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Voices Speaking

January 30, 2017

Voices from the Capitol (IV): tax loopholes, education & DCF settlement

Roger Senserrich

 

Thanks to everyone that attended our 16th Annual Budget Forum. We had a great turnout, including appearances by Governor Malloy, Senator Murphy, Comptroller Lembo, and Secretary Barnes. If we missed you, there are links to resources from the event below.

This week, lawmakers are meeting with their respective committee members to determine which bills to raise for public debate. We'll also be joining allies in a press conference at the Capitol to call on lawmakers to close the carried interest loophole.

This week: press conferences, meetings & hearings

Press conferences

Tuesday, 1/31 - Carried interest loophole (10:30am, Room 1E)
The carried interest loophole is a tax provision that allows hedge fund managers to pay lower rates on their earnings. Closing this loophole is one of the revenue options we covered in our recent report and can raise up to $535 million.We encourage you to attend the press conference to support this proposal.

Friday, 2/3 - Education Equity (12:00pm, Room 1B)
A press conference to present S.B.137, an education bill we are supporting; you can find more details bellow.

Meetings and hearings

While meetings in which lawmakers meet to determine which bills to raise for public debate are not open to public testimony, you can view their schedule here and contact your lawmaker if you think a particular bills should be discussed.

There are no public hearings on legislation we're tracking yet - we will make sure to keep you posted once the first pieces of legislation come up. There are still quite a few bills waiting for a bill number or in the process of being drafted by their respective committees, so some patience is required. Once things get going they can move pretty quickly, so be ready.

Legislative updates: the Juan F. settlement

 

Last week the Appropriations Committee soundly rejected the Juan F. settlement, a plan towards ending federal oversight of the Department of Children and Families (DCF). You can find more details on the vote here, here, and here.

One of the key elements of the proposed new exit plan is a commitment to steady funding. DCF Commissioner Joette Katz believes that with the funding proposed in the revised Juan F. exit plan, DCF can exit federal oversight within two years. However, she does not believe she can meet key outcomes, such as ensuring reasonable case loads for social workers, if there are budget cuts. Legislators expressed a number of concerns, including that the settlement would lock in funding for the Department of Children and Families in this year's budget and in future budget years.

Connecticut Voices for Children supports the settlement to ensure that there are enough social workers to adequately investigate abuse and neglect reports and to meet the needs of children under state care.

The vote is not final; the House and Senate each need a two-thirds vote against the settlement to definitely reject it. The final vote is expected February 1st.

Updates: bills we are tracking

Monitoring:

The aim of these two bills is largely similar: move part or all of the functions of the Office of Early Childhood (OEC) back to the Department of Social Services (DSS). In theory, this would place programs like Care 4 Kids under the umbrella of a much bigger agency, potentially offering more avenues to protect their funding. Connecticut Voices is monitoring these two bills, as they represent a significant reorganization of programs and policies we consider critical for Connecticut's children and families. 

Supporting:

This bill proposes to expand best practices in education to improve the quality of education for all students and help narrow the rich/poor achievement gaps and racial/ethnic achievement gaps in Connecticut.

The proposed bill includes, among other provisions, expanding the Birth-to-Three program, universal preschool, increasing minority teacher recruitment, lowering classroom sizes, and mentoring to improve teacher quality. We will keep you posted with any updates and hearing dates.

This bill seeks to introduce a state-wide property tax to fund education in Connecticut, based on the principle that equal effort in raising revenue for education should lead to equal funding and resources.

This might sound familiar - mainly because the framework is very similar to the Vermont property tax model, described in our recent report on this issue. The bill is currently sitting in the Planning Committee with language being drafted; we will track it closely.  For more information on how the model works, see below.

Spotlight: a property tax reform primer

Our recently released report, "Equal Funding for Equal Effort: A Proposal to Reform Property Tax Funding for Local Education in Connecticut," proposed bold reforms to Connecticut's property tax system. 

The following summarizes the report's findings, trying to keep the math at a minimum. Please refer to our report for more details.

Who gets a tax cut?

Our proposal would cut taxes for 2.7 million residents in 117 cities and towns, strengthen the tax base of our largest cities, and level the playing field so that all communities can attract jobs.

What are the the main ideas of the Vermont model?

