PERSPECTIVE: Effective State Spending Cap Is Number One Priority for Business

by James C. Smith Formulating definitions for key spending cap terms and holding the line on exemptions from the cap in the name of fiscal responsibility will have a significantly positive impact on businesses’ willingness to invest here and on our state’s socio-economic future. Our success depends on the state’s ability to create a stable, competitive economic environment where people can start and expand businesses and families, with confidence in the future operating environment.

I am a Middlebury resident who was born and raised and works in the great city of Waterbury in our great state of Connecticut. I'm chairman and chief executive of Webster Bank. Webster was founded by my father, Harold Webster Smith, in Waterbury in 1935, the depth of the Great Depression, to help his neighbors build and buy their own homes. Over the years we've grown to become one of the largest commercial banks headquartered in New England.

For all of our recent growth into markets beyond Connecticut’s borders, Connecticut remains our most important market, accounting for nearly 70% of our 185 banking offices and over 70% of our 3,300 bankers. Webster serves one of every nine Connecticut households and about 30,000 Connecticut businesses. Yet as Connecticut’s growth has lagged the nation and the region in recent years, most of our growth is coming from faster growing regions in the Northeast…

We feel we have a duty to our customers and communities to speak out on important policy issues, like the spending cap, as we strive to be a catalyst for positive economic change. We are driven by policy, not partisanship. We listen closely to our customers, and we share with you the thoughts and concerns of many of them today.

I am deeply concerned for the state's fiscal condition, which I think we can agree is deteriorating. I strongly believe that fiscal pressures and related uncertainty regarding taxes and regulatory rules are largely responsible for the low and waning confidence expressed by businesses and consumers and is contributing to our alarmingly low standing in surveys measuring the business environment and economic prospects in states across the country…

It’s well known that Connecticut has yet to recoup all of the jobs lost in the Great Recession and that we lag well behind the nation in economic growth. In fact, private sector employment is about what it was in 1990. At the same time, many of the jobs that are being created are in lower-paying sectors of the economy, so personal income is growing slowly. At the core of our stubbornly slow recovery lies a profound lack of confidence among businesses, large and small, in the sustainability of state fiscal policies. Despite the two largest tax increases in state history in recent years, our state nonetheless remains mired in an endless cycle of budget crises with no end in sight…

This crisis atmosphere has had a predictable impact on business confidence… We are seeing a diminished appetite for capital investment among our state’s businesses compared to what we customarily have seen in the past. Many of our clients are being acquired rather than becoming active acquirers. As a barometer for the future, these signs do not portend a robust economy that provides good jobs for our children and grandchildren.

More and more people are losing confidence in our ability to achieve fiscal sustainability given the ‘new economic reality’, asserting that the challenges are insurmountable and apparently accepting our fate as a second tier state sinking deeper into that "economic cul-de-sac" that Michael Gallis, the expert on state competitiveness, warned us about in 1999.

I’m confident that we can turn it around if we adopt a ‘control our destiny’ approach to solving our fiscal problems, and that begins with you. You have it within your power to change the course of events by defining the spending cap, and especially the exemptions, in a way that sustainably controls total state spending, lowers the state’s cost of doing business and improves public sector productivity, and enables investment of the savings in programs and infrastructure improvements that will facilitate and encourage economic investment, thereby increasing business confidence and job creation. If we do not instill businesses with confidence in our state's leadership and finances, the attrition of businesses to other states will accelerate.

Businesses in this state are vitally interested in what this commission recommends. I would rate achievement of a functioning, effective spending cap as their number one priority. The commission’s recommendations will be closely watched to determine the level of discipline it seeks to impose on future spending, and taxes. You can be sure that businesses will make investment and location choices accordingly.

The plain truth is that our state has promised more than it can afford, or has been willing to fund, over many years. Governors and Legislatures made and underfunded forward commitments for decades and only recently have begun to defease them. Not funding those commitments is the primary reason we’re in the difficult situation we’re faced with now, since it led directly to more spending under the cap, which would not have been possible had that funding occurred more responsibly. Now two powerful forces are colliding, threatening to push spending even higher…the need to fund our promises previously made, and the willingness of the legislature to continually raise taxes to meet seemingly insatiable overall spending desires.

As the required funding trajectory for unfunded liabilities now rises, some favor exempting these expenses from the cap. This is 100% contrary to the intent of the constitutional amendment, and I believe it’s the biggest issue facing the commission.

The spending cap was intended to enforce fiscal discipline by limiting spending, and ‘limit’ is the key word in the constitutional amendment. This would require government to decide what to fund…and, importantly, what not to fund…and to make decisions that enable efficient management of government within our appropriately constrained ability to increase revenue consistent with growth in personal income or inflation.

Pushing fast-growing expenses out from under the cap in order to nominally comply with the cap while still satisfying our spending habit defeats the cap’s purpose and the voters’ intent. It’s like trying to eat our cake and have it, too. Most recently a simple majority of legislators moved $1.9 billion in payments toward unfunded pension liabilities outside the cap, freeing up approximately $100 million in additional spending under the cap this year. Such maneuvers violate the will of voters and only serve to make our finances more precarious. Unchecked, these maneuvers will surely produce a catastrophic result and would be the ruin of Connecticut. Exemptions from the cap now comprise approximately 30% of state expenditures. Remember that in the end, it’s total spending that matters most, since that is the basis for determining appropriations and taxes.

The constitutional amendment envisioned that only debt service was to be exempted, since placing debt service under the cap could unsettle the credit markets, raise the state’s cost of borrowing and possibly lead the state to postpone needed infrastructure improvements. I believe that only debt service should be exempted in the future since the fewer the exemptions, the more likely we can achieve true fiscal discipline. A case in point is that over the last forty-five years, total appropriations have grown at well over twice the rate of personal income.

