PERSPECTIVE: Just 3 of the JUST 100

by Larry Bingaman Quarterly earnings alone can no longer determine the success of corporate America – such assessment is shortsighted and has proven harmful to the well being of our economy and those who support it. According to Paul Tudor Jones^1, “…we as a society have come to view our companies and corporations in a very narrow, almost monomaniacal fashion with regard to how we value them, and we have put so much emphasis on profits, on short-term quarterly earnings and share prices, at the exclusion of all else. It's like we've ripped the humanity out of our companies.”

Stark words that hold much truth. Why do we as a society check our values and purpose at the door before entering the workplace? Why do we in the US have the greatest income inequality and the greatest social problems?¹ What are we doing to reverse this trend of unjust behavior in our corporations and companies?

I agree with Paul Tudor Jones – we must hold all companies accountable.¹ Through Tudor Jones’ JUST 100: America’s Best Corporate Citizens in 2016², he does JUST that. His research team surveyed 50,000 Americans on corporate behavior, ranking the largest 897 publically-traded companies within their industries according to the following 10 metrics: worker pay and benefits, worker treatment, supply chain impact, community well-being, domestic job creation, product attributes, customer treatment, leadership and ethics, environmental impact, and investor alignment.³

Interestingly, each of these metrics align with three of the four tenants of Conscious Capitalism, a business philosophy stating that business should exist to elevate humanity through higher purpose, conscious leadership, conscious culture, and stakeholder orientation. Of note, the JUST 100 study does not seem to capture whether the company embraces a higher purpose. It will be interesting to see if this driver is added as the study matures.

Three of the JUST 100 companies are headquartered here in Connecticut:

• FactSet Research Systems, Inc, ranking #2 out of 23 Consumer & Diversified Finance companies;
• Cigna, ranking #2 out of 27 Health Care Providers & Services companies; and
• Terex, ranking #2 out of 32 Machinery companies.

In FactSet’s category of Consumer & Diversified Finance companies, American Express ranked first while Capital One Financial ranked third. FactSet’s JUST Strengths included worker pay and benefits, paying its workers above the industry average and having the employees themselves highly rate company benefits such as healthcare, paid time off, and free working lunch in its offices. Additional strengths included investor alignment and domestic job creation.⁴

In the rankings, Cigna was preceded by Humana and followed by Anthem. Its JUST Strengths include worker treatment, environmental impact, and investor alignment. According to the company’s JUST Capital report, “The company shows good performance in serving the interests of employees, communities, suppliers, and the environment, as well as investors.” Its noted that Cigna focused intently on employee diversity and inclusion with over 1,400 clinical staff participating in Culture Diversity Forums in 2015 and 2016, and it has provided more than $5.6 million in funding through Educational Reimbursement Program.⁵

Terex, which was sandwiched in the rankings between first place Cummins and third place Deere, won the category for worker treatment as a result of its commitment to diversity and inclusion. While additional JUST Strengths include domestic job creation and product attributes, it is noted that the company was outperformed by peers in supply chain impact, citing the need to enhance management of the social impact of its supply chain.⁶

While we should be proud of these three corporations for their commitment to just behavior, I propose we should be calling on all Connecticut companies to commit to uphold a similar level of “justness.” A commitment to justness and Conscious Capitalism would no doubt benefit our employees, our customers, our companies, our communities, and the economic well being of our state.

If you want to learn more about the JUST 100 or Connecticut’s Conscious Capitalism Chapter, which seeks to engage, educate, and inspire leaders to practice Conscious Capitalism so they can make a positive impact on their business or organizations and its people, then please email me at info@consciouscapitalismct.org.

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Larry Bingaman is the president & CEO of the South Central Connecticut Regional Water Authority (RWA). Since 2009, he has been keenly focused on RWA’s sustainable and conscious business practices that maintain and grow the region’s rich natural resources to create new opportunities.  He is deeply involved in the New Haven community, serving as a founding board member of the Connecticut Chapter of Conscious Capitalism, chairman of the Greater New Haven Chamber of Commerce Board of Directors, member of the Gateway President’s Advisory Council, and member of the Business Advisory Council at Southern Connecticut State University.

