Panera in Connecticut: State of Flux

If you’re looking for a Panera location in Connecticut, check twice before you head out for a sandwich.  There may be a new location opening nearby, or the locale you’re familiar with may have already closed its doors. The churn at Panera may not be unusual, but it did come as an unwelcome surprise to regulars at the Newtown location when it abruptly closed in mid-November, with a sign on the door saying farewell (and please visit other locations.)   And later this month, the long-time location in Darien will be closing.

The Darien store has been renting 3,754-square-feet — the entire first floor of its building, since 2007, when it became the first Panera Bread restaurant to open up in Connecticut, according to published reports.

The chain now has more than 2,000 locations, including in Connecticut – some owned by the company, most by franchisees.  While the departure from Newtown was an unexpected surprise to customers, plans to leave the Darien location have been known since June, when it was first reported by local media.

Last fall, a Panera location closed in Meriden and a location in nearby Wallingford opened. Also on the plus side, a Panera opened earlier this year at Evergreen Walk shopping plaza in South Windsor.  As of this spring, there were 17 Panera Bread locations in Connecticut, all across the state.  The Downtown Hartford location, its first in the city, opened in 2013.

As of June 28, 2016, there were 2,007 bakery-cafes in 46 states and in Ontario, Canada operating under the Panera Bread, Saint Louis Bread Co. or Paradise Bakery & Cafe names. Published reports indicate the company has 97,000 employees nationwide and saw a 3.4 percent growth in sales in its third quarter this year. In 2015, it reportedly generated roughly $2.7 billion in revenue. Founder and CEO Ron Shaich attended college at Clark University in Worcester in the 1970’s.

Earlier this year, Fortune magazine reported that the company estimated that over 20% of orders would be produced and paid for digitally by the end of 2016, up from 16%. In some markets, digital sales are making up more than a third of retail sales, according to the company. The restaurant chain says digital orders could make up half of the total business down the road, the magazine reported.

According to the industry website Fast Casual, Panera Bread does not sell single-unit franchises, so it is not possible to open just one bakery-cafe. Rather, the company has chosen to develop by selling market areas which require the franchise developer to open a number of units, typically 15 bakery-cafes in a period of 6 years.

Panera says it serves 3 to 4 percent of all Americans every week.

Changes on the Way in New Haven Media Coverage

The news media focused on New Haven is undergoing some changes, as one publication ends, a new electronic weekly business news round-up is about to begin, and a longtime local business paper is changing its subscription system, reducing the number of non-paying subscribers. New Haven Living magazine, published by the Hartford Courant Media Group in recent years, will cease publication with its January edition, the company recently announced.  The New Haven-focused edition of the weekly CTNOW. an entertainment section, will also cease publication, last publishing on Dec. 29, the company said.

The Courant plans to continue publishing Hartford Magazine and the Hartford edition of CTNOW.  Each monthly addition of New Haven Living was nearly identical to Hartford Magazine, usually with a handful of New Haven-focused articles and features added.  The Courant reported that it made the decision while evaluating opportunities to invest in higher-growth areas and the cost of distribution in Greater New Haven.

Business New Haven, which began publication in 1993, announced in its latest issue that “we are changing our publishing approach” in an open letter to readers from veteran publisher Mitchell Young, under the headline “The Time Has Come To Decide.  Do You Want Business New Haven?”

Young says that “only paid subscribers will be guaranteed” to be included on the newspaper’s circulation list beginning with the next issue.  Subscriptions to the monthly print edition will be $24 per year.

“We believe in the value of quality local publications and we hope you find us worth the cost of a lunch – perhaps that is a way of saying there is No Free Lunch,” the full-page letter said.

A limited number of promotional copies will be limited “based on a proprietary algorithm for the support of our advertisers,” Young noted.  He also indicated that plans are in the works to expand the publication’s CONNTACT.com website in the next year, as “we try to build our subscriber base” for the print edition.  Business New Haven also publishes the monthly New Haven Magazine.

