Hartford Business Journal

28 Hartford Business Journal • April 4, 2016 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL Sustainability commission should be supported D esperate times call for desperate measures. It's an overused phrase but one that accurately reflects the circumstances surrounding the city of Hartford and its grim financial outlook. Freshman Mayor Luke Bronin is facing fierce resistance from unions, nonprofits and others on his proposal to create a financial sustainability commission, but we largely support his efforts to truly reform the Capital City, whose ailing financial position has been recklessly brushed over for years. With the city facing a $48.5 million deficit next fiscal year, and even larger deficits down the road, Bronin will need flexibility to reduce expenses wherever possible. And that puts union wages and benefits directly in the crosshairs. The city of Hartford – and the state for that matter – can no longer be handcuffed by labor contracts that make it impossible to adjust to this new era of slow economic growth and stagnant wages. And by adjust, we mean the city needs the ability to freely reduce costs when spending significantly outpaces tax receipts. We aren't advocating for the end of collective bargaining, but Hartford must have greater power to renegotiate contracts city taxpayers can no longer afford. And that's what the financial sustainability commission would allow for; specifically, it will serve as an arbitration panel if the city is unable to reach agreements with its unions. It would also give an oversight board made up of various constituents, including two business representatives and one union representative, among others, final say over new labor contracts and the ability to negotiate pension and health benefits. The City Council would still have a final say on the commission's recommendations. Organized labor has accused Bronin of union busting. No doubt this is a much tough- er stance on unions than many city employees are used to, particularly from a Demo- cratic mayor. (It's ironic that Connecticut's two highest-profile Democrats — Bronin and Gov. Dannel P. Malloy – have turned into enemies No. 1 and 2 of organized labor). Again, this is another clear sign that desperate times require desperate measures. To be fair, Bronin's commission proposal doesn't simply target organized labor. He's asking for shared sacrifice, including the power to levy a commercial property tax surcharge – likely targeting the city's largest property owners — and establish a payment-in-lieu-of-taxes program for nonprofits. Both of those proposals have raised concerns – particularly among not-for-profits, like hospitals, facing their own budget woes – but not outright opposition from the MetroHart- ford Alliance, the city's top business lobby typically loathe to any threat of tax increases. In its response to Bronin's proposal, the Alliance asked for a cap on any surcharge and also for the entire commission to be sunset by the end of fiscal 2019. Along with city employee compensation reforms and pension reductions, the Alliance also wants resi- dential homeowners to contribute more — all fair and reasonable demands in exchange for potentially soaking Hartford's largest taxpayers and employers with higher costs. More importantly, Bronin's proposal doesn't mention increasing the city's highest- in-the-state 74.29 mill rate, a move that would further deteriorate small businesses' ability to operate in the city. Of course, Hartford doesn't need the state's permission to raise its mill rate, but Bronin has wisely said publicly such a move risks "killing a city." Bronin will have to risk much of his political capital early on if he is going to get his com- mission passed by the state legislature, but the price will be worth it. Without greater flex- ibility to deal with its fiscal crisis, Hartford's financial position will continue to deteriorate. If that happens the end result could be a state takeover or bankruptcy — two scenarios that will be even more unpleasant to city workers and pensioners. The surrounding region, as Bronin has noted, will also feel the pain of a weakened Capital City. Let's hope we can avoid those outcomes. n RULE OF LAW State's lockbox proposal may be unenforceable By John Horak I first heard the idiom "fool me once shame on you, fool me twice shame on me," in a 1967 episode of Star Trek in which Engi- neering Officer Scott was duped into respond- ing to a phony distress signal planted by the Klingons – only to have the Klingons try the same thing again. These words reverberated with me as I drove home from a Feb. 9th forum at UConn Law School con - vened by the Metro- Hartford Alliance to discuss the state's 1992 constitutional spending cap and the proposal to enact another constitutional spending provision – the so-called transportation fund "lockbox." The lockbox would secure funds (make sure they are used as intended and not divert- ed to other expenses) raised for Gov. Malloy's proposed 30-year transportation infrastruc- ture improvement plan Let's Go