Walker Wants To Bring Sanity To Connecticut Fiscal Woes

By Scott Benjamin

Ten years ago when CBS 60 Minutes correspondent Steve Kroft called him an “old testament prophet,” the circumstances were slightly different.

David Walker, who was then the U.S. Comptroller General, said the biggest crisis facing the United States was unsustainable commitments to Medicare, Social Security and Medicaid that were being “ignored” as the Baby Boomers began to retire.

However, today in Connecticut the consensus is that there is a fiscal crisis.

After a series of shredded budgets, a deficit projected at $5.1 billion for the next two-year cycle, $30 billion of unfunded state employee pension obligations over the next 15 years and $22 billion in unfunded retiree health benefits, the problem is no longer being ignored.

But it also is not clear that it will be fully addressed.

There has been little progress over the last six months between Gov. Dannel Malloy (D-Stamford), who will not seek a third term next year, and the state employee collective bargaining units over concessions on their fringe benefits and pensions, and little appetite in the General Assembly for placing one-third of the teacher pensions on the municipalities.

Retired Webster Bank economist Nick Perna of Ridgefield told CT Mirror last month that over the last six years, Connecticut has been unable to “follow short-term pain with longer-term gain.”

“No way can this be sustained unless changes are made in the pension benefits and retirement health care benefits,” Walker declared in a phone interview.

Even before he left his post as the nation’s top accountant in 2008, he conducted a wake-up tour, including appearances with economists from such disparate groups as the Heritage Foundation, the Concord Coalition and the Brookings Institute.

After leaving office, he embarked on a similar campaign called the Comeback America Initiative, was considered a third-party candidate for president and a founder of the nonpartisan No Labels movement.

He ran for lieutenant governor in 2014 and finished third, less than 2,000 votes behind the winning candidate.

Walker says he learned that politics “isn’t a merit-based system,” but he’s comfortable with it, noting that he is “a people person” who enjoys answering voters’ questions and discussing issues with reporters.

Three years ago, he received rave reviews that President Donald Trump would stand in line for.

“Walker has more experience than the other candidates for lieutenant governor AND governor from both parties combined in dealing with the biggest issue facing Connecticut, [the fiscal crisis]” the New Haven Register wrote in its August 2014 editorial endorsement.

Walker announced last month that he had established an exploratory committee for the Republican gubernatorial nomination, saying that during the 2014 campaign the question he received most was why he wasn’t running for that office instead of for lieutenant governor.

How do you enact short-term pain to produce longer-term gain?

“You do it through legislation,” said Walker. “These benefits are not protected by the state constitution.”

He said that current state employee retirees should not get increases in their pensions or health care benefits tied to any “excesses,” such as overtime, during their service, and that current and new hires should be placed in hybrid or defined contribution plans.

Many are now in defined benefit plans, which are seldom used by major private corporations because they’re so costly, according to Republican pollster Kristen Soltis Anderson in her 2015 book, “The Selfie Vote.”

CT News Junkie columnist Terry Cowgill wrote last December that nationally the average contribution by state employees to their pensions is seven percent and Connecticut state employees contribute just 0-2 percent.

Walker said the state employees will have to contribute more to their pensions, but he doesn’t yet have a specific figure.

Furthermore, he says there needs to be more “rigorous analysis of bonding” in Connecticut and government officials need to address why it is the second most highly-regulated state in the nation.

Additionally, Walker wants to find an answer to an issue that governors in Connecticut haven’t been able to solve for generations: Why are electricity costs so high?

Former Gov. Ella Grasso (D-Windsor Locks) made that issue a centerpiece of her 1974 campaign platform. Former Gov. John Rowland (R-Middlebury) signed a deregulation package in 1998 that was supposed to lower costs by 10 percent. In 2010 Malloy said he was going to address the issue since Connecticut had the highest electricity costs in the 48 contiguous states.

Walker said the “production costs” for electricity in Connecticut are twice what they were in northern Virginia, where he lived until he moved to Bridgeport eight years ago. He said the distribution costs also are more expensive.

“If you’re doing intense manufacturing, with those kind of costs, you’re not going to go to Connecticut,” said the candidate, who called for an “independent investigation” on Connecticut’s electricity costs.

Walker said he opposes Malloy’s First Five/Next Five initiative, which has given financial incentives to such companies as ESPN in Bristol, Bridgewater Associates in Westport and Cartus in Danbury to expand their operations in Connecticut over the coming years instead of moving to or placing part of their operations in another state.

“We shouldn’t be bribing companies,” he explained.

Walker said much of the future job growth in Connecticut would be in bio-tech, nanotechnology, high-end manufacturing and fuel cell – the same areas that Malloy identified when he was running seven years ago.

He said he believes that Connecticut can attract more foreign direct investment. The Connecticut Business & Industry Association has reported that about seven percent of the state’s work force is employed by foreign-based companies.

Grasso helped bring two German-based companies - Boehringer-Ingelheim to Ridgefield and Trumpf to Farmington - in the 1970s.

On education, Walker said he would continue Malloy’s practice of making more public money available for placing students in charter schools, but that they will have to demonstrate results.

He said the state’s Education Cost Sharing formula for the public schools needs to be revised to better reflect the expenses in each district.

Perna told CT Mirror that there are a “boatload” of public colleges in the state and private industry wouldn’t run things that way.

Does at least one campus need to close?

“I would not take it off the table,” Walker said when asked about that possibility.

Walker said the public colleges in Connecticut should revise their curriculums to address where the jobs will be in a society where, according to a recent ABC News report, 38 percent of the jobs will be eliminated in the next 15 years through robotics and automation.

Also, he said the state should consider making Cooperative Education mandatory, with a waiver provision, at the four-year public colleges.

“Cooperative Education provides the student with invaluable experience and the employer gets to see what the student can do,” he said.

He also supports expanded online offerings at the public colleges.

Gregory Gray, the former president of the state Board of Regents, said in 2014 that every student in the four-year universities in the system should take at least two classes online, since it forces them to learn differently.

Walker said that he has a son and a daughter-in-law who both got degrees from the University of Phoenix, which is mostly online.

He said he began raising money in late April and believes he can reach the $250,000 threshold for the Citizen Elections Program by next February. Candidates that reach that standard can get $1.4 million for the primary and $6.5 million for the general election.

However, Walker noted that the program may not still be in place for the 2018 election. In their recent proposed budget, Republicans in the General Assembly have proposed eliminating it to help close the projected budget gap.

He said that he would make his income tax returns public after he secures the GOP nomination.

It appears almost certain that both the Republicans and Democrats will each have primaries in August of next year.

The list of candidates either in the GOP race or at least considering it include state Rep. Prasad Srinivasan of Glastonbury, former congressional candidate Steve Obsitnik of Westport, Shelton Mayor Mark Lauretti, Danbury Mayor Mark Boughton, Trumbull First Selectman Tim Herbst, state Sen. Tony Hwang of Fairfield and former Secretary of the State candidate Peter Lumaj of Fairfield.

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