT Mirror

Lamont will ask lawmakers to resist the urge to spend big in next CT budget

Mary Pat Campbell

Link:https://ctmirror.org/2022/02/08/lamont-will-ask-lawmakers-to-resist-the-urge-to-spend-big-in-next-ct-budget/

Excerpt:

That doesn’t mean there’s nothing important in the budget. Connecticut is in the midst of a two-year plan to put nearly $6 billion in federal coronavirus aid to work to bolster its schools, health care system, economy, and state and local governments.

While the plan is generating big surpluses in state finances, the jury is still out on the overall Connecticut comeback. And since the state will invariably face a fiscal shock in 2024 — when $6 billion in federal aid has expired — Lamont is cautious about tackling anything more ambitious right now.

….

The state has the legal maximum in its rainy day fund, $3.1 billion or 15% of annual operating expenses, and already made a supplemental $1.6 billion payment last fall to reduce pension debt.

But with a nearly $2.5 billion surplus projected for the current fiscal year, the state can keep its reserves full, reduce more pension debt and help do more for those hardest hit by the pandemic, Walker said. 

Author(s): Keith Phaneuf

Publication Date: 8 Feb 2022

Publication Site: CT Mirror

Public sector pensions are prime beneficiary of federal COVID relief grants

Mary Pat Campbell

Link:https://ctmirror.org/2021/07/07/ct-public-sector-pensions-are-prime-beneficiary-of-federal-covid-relief-grants/

Excerpt:

Yet an analysis by the CT Mirror shows that more than six out of every 10 federal relief dollars built into the new state budget that began July 1 effectively will wind up in public-sector pension accounts.

And while Gov. Ned Lamont and others insist the new state budget — and the billions Congress sent to Connecticut via the American Rescue Plan Act — will be used to heal the state’s wounds, others question whether the administration’s priorities are askew. Pension debt deserves to be addressed after being ignored for decades, they say, but that shouldn’t come at the expense of the state’s response to a once-in-a-century health and economic crisis.

….

Analysts project the newly adopted $46.4 billion, two-year state budget will close in July 2023 with $2.3 billion left over — an amount that exceeds the $1.8 billion in federal coronavirus relief built into the budget. Because the state’s rainy day fund already is filled to the legal maximum, those dollars must go into either the pension fund for state employees or the retirement system for teachers.

And that’s in addition to the nearly $6 billion in required pension deposits Connecticut already plans to make as part of the two-year budget. That’s a supplemental payment of more than 35%.

Author(s): Keith Phaneuf

Publication Date: 7 July 2021

Publication Site: CT Mirror

CT to borrow over $1.3 billion to fund a long list of state, local projects

Mary Pat Campbell

Link:https://ctmirror.org/2021/12/21/ct-to-borrow-over-1-3-billion-to-fund-a-long-list-of-state-local-projects/

Excerpt:

Gov. Ned Lamont helped to hand out more than $1.3 billion on Tuesday by voting to have the state borrow money to pay for various infrastructure projects, state grant programs, improvements at a mental health center in Bridgeport and a new train station in Enfield.

In total, the State Bond Commission, which Lamont leads, agreed to fund more than 50 different projects, programs and initiatives — some of which were championed by state lawmakers who are heading into a campaign season next year and are eager to bring home financial wins to their district.

….

The more than $1 billion in spending that was approved Tuesday will be financed through state revenue and general obligation bonds, which Connecticut officials market to Wall Street investors and will eventually need to repay with interest.

Connecticut frequently relies on that type of borrowing capacity to finance school construction efforts, capital projects at state universities, transportation upgrades, building maintenance projects, land preservation deals and the smaller community projects that often benefit state legislators. This week’s meeting marked the third bond commission gathering this year.

State legislators largely control the first step in the borrowing process by adopting a two-year bond package, but after that, the governor and the executive branch get to decide what gets funded and when.

Author(s): Andrew Brown

Publication Date: 21 Dec 2021

Publication Site: CT Mirror

COVID-19: Eight Dead, 89 Infected In Outbreak At Connecticut Nursing Home

Mary Pat Campbell

Link:https://dailyvoice.com/new-york/northsalem/news/covid-19-eight-dead-89-infected-in-outbreak-at-connecticut-nursing-home/819985/

Excerpt:

Eight residents of a Connecticut nursing home have died during a COVID-19 outbreak that has lasted nearly six weeks.

A total of 89 employees and residents have tested positive since the outbreak began at the Geer Nursing and Rehabilitation Center, located in Litchfield County, in the Town of Canaan, on Thursday, Sept. 30.

“Despite seeing significant numbers of residents recovering from Covid,” the facility’s chief executive Kevin O’Connell and nursing director Cady Bloodgood said in a statement. “testing has resulted in one additional positive case among fully vaccinated residents and staff members. Sadly, we have lost eight residents with serious underlying health issues to Covid.”

Author(s): Joe Lombardi

Publication Date: 14 Nov 2021

Publication Site: Daily Voice