NOTES

1. Tudor Jones, P. (2015, April). Paul Tudor Jones: Why we need to rethink capitalism [Video file]. Retrieved from https://www.ted.com/talks/paul_tudor_jones_ii_why_we_need_to_rethink_capitalism
2. JUST Capital, Retrieved from https://justcapital.com
3. Whittaker, M. (2016, November 30). The Just 100 Methodology: How The Rankings Work. Retrieved from http://www.forbes.com/sites/martinwhittaker/2016/11/30/the-just-100-methodology-how-the-rankings-work/#572dfd4643ed
4. JUST Capital, Retrieved from https://dataexplorer.justcapital.com/pdfs/FDS.pdf
5. JUST Capital, Retrieved from https://dataexplorer.justcapital.com/pdfs/CI.pdf
6. JUST Capital, Retrieved from https://dataexplorer.justcapital.com/pdfs/TEX.pdf

PERSPECTIVE: Self Control is the Best Control

by Marvin Weisbord and Sandra Janoff One of the great motivational discoveries of the twentieth century is that people who coordinate and control their own work produce greater economic and social results than those who do not. Many leaders, though they might deny it, act as though they prefer control to results. How do we know? They impose coordination and control from above. They have never experienced the alternative: control from within.

Running large-group strategic-planning meetings in the 1990s, we soon recognized that we preferred results to control. We could not control scores of people working in the same room toward a plan that incorporates all of their experiences and aspirations. We found that we got the best results by focusing everyone on the same goal, creating structures for self-managing, and getting out of the way.

That way of leading proved harder than we imagined. Our biggest challenge was controlling ourselves—holding back, waiting, listening, opening doors, and letting people learn their own capabilities. Doing that meant setting the bar higher.  We had given ourselves a new leadership challenge. We had to overturn the conventions we inherited. As we became more confident of consistent results, we began inviting others to try leading in new ways.

We have now helped thousands of people access the advanced skills presented here—“advanced” in the sense of adding new capabilities to your repertoire. These skills need not replace anything you do now. If you are trying some of them for the first time, however, you will indeed be “overturning convention” if you employ them to plan, organize, motivate, and control.

We settled on eight core skills after much iteration. You could easily make our list longer.  These are skills that reinforce one another, that we could use anywhere, and that led people to do more than they dreamed they could. Best of all, we could bring them to bear on any given day. You can do likewise if you are willing to experiment.  But are you?

More than 50 years ago, Douglas McGregor, a professor at the Massachusetts Institute of Technology, wrote an all-time best seller, The Human Side of Enterprise. His was the famous Theory X, Theory Y book. McGregor described how our assumptions about human nature determine how we lead. Theory X assumes that most people are dependent, dislike work, and require close supervision. Theory Y assumes that most people enjoy work, want to learn, and welcome responsibility. Each theory is a self-fulfilling prophecy. The tighter the control, the narrower the jobs, and the less judgment people exercise, the more helpless, inept, and dependent they become.

“They act like children,” says the boss.  “He treats us like children,” say the employees.

By contrast, people who have discretion, broad skills, accurate information, and opportunities for growth motivate themselves. From birth we carry the seeds of both theories. Babies come into the world helpless and dependent—and also curious and eager to learn. When (unconscious) Theory X assumptions dominate an organization, they translate into dysfunctional policies, procedures, and structures. They discourage the behavior leaders want to instill.

On the other hand, we have seen people around the globe act out (unconscious) Theory Y assumptions. Under the right conditions, they rediscover natural impulses they had since birth, impulses nourished by unconventional policies, procedures, and structures. People respond to jobs that foster autonomy and growth. Structure includes determining who is allowed to do what. That is something you can control. It involves encouraging people to take initiative beyond their job descriptions. It means enabling communication up, down, and sideways, not just top to bottom. It means turning supervisors into coaches. It means insisting on integrating meetings between departments rather than putting up with silos.

Much organizational conflict is structural. People act the way their jobs require. Salespeople emphasize interpersonal skills. They spend time in small talk before getting down to business. Production workers relate to their machines. They skip the small talk and solve the problem. The structural strategy is to encourage people to maintain their functional differences.

