Lawmakers Want More Chefs for State Pork
2/9/2008
By Adam Wittenberg, Record-Journal staff
The city has more than $12 million in state money for flood control and downtown redevelopment on the table, but getting it out of the Capitol and into city coffers is another matter.
For decades, city leaders and legislatures have wrestled through the political process in Hartford to bring back funds for local projects. The state borrows money in the form of long-term bonds to help municipalities pay for everything from multimillion-dollar school construction to smaller grants for a park or nonprofit group.
Politicians and the governor like being able to take credit for the grants, but the process of approving and allocating money is somewhat murky. A reform movement is gathering steam, but it remains to be seen whether politicians will agree to curb their power over what some have called "the barrel the pork's put in."
Gov. M. Jodi Rell, a Republican, like her predecessor John G. Rowland, has battled with the legislature over bonding. It's a political tool used by both sides, but the governor has the upper hand. She controls the agenda for the State Bond Commission, the agency that releases funds. No money goes out without her approval.
It's a form of local property tax relief, legislators say, when the state helps pay to clean up a blighted property or buy a piece of land to preserve open space.
But frustrations rise when the money isn't released.
Legislators routinely approve more projects than they realistically expect Rell to bond, but caucus leaders generally press for a short list of items they expect will reach the agenda.
Since taking over for Rowland in mid-2004, Rell has sought to make the bonding process more open.
Whereas Rowland approved pools of money for areas such as flood control and economic development and then distributed the funds among various projects, Rell allowed legislators to include specific items in the 2005 biennial bonding bill. She then assigned her staff and the applicable state agencies to review the requests and advise her on their merit.
But the inner workings of the process are closed to the public - and even to the legislature. No one knows what project is coming next, or how their request stacks up against the others.
The lack of a public review and an openly competitive process leads to questionable spending, says Robert Santy, president of the Connecticut Economic Resource Center, a nonprofit think tank that promotes economic development.
Wanted: A vision
A more open system is needed, he said, complete with uniform standards for projects and an overall strategy for state growth.
"In transportation, federal and state law requires the development of transportation investment plans that set priorities for capital expenditures. Why can't we extend a similar process to other bonding projects?" Santy wrote in a report last month.
Legislators will be asked to do just that when they receive copies of a corresponding research study from CERC in the next week or two.
The time is right, Santy said, because a new law requires the state to develop a long-term economic development plan that sets priorities for large capital expenditures.
"Let legislators come up with a list of projects, then put them through a rigorous and strategic evaluation before they come to the Bond Commission," he said. There would be exceptions allowed for unforeseen circumstances, but "we should have a vision of what we want Connecticut to be and measurement criteria to support that vision."
Another proposal, from state Sen. Thomas P. Gaffey, D-Meriden, was submitted Friday. Gaffey said the nation's fragile economic climate warrants an investment in infrastructure and projects that spur job retention and growth.
"The one area where the government could spend money and get a 100 percent return in the domestic economy is infrastructure projects," he said. His bill would require that the Bond Commission's agenda be prioritized based on economic factors.
"There would be an economic stimulus justification attached to each project (saying) 'this is what we're going to yield from the investment of the state's dollars,'" he said. "This makes all the sense in the world to me because it's local dollars being spent on local companies that are growing jobs, and you rebuild the state's infrastructure."
Gaffey admitted that Meriden's flood control and Hub redevelopment project would likely benefit from such a law, but he said it's time for the state to move away from the politics of the Bond Commission agenda and focus objectively on economic development.
"An awful lot of projects get on that agenda out of sheer politics, and I've been part and parcel to that," said Gaffey, who joined the Senate in 1995 and has worked in state government since the early 1980s. "But if we're really serious about utilizing the great power of Connecticut state bonding and stimulating the economy, this is the type of process we'd have to follow."
Gaffey took heat late last year for promoting a 10-year, $1 billion bonding program for the State University System. The measure passed, but it was later revealed that he was dating the system's vice chancellor for governmental affairs while he was advocating for the money. An Office of State Ethics opinion said Gaffey had not violated the state's ethics code.