We need to resurrect our Inner Yankee and become the "Land of Steady Habits" once again on spending. Despite its currently flawed status, the spending cap has acted as a brake on spending, encouraged bipartisanship, and spurred innovation in program delivery and organization of state government. And if the cap had been faithfully observed since 1992, cumulative state spending would have been reduced by as much as $5.5 billion.

The spending cap was adopted by more than 80% of voters as part of the grand bargain that led to the state income tax. I urge you to adopt definitions that allow the cap to work as voters intended. With proper definitions, an effective spending cap will encourage working across the aisle in the General Assembly, force our leaders to prioritize spending, and lead to new ways to deliver state services more efficiently.

To those who say that the spending cap is blind to needs, I point to the cap's safety valve. By a gubernatorial declaration and a three-fifths legislative vote, the cap can be exceeded, providing sufficient flexibility to respond to unforeseen needs.

Another area that needs attention is the Budget Reserve Fund (‘rainy day fund’) which is designed to protect surpluses to plug revenue shortfalls in recessions. Much of the surpluses were appropriated by the Legislature for other purposes such that in the early 2000's, when our state ran more than $5 billion in surpluses, only about $1.5 billion of that went to fill emergency revenue gaps or to retire outstanding obligations.

Had the Legislature faithfully adhered to the spending cap, Connecticut‘s rainy day fund in 2008 would have been over $2 billion greater. A larger balance in the rainy day fund could have significantly reduced the need for subsequent tax increases. And as any economist will tell you, a recession is not the time to raise taxes. I hope your recommendations will include some reference to the need for tighter oversight of the BRF.

As you craft definitions, I urge you to consider to these thoughts,

1. In my view the most important issue the commission faces is deciding what expenditures should be included under the cap. The spending cap should be comprehensive and include all state spending other than debt service as envisioned in the constitutional amendment. The selective removal from the cap of fast-growing budget items guts the value of the cap and defeats the will of voters by allowing otherwise unallowable spending increases which in turn raise taxes.
2. Specifically, contributions to meet unfunded pension liabilities (and other post-employment benefits) should be under the cap, since this is one of the state's largest and fastest-growing expenditures. Yes, this will lead to hard choices, as envisioned in the constitutional amendment… and hard choices are required for Connecticut to regain competitiveness.
3. The definitions for income growth and the inflation rate should look back over at least five years to smooth out volatility and ameliorate the impact of one-time events.
4. Capital gains should continue to be excluded from the calculation of personal income due to their inherent volatility. Capital gains are subject to numerous influences beyond the control of the state, including market movements up and down and federal tax increases, such as the 2013 increase that most likely inhibited investors from taking gains and in turn affected state tax collections.
5. In years of revenue windfalls, a meaningful portion of revenue in excess of the cap should go automatically to the BRF with the remainder going to pay down the state's unfunded pension and healthcare obligations, the highest in the nation on a per capita basis.
6. The spending cap must be enforceable and include a mechanism for judicial review in anticipation of potential legislative attempts to exploit any ambiguity in the definitions.
7. Consider these three principles of fiscal responsibility -- stability, predictability, and competitiveness -- in crafting your recommendations:

Stability. Volatility and changeability are anathema to business investment. Businesses seek assurance that state finances, together with the BRF, are on solid footing when deciding where to invest or expand their workforce. The cap should act to protect both taxpayers and recipients of needed services from the unforeseen.

Predictability. Businesses need to have to have confidence in the state’s policy direction. In recent years, the state has made repeated changes to the tax code that penalize businesses or create uncertainty as to tax structure and rates. Recent actions to limit the research and development tax credit, adopt the unitary tax, and restrict the use of net operating loss carry-forwards are prime examples of the whipsawing policy that unnerves businesses and discourages investment. Likewise, state retirees need the confidence to know that the state can meet its pension obligations while fiscal responsibility requires that we adopt a credible plan for funding them, which we don’t have today.

Competitiveness. Competition breeds advantage, while a lack of competitiveness breeds decline, whether for states or nations. Competition lowers costs and enhances affordability by continually improving efficiency and creating the capacity to invest, which otherwise would be lacking. Every service that government delivers should be subject to rigorous competitive review to ensure delivery through the most efficient means, including knowledge of other states’ best practices. Our tax structure and rates must be competitive if we are to grow.

When Connecticut voters spoke in 1991, their message was loud and clear. They demanded a mandatory brake on state spending, which would be especially important in times when incomes are growing slowly. We live in such a time.

I urge the commission to recommend adoption of spending cap definitions that will impose constructive discipline on state spending, force our elected leaders to make choices, encourage public sector productivity gains, and regain the public’s confidence. If this commission adopts and the Legislature enacts definitions that meet the principles I’ve shared, Connecticut’s businesses will regain the confidence to grow and invest and create jobs.

____________________________

James C. Smith is Chairman and C.E.O., Webster Bank.  This is excerpted from testimony provided on Sept. 7, 2016 to the State Spending Cap Commission, where Smith was invited to testify.  Subsequently, at the Commission's Dec. 15 meeting, the members did not reach a consensus on recommendations.  The state legislature convened this month for the 2017 session.  

PERSPECTIVE: Obscuring What Made America Prosper

by Jacob S. Hacker Distrust in public institutions is a broad cultural trend. It is whipped up in popular entertainment and reinforced by a news media that sometimes seems to relish treating every person and organization as equally venal. Distrust in government, we have seen, is also, however, spread systematically, deliberately, and relentlessly—by GOP leaders who gain politically by “destroying the village to save it” and by powerful interests that have profited from the confusion and disaffection that widespread distrust feeds.

Consider the biggest threat facing our planet: global warming. Sowing doubt about climate change has proved a huge and hugely successful enterprise. Indeed, the fossil fuel industry deserves some special prize for chutzpah: In its propaganda, the bad guys aren’t carbon-emitting corporations trying to preserve trillions in dirty assets but instead climate scientists supposedly ginning up a false crisis to get research grants.

