About the Blog

While the CPI's policy research involves proactive research-based recommendations for Connecticut government, the blog is a forum for shorter, reactive analysis and commentary on ongoing developments in Connecticut. 

Blog Posts

Jobs & the Economy

New Jobs Data -- CT Continues to Lag USA As A Whole

  • Mar 18, 2014
  • by Ben Zimmer
New Jobs Data -- CT Continues to Lag USA As A Whole

The Connecticut Department of Labor released a new jobs report last week.  The report upwardly revised Connecticut's 2013 non-farm payroll growth by 12,300 before reporting that the state lost 10,400 payroll jobs in January 2014.  High volatility is Connecticut's monthly payroll data is nothing new, and the overall trajectory in Connecticut's payroll employment remains one of slow growth that lags the country as a whole.  As the chart below shows, Connecticut has regained only 50% of payroll jobs lost during the last recession, while the United States as a whole has regained more than 90%.

About the Author: Ben Zimmer is the CPI's Executive Director

Jobs & the Economy, Taxes & Government Spending

State-Run Retirement Plan For Private Sector Workers A Bad Idea

  • Mar 17, 2014
  • by Ben Zimmer & Helen Fang
State-Run Retirement Plan For Private Sector Workers A Bad Idea

The Connecticut General Assembly is considering a bill that would establish a state-run retirement plan for private sector workers and require any business without a retirement plan to set up direct-deposit and payroll-contribution systems for the state plan.  The mandate would apply to businesses with five or more employees.

Proponents of the bill have relied on a misleading claim from the AARP that “more than 600,000 workers in Connecticut have no access to a retirement plan” beyond Social Security.  It is true that many Connecticut residents do not have access to employer-provided retirement plans, but any employed Connecticut resident can set up a tax-preferred Individual Retirement Account (IRA) through one of many private financial companies.  For instance, Charles Schwab offers an IRA with no annual fee, a minimum account balance of $1,000, and an option to automatically transfer funds each month from a checking account.

In addition to being unnecessary, this bill would have several adverse impacts.  For example, the costs of managing the state-run plan would fall on taxpayers as Connecticut faces ongoing deficits averaging more than $1B per year beginning in July 2015.  And the fees associated with mandatory payroll-contributions to the state plan would add to Connecticut’s already unfriendly small business climate, stifling job growth.

Connecticut’s government has shown little ability to design and manage effective retirement plans for its own employees.  As the charts below show, Connecticut’s unfunded public pension liabilities have grown by 65% since 2006 and are among the highest per capita in the country.  Fixing this should be the state’s retirement security priority.

About the Author: Ben is the CPI's Executive Director; Helen is a CPI Policy Analyst

Jobs & the Economy, Legislation

Benefit Corporations Coming To Connecticut?

  • Feb 19, 2014
  • by Helen Fang & Ben Zimmer
Benefit Corporations Coming To Connecticut?

The Connecticut General Assembly is considering legislation that would create a new corporate form in Connecticut – the “benefit corporation.”  Benefit corporations are for-profit companies that receive no preferential tax treatment from the government.  But unlike traditional companies they are required to pursue a “positive impact on society and the environment,” as assessed against a third-party standard, in addition to the economic interests of shareholders.

Benefit corporations have become increasingly popular with advocates of so-called socially responsible investing, and legislation allowing for benefit corporations has already been passed in twenty states.  There are currently more than 550 benefit corporations across the country, including clothing-maker Patagonia and brownie-producer Greyston, which supplies Ben & Jerry’s.

Anyone investing in a benefit corp. understands that economic returns may be lower than with a traditional corporation, so there is no reason not to allow new companies to incorporate in this way if they wish.  On the other hand, if an existing publicly traded company wishes to reincorporate as a benefit corporation, their present shareholders could be harmed.  Delaware, where 50% U.S. publicly traded companies are incorporated, addresses this risk by allowing publicly traded companies to reincorporate as a benefit corporation only with the approval of 90% of shareholders.  Connecticut’s proposed bill would allow this change with only a 2/3 majority. 

The Connecticut General Assembly should pass legislation allowing for the formation of benefit corporations under CT law, but only after amending the proposal to include protections as rigorous as Delaware’s for shareholders of existing publicly traded companies. 

