New Connecticut Senate leaders cautious but hopeful [New Haven Register]

Newly elected State Senate Minority Leader Len Fasano is photograph in his office in New Haven on 12/23/2014. He is standing next to a photo of the State Senate from 2003 when he first served. (Arnold Gold — New Haven Register)

New Haven Register

HARTFORD >> Martin Looney’s Democratic political career began with a knock on his door by Rosa DeLauro, a young volunteer at the time for Frank Logue’s New Haven mayoral campaign almost four decades ago.

DeLauro went on to win the 3rd District congressional seat in 1990, a position she has held for 24 years, while Looney quickly won election to the state House in 1980 and the state Senate in 1993. After a dozen years as majority leader, he will have reached the pinnacle of his Senate career as president pro tempore starting on Jan. 7.

Across the aisle, a friend, fellow attorney and another native New Havener, Len Fasano, who now represents North Haven, East Haven and Wallingford, will lead the opposition as the Senate Republican minority leader when he is also sworn in on the opening day of the session, having risen up the ranks over the past 11 years.

Since outgoing Senate Minority Leader John McKinney ran in the Republican gubernatorial campaign, Fasano has already been the point person representing the party on partisan issues.

In separate interviews, the two touched on their agendas for the upcoming legislative session with the budget the number one priority for both as the state faces a projected $31.6 million deficit this year, but a $1.1 billion deficit in fiscal 2016 and another $1 billion in fiscal 2017.

Collegial respect aside, they are furthest apart on issues of finance, but on the same page as they try to set up a regulatory environment for hospital mergers, facility fees and the purchase of physician practices. Both are expected to back legislation protecting consumers on these medical costs.

Looney’s outlook for the next two years can best be described as cautious.

Gov. Dannel P. Malloy, re-elected after a tough rematch with Republican Tom Foley, was able to boost education funding and maintain municipal grants for four years, while closing the $1.3 billion deficit he inherited without hurting the towns. It was a model that not many states followed.

Looney was asked if protection for local governments was going to be possible going forward.

“We don’t know yet. Obviously, it is a high priority to try to do, but it is too early to commit absolutely to where we might have to be on these things,” Looney said. “We hope we will be able to.”

Fasano said to keep the towns whole, the legislature had to borrow some funds to cover municipal aid last year and to continue that, it could mean more borrowing and higher debt service.

Pensions and the healthcare contracts are in effect until 2022, but other aspects of the agreements with the state employees are open as of July 1 of next year, including wages, cost of living adjustments and potentially pension arrangements for new hires.

New workers hired after the 2011 negotiations have less favorable pension benefits than workers already on the payroll at that point and that could be the case for staff members hired under a new contract.

“It is all too early to speculate as to what it might be,” Looney said of a contract and while the need to save on pension costs is important, any changes would not factor into immediate savings. Contract negotiations are also the purview of the governor’s office.

As of June 2012, the level of funding for the State Employees’ Retirement System was only 42.3 percent and 55.24 percent for the Teachers’ Retirement Fund. Updates are done every two years and the latest is expected shortly.

For new workers, Fasano would like to see a switch to defined contribution plans, rather than a defined benefit plan

Fasano, referring to a an earlier state study done by the Program Review and Investigations Committee, favors a heavier reliance on private nonprofits to provide social services now done by state workers as a way to save money and in some areas, improve quality.

“If I’m putting a dollar into state government, I’m getting “X” services and “X” medical care, and I put that dollar into nonprofits, I’m getting more out of the that dollar. So it is the same amount of money you are just getting better results and maybe more people treated,” Fasano said.

Looney said shifting the work load to nonprofits would mean increasing state grants that now fund them, leaving him to question any net savings and other aspects of such a plan.

“One of the concerns that we have is that nonprofits pay their workers so much less that there is less stability in employment there and lots of turnover,” Looney said.

Fasano wants to sit down with the Democratic leadership early on to deal with this year’s projected deficit, but more importantly, the projected shortfall in the next biennium. He said this has been rejected by the Democratic leadership and the governor’s office.

He points to the success of the 2012 deficit mitigation plan worked out by the leadership of both parties from the House and the Senate, as well as the chairs of Appropriations and Finance.

“It doesn’t cost anything to talk. We’re here and maybe we come to some common ground. Maybe we don’t, but maybe we do,” Fasano said. “Problems are best resolved with everybody at the table having an open dialogue.”

With the 2012 exception, Fasano said budgets are proposed, negotiated and adopted “by one party-rule and with all due respect, that hasn’t worked out too well.”

He said arguably, such negotiations might not have been possible for the current budget when there was talk that Republican House Minority Leader Lawrence Cafero, R-Norwalk, would run for governor, while McKinney ultimately did so.

“That’s not true now,” Fasano said.

Democrats continue to have the majority in both the House and the Senate with the GOP gaining one Senate seat in this past election, but 11 in the House. Two of them were open seats, while nine were held by Democrats who voted in favor of the gun reform package.