Gaffey said he would prefer an independent group do the economic assessment for bonding projects, not the state Office of Policy and Management - which works for the governor - to avoid politicizing the process.
Politics of bonding
Changing how the agenda is set would require curtailing Rell's power.
Connecticut's governor has more authority over bonding than in most other states, where legislators or other officials help set the agenda, Gaffey said, and they have long used that power to reward friends and punish enemies.
"Bonding is used to get people on board or punish those who are misbehaving in a particular caucus," said Chris Barnes, a former University of Connecticut pollster who worked for two Democratic state legislators between 1988 and 1996. He saw bonding projects cut for legislators who opposed the income tax in the early 1990s.
"No one says 'you cut this because of this,'" Barnes said. "As a legislator, you know (you) made this guy angry, whether it's the (House) speaker or president pro tempore (of the Senate) or the finance chairs or chairs of the bonding subcommittee."
Legislative leaders still negotiate with the governor over the bonding package, and rank-and-file lawmakers typically don't approach Rell without their party leadership present.
This allows Rell the ability to work through the leaders to seek votes on a particular bill, such as the budget.
No one interviewed for this story said they had received a direct offer of bonding money for a vote, but the connection is often understood.
"I was called into John Rowland's office, face to face, on Adriaen's Landing," Gaffey said. Rowland wanted him to vote for a massive bonding package for the Hartford redevelopment project, but Gaffey stood his ground.
"He gave me his spiel, and I said, 'I told your aides I'm not supporting this,'" Gaffey said. "I had read through the document. There was not a penny of equity of developer money, the property was contaminated ... it was not a good deal for the taxpayers."
The measure passed, but Rowland didn't take kindly to Gaffey's choice, and the city's bonding was affected.
"Soon thereafter, the cash register door was slammed shut on the Meriden flood control project," Gaffey said of the 1999 vote. "There's no doubt in my mind" there was a connection. "It's clear that that's what happened."
Interestingly, money began to flow back into the city five years later, during the time a committee was investigating Rowland for a possible impeachment.
James A. Abrams, then a representative from Meriden, was on the committee, and the state budget that year included more than $49 million for the city.
"(Rowland) has kept a tight lid on Meriden funding for a couple of years," Rep. Christopher G. Donovan, D-Meriden, said at the time.
Reports found that grants to municipalities represented by other committee members had also increased. Rowland resigned in mid-2004, in the midst of the committee's investigation.
Members of his administration were later accused of helping steer more than $100 million in no-bid contracts to the Tomasso Group for projects including the now defunct Juvenile Training School in Middletown and a parking garage at Bradley International Airport.
Those projects were paid for through bonding.
Tomasso officials and companies had contributed money to Rowland's campaigns and illegally provided him with gifts.
Rell's attempts to clean up the bonding process have yielded mixed results.
The state has increased oversight of projects, but lawmakers complain the process by which Rell determines the bonding agenda still remains unclear. They also accuse her of not living up to the 2005 agreement to bond certain items, including $3 million for Meriden flood control.
Donovan, the House majority leader, and Rep. Catherine P. Abercrombie, D-Meriden, said they were frustrated when Rell held six Bond Commission meetings and cancelled eight in 2006, effectively slowing the flow of money.
Donovan and the Democrats, who control the House and Senate, pressed for a greater voice in setting the agenda, but ultimately decided to "give the governor another chance," he said.
Rell extended the olive branch, giving House Speaker James A. Amann, D-Milford, and Senate President Pro Tempore Donald E. Williams Jr., D-Brooklyn, each $10 million in bonding funds to distribute, but "for 107 (House Democrats), that doesn't go very far," Donovan said.
The more items legislators have included in the bonding bills, the more pressure Rell has faced from local officials and residents wanting to know when money for their project is going to be released.