Connecticut! The lesson Scott learned from the Klin- gons is one that Connecticut voters should heed because the only reasonable inference to draw from the remarks of elected officials at the UConn forum (Richard Balducci and Attorney General George Jepsen) is that the constitutional cap was a well-camouflaged ruse. Accordingly, when it comes to the lock- box the question is whether we will shame ourselves by being fooled twice. The answer appears to be "yes." More on that later. Balducci was Speaker of the House in the 1991-1992 legislative session, and, as he said at the forum, "spending caps" were used as a bargaining chip in 1991 to induce legislators to vote for the then new personal income tax. In 1991, the legislature enacted a statutory spending cap and drafted and approved the constitutional version for placement on the Nov. 2, 1992 ballot (where voters approved it with an 80 percent majority). The constitutional cap was needed because a statute can always be amended or repealed by future legislators willing to renege on a past promise – which is not the case with controls imposed by the constitution (which is also the theory behind the lock box). Jepsen's topic at the forum was the con- stitutional cap. He is familiar with the topic because he was in the state Senate in 1991- 1992; and, in November of last year, he issued an Attorney General's opinion letter conclud- ing that the cap is not legally enforceable. His reasoning: The constitutional cap (as drafted by the legislature in 1991 and approved by voters in 1992) is circular in that it requires the legislature to define economic measuring terms used in the cap with a 60 percent majority vote (which it has refused to do) – such that the cap will not be enforceable until this happens. Jepsen's opinion differs from a 1993 opin- ion letter from then Attorney General Rich- ard Blumenthal, which concluded the cap is enforceable as written. My disquietude with the speakers' semi- casual treatment of the constitutional cap and the people who voted for it caused me to re-read Jepsen's 2015 opinion in detail – and in doing so it dawned on me that his conclu- sion is based on the fact that the constitu- tional cap was drafted (by the legislature) purposefully to be unenforceable. In other words, the voters who approved the cap thinking otherwise did so with legislature's wool pulled firmly over their eyes. This conclusion is self-evident if you con- nect the dots in the record of the 1991 House and Senate debates, on which Jepsen relies as a basis for his opinion. He writes that dur- ing the "debate on the proposed amendment, legislators discussed the requirement that the General Assembly define the amend- ment's key terms and recognized that these definitions were essential prerequisites to the amendment taking effect." He then quotes Rep. Shaun McNally to the effect that the cap "provides the potential for future spending control … [it] does not pro- vide any guarantees." At the UConn forum he noted the continuing antipathy for spending controls of any type among legislators (which I interpreted to mean they intend never to define the terms). The sleight of hand upon the voters is also self-evident from the relevant voting percent- ages. A 75 percent vote was needed in the House and Senate in 1991 to approve the text of the con- stitutional cap before it could be put on the Nov. 1992 ballot. The vote in favor was 100 percent in the Senate and 97 percent in the House. So, despite these overwhelming percent- ages ostensibly in support of enforceable spending controls, legislators did not then, and never have, mustered a 60 percent vote to fix the problem by defining the terms (which are the same terms as in the statutory cap). I voted for the cap in 1992. Not wanting to be fooled twice I reviewed the most recent version of the proposed text of the constitu- tional "lockbox," and found that it lacks not only precise definitions, but the essential ele- ments needed to ensure enforceability – such as giving the court's jurisdiction to intervene if the legislature breaks its word and a clear statement of who would have standing to sue to compel enforcement. To put it simply – this is a sieve and not a locked box and our state leaders should be ashamed of themselves for trying to pull the wool over our eyes a second time. Any read- ers who voted for the spending cap in 1992 and who share my concerns about being fooled again should beam them up to their legislators with a demand for intellectual honesty. n John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. His opinions are his own. HARTFORDBUSINESS.COM POLL Will bioscience be the CT economic engine most hope it will be? ● Yes ● No ● Too early to tell To vote, go online to HartfordBusiness.com. Last week's poll results: Should municipalities or the state receive event admissions tax revenues? 30.8% State 30.8% Municipalities 38.5% Neither — Eliminate the tax John Horak Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com. Or you may fax submissions to Editor, Hartford Business Journal, at (860) 570-2493.

• Cover