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OVERVIEW

The Connecticut General Assembly voted on more than 1,000 bills over the past two years. Most of these made minor changes and were adopted unanimously. Other votes reveal the differences between those legislators that would harness the power of individual liberty and the market to improve lives, and those that prefer a centrally-planned approach.

This Voter Guide contrasts these views on the basis of ten key bills considered in 2011-2012 and identifies how each legislator voted.

LEGISLATION CONSIDERED

1, 2 – ObamaCare for Connecticut in Two Parts

The General Assembly considered H.B. 6308, An Act Concerning Healthcare Reform, that opened the state’s health insurance plan to municipal and non-profit employees. This bill transforms state government into a provider of health insurance coverage to thousands of new individuals despite the state’s inability to manage its current health care-related costs.

The bill passed the House of Representatives by a vote of 88 to 48 and the Senate with 22 votes in favor and 14 opposed. Governor Malloy allowed the bill to become law without his signature.

An Act Establishing a State Health Insurance Exchange, S.B. 921, created a state health insurance exchange
as required to implement the Patient Protection and Affordable Care Act (PPACA), otherwise known as ObamaCare. Federal law encourages states to create an online portal that will offer taxpayer-subsidized health insurance plans to eligible buyers. Many states concerned about the cost of the program chose not to set up an exchange.

The legislation passed the Senate 23-13 and the House 108-30. Governor Malloy signed it into law on July 1, 2011.

The Yankee Institute proposes a significantly different vision for a patient-centered health care reform as described in the Yankee Institute 2012 Policy Guide (http://www.yankeeinstitute.org/2012policyguide):

• Encourage individual ownership of health insurance policies • Promote the adoption of health savings accounts (HSAs)
• Allow the interstate purchasing of health insurance
• Reduce the number of mandated coverages

• Reallocate Medicaid into a voucher-based insurance system for low-income individuals • Reform the tort system
• Eliminate unnecessary scope of practice and certificate of need regulations

The new laws move Connecticut further away from patient-centered health care reforms that use the power of the marketplace and individual choice to drive down costs and improve quality.

3 – Paid Sick Leave Mandate

Connecticut became the first state in the nation to require most employers with more than 50 employees
to provide paid sick leave with passage of S.B. 913, An Act Mandating Employers Provide Paid Sick Leave to Employees. The legislation raised the cost of employment in Connecticut though the state’s unemployment rate exceeded 8.0% in 34 of the last 38 months (May 2009 – July 2012).

The bill passed in the Senate by a vote of 18 to 17 and in the House by a tally of 76 to 65.

The Yankee Institute’s plan for economic reform focuses on reducing the cost of employment. The competitive market should be allowed to determine wage and benefit levels rather than a government-mandated price floor. The state’s action artificially increases the cost of labor in Connecticut, serving as a deterrent to additional hiring and a disincentive to employing people. Repealing the measure would be a small step toward improving economic competitiveness in the state.

4 – Malloy Tax Hikes

Though Connecticut’s state-local tax burden was already the third highest in the nation, in 2011 the General Assembly approved Gov. Dan Malloy’s proposal for the largest tax increase in Connecticut history. The legislation, An Act Concerning the Budget for the Biennium Ending June 30, 2013, and Other Provisions Relating to Revenue, S.B. 1239, created or increased 77 taxes and fees that were estimated to generate $1.9 billion in new revenue for state government.

The measure passed the Senate by a vote of 19 to 17 and 83 to 67 in the House. Gov. Malloy signed it on May 4, 2011.

Yankee notes that inflation-adjusted state spending growth dramatically outpaced growth in gross state product, median income, and population since 1970. Despite this, the state actually had fewer jobs in 2010 than it had in 1990. The Yankee Institute supports tax & spending reform that reduces the tax burden on Connecticut’s citizens in order to incentivize economic growth and expand employment.

5, 6 – Malloy’s Crony Capitalism: First Five & the October Jobs Bill

The Malloy Administration’s First Five program offers financial incentives to businesses pledging to create at least 200 new jobs in Connecticut. Since the program’s launch in 2011, participants are set to receive up to $315 million in taxpayer funds:

• Cigna – $47 million
• TicketNetwork – $7.75 million
• ESPN – up to $24.7 million
• NBC Sports Group – $20 million
• Alexion Pharmaceuticals – up to $51 million
• CareCentrix, Inc. – up to $24 million
• Deloitte – up to $14.5 million
• Bridgewater Associates – up to $115 million
• Sustainable Building Systems – up to $19.1 million

TicketNetwork withdrew from First Five after CEO Donald J. Vaccaro was arrested on a hate crime charge.

An Act Creating the First Five Program, S.B. 1001 passed the Senate 32 in favor with 4 against and 116-26 in the House. Governor Malloy signed it into law on July 8, 2011.