This includes appointing people to integrating roles, using project coordinators, and having cross-functional mechanisms such as product teams and ad hoc problem-solving teams that head off conflict.  In our book “Lead More, Control Less,” we show how to develop the following skills:

• Gain more control by controlling less
• Get others to share responsibility
• Change the structures under which people interact without struggling to change the people
• Demonstrate how getting the “whole system” to explore the “whole elephant” leads to high motivation and fast implementation
• Use anxiety and authority projections to build respect and improve teamwork
• Resolve conflicts and lead people to find where they are 100 percent in agreement
• Experience what you can accomplish by trying out actions that may not come naturally

We emphasize a stubborn reality: Change means doing something you never did before. That is the message from ordinary leaders in business, education, health care, and community building who discovered new capabilities in themselves. We quote them throughout the book.  You may find changing structure ahead of behavior a stretch if you are used to managing personal styles, attitudes, motivations, and extrinsic rewards.  Each chapter advocates an advanced leadership skill and principles of action that you can try out every day:

1. Control Structure, Not People
2. Let Everyone Be Responsible
3. Consider Anxiety “Blocked Excitement”
4. Avoid “Taking It Personally”
5. Disrupt Fight or Flight
6. Include the Right People
7. Experience the “Whole Elephant”
8. Surface Unspoken Agreements

We invite you to travel with us down a road where people perform better the more you let go. If you go far enough, you will discover higher performance, greater self-control in others, and greater freedom for yourself. When you see the results you are getting, you will need no further proof.

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Marvin Weisbord and Sandra Janoff are co-authors of “Lead More, Control Less.” Janoff will be speaking on February 23 at Leadership Greater Hartford’s Lessons in Leadership program. Book excerpt published with permission of Berrett-Koehler Publishers.

PERSPECTIVE: Taking Risks, Serving Customers Key to Sustaining Success

by Mickey Herbert A few years ago, I was asked to talk to a group about my career as an entrepreneur.  I had never considered myself an entrepreneur, but I realized that I had taken risks in my professional life that were, in retrospect, pretty significant.  Here’s what I had to say regarding risk taking and a company's corporate culture.

My parents were always my mentors, teaching me integrity, and how to be respectful of others.  I'm not sure how they taught me to be a risk taker, but somehow, I think I got that from them too. 

Nobody in my family had ever gone to college, and I remember when my Swarthmore College acceptance letter came in the mail to our home my father took it to work before I even saw it. He wanted to show it to all the PhD's he worked for at the U. S. Naval Research Laboratory.

He hadn't finished college because of WWII, but he had learned glass blowing in the Navy and he was the only one who could build those lasers they designed.  He was also a terrific athlete, a football and baseball player in the mold of Babe Ruth, who might have played professional sports except he opted to be the first kid on his block to enlist after Pearl Harbor.

So, in a very real sense, he encouraged me to take the risks he never had the opportunity to take.  Above all else, he wanted me to go to college and/or to play professional baseball, the two life choices that had eluded him because of the war.

Throughout my life, I have always wanted to live up to the person my father wanted me to be - indeed, to be the person he wanted to be if circumstances in our country were different, almost 80 years ago.

To quote Mark Twain, one of our state's most famous citizens, who died over 100 years ago, "Twenty years from now, you will be more disappointed by the things you didn't do than by the ones you did.  So, throw off the bowlines.  Sail away from the safe harbor.  Catch the trade winds in your sails.  Explore, Dream, Discover.

So, with a firm sense of right and wrong, but no money to speak of, I went off to college in Pennsylvania, foregoing, by the way, an opportunity to sign a professional baseball contract. After college, I went straight to the Harvard Business School, then to New York City for a couple years before I headed to Minnesota - where I didn't know a single person in the upper Midwest.

Six years later, I set sail for Connecticut where, again, I did not know a single person in this state, but I was determined to become a successful CEO of a new health plan which would challenge Blue Cross and Blue Shield - Connecticut's dominant health insurer - covering most of our state's 3.5 million residents. I also took advantage of an opportunity to play fast-pitch softball with the Raybestos Cardinals in Stratford, the defending national fast-pitch champions at that time.