Mainly, two simple principles.

  • First, communities will retain full local control in deciding how much they want to spend in education.
  • Second, two communities that decide to spend the same amount per student will pay the same mill rate for education funding.

How does it work?

First, the state legislature has to set two numbers.

  • They have to establish a base per-pupil spending amount. In simple language, this is a dollar figure that will be used as benchmark for education spending.
  • They will set the base mill rate for a statewide property tax that will cover the cost for all school districts' local education spending.

With that in mind, municipalities will decide how much they want to spend in education. Their starting point will be their per-pupil spending. This figure can be either higher or lower than the state per-pupil number; it is up to the town to decide how much.

  • If they decide to spend the same as what the state government set for base per-pupil spending, they are done. That town will get the funding from the state to cover that cost, and residents will only pay the base statewide mill rate for education. That´s it.
  • If the town wants to spend more than the per-pupil rate set by the state, they will have to pay a higher rate on their statewide property tax. On top of the base statewide tax mill rate, they will have to pay a few additional mills to cover the additional cost.
  • If the town wants to spend less, the opposite will happen: the town will have a lower tax bill, paying less than the statewide mill rate.

It can´t be that easy!

Well, it really is not that easy. This is what the system will look like for most taxpayers; in practice, there a few under-the-hood calculations taking place to make sure the statewide tax adjustments work.

For instance, the sequence in which spending levels are decided is a bit more complicated. The state takes into account total predicted spending, as that sets how much money they need to raise. Our model fully funds PILOT (the state program that compensates municipalities with tax-exempt property) to make the system more balanced. The model also separates residential (homestead) and commercial mill rates, with changes in municipal spending only affecting the former.

We also left out from this explanation a few complicating factors, like how the state decides on a base per-pupil spending, how spending per pupil is adjusted by need, and a few more details.

You can experiment with how the system would work on our Tableau page. Again, read our full report for more information - and make sure to send us any questions you might have. We will host a webinar on this issue in the coming days, so stay tuned.

What we are reading, Budget Forum edition

For those that couldn't make it to the Budget Forum:.

  • Download the presentation here.
  • Watch on demand on CT-N.
  • Watch Senator Chris Murphy´s video introduction here.
  • Our revenue options report is available for download here.
  • The Children's Budget policy brief is available for download here.
  • You can find our policy report on property tax reform here.
  • You can build your own property tax system on our Tableau page, using the model from our report. Contact Ray Noonan if you have any questions.
Issue Areas:
Budget and Tax, Child Welfare, Education
January 23, 2017

Voices from the Capitol (III): Budget Talk

Roger Senserrich

We have a new President, but that does not mean that the work at the General Assembly is slowing down. This week we have a look at the new revenue estimates, possible  revenue sources to balance the budget, our analysis of the Children's Budget, and our new report on property tax reform. Let's get started.

The latest: consensus revenue estimates - January

State law directs the Office of Policy and Management (OPM), the Office of Fiscal Analysis (OFA) and the State Comptroller (that is, the budget agencies for the executive and legislature, plus the elected official who keeps track of the figures) to release a consensus revenue estimate a few times during the year. We just got a new one today.

Why is this consensus estimate important? It serves as the basis for the Governor's proposed budget and for the budget that the legislature will approve.

Last week's consensus revenue estimate has some mixed news. For the current budget year (FY17) the state now has a small budget surplus, thanks to stronger-than-expected growth in business tax revenue. Sales and income tax collections, however, are less than expected, keeping the surplus at a modest $10 million. This at least is a welcome contrast with last year, when FY16 collections constantly missed their targets, prompting several rounds of additional budget cuts.

The new revenue estimates have also left the budget projections for FY18 and onward largely unchanged. That is, Connecticut is still facing deficits above $1.4 billion a year; this adjustment only reduced the projected gap for FY18 by $31 million.

In other words: still a dire budget, but at least it is not getting worse.

Spotlight: a look at the state budget

Tomorrow, Connecticut Voices for Children will be hosting our 16th Annual Budget  Forum at the Capitol to provide a clear, broad overview about the state's fiscal situation. Here are the highlights of the four policy briefs and reports that we  will discuss tomorrow. They will  form the basis of our advocacy work this session.