The Hartford Business Journal (HBJ), which prints a weekly print edition in the Hartford region and has a roster of electronic news publications and business-oriented events, added a statewide daily email aimed at business executives statewide in 2013.  The  paper recently announced that for those doing business in New Haven and Middlesex Counties, a weekly news round-up, New Haven Biz, will be added to the HBJ e-mail line-up on February 1.

The email is slated to deliver a weekly roundup of business news and information from the Elm City and beyond, the paper’s website explains. The Hartford Business Journal recently had a prominent location at the Greater New Haven Chamber of Commerce Big Connect annual business-to-business event to promote the upcoming news service.

The publication also emails HBJ Today each weekday at noontime highlighting the day’s lead business stories.  Subscriptions to the email-delivered news products, which also include the CT Health Care Weekly and CT Green Guide Weekly, are free.   CT Morning Blend includes the top business stories from online news sources around the state and the nation “to keep business decision-makers ahead of the competition.” It also includes a stock market snapshot and a business calendar.

HBJ, with a strong local presence in Greater Hartford for more than two decades, is published by New England Business Media, which also publishes the Worcester Business Journal and MaineBiz.  It also sponsors the annual CT Business Expo at the Connecticut Convention Center and numerous business programs and events in the region.

CT Unemployment Rate in Construction Industry Improving, But Remains Among Highest in US

Connecticut’s unemployment rate in the construction industry remained among the highest in the U.S., ranked 39^th among the 50 states in October, although the year-over-year change was the 12^th best in the country.  Connecticut’s October unemployment rate in the industry was 6.7 percent, higher than the U.S. average of 5.7 percent, according to data released by the Associated Builders and Contractors (ABC).  The state’s construction industry unemployment rate nudged downward from 7.1 percent in September, but was 6.4 percent in July 2016.  In recent years, the rate ballooned to 18.1 percent in October 2010, at the height of the recession, from a low of 5.8 percent in October of 2008.

Overall, the U.S. construction industry added 19,000 net new jobs in November and has now added jobs for three consecutive months, according to analysis of U.S. Bureau of Labor Statistics data compiled by Associated Builders and Contractors. 

Industry employment is up by 2.4 percent on a year-over-year basis, considerably faster than the overall economy’s 1.6 percent job growth rate. Construction industry employment growth would likely be much sharper if more suitably skilled or trainable workers were available to fill available job openings, according to the ABC.

The data indicate that skilled labor shortage nationally appears to be impacting nonresidential activity more than residential. The nonresidential sector added 1,100 net new jobs in November, while the residential sector added 19,600 positions. Heavy and civil engineering lost 2,100 jobs for the month.

“The demand for construction talent was strong before the election, and the outcome has improved the near-term outlook for private and public construction activity,” said ABC Chief Economist Anirban Basu.  “The implication is that demand for construction workers is positioned to remain high, which will translate into gradual reduction in industry unemployment and significant wage pressures.

In the state-by-state numbers, calculated for October, the states with the lowest estimated not-seasonally-adjusted construction unemployment rates were North Dakota, Massachusetts, Colorado, Utah, New Hampshire and South Dakota. October not seasonally adjusted (NSA) construction unemployment rates were down in 33 states, including Connecticut, on a year-over-year basis.  Connecticut's October 2015 unemployment rate in the construction industry was 8.0 percent.

North Dakota’s unemployment rate in the industry was 2.4 percent, with Massachusetts at 2.5 percent.  New Hampshire’s construction industry unemployment rate was 3.6 percent.  Elsewhere in New England, Rhode Island’s unemployment rate in the construction industry was fourth highest in the nation, at 8.7 percent in October.

The unemployment rate for all U.S. industries fell to 4.6 percent in November, the lowest rate since mid-2007 and 0.3 percentage points below October’s rate. The labor force lost 226,000 persons for the month, but is still more than 2 million people larger than at the same time one year ago, officials pointed out.

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.