Management guru Tom Peters has said that the greatest predictor of one's success in business is one's willingness to take risks.  I used to have a sign in my office which said "Mistakes don't matter, it's the response to error that counts".  In other words, I believe we should all be risk takers, and not be afraid to make mistakes; but when you do make one (and I've made a few doozies in my life), learn from it so you won't make that mistake again.

Because I was a CEO from 1976 to 2010 (and am now one again), I had the incredible opportunity over three and a half decades to define the corporate culture at three companies - PHS, the Bridgeport Bluefish and ConnectiCare. In looking back, I realize that so much of what made these three companies special is very simple.  Peter Drucker once said that successful management is doing a few simple things and doing them well.  For me, it was figuring out what business we were in, and then sticking to the knitting. 

• At PHS, and then again at ConnectiCare, we determined that our business was delivering the highest quality, affordable health care, with unsurpassed customer service, to the citizens of our region. Notice that I said nothing about health insurance. At PHS, we had a slogan, "Intensive Caring" that we trademarked and ingrained into every employee we hired.
• At ConnectiCare, our slogan, and theme song, was "You Know Us by Heart" which carried the very same message.
• At the Bluefish, we determined at the very outset that we were in the business of delivering the highest quality, affordable, family entertainment to the citizens of our region. Notice I didn't say anything about professional baseball.  We made the ballpark a happy, happening place where people wanted to be, a veritable town meeting place, a place where they could be proud to be in and from, Bridgeport, a place where something was going wonderfully right in a city that had often seen things go wrong.

At all three companies, we made all kinds of decisions to increase our likelihood of success, not the least of which was to hire the best people we could, provide them with extraordinary training, and then empower them to go out and make decisions on their own.  What I guess it is about more than anything else is having a totally-focused, customer-friendly culture.

I feel very fortunate to be able now, at the Bridgeport Regional Business Council, to continue the legacy.

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Mickey Herbert is President and CEO of the Bridgeport Regional Business Council

PERSPECTIVE: Fighting 'fake news' - The myth of 'information literacy'

by John Richard Schrock The Thunderbolt was a publication of the American Nazi Party. I saw my first copy my first year of teaching in rural Kentucky in 1969.

Before class, a high school student showed me a copy, careful that no classmates were nearby. The feature story was an outrageous claim that African-Americans were more closely related to gorillas because they could produce hybrids and white Aryans could not. The article had a picture of a very hairy black infant to “prove” the case.

I recognized the picture. I wrote the term “hirsutism” on a slip of paper and sent the student to the library with instructions to look it up in the World Book encyclopedia. When he came back, after class was over he came up and whispered: “They lied, didn’t they.” I nodded. He had found the encyclopedia entry on the wide range of infants that have this rare hirsute condition and realized how the neo-Nazis had fabricated their racist article.

We did not use the term “fake news” in 1969. We had fake news, but it was slow to spread in print, and readership was small.

Today with social media, such fake news could “go viral” overnight.

Today, both K–12 and higher education are rushing to battle fake news with so-called “information literacy” courses that have magic cures for detecting the range of amateurish didn’t-quite-get-the-story-right misinformation to vicious falsehoods, such as the example above.

Librarians are often called upon to sort truth from trash. That is ironic because before the internet, library materials were classified: 500s and 600s were the pure and applied sciences. The occult was in the 100s.

But our misunderstanding of free speech has kept the Internet free from classification. How dare anyone put vaccines-cause-asthma or dolphins-are-just-underwater-humans in the non-sciences.

So the Internet has become a vast wasteland. I let my student teachers discover this themselves. I assign them to find 10 accurate websites on the Internet in some specific biology field that they choose: kidneys, ferns, fish, etc. They think it will be an easy assignment, but it takes hours or even days.

They have more than 40 credit hours of biology under their belts and they detect website after website that looks good — until they read the details. Tips on search words and other literacy tricks have little effect.

A study in the journal Pediatrics found the majority of online information on childhood diarrhea was wrong, and sometimes fatal. Dot.gov and dot.edu sites are no more accurate than dot.com addresses.

A most damning piece of research came from the University of Connecticut. Seventh-grade students were taught to become “research pros” by using RADCAB, a “critical thinking assessment tool for online information” teaching about Relevance, Appropriateness, Detail, Currency, Authority and Bias.