In the October 2011 special session, the General Assembly considered An Act Promoting Economic Growth
and Job Creation in the State, HB 6801. The measure contained a host of initiatives intended to spur economic development including expansion of Gov. Malloy’s First Five program, the establishment of a new job creation tax credit, and an increase in the number of productions eligible for the film production tax credits, and more.

The legislation was approved by the Senate 34-1 and 147-1 in the House.

In July 2012, the Mercatus Center’s Michael Mitchell released his white paper The Pathology of Privilege: The Economic Consequences of Government Favoritism. Mitchell highlights the major problem with crony capitalism:

“Whatever its guise, government granted privilege is an extraordinarily destructive force. It misdirects resources, impedes genuine economic progress, breeds corruption, and undermines the legitimacy of both the government and the private sector.”

Rather than trying to force economic development through the top-down approach pursued by First Five and the Jobs Bill, the Yankee Institute proposes tax and spending reform to incentivize bottom-up growth. As described in the 2012 Policy Guide, reducing costs on families and businesses will encourage organic economic growth. Reducing the tax burden, the high cost of electricity, and other similar efforts will encourage private actors to create economic growth organically.

7 – Bioscience Connecticut

The Malloy Administration is trying to replicate the success of business clusters in Silicon Valley, California, the Research Triangle in North Carolina, and the Route 128 Corridor in Massachusetts with the Bioscience Connecticut initiative. The plan aims to link the University of Connecticut, the UCONN Health Center, and Yale University in a cluster focused on specialized medical research. To support the initiative, the Malloy Administration requested legislative support for a $290 million investment for Jackson Laboratory, a Maine-based company that will pursue genome-based medicine at a new facility in Farmington.

The legislation, An Act Establishing the Bioscience Connecticut Program, S.B. 1401, was approved in the Senate by a vote of 21 in favor, 14 opposed and in the House by a tally of 101 for and 41 against.

The Yankee Institute notes with caution the words from the Brookings Institution study on business clusters: “Although government policy can play an important supporting role, it is abundantly clear that government
can almost never create clusters where none exist.” The Malloy Administration effort to do so seems unlikely to succeed.

8 – Creative Accounting to Cover Up State Budget Deficits

The historic Malloy tax increase failed to fully close the Fiscal Year 2012 budget deficit, forcing legislators to act in 2012 to re-balance the budget. They increased net General Fund appropriations by $187.5 million and reshuffled spending across numerous spending categories.

The bill, An Act Making Adjustments to State Expenditures for the Fiscal Year Ending June 30, 2012, H.B. 5557 passed the Senate 22-13 and the House 95-49.

The Yankee Institute supports comprehensive budget reform that shrinks the size and scope of state government in Connecticut while making the state far more conducive to economic growth and development.

9 – Forced Unionization of Family Child Care Providers and Personal Care Attendants

The General Assembly considered An Act Creating a Process for Family Child Care Providers and Personal Care Attendants to Collectively Bargain with the State, H.B. 5312, in 2012. This legislation sought to codify in law two executive orders issued by Gov. Malloy in September 2011, Executive Orders 9 and 10.

Home daycare providers offer child care services to friends, family members, and neighbors. They are entrepreneurs operating a business out of their home to earn a living. Gov. Malloy used the state subsidy for some daycare services through the Care 4 Kids program as a way to inject the state into the relationship between service providers and their clients.

Similarly, the state subsidizes personal care attendants for individuals with disabilities through Medicaid. They were also targeted for unionization.

Malloy set in motion a process that forcibly unionized these independent contractors into the Service Employees International Union (SEIU). These individuals will be forced to pay union dues and otherwise participate in collective bargaining efforts with no means of opting out of this process.

The Yankee Institute, in conjunction with aggrieved home daycare providers and personal care attendants, and Connecticut Personal Care Assistance, Inc. sued the Governor on the basis of both constitutional and labor law violations.

The General Assembly took action to retroactively codify Gov. Malloy’s orders. The legislation passed the Senate 22-14 and 84-57 in the House. Gov. Malloy signed it on May 14, 2012.

The Yankee Institute argues that independent contractors should be allowed to set their prices based on market demand, not government interference. Yankee also opposes the effort to use state subsidies as a mechanism to expand the power and influence of public labor unions. Yankee’s lawsuit remains in litigation.

10 – Mandating Project Labor Agreements for Public Construction Projects

Though public construction projects are already notorious for the host of rules and regulations that artificially drive up their cost, the General Assembly added another with its passage of S.B. 33, An Act Concerning Department Transportation Project Delivery and Project Labor Agreements for Certain Public Works Projects. It enables public entities to require a Project Labor Agreement (PLA) on construction projects. PLAs typically require all subcontracted work be completed by union shops.

The General Assembly passed the measure 32-3 in the Senate and 109-37 in the House.

The Yankee Institute plan for economic reform would enable open shop contractors to compete on a level playing field with union shops. Taxpayers benefit when contractors compete which drives down costs and improves the quality of work.

 

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