The modern GOP has joined the industry in its endorsement of whatever egregious defense seems most effective at the moment. Although the first lines of resistance (“global warming isn’t happening”; “it is, but for natural reasons”) have more or less crumbled, and “I’m not a scientist” doesn’t seem likely to work for long, either, there are plenty of additional trenches to retreat to: “Reform won’t work.” “It will be too expensive.” “It is pointless absent efforts by other countries.” “We want reform, just not this one —or the next one.” In the meantime, the fossil fuel industry continues to book huge profits and atmospheric carbon dioxide levels continue to rise.

The marketplace of ideas is of great value. But just as in the actual marketplace, we all need help deciding which products are reliable and which are not. Consumer Reports is available for car buyers—whose decisions are a lot simpler than the typical policy choice. Yet, in our hyperpolarized political world, institutions recognized as credible sources of independent knowledge continue to lose ground.

Take the news media. As much as the decline of broadcast and print news has hurt independent journalism, the media remains the main mechanism through which people learn about the broader world. Too often, however, reporters structure stories to create controversy or convey catastrophe…The basic story of this book—that governments and markets, working in tandem, have steadily increased human welfare (if, of late, far too gradually)—offers no hook that will excite reporters.

What’s more, even when journalists cover important policy debates, they tend to fall into the trap of “he said, she said” reporting on political conflict. Simply recounting the claims of both “sides” in a debate—each debate having exactly two—imparts a potentially misleading message of unresolved controversy and false equivalence. When the weight of the evidence is in fact on one side, the “he said, she said” approach provides journalists with a safe posture of neutrality that, in practice, advances particular agendas and makes it harder for readers to understand events…

Our discourse about government has become dangerously lopsided. The hostility of the right is unceasing and mostly unanswered. Eloquent leaders defend individual programs, but too rarely defend the vital need for effective governance. Politicians facing electoral pressures participate in a spiral of silence. Chastened by government’s low standing, they reinforce rather than challenge it…

Rhetoric is only one part of problem. Cowed policymakers also design programs that send much the same message.

The political scientist Suzanne Mettler has documented the increasing tendency to “submerge” policies so the role of government is hidden from those who receive benefits. These subterranean policies include tax breaks for private savings for education and retirement, as well as reliance on private companies and contractors even where these proxies are less efficient than public provision. These submerged benefits are usually bad policies, but they are even worse politics. Voters who don’t recognize government are not likely to appreciate what government does. Nor are they likely to form an accurate picture of government’s role, seeing only its visible redistribution but not the vast numbers of ways in which it enables prosperity…

Consider the most maligned policy of recent years: the Affordable Care Act. Even as the law has expanded health coverage while moderating costs, critics continue to spew out disinformation and insist their direst predictions have come true (and get a respectable hearing from the news media). They claim millions are losing good insurance despite a historic expansion of coverage. They claim costs are skyrocketing despite a historic slowdown of medical inflation...

Given all this, it’s no surprise that Americans know strikingly little about the most important social policy breakthrough of the past half-century. Asked how the actual cost of the law compares with estimates prior to enactment, roughly 40 percent admitted they had no idea. Another 40 percent thought costs were higher than predicted. Only 8 percent knew that costs were substantially lower than anticipated.

Here, as in so many areas, voters have a limited understanding of government performance, receive scant guidance from the media, and are encouraged by a barrage of negativity to assume the worst. In the 2014 election campaign, anti-ACA ads outnumbered favorable ones by a ratio of 13 to 1…

A government that effectively promotes human flourishing is a government worth fighting for. More than ever, the problems we face demand a sustained and principled defense of a vital proposition: The government that governs best needs to govern quite a bit. Americans must remember what has made America prosper.

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Excerpt from AMERICAN AMNESIA by Jacob S. Hacker and Paul Pierson.  Copyright © 2016 by Jacob S. Hacker and Paul Pierson. Reprinted by permission of Simon & Schuster, Inc, NY. 

Hacker was the keynote speaker at the Connecticut Data Collaborative conference, “Counting What Matters: Better Data for Better Policy in Connecticut,” on Dec. 9.  He is the Stanley B. Resor Professor of Political Science and Director of the Institution for Social and Policy Studies at Yale University, and a member of the Steering Committee of the Scholars Strategy Network, research to improve policy and strengthen democracy.

PERSPECTIVE: Municipality Prevails as Fire Department Takes Over Ambulance Services in Milford

by David Slossberg In a first-of-its kind decision in Connecticut, the state has granted a municipality’s petition to revoke the basic level transport license of its national ambulance provider and reassign that license to its superior municipal fire department.  This pioneering effort was championed by the City of Milford, which now benefits from complete municipal control over the operation of, and revenue from, the provision of emergency medical services within its boundaries.

The City of Milford filed a petition with the Connecticut Department of Public Health (”DPH”)  in December 2014 requesting that it assign the Milford Fire Department as the City’s primary service area (“PSA”) responder for basic level ambulance service, a change that meant ousting American Medical Response (AMR), which had held the PSA license for Milford since 1995.

The City filed its petition pursuant to a newly enacted statute that gives municipalities the right to petition for removal and reassignment of its primary service area responders.  The City presented written briefs, testimony and oral arguments explaining why and how provision of ambulance service by its Fire Department would effectively maintain or improve patient care in the area.  Problems cited included AMR’s delayed response times, refusal to negotiate a service contract with improved standards, and failure to provide a bariatric ambulance (a specially-outfitted ambulance to accommodate the severely obese).

After nearly two years of proceedings before the DPH, the State agreed that the Milford Fire Department is better suited to meet community needs. The finding is based on Milford Fire Department’s plan for additional ambulances, considerably shorter response times, increased personnel training requirements, decreased costs, and more intense scrutiny of performance standards.