Revenue options

Long term investments in children and families have been the cornerstone of the state's prosperity. To preserve these investments and support long term economic  health, a balanced approach to the upcoming biennial budget must include new resources.

In this report, we explore what the current challenges are facing Connecticut's tax system and provide several possible tools to modernize and update it whilealso raising needed revenue. You  can download the full report here.

Equal funding for equal effort: property tax reform

Connecticut relies on property taxes to fund local government and public education.This arrangement gives municipalities local control and flexibility, but also makes residents in poor communities pay more, stifles economic development, and exacerbates racial inequalities.

In this report we explore a partial solution to this problem: a system in which communities that tax themselves equally for education receive equal per-pupil funding.Our model would cut taxes for 2.7 million residents in 117 cities and towns, while maintaining local control and education funding levels.
As the General Assembly considers changes to education funding, this will be especially relevant this session. Make sure to read the report here

The Children's Budget:

In our new report we find that the share of the state budget devoted to children  has reached a record low, down to 29.5 percent of overall spending. Although absolute spending in the Children's Budget has risen modestly since 2008 (by $269.1 million or 4.5 percent, in 2017 dollars), the increase in spending in other budget areas  has outpaced investments in children.

We will present the full policy brief tomorrow at the budget forum. You can download it here.

Business tax breaks:

Next week we will look at the growing cost of business tax breaks in Connecticut's state budget. We will provide a sneak peek of the report at tomorrow's Budget Forum.

For a primer in business taxes in Connecticut, do not miss this article by Derek Thomas from earlier this year.

Still time to register: State Budget Forum

Tomorrow we will convene at the State Capitol for Connecticut Voices for Children's 16th Annual State Budget Forum: "Building a Budget for Connecticut's Future."

  • WHAT: 16th Annual State Budget Forum.
  • WHEN: January 24th from 8:30 AM to 12:00      PM.
  • WHERE: Old Judiciary Room, State      Capitol, 210 Capitol Avenue, Hartford.
  • REGISTRATION: please RSVP here.Seating is limited.

Participants will include Governor Malloy,  Secretary Benjamin Barnes, Comptroller Kevin Lembo, Mayor Ton Harp (New Haven), and Representative Vincent Candelora, among others. Please visit our event page for more information, or e-mail Ray Noonan with any questions.

This Week: Committee Meetings

Another week of committee meetings, as legislators begin to map out the work ahead this legislative session. Committee members and chairs continue discussing what bills will be raised and will begin to draft committee bills.

This means that this week we will see again quite a few committee meetings: Transportation, Environment and Appropriations today; Housing Tuesday; Public Health and Planning Wednesday; Aging, Public Safety, Higher Education, Human Services, and Veteran's  Affairs Thursday; and Environment again on Friday. The agenda for each meeting is usually posted the day before on the CGA website. This week, committees will be mostly voting on which bills will be drafted as committee bills and/or get public hearings.

The full schedule can be found here We will keep you posted on any major decisions or bills to follow as we go along.

What we are reading

Issue Area:
Budget and Tax
Tags:
revenue estimates, tax, Voices from the Capitol
January 17, 2017

Voices from the Capitol (II): Who is Juan F. ?

Roger Senserrich

Last Friday was the last day that individual legislators could introduce bills at the General Assembly. We have been reading through proposals and working on our priority list.

Our focus this week, however, is on the Department of Children and Families (DCF) and an important hearing that will take place next week. Let´s get started. 

Spotlight: the Juan F. Settlement

In 1991, the state of Connecticut´s Department of Children and Youth Services (now the Department of Children and Families, DCF) entered into a consent decree that covers all children that are in the care, custody, or supervision of DCF due to abuse, neglect, or abandonment, as well as children the agency knows (by virtue of a report) are at risk of such maltreatment.

The consent decree was the result of the Juan F. case, a 1989 suit that challenged how Connecticut served children in state care. The consent decree established a series of benchmarks for DCF, trying to ensure that the needs of children and families under their supervision were being met. The agency has been operating under court oversight since.

In 2004, under the guidance of a Federal Court Monitor, the parties drafted a plan to exit federal oversight. This exit plan requires DCF to meet 22 measurable goals pertaining to the well-being of children in their care. Since then, DCF has slowly but steadily improved outcomes related to placement of children in care, discharging of children, disruptions in child placement, and reunification and adoption.