Crunching the numbers
Since 2003, general obligation bonding authorizations have nearly doubled from more than $900 million to $1.7 billion for 2008. School construction and transportation consume the largest portions, so not all of the items are discretionary.
Allocations, or money actually bonded, have risen from about $900 million in 2003 to more than $1.2 billion in 2007, the year the legislature authorized $1.4 billion in general borrowing.
(More detailed information can be found at http://www.cga.ct.gov/ofa/Documents/OFABudget/2007/Book/Bonding.pdf)
Last year, Rell tried to revert to the system of pools Rowland used, Gaffey said, but lawmakers blocked the change.
"She tried to take away the authority of the legislature to author into bills particular projects," he said. "She wanted to not have people from Meriden, or any other town for that matter, specifically e-mailing her, writing her, calling her asking why she has not authorized (their project) to go onto the agenda. We made a strong statement that you can't have it both ways."
Rell also vetoed the legislature's first bond package in 2007, saying it was too expensive.
The state already has one of the highest rates of bonded indebtedness in the country, paying 11 cents of every dollar to debt service. Rell is advocating financial caution this year, given the questionable health of the economy, but Gaffey is less cautious about bonding more projects.
There's a reason banks keep lending to the state, he said - its per capita income is among the highest, meaning "they know the state has the ability to pay."
Still, the more money the state bonds, and the more outstanding authorizations it allows, the greater the threat to the state's bond rating, which influences how much it pays in interest.
"We are going to have a problem if we carry so much potential state indebtedness on the state's credit card," Barnes said. "It's just like your credit rating. If you go ahead and open 57 credit cards, even if you're using a couple of them, at some point your credit score's going to take a hit."
Property tax help
But legislators aren't keen on reducing the number of bonding authorizations, particularly in poorer cities like Meriden.
There's room under the state's self-imposed bonding cap to release the city's funds, Donovan said.
"These are projects people care about. These are concerns the city is looking at," he said. "We look at it as property tax help. If the state isn't able to help ... then it's up to local taxpayers to take up the fight. We're of limited means in Meriden."
Rell spokesman Chris Cooper said he wasn't familiar with CERC's or Gaffey's reform proposals, but that Rell's goal has been to bring uniform criteria for reviewing projects.
"She's saying most projects should go through the agencies of cognizance," he said, although "there's always going to be programs that there's tremendous local consensus on."
Santy, the CERC president, acknowledged the need for a "release valve" to allow the bonding of projects based on unforeseen needs. He also said the ranking system should allow for priorities that cater to smaller towns, not just the cities, where large economic development projects tend to be located.
That warmed state Sen. Leonard A. Fasano up to the idea.
Fasano, a Republican who represents the small- and mid-sized towns of North Haven, Wallingford and East Haven, said such a provision could cause him to support the reform.
"You can say $100,000 is a lot for this town, but $100,000 may not be a big deal to Waterbury or New Haven," he said.
Gaffey said exceptions could be made "for extenuating circumstances," but not "political exceptions."
The CERC report also addresses the need to stop bonding local projects such as athletic fields and items that are sometimes out of use by the time the bond is paid off in 10 or 20 years.
Restricting bond money for such projects could cause a rise in municipal property taxes, but Santy said his group is looking out for the state's long-term health, which ultimately includes more jobs and more overall tax revenue.
The risk of not changing the system "is that we squander limited and important resources on projects that are not toward the vision of what we want Connecticut to be," he said.
For Gaffey, there's a historical basis for his proposal: It's like Franklin Delano Roosevelt, who initiated massive public works projects during the Great Depression to spur the economy, he suggested.
"He did it and it worked," Gaffey said. "We ought to be doing it again, and not stop doing it."
It's an ambitious fight, one Gaffey knows won't be easy.
"I don't think that any governor will give that (power) up," he said. "But I think if we're being intellectually honest about the need for more transparency and how we're making decisions with massive amounts of taxpayer money, then this is the way to go."
awittenberg@record-journal.com
(203) 317-2231