This decision is particularly important because it focuses emergency response on patient care, and makes clear that communities can have cost effective emergency services tailored to local needs that does not have to be compromised by the bottom line financial concerns of a large, national company.

I believe the decision is an effective first step towards breaking up AMR’s monopoly in the region. Over the last 15 years, AMR has compiled regional strongholds by buying smaller, local ambulance companies.  However, as it has become more regionally based, it has also become less responsive to the needs of local communities like Milford.  By controlling the primary service area, municipalities can either provide services themselves at standards suitable for their citizens, or place those services out to bid at standards set by the municipality.  That effectively prevents companies like AMR from citing, among other things, the costs to provide ambulance coverage on a regional basis and labor issues as reasons why they cannot agree to meet faster response times and more rigorous performance review and reporting requirements.  If they want the work, they must meet these higher standards.

The final decision of the Commissioner of the Department of Public Health transferred control of the basic level ambulance service in Milford to the Milford Fire Department in mid-October.  The City has now implemented its plan to the benefit of its residents.  Emergency responders currently serve the city’s population of some 55,000 in an area of approximately 26 square miles.

Milford Mayor Ben Blake lauded the decision, emphasizing that “it is a culmination of almost two years of hard work to develop a better response system for our residents and secures important advancements that will benefit patients and taxpayers.”

Of the victory, Milford’s Fire Chief, Douglas Edo said,” It was important for the City of Milford to have control over these services, which are so crucial to the public’s health and safety.  We are thrilled that the issue was decided in our favor to the great benefit of our community.”

_____________________________________

Atty. David Slossberg is a named partner in the Milford-based law firm Hurwitz, Sagarin, Slossberg and Knuff, LLC. He can be reached at 203-877-8000.

PERSPECTIVE commentaries by contributing writers appear each Sunday on Connecticut by the Numbers.

PERSPECTIVE: 10 Years, 10 Questions – A Reflection on Safe Driving Advocacy

Connecticut was reeling, from 49 teen-driver-related deaths in 2006 (among more than 5,000 nationally), and then seven teen fatalities in six weeks during August and October 2007. Connecticut’s governor, a grandmother herself, had had enough, and appointed a task force to overhaul our state’s teen driver law. The Connecticut task force recommended, the legislature accepted, and the governor signed (in April 2008) revisions to our teen driver law that made it one of the strictest in the nation: an earlier curfew, longer passenger restrictions, mandatory seat belts, a ban on texting, license suspensions for violations, enhanced powers for police, and a required safe teen driving class for parents. The class, a controversial proposal, demonstrated that the political mood was to risk the ire of parents in the name of safety.

The group would build on the heroic efforts of three mothers who had lost teens in crashes in the span of eleven days in 2002, but plainly there was more to be done. Governor Rell asked me to serve, because one of the 2006 fatalities, on December 2, had been my son Reid, seventeen years old, the driver in a one-car crash on an interstate highway. I had an opportunity to make sure that Reid had not died in vain.

I have learned that stricter traffic safety laws work. Nationally, annual deaths from motor vehicle crashes have declined from more than 50,000 in the 1970’s to about 35,000 in recent years. In Connecticut in 2014, that 2006 number, 49 teen-driver-related deaths, was reduced to ten, a remarkable public safety achievement. But while learning the characteristics of successful advocacy, I also became acquainted with the forces that impede stricter safe driving laws and efforts to lower crash rates and fatalities.

So where are we today? Confronted by this alarming new statistic: in 2015, more than 35,000 people died on American roads, a seven percent increase from 2014. More than four thousand of those deaths were in teen-driver-related crashes. In 2016, we are on pace for yet another increase. Decades of progress are beginning to reverse.

I now offer ten questions. These are intended to be provocative. They ask, “Why not?” and “Can’t we do better?” They are unconstrained by political reality, cultural norms, or public budgets. My aim is to provide to you readers, especially those in government and the traffic safety community, with pointed inquiries about where we are drawing the line today between freedom and safety:

1. Why does the government allow the manufacture and sale of cars that can go much faster than eighty miles per hour, when it is illegal to drive faster than eighty on any road in the United States? In the October 2007 crash in Connecticut that killed four teens, the estimated speed was 140 miles per hour. The federal government can mandate safety features for automobiles, the technology to install so-called “speed governors” exists, and they can be installed and even retrofitted at little cost.
2. Federal regulations ban cigarette advertising because smoking is dangerous, so why do we allow automobile advertising on television that shows illegal and unsafe driving? Ads show cars driving fast, in dangerous places, performing stunts and smashing through concrete and glass without a scratch. Would it really hurt sales to ban advertising that shows absurdly unsafe and plainly illegal driving?
3. The federal Food and Drug Administration does not allow products to be sold to the American public until they have been proven safe, so why does the federal government allow installation in cars of electronic devices that have nothing to do with the safe operation of the vehicle, without making the manufacturers first prove that these devices will not distract from safe driving? Are we allowing auto manufacturers to experiment with the safety of the American public? Why is the response to date only voluntary guidelines?
4. If assessment of risk and judgment about how to avoid it are not fully developed in the human brain until we reach age 22 to 25, why do states issue licenses to teens as young as 14, 15, and 16? Tradition and parent convenience are not acceptable answers.
5. Because it is well-established that new teen drivers have the highest crash rates, and that parent supervision is essential to the success of teen driver laws, why don’t all states require at least one parent or supervising adult, as a condition of putting their teen on public roads, to attend a class about the elevated dangers of teen driving?
6. Why do most distracted driving laws cover only cell phones and texting, but not distractions from dashboard-mounted, interactive, Internet-ready, smartphone-synched screens?
7. When all of the world’s leading public health and safety organizations agree that hands-free/voice-activated use of a cell phone can be just as distracting as hand-held use (because voice-activated causes what is called “cognitive blindness”), why do so many states ban or limit hand-held use, but allow hands-free?
8. Why do cell phone and distracted driving laws vary by state, when the driving technology and the risk are essentially the same everywhere? Has anyone considered the absurdity of someone driving from Maine to Florida passing through fourteen different sets of rules about cell phone use? One uniform set of rules would help drivers understand their obligations and law enforcement monitor compliance.
9. Why do most distracted driving laws focus on specific devices, such as cell phones and laptops, when it is foolish for our laws to try to keep pace with ever-evolving ways that information, music, and entertainment are delivered, and a more comprehensive approach would be a rule targeting driver conduct, such as: “Except in an emergency, no driver of a vehicle not in Park shall use any electronic device, whether in hand-held, hands-free, or voice activated mode, to send or read a message, send or view a photograph or video, make a phone call, or communicate with a person outside the vehicle”?
10. Why do legislators often demand incontrovertible statistical evidence before enacting stricter safe driving measures when the risks are obvious? In 2014, at a conference, I heard a leading traffic safety engineer say that, “We don’t know definitively how risky cell phone use while driving is.” Well, maybe not to the fourth decimal point, but should the lack of precise, multi-year data hold us back from common sense safety regulation when the danger, if not the exact quantity, is clear?