Last year, more than two decades later, the state of Connecticut reached an agreement to finally settle the case.

The agreement covers the following:

  • Connecticut will agree not to cut DCF´s budget.
  • The agency will still have to meet a series of goals (around items including investigations on abuse cases, social worker caseloads, case planning and outcomes, meeting the needs of children in care, and site visits) to protect and provide for children under state care.
  • The full exit plan is available here.

Why are we talking about this today? First of all, because after a quarter of a century under federal monitoring, DCF is still struggling to hit many of the benchmarks on this settlement. If we want to ensure that vulnerable children and youth under state care receive the services they need, it will require both funding to ensure that there are enough social workers to manage these complex cases and accountability.

Second, the Juan F. settlement agreement must be approved by the General Assembly - and the Appropriations Committee will be holding a hearing on this very issue Monday next week. It is important to make our voices heard.

Hearing Alert: Juan F. at Appropriations, January 23

  • The Appropriations Committee will hold a public hearing on Monday, January 23, 2017 at 10:00 A.M. in Room 2E of the Legislative Office Building (300 Capitol Avenue, Hartford.)
  • Sign-up for the hearing will begin at 9:00 A.M. in Room 2700 of the LOB. 
  • You must submit 60 copies of written testimony to Committee staff at the time of sign-up.
  • You can email written testimony in MS Word or PDF format to APPtestimony@cga.ct.gov.
  • Even if you are unable to attend the testimony in person, we encourage you to submit written testimony by email. Many legislators use this testimony when drafting arguments to present on the House and Senate floors.

Connecticut Voices for Children will testify at the hearing in favor of accepting the settlement. Although DCF still struggles to meet many of the goals set in the 2004 exit plan, the agreement will protect the agency´s funding from further cuts while maintaining oversight in key areas.

Of course, sheltering DCF from cuts could mean further service reductions in other social service agencies. We are watching to make sure this does not put children and families at further risk - like everything in the budget, it is a balancing act. We believe, however, that DCF's (slow, steady) progress and the chance to protect crucial state funding justifies our support.

If you are interested in testifying on this hearing or have any questions on the Juan F. settlement, e-mail us! Lauren Ruth, our Youth Policy Fellow, has been tracking this issue closely and will be happy to answer any questions.

This Week: Committee Meetings

Quite a bit of movement this week at the General Assembly. After the Friday rush of legislators introducing individual bills, committee members and chairs are starting to discuss what bills will be raised, and will begin to draft committee bills.

This means that this week we will see quite a few committee meetings: Public Safety today; Insurance, Labor, Higher Education, Children, and Human Services Thursday; and the Office of Early Childhood Cabinet Friday. The agenda for each meeting is usually posted the day before on the CGA website. This week, committees will be mostly voting on which bills will be drafted as committee bills and/or get public hearings.

The full schedule can be found here. We will keep you posted on any major decisions or bills to follow as we go along.

Still time to register: State Budget Forum

Next week we will convene at the State Capitol for Connecticut Voices for Children's 16th Annual State Budget Forum: "Building a Budget for Connecticut's Future."

  • WHAT: 16th Annual State Budget Forum.
  • WHEN: January 24th from 8:30 AM to 12:00 PM.
  • WHERE: Old Judiciary Room, State Capitol, 210 Capitol Avenue, Hartford.
  • REGISTRATION: please RSVP here. Seating is limited.

Participants will include Secretary Benjamin Barnes, Comptroller Kevin Lembo, and Representatives Toni Walker and Vincent Candelora, among others. Please visit our event page for more information, or e-mail Ray Noonan with any questions.