The Connecticut study directed students to use RADCAB on the Pacific Northwest Tree Octopus website. The students found that the Tree Octopus website passed all the tests for authority, citations and other criteria (the Ph.D.s and journals were fake, however).  But when an actual expert was brought in to explain how the octopus only lives in the sea, nearly all of the students rejected the expert.

They now had “ownership” of this falsehood.

This would not have happened if the students had actually known something about an octopus. To combat fake information in the future, citizens are just going to have to know more content.

To return to the neo-Nazi Thunderbolt article I described at the beginning, my ability to de-fuse that terrible lie came directly from my having read through the World Book encyclopedia in fifth grade and then recognizing the picture more than a decade later.

Without that knowledge and our unique ability to recall faces and photos for long times, I would have had to resort to an authoritative “believe me” explanation that would not have undermined the legitimacy of the claim.

Abstract “information literacy” lessons don’t work. If there was any god-like truth-detector, we would all be using it.

Simply, any assertion that schools can teach students a method to separate truthful reporting from fake news, is itself “fake news.”

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John Richard Schrock is a distinguished biology professor at Emporia State University in Kansas.  This column first appeared in the Crowley Courier Traveler and is published here with permission. 

PERSPECTIVE: Manufacturing - Opening Minds to the New World of Innovation

by Bob Sobolewski With more than 4,500 manufacturing companies, Connecticut is no stranger to the world of innovation. In fact, some pretty cool things were first made here in our state — such as helicopters, erector sets, guitars, watches, sneakers, typewriters and bicycles. Most of these items continue to be mass-produced in plants of all sizes today — well, perhaps not typewriters.

Manufacturing employs more than 18.6 million people in the United States, and in the last few years manufacturing jobs have increased by 500,000, according to the National Association of Manufacturing (NAM). In Connecticut, there are about 160,000 people working in the manufacturing field, according to CT Department of Labor (DOL).

The bottom line is stuff has to be made — and Connecticut companies have an ongoing demand for production workers, mechanical engineers, CNC operators, machinists and much more. Unfortunately, many people have the wrong impression about manufacturing. These perceptions stem from a vast history of dark, dusty and dirty industrial environments.

Today is a far different picture as manufacturing plants now embrace new operational standards and LEAN processes. Most facilities maintain cleanliness, order and advanced technology so they can be as efficient and productive as possible.

Manufacturing is a process with many essential steps, including concept, design, sourcing, funding, production, testing, marketing, distribution and disposal. Staffing manufacturing companies requires many unique talents, especially in the high growth fields, such as precision machining, fiber optics and precision metal fabrication.

State and community colleges across Connecticut are now offering certificate and degree programs focused on different disciplines within manufacturing, so graduates can enter the field earning competitive salaries. For instance the median income for an aerospace engineering technician with a bachelor’s degree is about $77K, or a CNC operator with a certificate may earn a median income of $55K, according to the CT DOL.

Manufacturing is an ideal career for those who like to figure out how things work, or enjoy making things. It is also for those who thrive in a world of innovation and critical thinking. It is a field where creativity and curiosity opens the door for new methods, products and processes to be conceived and developed.

Manufacturing accounts for more research and development in the nation, creating more innovation than any other economic sector, according to NAM. Manufacturing is a key driver in our economy, bringing in $1.48 of economic activities for every $1 in manufactured goods.

This is why it is necessary to change perceptions and showcase all the positive aspects of the manufacturing landscape, especially as the older, more experienced workforce ages out. We need to invite students and their parents into Connecticut manufacturing plants for informational tours, so they can see the magic that happens inside the spaces.

We need to encourage internships for students, so they can experience the work environment first hand. We need teachers to become more connected to businesses through externships, so they can share the possibilities and excitement of the manufacturing field in their classrooms.

We need to ensure that curriculum design aligns with workforce demands so students come prepped and ready for a fulfilling career. And we need have people eager to take the helm to ensure all of the stuff essential to live, work and play is designed, made and distributed without missing a step.

To find out more about Connecticut’s manufacturing initiatives and how your company can become involved, visit www.nextgenmfg.org.