In summary, can we envision adopting driving laws that better align with science and evidence; requiring safety education for parents of teen drivers; banning cars that can go faster than any speed limit; allowing only advertising that proclaims features, but doesn’t show driving fantasies; making manufacturers prove that electronic devices are safe before installing them; imposing a uniform distracted driving law that focuses on driver conduct instead of particular devices; and treating hands-free and voice-activated the same as hand-held? The costs and even the inconvenience would not be substantial, but the lives saved would be.

As I always say, I am not an expert, engineer, or professional; I’m just a Dad with a keyboard, fueled by a still-raw, emotional need to vindicate the memory of a boy who died. I’m a guy who has done some research and writing, an outsider questioning what has and has not been achieved, and why. It’s a strange thing, traffic safety advocacy: success is ephemeral and change is incredibly hard.

Giving up and accepting fatalities and injuries as the price of our mobility, or beyond our control, is not an option.

_______________________________

Tim Hollister, of West Hartford, is the author of “From Reid’s Dad,” www.fromreidsdad.org, a national blog for parents of teen drivers, and Not So Fast: Parenting Your Teen Through The Dangers of Driving (Chicago Review Press, 2013). Tim’s advocacy has received national public service awards from the U.S. Department of Transportation, the Governors Highway Safety Association, and the National Safety Council.  This excerpt of his Reflection is printed with permission.  The full text can be seen here.

PERSPECTIVE: The Rise of the Full-Time Freelancer

by Melissa Harris Four months in, it still feels a bit strange when I come home after dropping off the kids at school. I’d been a full-time employee for 14 years—Going to work meant going somewhere else, not back home.

But here I am, at home, working. And I am so grateful.

My children are 4 and 6 years old, so predictability (and avoiding germs at school) is a laughable idea. And long days in before- and after-care were not only very expensive, but also exhausting for them. I needed to work and wanted to stay in my profession, but I also wanted the flexibility to work around the needs of my family. Office life just wasn’t right for me, or us, anymore.

When I shared the news that I was striking out on my own, many people encouraged me with their own stories of going freelance or running a small business from home. Some did it for their family, and some did it to pursue their career and passions on their own terms. They all said it was really, really hard—but none of them regretted it. It was right for them.

Just like anything else, becoming an independent consultant has its pros and cons. Over the last four months, I’ve already learned that it’s not a better way, rather a different way to juggle career, income, and family needs. I’m working hard (and lots of odd hours), but around life. So, it’s right for me.

And it’s right for a steadily increasing number of people.

An annual study commissioned by Freelancers Union and Upwork estimates that 19.1 million professionals, or about 12% of the U.S. workforce, are independent contractors who freelance full time. Other studies more conservatively estimate the full-time independent workforce at about 8%. That’s still about 12.5 million Americans.

The Upwork study also found that 63% of freelancers do so by choice, up from 53% in 2014.* Full-time freelancers indicated they feel empowered and engaged by their work, and that flexibility and freedom are the biggest reasons they chose to freelance. (It also doesn’t hurt that 77% of full-time freelancers reported that within a year, they were making as much or more than when they were full-time employees.)

This dynamic is consistent with research done by the McKinsey Global Institute (MGI), and by Field Nation. Field Nation cited a recent Gallup Poll that found 70% of traditional W-2 employees are disengaged in their workplace. By comparison, Field Nation found that 88% of independent contractors see themselves as highly engaged entrepreneurs who feel ownership and enjoyment in what they do. And 90% feel deeply committed to their clients’ success.

Who is freelancing may or may not surprise you. Upwork estimates that Baby Boomers reluctant to retire account for about 30 percent of U.S. freelancers. And a 2015 survey by economists Lawrence Katz and Alan Krueger found that freelance work is especially on the rise among older workers, women, and minorities.

Of course, technology is a huge enabler of freelancing, but there are also other factors that are creating a greater demand for freelancers.

Simply put, employee benefits are very expensive, and many large corporations are already accustomed to managing teams spread out over multiple locations. More companies are therefore moving towards a “blended workforce,” with leaner W-2 staffing supplemented by readily available and skilled freelancers (1099s).

In this labor equation, the biggest risk for the American worker is taking on the cost of health insurance. If more employers staff lean, then more individuals and families will be on the hook for their healthcare. (Cue the partisan bickering.) Saving for retirement could similarly become more difficult.

Another risk of freelancing is not getting paid for the work you do. New York City is leading the way with new a labor law called the “Freelance Isn’t Free Act,” which protects freelancers from wage theft.

Other labor policies will similarly need to be examined. Katz and Krueger raise red flags around protections for a reasonable workweek, vacation and sick days, gender parity, and fair wages. Access to credit is another concern.

As the full-time independent workforce continues to grow, employers and policymakers will need to evolve practices and protections so that the dynamic continues to be mutually beneficial.