EpiPen in Connecticut: Costs Vary, Concerns Continue; New Congressional Hearing Possible

Obscured in recent months by the intense presidential campaign, the furor over the price of pharmaceutical company Mylan’s life-saving EpiPen may be moving back to center stage in Washington as questions continue about Connecticut’s policy and the varying impact on school districts across the state.  The EpiPen is the widely used medical device that quickly administers a dose of epinephrine to counter allergic reactions. The cost of EpiPens to Connecticut schools - which keep EpiPens in their nurses’ offices in case a student has a severe allergic reaction - may be defrayed or eliminated by Mylan’s “EpiPens4Schools” program, which gives some schools two twin packs of the medical devices for free.  But that is not uniformly true, according to a recent survey by CT by the Numbers, and questions are being raised about the program’s future. 

A report by Connecticut’s Office of Legislative Research found that “over the last decade, Mylan has continuously increased the EpiPen’s cost, from approximately $60 in 2007 to over $600 in 2016 for a pack of two pens. The device requires a prescription and must be replaced annually.”

North Haven, which has participated in the free program, warns that “if the free program is discontinued, it will be a significant financial burden” for the school district.  “To satisfy the Connecticut mandate, we must stock one box each of EpiPen Jr. and EpiPen Sr., bringing the total cost to $1,600 x 7 schools = $11,200/year!!!”

In Chaplin, officials have also been using the free program, but note “we will not always be eligible year-to-year,” anticipating “the cost increasing by at least $300 or greater per school.”

Now, the chairman of the U.S. Senate Judiciary Committee says he is considering a subpoena or another method of compelling testimony from Mylan and federal officials, the Associated Press is reporting.  Mylan says it agreed to pay $465 million to settle allegations it overbilled Medicaid for EpiPen, but Sen. Charles Grassley says the Justice Department has said there is no "executed settlement."  At issue is whether the product should have been classified as generic.

Published reports indicate that Mylan acquired the decades-old product in 2007, when pharmacies paid less than $100 for a two-pen set, and has since been steadily raising the wholesale price. In 2009, a pharmacy paid $103.50 for a set. By July 2013 the price was up to $264.50, and it rose 75 percent to $461 by May 2015. This past May the price spiked again to $608.61, according to data provided by Elsevier Clinical Solutions’ Gold Standard Drug Database.

At a December 1 health forum sponsored by Forbes, Mylan CEO Heather Bresch said “We absolutely raised the price and take full responsibility for that, ” insisting that Mylan’s price increases were justified by improvements the company made on the product.

As the increases were being imposed, Mylan intensified efforts to have states require that EpiPens be made available in schools.  Connecticut was among 11 states which passed such a law.  The Connecticut General Assembly approved a bill in June 2014 that required all state primary and secondary schools to carry a supply of EpiPens. The new law also allowed school personnel other than a school nurse – if they were properly trained – to administer the epinephrine.  Published reports indicate that other states have approved laws allowing student to bring the dispensers with them to classes or encouraging schools to stock the drug.

The Connecticut Department of Education said it does not know how much the new mandate cost the state’s more than 1,300 primary and secondary schools, because the drug is purchased at the local level at a number of approved pharmacies throughout the state, officials told CT Mirror earlier this year.

A number of districts indicated to CT by the Numbers that they had EpiPens on hand in their schools even before passage of the state requirement, and at least one that had participated in the free program previously did not do so this year.

In Eastford, officials purchased one .15 mg dose and one .30 mg dose EpiPen in each of the past three years.  The costs increased steadily, from $599.90 in 2021-13 to $740 in 2015-16.   In the Region 9 (Easton, Redding) school district, for example, officials indicated that they paid $325 each for three EpiPen twin-packs for the Helen Keller Middle School this year.

Northwestern Regional School District 7 and Regional School District 12, both participants in the free program, have not incurred any costs for EpiPens in recent years.  Bolton school officials report that costs have increased in recent years, to approximately $600 per package of two” for a total of $1800 for the year.  Region 16 reports that they budget for EpiPen purchases each year, in case the free program is no longer available to them.  As of last year, they indicated, the twin-pack price was $535, but they were able to benefit from the company’s free program.

