Blog: Environment

Jobs & the Economy, Taxes & Government Spending, Environment

CT Government Round Up Weekly Rundown—September 30

  • Sep 30, 2013
  • by Alexandra Forrester
CT Government Round Up Weekly Rundown—September 30

Debt Debates Heat Up as State Approaches Unofficial Bonding Ceiling

The state is creeping closer to its self-imposed unofficial $1.8 billion bonding ceiling, reaching $1.78 billion as the CT Bond Commission plans to borrow another $395.5 million in GO Bonds by the end of the week.  With two more Bond Commission meetings scheduled for this year, it seems likely the government will exceed the ceiling.

This announcement added fuel to the debate concerning Connecticut’s government debt, which is among the highest in the country on a per capita and per GDP basis.  Recently, this debate has concerned whether high debt is good or bad for job creation. As the Malloy administration and a recent UConn report have noted, debt-financed spending does create jobs in the short-term.  The problem is borrowed money has to be paid back, requiring higher taxes or reduced future spending, which serve as drags on job growth.  So the state should take care that bonds are used to fund projects that are good investments, paying back initial investments by generating comparable returns.

Two recent debt-financed payments to companies illustrate the difference between sound and imprudent bonding. Connecticut this week gave $2.5 million to Kayak Software in exchange for a commitment to create 50 jobs, and gave of $4 million to BYK -- a German chemical company -- in exchange for a commitment to create 37 jobs.  The CPI’s work on state jobs incentives notes that to achieve a ten-year return from incremental tax revenues (income, sales, and otherwise), an incentive’s cost per job should not exceed half of the jobs’ average annual salary.  At a cost of $50,000 per job the Kayak deal could meet this threshold.  At a cost of $110,000 per job, it’s doubtful the BYK deal does.

What it means for you: Connecticut’s high debt is a problem for long-term economic growth.  The solution is not to abandon all bonding, but to apply more rigorous analysis and exercise greater discretion in selecting projects.
 
Commission Orders Newtown 911 Calls Released

On Wednesday the CT Freedom of Information Commission ordered Newtown Police and CT State Prosecutors to release the 911 emergency calls from the Sandy Hook Elementary School shootings. The State’s Attorney Office plans to appeal to Superior Court.  The records will remain private until legal proceedings have concluded.

These proceedings are separate from a FOI taskforce created last June. This task force is expected to make a report January 1st, recommending more general strategies for balancing victim privacy under the Freedom of Information Act with the public’s right to information.

What it means for you: In these recent proceedings the focus in arguments has been over legal technicalities, like whether Newtown investigation is “ongoing.” But the real underlying concern is how to protect victim privacy while respecting the public’s right’s to information.

CT Legislature Blocks Wind Power Regulations for Third Time

The General Assembly Regulations Review Committee rejected regulatory changes that would end the state’s moratorium on in-state wind power generation. 

This is the third time in nine months the committee has rejected the changes, which effectively takes CT wind power out of the running for federal tax credits available to wind turbine projects.  The credits are only available to projects that begin construction by the end of this year. The Legislative Commissioner’s Office’s had recommended approving the legislation.

The Regulations Review Committee’s lukewarm response to CT wind power comes in the wake of the Malloy Administration’s recent establishment of a 15-year contract with a wind farm in Maine.

What it means for you: At least for now, Connecticut will not be seeing any in-state wind power generation.

About the Author: Alexandra Forrester is a CPI Policy Analyst

Crime & Public Safety, Environment

CT Government Weekly Rundown -- September 3

  • Sep 03, 2013
  • by Alexandra Forrester
CT Government Weekly Rundown -- September 3

DEEP Proposes Higher Energy Rates to Fund Efficiency Investments

Energy prices are on track to significantly rise for the next three years, pending Public Utilities Regulatory Authority approval of a new Department of Energy and Environmental Protection (DEEP) program aimed at increasing energy efficiency. The DEEP proposal would increase Conservation Adjustment Management fees on energy bills, doubling the electricity fee to $4.50 per month and tripling the gas fee to $7 per month. The higher rates would be used to fund residential and commercial energy efficiency investments, such as rebates for the purchase of energy efficient home products and retrofitting buildings to make them more energy efficient.  Environmental organizations predict significant future returns from those investments, estimating that consumers and businesses currently lose $400 million annually in energy waste that would be mitigated by the program.

What it means for you: CT’s energy prices declined in the first few months of this year, but a recent report has shown that they are rising once again. The DEEP proposal will likely save consumers money in the long-term by reducing energy consumption, but these savings will come at a short-term cost with higher rates.  Connecticut already has some of the highest electricity rates in the northeast and the country.

Medical Marijuana Implementation Begins

This past Tuesday, August 27th, a Connecticut Review Committee approved regulations for the production, sale, and use, of medical marijuana within the state. These regulations specify implementation guidelines for the bill passed in May that legalized medical marijuana in Connecticut. Within the next two weeks Connecticut’s consumer protection agency will begin reviewing applications for producers and dispensaries, and licenses will be awarded by the beginning of next year. The new regulations limit Connecticut medical marijuana to licensed in-state producers and dispensaries and limit the number of licensed producers to between 3 and 10 and the number of dispensaries to between 3 and 5.  They also require application and licensing fees amounting to $3 million for producers, and $6,000 for dispensaries.Federal law still prohibits marijuana consumption for both recreational and medical uses, but the U.S. Department of Justice released a memo on Thursday announcing that it would not interfere with states that have legalized strictly regulated marijuana use.  The federal enforcement decision would not be binding on future administrations should they decide to more strictly enforce federal marijuana laws.

What it means for you: Connecticut residents with a valid prescription should be able to start purchasing medical marijuana sometime next year.  The limited number of producers and dispensaries combined with high licensing fees means medical marijuana in Connecticut is likely to be quite expensive.  The future of the industry beyond 2016 is also uncertain if federal enforcement policies change.

About the Author: Alexandra Forrester is a a CPI policy analyst.