What we are reading:

With Congress taking the first steps towards repealing the Affordable Care Act (ACA), a lot of reading on what this means both for Connecticut and the country as a whole:

  • The Congressional Budget Office reports that repealing the ACA could increase the number of uninsured Americans by 32 million in 10 years, while causing insurance premiums to double over that time. Here is the report; here is the NYT article on this subject.
  • The Center on Budget and Policy Priorities estimated the cost for each state of an ACA repeal. For Connecticut it would mean 248,000 people losing insurance coverage by 2019. Here is the report; here is a good overview at the CT Post on this issue.
  • The ACA repeal could also have a significant impact in the economy. According to a Commonwealth Fund Study, Connecticut would lose 36,000 jobs and billions of dollars on economic output. Nationwide, the repeal would lead to the loss of 2.6 million jobs. Here is the full report.
  • Silver lining: a majority of Americans now think that the ACA is a good idea
Issue Areas:
Child Welfare, Family Economic Security
Tags:
DCF, Juan F., Voices from the Capitol
January 9, 2017

Voices from the Capitol - our newsletter for the legislative session

Roger Senserrich

The 2017 legislative session has started, and we know it is going to be a challenging year. Connecticut is facing a large budget deficit, an unpredictable federal environment, and a new power-sharing agreement in the State Senate.

To make sense of all of this - and keep you up to date on the legislative session - Connecticut Voices for Children is launching our new weekly Capitol Newsletter. Let´s get started.

Voices from the Capitol newsletter

During the legislative session, E-notes will become the weekly Voices from the Capitol newsletter, with updates, alerts, and analysis on the 2017 legislative session and how it affects children and families in Connecticut.

Central to our coverage will be the state budget, something that will likely dominate the debate again this year. Expect analysis, tracking changes, and updates on plans and proposals.

We will make sure, however, that other bills get the spotlight they deserve. Every Monday we will send news and updates on key bills, a calendar on what is coming up during the week, action alerts on key pieces of legislation, extended information on important issues, and (when necessary) explanations about legislative procedure to make sense of what is is happening and how it might affect legislation.

We want this newsletter to be a conversation, so we welcome your feedback and questions. Email us - we are here to help.

Last week: Governor's speech & committee assignments

The legislative session began last Wednesday, so legislation has not started moving yet. We had, however, some relevant news.

  • The Governor´s State of the State Address: It was the first big speech of the session, and it laid out the policy priorities for the Governor. He focused on three areas that must be addressed this session to balance the budget: continued cost savings and efficiencies, making state pensions sustainable, and creating a more equitable system for town aid to fund education. Expect to hear much more about these issues this year. You can watch it in full or read the transcript here.
  • Committee Chairs: Committee chairs control much of the agenda at the General Assembly, and who heads each committee can make a big difference in many areas. Three important lists to take into account: House Democrats Committee Chairs, Senate Democrats Committee Chairs and Senate Republicans Committee Chairs. The 18-18 tie in the Senate means that committees have two Senate Chairs this session and much more to negotiate.

The session: a brief calendar

This year we have a long session: from the "Wednesday following the first Monday of January" to the "the first Wednesday after the first Monday in June", following the state constitution. Translated to regular dates, it means that the session will go from January 4th to June 7th.
Important dates:

  • Individual legislators´ bill filling deadline: January 13.
  • Governor´s budget: early February.
  • Deadline for introducing committee bills: February 14-15.
  • Public hearings for bills in committee: from late January to early March (non-budget), March-April (Appropriations and Finance).
  • Deadline for bills getting voted out of committee: mid- to late- March, except the budget, that has until April 27-28.

Legislative arcana: new rule - split committee

The legislative process is often complicated. In this section we will review and explain some of the rules that guide the General Assembly.

We mentioned that committees this session will have three co-chairs instead of the usual two: a Democratic House member, as they have the majority in the chamber, and two Senators, one from each party, as the parties are tied 18-18 in the Senate.

Committee chairs have a considerable amount of power - they largely decide which bills get a hearing or get called for a vote. The 3-chair arrangement might lead to more bipartisan consensus as both parties now have a strong say in what moves forward, or more gridlock if they cannot reach agreements. It is too early to tell how it will work.

The new arrangement, however, introduces an interesting new quirk in the legislative process: one Senator chair can automatically split the committee, separating the discussion of a bill between Senate committee members and House committee members. That is, we would have two versions of the bill, one for each chamber, that has to be approved out of committee separately. In practice, this means that there is yet another way for a piece of legislation to get stuck and fail.

Senators can only split the committee with Senate bills, so House bills are not affected - it might be a good idea to have bills introduced from the House side this session.

What we are reading:

A few good resources to follow the legislative session:

In case you missed it:

Issue Area:
Family Economic Security
Tags:
legislative session updates, Voices from the Capitol

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