In Cromwell, schools have received 2 twin-packs per school through the free program for the past three years; previously they were purchased by the school district, officials said. In Ansonia, some were provided at no cost, others were purchased. The last time that North Haven paid for the EpiPens was in 2012, when the cost was about $190 each.

In 2015 the legislature considered, but did not pass, a bill requiring the insurance commissioner to study and report on health insurance coverage of and out-of-pocket expenses for EpiPens, according to the OLR report.  The 2014 legislation requires (a) schools to designate and train nonmedical staff to administer EpiPens to students having allergic reactions who were not previously known to have serious allergies and (b) the public health and education departments to jointly develop an annual training program for emergency EpiPen administration.

The website STAT, which focuses on health and medicine, reports that Mylan Pharmaceuticals has been selling the devices to schools at a discounted price for years, giving them a break from rising costs. But the program also prohibited schools from buying competitors’ devices — a provision that experts say may have violated antitrust law.

Mylan’s “EpiPen4Schools” program, begun in August 2012, offers free or discounted EpiPens to schools. Over 65,000 schools receive free EpiPens through the program; an unknown number of schools buy the epinephrine auto-injectors at a discount. Laws in at least 11 states require schools to stock epinephrine, and keeping a stockpile is incentivized by federal law across the country.

As of last year, the EpiPen4Schools discounted price was $112.10, according to company documents reported by STAT, although the prices cited by Connecticut districts vary.

America’s Best States to Live In: Connecticut Ranks Second

The only state that is a better place to live in than Connecticut is Massachusetts, according to a new survey of key data.  Connecticut was ranked second when the website 24/7 Wall St. reviewed three statewide social and economic measures — poverty rate, educational attainment, and life expectancy at birth — to rank each state’s living conditions.  Based on the data analyzed, the state’s motto could easily be “live long and prosper.” Massachusetts, home to one of the nation’s wealthiest and most highly educated populations, followed by neighboring Connecticut, lead the nation in quality of life. Mississippi, the poorest state in the country, trails the other 49 states.

Among the key stats for Connecticut:

• 10-year population growth: 5.8% (10th lowest)
• Unemployment rate: 5.1% (19th highest)
• Poverty rate: 10.5% (6th lowest)
• Life expectancy at birth: 80.4 years (2nd highest)

Quality of life in the United States is heavily dependent on financial status, the survey summary points out. As a consequence, the nation’s best states to live in often report very high incomes. With a median household income of $71,346 a year, fifth highest of all states, Connecticut is the second best state to live in and an especially good example of this pattern, the description of Connecticut’s ranking explains.

The publication notes that “While satisfactory living conditions are possible with low incomes, this is true only to a point. Once incomes fall below the poverty line, for example, financial constraints are far more likely to diminish quality of life.”

Rounding out the top five:  New Hampshire, Minnesota, and New Jersey.  At the bottom of the list: Alabama, Arkansas, Louisiana, West Virginia and Mississippi.

Education levels are another major contributor to a community’s living conditions — not just as a basis of economic prosperity, but also as a component of an individual’s quality of life. Due in part to the greater access to high paying jobs that often require a college degree, incomes also tend to be higher in these states. In all of the 15 best states in which to live, the typical household earns more than the national median household income of $55,775, 24/7 Wall St. pointed out.

Like the vast majority of states on the higher end of the list, Connecticut is described as relatively safe. There were 219 violent crimes reported for every 100,000 state residents in 2015, among the lowest rates of all states, the survey stated.  Housing markets are also indicative of quality of living. A high median home value, for instance, frequently means high demand for housing in the area. Nationwide, the typical home is worth $194,500. In most of the 25 top states, the median home value far exceeds the nationwide median.

The survey did not take into account more subjective conditions such as climate preference, the presence of friends and family, and personal history.