But in the meantime, I’m going to get my daughter off the school bus.

_________________________

Melissa Harris a strategist and copywriter with over 10 years of experience developing meaningful brands, engagement programs, and communications. She now freelances full time as Forthwrite Strategies.

* If 63% of freelancers do so by choice, then 37% do not. This is where Krueger and Katz point to “involuntary part time” workers who want full time, traditional employment. They see the rise of nonstandard work as a consequence of the recession. As prime examples, they cite young graduates who take temp jobs, and people forced to supplement part-time jobs with freelance or gig work.

PERSPECTIVE: A New Direction for Shopping Malls

by Valerie Dugan It used to be, when I was young, that a trip to the local mall was a real treat, with lunch at the food court and perhaps a Disney movie in the plush new cinemas. In summer we could cool off with ice cream, and before Christmas, we’d enjoy the trees and wreaths with their giant ornaments, battle the crowds, and sit on Santa’s lap for a picture in front of his castle.

These days, with the phenomena of e-commerce, giant box stores, and shopping clubs, the mall as we knew it seems to be changing. While many landmark malls around the nation are plagued by empty retail space and a significant drop in visitors and revenues, others have added attractions that continue to bring retail traffic.

E-commerce sales in the U.S. last year totaled over $341 billion, a more than 14 percent increase over the year before, and spiked in November and December for pre-holiday sales.^[1] Some experts project the e-commerce space will grow to $548 billion by 2019.^[2]

What will that trend mean for traditional retail? According to some analysts, over the next decade, about fifteen percent of the nation’s malls will either go bankrupt or will be converted into non-retail space, and the numbers are rising.^[3] One retail consultant even predicts that in the next fifteen to twenty years, up to half of America’s shopping malls will close, especially those that house lower end to midlevel stores.^[4] The ones that survive will be those that successfully adapt to changing consumer demands.

Mini-golf courses, skating rinks, gym facilities, laser tag, mazes, and even go-kart raceways are all within the spectrum of entertaining additions to malls these days.

In Connecticut, one furniture retailer has incorporated a giant, indoor rope-climbing attraction coupled with entertainment^[5]. While not in a mall, this retailer is a perfect example of the kinds of things that malls may need to do to maintain their foot traffic.

Another successful approach to damming the tide of dying malls has been the addition of grocery stores: developers bank on the philosophy that “everyone needs to buy food, so why not entice them to look at other items, too?”^[6]

Some malls replace slumping anchor stores with restaurants, movie theatres and discount shops. This may be a short term fix, but if two or more anchors fail at the same time, chances are the entire mall will go out of business, researchers found.^[7]

The research results further predict that the space would likely be replaced with business offices, health care facilities and community colleges.^[8]

What are other nations doing? In China, futuristic new high-end malls target “smart” shoppers with technology, such as touch-screens and interactive mirrors in fitting rooms that can change lighting, reach a sales associate, or display a selection of other items of interest.^[9]

At the same time, these malls-of-the-future provide consumers with “experiential” reasons to visit, reasons that cannot be found online. For instance, one mall offers a Christmas headquarters which sends out texts to guests advising them when Santa is available for a visit.^[10]  Once there, guests also can superimpose themselves into a selection of “selfie” videos with unique backgrounds and themes.^[11]

As American malls look for anchor stores, and innovations, to attract shoppers, investors simultaneously look for interesting opportunities for their portfolios.

Open-air retail space, such as strip malls, seem to fare well because their tenants often include discount stores, grocers and drug stores – staples of every economy.^[12] In fact, open-air shopping centers make up a larger proportion of the country’s total square footage for retail than do enclosed malls.^[13]

And, tenant occupancy for existing properties is reportedly high as new construction decreases in a slow growth economy.^[14] The dearth of supply means that landlords can push rents up.

Investors should discuss the sector with their financial advisors and consider it as part of a well-balanced portfolio. As with any other investment, of course, there may be risks involved, and each individual should evaluate based on their long term financial plan.

While visits to the malls as we remember them from childhood may be a thing of the past, the malls of the future certainly hold promise.

_________________________________

Valerie B. Dugan, CFP, is a Senior Vice President and Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Hartford. For more information, please contact Valerie at 860-275-0779.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.

[1] https://www.internetretailer.com/2016/02/17/us-e-commerce-grows-146-2015

[2] https://www.statista.com/topics/2443/us-ecommerce/

[3] http://www.businessinsider.com/shopping-malls-are-going-extinct-2014-1

[4] ibid

[5] http://www.jordans.com/attractions/it

[6] http://www.sandiegouniontribune.com/sdut-why-your-mall-putting-grocery-store-2012aug04-htmlstory.html

[7] http://www.businessinsider.com/shopping-malls-are-going-extinct-2014-1

[8] ibid

[9] http://www.businessinsider.com/what-the-mall-of-the-future-looks-like-2016-1

[10] http://www.businessinsider.com/what-the-mall-of-the-future-looks-like-2016-1

[11] http://www.businessinsider.com/what-the-mall-of-the-future-looks-like-2016-1

[12] http://www.wsj.com/articles/mall-reits-are-on-many-investors-shopping-lists-1457456123

[13] http://www.wsj.com/articles/mall-reits-are-on-many-investors-shopping-lists-1457456123

[14] ibid

PERSPECTIVE: Paving a Path to Postsecondary Attainment in Connecticut and Beyond

by Jamie Merisotis I was raised in Manchester. My father arrived in Connecticut almost 70 years ago after serving his country in World War II. Although he and my mother never made it to college, they instilled a strong belief in the value of education. Two generations of us – most still living here – have benefited from the state’s public schools, and colleges and universities.

