Hartford Business Journal

28 Hartford Business Journal • November 12, 2018 • www.HartfordBusiness.com EDITOR'S TAKE CT Republicans push further into irrelevancy T he Grand Old Party in Connecticut is once again the Grand Out of Power Party. Nutmeg State Republicans suffered another devastating loss Nov. 6, losing the gov- ernor's mansion, ceding power in the Senate and widening a deficit in the House. Democrats will once again fully control the two major branches of govern- ment while the state faces a $4 billion-plus budget deficit over two years. Higher taxes and/or fees will be a predictable outcome, as will a $15 minimum wage and paid family medical leave. At a time when Connecticut was in desperate need of fis- cal conservatism, we got a blue wave. Split government would have been better. So what happened? The Republican party once again proved its irrelevancy and nominated another unappealing gubernatorial candidate. President Donald Trump played a major role in this election. Even though recent polls found Trump to be more popular than Gov. Dannel P. Malloy, the president's boorish behavior and lack of stately leadership energized the Democratic base — and rightfully so — helping lift Connecticut Democrats' chances. The fact that Bob Stefanowski at times aligned himself with Trump was a strange and off-putting miscalculation by the nov- ice politician. But he had many other shortcomings as well. His decision to maintain his false promise to eliminate the income tax over eight years hurt his credibility. Any informed voter would know it's essentially impossible, if not irresponsible, to implement such a policy, especially at a time when Connecticut has major debt and long-term liability issues. Stefanowski was either lying about his intentions to sway an uninformed electorate, or he thought his overall message as a tax cutter would resonate in a highly overtaxed state. It's somewhat understandable he took that stance during the Republican conven- tion and primary, which featured myriad candidates. He needed to find a way to stand out and his pledge to erase the income tax was effective. But any good politician knows a move to the center on certain issues is usually needed during a general elec- tion to appeal to a wider electorate. Stefanowski refused to do it. He should have backed off the income-tax- repeal pledge and run on a platform to reduce the tax, but not eliminate it. Threatening to cut out 50 percent of the state's revenue, with no realistic plan on how to pay government's bills, is no way to win an election in a dark blue state. Meantime, his lack of knowledge and interest on other issues, ranging from energy to health care, also made him an overall unimpressive candidate. His lack of access to the media was also misguided because it created resentment among the press corps, whose tone, at times, reflected that. The media sets the narra- tive on political candidates and Stefanowski left himself open to criticisms. Finally, his constant negativity on the campaign trail didn't help either. Yes, Connecticut is in rough shape right now, but a leader must point to a brighter future. Too often, he failed to do that. In spite of those shortcomings, Stefanowski kept the race close. However, current conditions in the state made it ripe for a Republican victory at the top of the ticket (minus the Trump influence, of course). For the last three election cycles, Republicans nominated millionaire candi- dates who lacked charisma, weren't all that familiar with state government and didn't fully resonate with the majority of voters. That playbook is outdated. If Republicans want to shape the future course of Connecticut's near-term history, they must groom informed and civically en- gaged candidates who can appeal to blue state voters, including those in cities. And they better start now. OTHER VOICES It's time for a state board of finance By R. Michael Goman F or most people, reducing government spending is a dull topic. We readily agree that something needs to be done, but we're at a loss as to exactly what to do. Balanced-budget amendments and the like sound good but have proven ineffective, as they are easily bypassed by those motivated to find loopholes in the law. That's because the people we elect to make the laws also control the spending. The current state of Connecticut's finances proves that concentrating the power to spend, tax and borrow in the hands of one group of people — the state legislature — simply doesn't work very well. In reality, our system is rife with conflicts of interest. There is a clear misalignment of goals between politicians and taxpayers, only some of whom, incidentally, even bother to vote. We shouldn't be surprised that things have gone this way. Many politicians first look after their self- interest when they hand out more money to more groups. Our democ- racy incentivizes them to behave this way since that's how they get re-elected. We must stop encouraging un- sustainable spending and begin to return our state toward a better financial standing. This requires separating those who decide how to spend the money from those who have overall control of the state's finances. That means establishing a better system of financial checks and balances. Think of this as analogous to the board of an organization versus those who run the company day to day. The board serves a critical role in the management of the organiza- tion, overseeing the condition of the company's balance sheet, holding operating people accountable for utilizing the company's resources productively, and establishing limits on spending. Perhaps most impor- tantly, the board represents the stakeholders, ensuring that the oper- ating people don't put the organiza- tion into jeopardy by borrowing and spending beyond what the company can sustain. Such separation already exists in most Connecticut towns. The town council (or board of selectmen) and the town's board of finance are separate, with the finance board charged with overall control of the purse strings. The board of finance decides how much town residents can be taxed, how much the town can borrow and how much the council, selectmen and board of education can spend. These local structures are a proven way to check local government spending — virtually all Connecticut towns run a balanced budget each year. If we adopted this system at the state level, we would elect people to a legislative branch of government and also a state board of finance. Each would have very distinct and sepa- rate responsibilities. The state's finance board would determine what total tax burden the economy could afford to support. It would then set overall debt and bud- get limits but exercise little control over the details of how the money was spent. The legislative branch would continue to decide how to spend the budgeted money, but it would no longer control the total amount available to spend by raising taxes or authorizing borrowing at will. Would such a finance board be elected or appointed, and for how long? I'd suggest a blend of elected and appointed members so that the board has people with the requisite skills as well as general representa- tives of the electorate. Importantly, board terms should be lengthy since most financial oversight and planning efforts benefit from a long-term horizon. Think of this state board as a sort of "supreme court" of finance, overseeing and protecting the state's financial condition. No doubt this would be an unpopu- lar idea among many politicians since it would limit their ability to tax and spend. It would require a change to the state constitution, and political leaders who are committed to doing what's right for our state. Most of all, it would require an engaged elector- ate that demands this change be made to restore fiscal sanity. Whatever the method, we need a better system of financial checks and balances — and the sooner, the better. Connecticut's next generation is counting on us. R. Michael Goman is a principal of Goman + York Property Advisors LLC, an East Hartford-based real estate advisor. Goman is also a member of the Simsbury Board of Education. Opinion & Commentary Greg Bordonaro Editor R. Michael Goman If Republicans want to shape the ... course of Connecticut's near-term history, they must groom informed and civically engaged candidates who can appeal to blue state voters.

• Cover