To identify the best and worst states in which to live, 24/7 Wall St. devised an index composed of three socioeconomic measures for each state: poverty rate, the percentage of adults who have at least a bachelor’s degree, and life expectancy at birth. The selection of these three measures was inspired by the United Nations’ Human Development Index. Poverty rates and bachelor attainment rates came from the U.S. Census Bureau’s 2015 American Community Survey. Life expectancies at birth are from the Centers for Disease Control and Prevention and are as of 2012, latest year for which data is available. Unemployment rates are from the Bureau of Labor Statistics, and are for October 2016, the most recent available month of data.

CT Residents See Improving Economy, Even As Jobs Remain in Short Supply; Millennials Most Upbeat About Business Conditions

Seven in 10 Connecticut residents say overall business conditions in the state are either better or the same as six months ago, according to the quarterly Inform CT Consumer Confidence Survey, and 75 percent expect conditions to either remain the same or improve in the next six months. The latest survey, covering the third quarter of 2016, also found residents are more willing to spend on major consumer items – a sign of a strengthening economy – and less concern about immediate job security.  The survey also found that millennials, ages 22-25, are the demographic most upbeat about the state’s economic progress, with 41 percent saying overall business conditions were better than six months ago.  Those ages 18-21 and 26-35 had the next most positive views.

In a reversal from the previous quarter, 42 percent of state residents surveyed said they were unlikely to move out of state in the next 5 years, compared with 34 percent who described such a move as likely.  In the previous survey, conducted in the second quarter of this year, the numbers were reversed with 42 percent saying that it was likely they’d be moving out of state within five years, compared with only 32 percent who said such a move was unlikely.

The quarterly survey is released by InformCT, a public-private partnership that provides independent, non-partisan research, analysis, and public outreach to help create fact-based dialogue and action in Connecticut.

Tempering upbeat views is the continuing widely-held opinion that there are “some jobs in Connecticut, but not enough.”  Those expressing that view increased to 63 percent in the third quarter, the highest percentage since the survey began.  An additional 24 percent view jobs as “very hard to get.”  Thus, nearly nine in ten view the number of available jobs as insufficient in the state.  The survey also found:

• Less concern about job security: Only one-third (35%) expressed concern that their job or the job of their spouse/partner is in jeopardy, down from 39 percent in the previous quarter and 42 percent in the first quarter this year.
• Continuing strong concern about health insurance costs: Nearly two-thirds of state residents (64%) say they are concerned about being able to afford health insurance.
• Continuing concern about retirement savings: Overall, 50 percent of those surveyed disagreed with the statement “I will have enough money to retire comfortably,” compared with 23 percent who agreed.  Those currently of working age are most concerned about retirement savings.
• Connecticut is a good place to raise a family: Overall, fifty percent of those surveyed expressed that view, compared with 28 percent who disagreed, a ratio that has been relatively consistent in the quarterly surveys.  The two age groups that agree most are now, or will likely soon be, starting families – 62 percent of those ages 22-25 and 60 percent of those ages 26-35.
• Personal financial situation improving: 30 percent of survey respondents said their personal financial situation was better today than six months ago, compared with 28 percent who said they were worse off.

Residents of Windham and Fairfield counties were more likely to view overall business conditions as being better now than six months ago, the survey found.  Twenty-nine percent of Windham residents held that view as did 28 percent of Fairfield residents.  Residents of the state’s other six counties, Middlesex (23%), New London (20%), New Haven (20%), Litchfield (16%), Tolland (16%) and Hartford (16%) had fewer residents expressing that opinion.

Among other consumer survey findings:

• Nearly three-quarters of those surveyed (73%) said that in the next 6 months they were likely to take a vacation outside the state, the highest proportion since the survey began nearly two years ago, and the fourth consecutive quarterly increase.
• The proportion of respondents likely to make a major consumer expenditure for furniture or another product also was the highest in seven quarters, at 43 percent, up from 26 percent a year ago.
• The percentage of respondents who indicated they were likely to buy or refinance their home (16%) or purchase a new car (26%) were both at levels higher than in the 3rd quarter of 2015.

Administered by researchers from the Connecticut Economic Resource Center, Inc. (CERC) and Smith & Company, the analysis is based on the responses of 510 residents across Connecticut and addresses key economic issues, providing a glimpse of the public’s views.  The survey has a margin of error of 5 percent.