So, as leader of a national foundation focused on increasing Americans’ success in higher education, Connecticut’s success is always on my mind. Last month, Lumina Foundation released its 2017-20 Strategic Plan. The plan describes what must happen for to achieve Goal 2025. Within the next eight years we must reach our goal for 60 percent of working-age Americans to earn college degrees or credentials, effectively creating a universal learning system beyond high school. We need a system that improves people’s lives and enables the nation to meet the rising demand for talent.

Since 2011, the U.S. economy has grown by 11.5 million jobs for workers with more than a high school education. In contrast, only 80,000 jobs have been added for those with a high school diploma or less. This disparity is projected to grow. By 2020, nearly two-thirds of jobs will require more than a high school diploma. Yet almost every state has an average level of education among working-age residents that is too low.

When the Foundation began reporting on the share of people with college degrees eight years ago, Connecticut stood at 46.6 percent. In 2014, the most recent year for which data is available, the rate reached 48.2 percent.

This year, Lumina added data about people with certificates and industry certifications. We believe an expanded focus on these credentials is vital for creating a better-educated country. Quality credentials have clearly stated, easy-to-grasp learning outcomes that create paths to good jobs and further education. In Connecticut, one of every 20 working-age residents has these types of certificates, bringing the share of people with meaningful credentials to 53.2 percent.

To reach the national goal of 60 percent by 2025, all of us have to do more to ensure fairer results for students who fare poorly today. The Foundation has been focused over the last several years on both traditional-age students and those who previously have gone to college but never finished.  Yet increasingly, we’ve come to recognize that we must do more and better for the nearly 64 million adults with no education beyond high school. This population is mostly made up of people from poorly represented racial and ethnic groups, immigrants with limited English-speaking skills, people who have lost middle-income jobs, and prisoners.

Others are faring better. In Connecticut, whites and Asian/Pacific Islanders with education beyond high school represent 53.6 percent and 71.9 percent of those populations, respectively. Yet for people who are African-American, Hispanic and American Indian, the percentages range from 22.5 percent to 32.8 percent. These numbers mean the system is not serving these learners who desperately need quality credentials to have better lives and jobs.

Eliminating disparities in outcomes across racial and ethnic groups and by socioeconomic status will require civic leaders, education leaders, policymakers, and employers to participate in a large-scale effort to redesign the system. To build tomorrow’s workforce, we must build a system that works for today’s diverse students. In the same way communities banded together to make universal high school a reality, it will take broad, coordinated action to ensure education beyond high school becomes a reality for all Americans.

This movement is underway, led by states setting goals to dramatically increase the number of people with education beyond high school. Connecticut is one of 26 states that set challenging, sustainable, and measurable goals in support of fair outcomes for students of all racial and ethnic backgrounds. My hope is that other states will follow Connecticut’s lead to ensure the country has the talented people it needs to address future civic, economic, and social challenges.

________________________

Jamie Merisotis is President and CEO of the Lumina Foundation,  an independent, private foundation committed to increasing the proportion of Americans with degrees, certificates and other high-quality credentials to 60 percent by 2025. Lumina’s outcomes-based approach focuses on helping to design and build an equitable, accessible, responsive and accountable higher education system while fostering a national sense of urgency for action to achieve Goal 2025.  Lumina operates from Indianapolis. 

1. America’s Divided Recovery, Georgetown University Center on Education and the Workforce, https://cew.georgetown.edu/cew-reports/americas-divided-recovery/
2. Recovery: Job Growth and Education Requirements Through 2020, State Report, Georgetown University Center on Education and the Workforce, https://cew.georgetown.edu/wp-content/uploads/StateProjections_6.1.15_agc_v2.pdf
3. A Stronger Nation: Postsecondary Learning Builds the Talent that Helps Us Rise, Lumina Foundation, http://strongernation.luminafoundation.org/report/2016/#connecticut

PERSPECTIVE: At the Next Presidential Election, the Popular Vote Must Win Out

by John R. Koza The state-based winner-take-all system no longer serves the citizens of the country and we must act to reform it now.

The fact that it appears the winner of the 2016 election, Donald Trump, was not supported by a majority of voters dictates that we elect our next president by popular vote. We can no longer endure presidential elections that primarily focus on the issues and outcomes in a shrinking number of battleground states, while the rest of us feel marginalized and muted in the political process.

The reason five of our nation’s 45 incoming presidents have entered office after losing the national popular vote is that most states have winner-take-all laws that award all the state’s electoral votes to the candidate receiving the most popular votes in that state.

Given that the average national popular vote has been close in the last eight presidential elections (an average margin of less than 5%), it is likely that the nation will continue to experience elections in which the president wins the electoral college, but loses the nationwide popular vote.

These same state winner-take-all laws force presidential candidates to focus 94% of their general-election campaign events in 12 closely divided “battleground” states – with the remaining states receiving little or no attention. In 2012, they concentrated all of their campaign events in 12 states. As presidential candidate and Wisconsin governor Scott Walker publicly observed a year ago: “The nation as a whole is not going to elect the next president. Twelve states are.”

When presidential candidates devote virtually all of their attention to 12 states (representing just 30% of the nation’s voters), it is not just about TV advertising and rallies. It has a real impact on public policy. Battleground states receive 7% more presidentially controlled grants, twice as many disaster declarations, considerably more Superfund and No Child Left Behind exemptions, and benefit from many other major presidential policy decisions. For example, in 2016, both party’s nominees catered to Michigan, Wisconsin, Ohio and Pennsylvania on the issue of trade treaties.

Former presidential spokesman Ari Fleischer said, “If people don’t like it, they can move from a safe state to a swing state.”

Fortunately, the Founding Fathers provided us with a better way to improve the system than mass migration. Article II, section I of the US constitution empowers state legislatures to change their method of awarding electoral votes. National Popular Vote asks the legislatures if they want to join together as states to make every vote matter throughout the country.

