Hartford Business Journal

14 Hartford Business Journal • February 20, 2017 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL Wisely, Malloy's budget shows a pro-business approach G ov. Dannel P. Malloy's two-year $40.6 billion budget proposal is liked by few, hated by many and loved by no one. Yet, we think the Democratic governor proposed an overall fair budget, con- sidering it needed to balance billion-dollar deficits in each of the next two fiscal years. Let's be honest, no one constituency in the state was going to be held totally harm- less from budget cuts or policy changes that aim to restore financial stability in a state that has lacked it for far too long. The key to Malloy's proposed budget is that he avoided any major income or business tax hikes, something the state's slow-growing economy can't afford. Malloy has apparently heeded the clar- ion calls from the business community, which responded harshly and publicly in 2015 to attempts by the legislature to raise business taxes by hundreds of millions of dollars. Months later, of course, one of those outspoken companies, General Elec- tric, announced it was moving its corporate headquarters to Boston. (GE's move was precipitated by several factors including a desire to be in a more high-tech city.) The governor is also demanding state labor unions to cough up $1.5 billion in concessions over two years, a large number that may or may not be achievable. If it can't be done, Malloy says up to 4,200 state employees could lose their jobs. We hate to see the state resort to layoffs, but since long-term debt costs related to state retiree benefits are a major driver in Connecti- cut's escalating expenses, labor unions must be asked to bear a significant part of the burden. State workers, after all, are here to serve the residents of Connecticut, not hold them hostage in the middle of a budget crisis. We urge labor unions to come to the table and negotiate givebacks because layoffs would have a harsher effect on the state's economy. Through his budget blueprint Malloy is acting more like a chief executive and less like a politician. Yes, Malloy's budget is still a very political document, but the progres- sive Democrat has prescribed some of the toughest medicine to his core labor-union constituency, which helped him win two elections. That's because economic realities have left few other options and Democrats' typi- cal tax-and-spend playbook has proven incapable of solving Connecticut's fiscal crisis. Indeed, long-term private-sector job and wage growth is the only way Connecticut can grow its way to balanced budgets. That can't happen if we continue to sack busi- nesses with higher taxes. As a result, Malloy must perform a corporate restructuring to the state government apparatus, significantly lowering overhead and other costs while also improving overall efficiency. There are concerns we still have with the budget. There is a lack of clarity on how changes to municipal funding will impact property taxes, which are already high in the state. What is known is that some municipalities will be winners (mainly poorer cities like Hartford that will receive increased funding) while many others (smaller, wealthier communities that will take a funding haircut) will be losers. If some cities and towns are forced to significantly raise property taxes to make ends meet, it could negatively impact many small businesses. That being said, we think it's time for local communities, which have been spared from funding cuts in the past, to share in some of the state's financial pain. Cities and towns should be forced to do some of the same cost-cutting as state government. n HARTFORDBUSINESS.COM POLL Should CT raise the sales tax to help municipalities raise more money? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: How does your company cope with winter storms? 23.1% Stays open 7.7% Closes down 69.2% Allows work remotely OTHER VOICES Do not fear the oncoming era of driverless vehicles By Brian C. Berry A utonomous vehicles. Driverless cars. Self-driving automobiles. No matter how it is phrased, it still seems like a foreign and futuristic concept to many. Over the past century, the "horseless carriage" has moved from an odd curiosity to the single most popular form of transportation the world has ever seen. But one constant has remained. Someone was always needed behind the wheel to drive it. Maybe not for much longer. The era of the autono- mous vehicle is not a dream anymore; by and large, it is just about here. How do we get ready for this new era? The answer is, believe it or not, we already are. Yes, it is hard to imagine what the world will look like when driverless cars arrive; the changes will be disorienting to say the least. Concepts and costs that today we expect to be "fixed" will no longer be so. Perhaps it's easier to consider, though, when we think about how innovation inspires adaptation and "thought evolution." It is human nature to continuously find new and better ways to get things done. Think of how medicine has changed over the past 150 years. Look at what happened when electricity became widely used in the late 19th century. Consider aeronautics and aviation, an industry that has taken us on a wondrous ride over the past 100 years. This is thought evolution to a tee; innovation inspires human adaptation in thought and action. Driverless vehicle technology represents the next step for the automobile. Rather than fear it, we should embrace and respect it. While autonomous cars are not yet ready for the mainstream market, products and servic- es powered by advanced analytics have hit the market in a big way, proving that machines can learn and can display "intelligence." In fact, we don't have to look very far for common applications of artificial intelligence, or "machine learning," which are impacting us right now. Digital assistants, such as Siri and Corta- na, provide voice-recognition services. These pieces of software take audio data and pre- dict the textual equivalent. Auto sensors today avert minor collisions. The reliability of these sensors varies greatly from model to model, primarily because today's automobiles are only very recently becoming digital and connected. Cloud-hosted email services have learned to identify and quarantine phishing exploits, which keeps you safe from ransomware. Home-automation products control our envi- ronment, enable home security systems and turn out the lights. Products like Nest learn your preferences for climate control. Product recommendations from online retailers, such as Amazon and Netflix, have become extremely common. These retailers have taught the technology to learn about humans as consumers. So yes, the machines are working for us today, right now, and autonomous vehicles are on their way as the next great achievement. The fundamentals of machine learning are being proven in millions of little ways; our products and services will be better, more per- sonal, more cost-effective and more timely. The key is not to live in fear of them, but to respect their capabilities and the very nature of thought evolution. If we can do that, the era of the driverless vehicle will be one we can all welcome and embrace. n Brian C. Berry is a director with West Hart- ford-based accounting and consulting firm BlumShapiro. Brian C. Berry LETTER TO THE EDITOR Insurance Dept. on target with insurance network adequacy review With consumer protection as our primary mission, the Connecticut Insurance Department (CID) takes very seriously its regulation of the industry to ensure carriers comply with state laws and regulations. The Hartford Business Journal's Feb. 6 article on the state's new health insurance network adequacy law ("CT expands scrutiny of health plans"), was cor- rect in its characterization of how the law evolved. It took the work of many stakeholders — CID, physi- cian groups, the industry and consumers — to craft a law that ensures consumers have access to robust networks and accurate, transparent provider direc- tories. There are a few points, however, that I would like to share for clarification so that HBJ readers un- derstand this review process. The CID review is on target with the timelines for reviewing surveys of each carrier's network. It is a dynamic process that began in the fall and required CID to request more information from some carriers because we felt we needed more information to deter- mine compliance. As we have done from our analysis of the October survey, we have asked carriers to make changes and we will continue to do so if necessary from the additional information we have requested. The CID review is very thorough and requires carri- ers to provide a detailed set of metrics and processes that include: Number and type of specialists, geographic standards, average length of a provider contract, pro- cesses for provider directory accuracy, etc. The Network Adequacy Survey is public and posted on our website. Ensuring that consumers have the most up-to- date information on provider networks allows individ- uals and employers to make informed choices when it comes time to select a health plan that best meets their needs. This new law gives the CID another regu- latory tool to do just that. I appreciate the HBJ's coverage of this important new law at this early juncture of implementation. Respectfully, Katharine L. Wade Insurance Commissioner State of Connecticut ▶ ▶ Malloy must perform a corporate restructuring to the state government apparatus, significantly lowering overhead and other costs while also improving overall efficiency.

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