Public Hearings Conclude; State Spending Cap Commission Seeks Definitions to Impact Spending Decisions

“Stop with the financial games and own up to the problem.”  That was the succinct comment provided to the 24-member state Spending Cap Commission by Darien resident Ken Weil at a public hearing this fall.  Small business owner Justin Higgins, of Orange, added that citizens should “always know where we stand financially without loopholes and political gamesmanship.” The Commission has held 18 meetings, beginning in March and most recently on November 14, as well as five public hearings during the past two months, during which nearly two dozen people filed testimony.  With the state anticipating an estimated $3.1 billion deficit for the next two fiscal years, dollars and sense will be front and center when the legislature, with 30 new members and a dead-even split in the State Senate, convenes in January.

The Commission next meets on Nov. 28, according to CT-N.  Public Act 15-1, December Special Session (Section 24) established the Spending Cap Commission, charged with creating, for the purposes of the state's constitutional general budget expenditures requirements, proposed definitions of (1) "increase in personal income", (2) "increase in inflation", and (3) "general budget expenditures".

What the commission has been asked to address is two decades in the making - definitional questions with fiscal implications that have influenced policy and budget balancing since the passage of the state income tax in the early ‘90’s.  The Director of UConn’s Center for Economic Analysis, Fred Carstensen, said in an article published this month that “the spending cap as designed has been an unmitigated disaster, fiscally and economically.” 

The Commission is chaired by William Cibes, a former state legislator and Secretary of the Office of Policy and Management when the income tax was imposed and state spending cap was approved by voters, and Patricia Widlitz, also a veteran former legislator.  Members include Republicans and Democrats currently serving in the legislature, and others who have extensive experience with state government, in the public or private sector.  It is likely that the incoming state legislature will be looking to the Commission’s findings, as it grapples with the way forward for state finances.

As the public hearings approached in October, the Commission voted to include the following proposed definitions to be addressed:

• “Increase in personal income” means the compound annual growth rate of personal income in the state over the preceding five calendar years, according to United States Bureau of Economic Analysis data
• “Increase in inflation” means the increase in the consumer price index for urban consumers, all items less food and energy, during the preceding calendar year, calculated on a December over December basis, according to United States Bureau of Labor
• The Commission is still considering potential optional language for the third proposed definition – “general budget expenditures” – it is charged with creating. That language may concern, among others, such expenditures as payments for bonds, notes and other evidences of indebtedness, court orders, federal mandates, grants to distressed municipalities, as well as the use of federal funds and monies contained in the budget reserve fund. Proposed language pertaining to these and other additional topics pertaining to general budget expenditures may also be suggested at the public hearing, and considered by the Commission.

Some of the comments received by the Commission, at hearings in Hartford, New Haven, Bridgeport, Willimantic and Waterbury, are quite clear on what the result ought to be done, even if precise wording is not offered:

Louise DiCocco, Assistant Counsel for the Connecticut Business & Industry Association, noted that “24 years ago, more than 80 percent of Connecticut votes overwhelmingly approved a spending cap to keep the cost of state government within the taxpayers’ means to afford it.  Voters demanded the cap as an offset to the persona income tax in Connecticut.  The state must enact a spending cap that is ironclad and works.”

Added the MetroHartford Alliance in testimony by Vice President Patrick McGloin: “Adoption by the legislature of well-crafted spending cap definitions will clearly demonstrate to our fellow residents and private sector employers that we have the political will to be fiscally disciplined.”  DiCocco noted that “the spending cap has always had a safety valve or escape mechanism.  They include bonded debt service, aid to distressed municipalities and first year costs of federal or court ordered mandates.”

The Connecticut affiliate of the National Federation of Independent Businesses pointed out that “reasonably understood, clear definitions of the key terms that will lead to additional budget transparency, predictability and ultimately cap state spending on an annual basis in a way that aptly reflects the will of the voters,” adding that “business owners feel that the legislature absolutely needs to stop allowing excessive spending to be an option and to recognize the ‘new economic reality’, just as small business owners have had to do. Achieving that goal is the most effective economic development policy we could have, and we believe that implementing the constitutional spending cap, and properly defining component terms, would go a long way in this regard.”