There are 87 Democrats and 64 Republicans in the House with 21 Democrats to 15 Republicans in the House, which keeps the GOP in the role of the loyal opposition, but still lacking crucial bargaining power until the end of the session when they can hold up bills.

One potential source of non-tax revenue to help with the budget could come from additional casinos, but it is speculative at this point.

The Mohegan tribe in November began talking about expanding gambling in the state to stay competitive and protect the jobs they generate, something that ultimately would need the legislature, the governor, the attorney general and the Mashantucket Pequot Tribe to weigh in.

Looney said in such a situation, Connecticut would have to get more than the 25 percent now allocated from slot revenues and others have argued it would need to realize a percentage of the entertainment and table revenues as well.

“I haven’t heard anything recently about any momentum toward a casino proposal,” Looney said, although there are concerns about the impact of casinos opening in Massachusetts, even if it is just the novelty factor of visiting a new facility.

Looney said he is not making a categorical statement one way or the other on an additional casino in Connecticut.

“If new revenues are needed, obviously, in many ways, it is easier to look to non-tax sources than to tax sources. But again, there is no consensus on it at this point,” Looney said.

So far, the only lawmaker pushing consideration of a casino is Rep. Peggy Sayers, D-Windsor Locks, according to the CtMirror, particularly because of the threat to employment at the Mohegan Sun, which has some 8,000 workers and to Foxwoods Resorts Casinos, which provides some 5,500 jobs.

MGM Resorts International is building an $800 million casino in Springfield; two others are on the drawing board in Massachusetts and a pair have opened in Rhode Island.

The state had approved Keno gambling in Connecticut, but rescinded that when it wasn’t necessary as a revenue generator and there was a groundswell of objections.

Fasano is opposed to more gambling if the purpose is simply to raise more revenues. He would be willing to consider it as a business venture and a way to keep Connecticut’s casinos open and competitive. “That’s a different conversation,” he said.

“It is a sad state of affairs if we are going to look to gambling to solve our budget deficit. … That is very bad policy. We are spending too much damn money and we are borrowing too much money,” Fasano said.
Throughout his campaign, Malloy said he will not propose new taxes going forward.
Asked if that would be the bottom line for the legislature, Looney said they are waiting for the governor to send his budget plan in February.

In the upcoming session, Looney expects to revisit a five-year phased-in fix to the payment in lieu of taxes program set up in 1970s to compensate municipalities whose Grand Lists are diminished by the colleges, hospitals and state properties that are tax-exempt by state law and some, like Yale University, by the state Constitution.

There were competing proposals to increase the amount municipalities are compensated which has dropped to 33 percent from the original 77 percent for colleges and hospitals and is down to 20 percent of worth rather than the 45 percent set for state property.

The funding nosedived over the years due to budget problems, while increasing requests for compensation cut it further.

The Grand Lists in New Haven and New London are more than 50 percent tax-exempt. New Haven officials testified last year that if the compensation rate had been held constant to the level it received some five years ago, it would not have faced a tax increase and its tax rate would have been commensurate with area communities.

The cities argue that they provide the jobs for the region, as well as the educational institutions and hospitals that benefit the entire area, but do not contribute to the tax base except on a voluntary basis.

Looney has proposed a new tiered system that would give a larger percentage of PILOT to those communities with the greatest amount of tax-exempt land with a guaranteed 50 percent payment for the top 20 municipalities; 45 percent for the next 20 and 40 percent for the remaining towns. To be politically palatable, no town would get less than it already does.

“It all depends on making the revenue available for the enhanced reimbursement,” Looney said.

Fasano said if PILOT was increased, he would want a rule that those funds only be used to reduce the tax rate, not to spend more on government or workers’ salaries. “If it is going to help the people, I’m all for it. If it is going to help Town Hall get fatter, then what are we doing?” Fasano said.

Fasano is generally suspicious if state spending on programs aimed at the cities are being properly spent.

Beyond that, he has consistently put in bills requiring communities, whose budgets are funded with at least 40 percent state money, to submit them to the state “so we can look at it … disclose to us what Town Hall payroll is … what accountability do you have if half the money is coming from the state to serve your governmental interest?”

He said large pensions approved by the city are in a sense being underwritten by other towns given the state funds they get yearly.
New Haven’s current budget is underwritten 44 percent with state funds, the majority of it for education.

Malloy is planning to present a major transportation initiative this session.

Looney said if that is the case, there will be a need for additional revenue to fund it.

One option could be electronic tolls at the borders, he said, although Connecticut would have to get a clarification on the impact that would have on getting federal funds for transportation.
“We would not be talking about tolls the way people remember them in Connecticut, that is having an internal toll every 10 miles on I-95,” Looney said.

Fasano rejects tolls unless the starting point is a constitutional amendment that those funds can never be used for anything but transportation needs.

If the conversation is that the funds will be “dedicated to transportation, dedicated in this building doesn’t mean anything,” Fasano said.