About the Author: Helen Fang is a CPI Policy Analyst; Ben Zimmer is CPI's Executive Director

Jobs & the Economy, Taxes & Government Spending, Education, Healthcare

Analysis on Tax, Healthcare, Education Bills From First Week of CT legislative session

  • Feb 11, 2014
Analysis on Tax, Healthcare, Education Bills From First Week of CT legislative session

The 2014 CT legislative session opened last week with a flurry of proposed bills from legislators.  Most bills proposed in the first weeks of the session include very little detail about what they will actually do – rather, they serve as placeholders that are referred to committees where they may be fleshed out in greater detail.   But a few bills did include specific proposals – here are a few of the most consequential for economic and education policy, accompanied by brief policy analysis:

H.B. 5012 and 5021, proposing to repeal the state’s Business Entity Tax 

Connecticut’s business entity tax imposes a $250 biannual fee on any company doing business in Connecticut.  The tax is a major deterrent to small business creation in the state, forcing companies to pay a fee even if they are not yet turning a profit.  The tax is not a major revenue source for Connecticut, bringing in about $40M per year of revenue.  That’s or less than a quarter of one percent of overall state tax revenue.  Repealing it is good policy.

H.B. 5003, proposing to repeal the state’s Earned-Income Tax Credit (EITC)

The Earned-Income Tax Credit (EITC) is a federal program that provides a tax-credit to low-income workers.  For any Connecticut taxpayer eligible for the federal credit, Connecticut provides a state tax credit equal to 27.5% of the federal credit.  The EITC has generally drawn bipartisan support as a way to provide work incentives and keep low-income families out of poverty.  There have been a number of good proposals to simplify the administration of the tax credit, but repealing it is not good policy. 

SB 5, 8, and 10, proposing new coverage mandates for health insurance plans

As of 2012, Connecticut already imposed 65 mandates on health insurance plans, the fourth most in the country and well above the national average of 43. Connecticut’s large number of coverage mandates is one reason it trails only Massachusetts and Alaska in per capita healthcare costs.  At a time when health insurance premiums are already facing upward pressures and the state is struggling to grow jobs, adding yet more mandates may not be the best idea. At the very least, the legislature should carefully study the costs of these particular mandates before passing them.

H.B. 5005, proposing to increase state aid to towns that pay for inter-district magnet schools

When students choose to attend a magnet school in another district, the state provides a grant to that district to help defray the cost of the students’ education.  However, that grant does not fully compensate the receiving district for those costs.  The best way to address this challenge is to adopt a student-based funding model in which students “carry” an allotted per-pupil funding level with them to whichever school they attend. The allotted amount per student should be based on a weighted student formula that allocates more state money for students whose education is more costly, such as those in extreme poverty, English Language Learners, and special education students.  HB 5005 should be amended to enact student-based funding in Connecticut, which would improve equity and accountability in state-funded public schools.

Here is a full list of bills introduced so far in the CT Senate and House.

Government Administration, Legislation

Stay Engaged With the 2014 Legislative Session Through CPI

  • Feb 04, 2014
  • by Ben Zimmer
Stay Engaged With the 2014 Legislative Session Through CPI

The 2014 Connecticut legislative session begins tomorrow.  The Connecticut Policy Institute will be providing several ways for you to stay on top of what’s going down in Hartford without having to invest too much of your own time.

Weekly Bill / Hearing Tracker & Analysis

Every day, the CPI will be tracking the proposed bills, scheduled hearings, and other legislative activity with the most direct impact on ordinary Connecticut residents and businesses.  We will post weekly summaries and accompanying analysis on our blog, and also include them in our weekly newsletter.  For more frequent updates than once a week, follow us on Facebookor Twitter.   

2014 Legislative Awards

For the second straight year, the 2014 legislative session will feature the CPI's, "Connecticut's Choice Legislative Awards" -- a lighthearted and interactive way for Connecticut residents to engage with the legislative session and hold political leaders accountable.  Anyone can submit a nomination for an award through this form, and the winners are determined entirely by popular voting on our website. 

Below are the four awards, with the 2013 winners listed.  Last session we received more than 25 nominations and 500 votes across all four awards.  This year we’re hoping to get even more participation, so if you see a policy proposal that makes you cringe or laugh be sure to submit a nomination and encourage your friends to vote. 

Worst Policy Idea

2013 winners:  First place: Gov. Malloy's ongoing "First Five" and "Next Five" programs paying companies to move to or stay in Connecticut.  Second place: An Act Requiring Use of Gender-Neutral "People at Work" Signs by the Department of Transportation.

Golden Fleece Award

2013 winner: $120M of State Spending on Hartford-New Britain Busway (plus $10M annually in operating costs)

Biggest Time Waster Award

2013 winner: Legislative Hearing Debating Who Decides How Long Hookah Lounges Can Be Open

Absurd Quote Award:

2013 winner: Gov. Malloy's claim that Connecticut is "leading the way" on job creation

New Policy Research & Recommendation

Stay tuned for new CPI policy papers in the coming months featuring research, analysis, and recommendations on:

  • Urban policy
  • Unfunded state mandates on municipalities
  • Public pension liabilities and CT's long-term fiscal outlook
  • Education Policy

About the Author: Ben Zimmer is the CPI's Executive Director