The National Popular Vote bill would guarantee the presidency to the candidate who receives the most popular votes in all 50 states and the District of Columbia. This interstate compact will go into effect after it is enacted by states possessing a majority of the electoral votes – that is, enough to elect a president (270 of 538). Under this system, the compacting states award all of their electoral votes (in block) to the candidate who received the most popular votes in all 50 states (and the District of Columbia). This guarantees the presidency to the national popular vote winner and makes every voter, in every state, politically relevant in every presidential election.

Eleven states possessing 165 electoral votes have already enacted the National Popular Vote bill into law. In addition, the bill has made significant progress by passing one legislative chamber in 12 additional states with 96 electoral votes. The bill was recently approved by a bipartisan 40-16 vote in the Republican-controlled Arizona house, a 28-18 vote in the Republican-controlled Oklahoma senate, a 37-21 vote in the Democratic-controlled Oregon House, and unanimously by legislative committees in Georgia and Missouri. A total of 2,794 state legislators have endorsed it.

The National Popular Vote bill offers the additional benefit of preventing a presidential election from being thrown into the US House of Representatives.

We cannot expect a system that makes every voter happy with the end result of every election. We can, however, demand a system where all citizens feel that their vote mattered and voice was heard. National Popular Vote will deliver this promise in every presidential election.

_______________________

John R. Koza is the founder of National Popular Vote.  A plurality of voters in Connecticut and in the United States voted for presidential candidate Hillary Clinton in 2016.  Connecticut's legislature considered, but did not approve, legislation proposed by National Popular Vote in 2015, 2014, 2013, 2012, 2011, and 2009.  The Connecticut House, but not the State Senate, approved NPV legislation in 2009, the same year that a statewide poll indicated that three-quarters of state residents were of the view that the presidential candidate receiving the most votes nationwide should be elected president.  This article first appeared in The Guardian.

PERSPECTIVE: Living in an Aging Connecticut

In Connecticut, a person born today can expect to live an average of 80.8 years, the third highest life expectancy in the nation. However, there are significant disparities in life expectancy between racial and ethnic groups.  Life expectancy is 89.1 years for Asian Americans; 83.1 years for Latinos; 81.0 years for Whites, and 77.8 years for African Americans.

Between 2010 and 2040, Connecticut’s population of people age 65 and older is projected to grow by 57 percent, but its population of people age 20 to 64 is projected to grow by less than 2 percent.

We live in an aging Connecticut.  More than one-third of Connecticut’s population is over the age of 50, and that proportion continues to rise.  Nearly every facet of our society will be impacted.

Increasing numbers of older adults will play pivotal roles, both as caregivers and as recipients of care in both families of origin and of choice.  They will prompt municipal and state leaders and their partners to ensure that communities have the features, services and funds to support aging in place.  And they will challenge our state’s creativity, polities and budgets as they increasingly outlive their financial resources, despite working longer.

Connecticut’s demographic transformation has been spurred by medical, social and economic advances.  And it has been buoyed by baby boomers, people born between the years 1946 and 1964, who were part of the noticeable increase in birth rate post-World War II.

At every stage, baby boomers have been changing this country, and now is no exception.  Not only are their sheer numbers larger than any other previous generation, but they are also longer-lived.

Overwhelmingly, these growing numbers of older adults what to stay in their communities and to have choice, independence and dignity.  By 2025, older adults will comprise at least 20 percent of the population of almost every town in Connecticut.

This perspective first appeared on the website of the now-defunct Connecticut Legislative Commission on Aging, with research and data analysis in conjunction with the Connecticut Data Collaborative.

PERSPECTIVE: All Ways Able Best Describes Deaf and Hard-of-Hearing

by Jeffrey S. Bravin This is a pivotal time for the American School for the Deaf.

In April, we celebrate 200 years of deaf education in the United States and ASD’s bicentennial anniversary.  While much has changed since our early days, ASD’s dedication to providing a quality education for all deaf and hard of hearing children has remained the same. 

We continue to explore innovative teaching methods while incorporating state-of-the-art technology into our classrooms.  ASD is equipped with the latest technology to provide students with total access to language – this includes signing, captioning, and advanced digital systems to assist students with hearing aids and cochlear implants.

We firmly believe that the use of sign language is also critical to ensure that our students benefit from communication access in all environments.  Exposing children to a communicatively accessible environment at the earliest possible age results in language development and academic success.  The bilingual approach will foster this accessible environment while providing our students with the tools to achieve fluency in two languages. 

Now in the second year of our three year strategic plan, we are hard at work growing our enrollment, raising our academic rigor, and integrating the American Sign Language/English Bilingual Approach on campus.

With our eyes to the future, we are also completing a comprehensive branding and marketing effort to reposition ASD as the first choice in education for all deaf and hard of hearing students.

We have unveiled a new logo, tag line (ALL Ways Able), and credo (see below) for the school that not only captures ASD’s centuries of excellence, but also translates our visions for the future as we embark on our next 200 years. Our credo:

What does it mean to be able?

It means you can.

You have what it takes.

To think.

Question.

Decide.

Dream.

Achieve.

Not just in a classroom, but in the world.

So we prepare deaf and hard-of-hearing students

not only for diplomas,

but for their whole lives.

By nurturing the whole child:

Intellectually.  Emotionally.  Physically.  And socially.

and by giving every student everything they need

to focus not on obstacles or challenges,

but on opportunities and potential.

Our students and their families find we’re more than a school -

we’re a true community, made up of passionate professionals

And, using a holistic ASL/English bilingual approach,

we help students and their families be well-prepared

To participate in everything tomorrow will bring.

Because we want all our students

To look forward to futures in which they’re…

ALL ways able.

_______________________

Jeffrey S. Bravin is Executive Director of the American School for the Deaf, located in West Hartford.  Founded in 1817, the American School for the Deaf was the first permanent school for the deaf in the United States and a nationally renowned leader in providing comprehensive educational programs and services for deaf and hard-of-hearing students.

https://youtu.be/MaMJ_sXbnc4