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Bob Sobolewski is a 30-year business veteran who headed up the U.S. division of the multinational manufacturer, ebm-papst, inc, before retiring and starting a change management consulting business. Bob is immediate past chair of the CBIA Board of Directors and in 2012 founded ingenuityNE, a not-for-profit public charity to create interest and excitement in STEM (science, technology, engineering & math) among K-12 students throughout New England. He serves on the Executive Advisory Board for FIRST.

PERSPECTIVE: Connecticut Must Act to End Traffic-Related Deaths and Injuries

by Adina Gianelli We have a problem in the state of Connecticut, a problem as stunning as it is abhorrent, as urgent as it is fixable. That problem is one of road safety.

According to the Connecticut Crash Data Repository, an estimated 311 car crash-related fatalities occurred throughout our state in 2016, a four year high. These crashes disproportionately affect people who are walking or biking. This is cause for alarm and a call to action.

Some may think: “I don’t ride a bike, and I don’t really walk anywhere, either. Why should this matter to me?”

Streets are the most fundamental of public spaces. And whether you think of yourself as a pedestrian or cyclist, we all require safe access to our streets.

Complete streets benefit cyclists and walkers, a broad and diverse category that includes, among many others, children who bike to school and seniors who walk for exercise, commuter cyclists and those who travel via public transportation, triathletes and people with mobility limitations (and triathletes with mobility limitations). It benefits people when they get out of the car, as motorists inevitably do. And yes, complete streets benefit drivers, as well. When it comes to street safety, policies that improve conditions for walkers and cyclists benefit us all.

Humans are not invincible. We remain especially vulnerable to the dangers of cars, as the 311 vehicular crash-related deaths in Connecticut in 2016 reveal. But even one death to a cause wholly preventable is one too many. This is why Vision Zero, which strives to end all traffic-related death and injury, is so important, and has been implemented in NYC and a growing number of cities nationwide.

I wish I could devote this piece to highlighting the joys and pleasures of biking, which confers myriad benefits to well-being and community health. I’d love to tell you about the advantages of walking, which Dr. Thomas Frieden, Director of the Centers for Disease Control (CDC), describes as “the closest thing we have to a wonder drug”.

In a perfect world, I wouldn’t have to tell you that there were 32,166 fatal motor vehicle crashes in the United States in 2015, resulting in 35,092 deaths. I wish I didn’t feel compelled to tell you that traffic fatalities represent the leading cause of death for teenagers nationwide, or that 4500 people are killed crossing the street in the United States each year, a disproportionate number of whom are children, seniors, and people of color. But as a matter of conscience, it is imperative to share this data. These statistics are harrowing and reveal necessary truths about the critical need for action on the part of the Connecticut General Assembly.

How might we move forward to improve road safety for all of Connecticut, and our most vulnerable users in particular? The problem is massive, but the solutions are all but laid out before us. We simply need to implement them.

Complete streets—and the resource allocation necessary to implement this infrastructure—are essential. Education represents another cornerstone, and a critical component of lasting cultural change. By adopting and implementing a statewide, evidence-based cycling education program—such as the one developed by Bike Walk Connecticut—in our public schools, we can keep our children healthy and safe.

Connecticut must strengthen its crosswalk legislation to align with best practices for public health and safety. As a state, we would be well served to revisit our vulnerable user laws, increasing penalties for motorists who injure or kill walkers or cyclists. Ours is one of only 10 states that doesn’t require motorists to refrain from opening a vehicle door until conditions are safe; this, too, must change. Boston, Massachusetts recently implemented a 25 MPH default speed limit; there is no reason that Hartford—and other Connecticut municipalities—shouldn’t do the same. Adopting Vision Zero is an imperative. The work has never been more urgent, and the need has never been more clear.

Arudhati Roy once wrote that “[a] new world is not only possible, but she is on her way. On a quiet day, I can hear her breathing.” On a quiet day, I can see her biking and walking, safe on beautiful and complete streets.

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Adina Gianelli is Executive Director of Bike Walk Connecticut, a member-supported non-profit organization changing the culture of transportation through advocacy and education to make bicycling and walking safe, feasible, and attractive for a healthier, cleaner Connecticut.

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.

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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.”

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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.

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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.