Westport resident Tom Lasersohn observed that “In business you learn that for every one customer that complains, there are many you have already lost as customers. For every citizen who gives testimony to this Commission, there are many who are so disgusted with the State’s fiscal mismanagement and chicanery that they will leave at the earliest convenient opportunity. Many outside the State peer in and resolve ‘no, not for me until the State gets its fiscal act together.’ A responsible definition for ‘general fund expenditures’ will communicate to both current and prospective residents and businesses that we are serious about fixing our problems.”

State Senator Toni Boucher of Danbury told the Commission:  “I hope that the commission to adopt a definition of general budget expenditures that is comprehensive and gives a complete and realistic account of all the money that the state spends… it is equally critical that the legislature not be allowed to move what was once an expenditure included under the cap to bonding or fund it with a revenue intercept for the purpose of undermining the cap’s integrity.”

The final form of Commission recommendations remains unclear.  Minutes of the Commission’s most recent scheduled meetings, on October 31 and November 14, have not yet been posted to the Commission’s website, nor has an agenda for the Nov. 28 meeting (as of Nov. 27).

While Boucher is not a member of the Commission, a number of her legislative colleagues are.  The definitions – and the implications for the state’s budget and taxpayers – may soon be theirs to decide.  A decade ago, a UConn report observed that “the spending cap is only as restrictive as the legislative process decides it should be; its strictures are not written in stone.”

UPDATE: 

link to Agenda for Commission's Final Meeting on Nov. 28, 2016 and CTNewsJunkie article reporting on meeting.

link to CT-N video of Commission's Meeting on Nov. 28  at the Legislative Office Building in Hartford; Next meeting scheduled for Dec. 5

ConnectiCare, First Health Insurer to Open Retail Store, Adds More

Holiday shoppers may encounter something new amidst the traditional retail stores vying for attention.  Last month, ConnectiCare opened its first storefront location, a 6,000-square-foot standalone building in Manchester. The company plans to open outlets in Bridgeport, Newington and Orange in the coming days, according to David Gordon, ConnectiCare's senior vice president for strategy and product innovation. "The impetus for taking this step came from listening to our customers," Gordon said. "The key thing that we consistently heard was how they want a choice in how they engage with us."  It is a way of “providing face-to-face interactions with our members and our nonmembers, who feel their relationship with us would work better if we were sitting across a table from each other."

ConnectiCare is apparently the first health insurance company in the state to offer services from a retail storefront location.  Manchester was chosen after a study of ConnectiCare members, traffic and drive-time patterns and general population figures. The selection of Bridgeport also was based on proximity to significant numbers of ConnectiCare members, and the surrounding population, and are tied to a new partnership with CliniSanitas to offer bilingual facilities for the state's growing Hispanic population.

The flagship Manchester location, near Buckland Hills mall, is staffed by 12 people and includes an area for seminars on various health topics as well as space for yoga and Zumba classes.   ConnectiCare's stores in Bridgeport, Newington and Orange will be smaller than the Manchester flagship, which opened in October.

The ConnecticutCare storefronts will be adjacent to CliniSanitas Medical Center locations.  The centers will offer primary care, specialty care, urgent care, laboratory and diagnostic imaging, as well as health education and wellness services. All three centers – Bridgeport, Newington and Orange - will offer extended evening and weekend hours, with walk-ins welcome. The centers are to be staffed with medical and administrative staff who are bilingual in English and Spanish.

This expansion is the result of a strategic alliance between GuideWell Sanitas and ConnectiCare to serve the health care needs of Connecticut's growing multicultural population, while helping to address the long-standing disparities in the health status of people from culturally diverse backgrounds, officials said. ConnectiCare is the only health insurance plan being accepted by the CliniSanitas Medical Centers, which will also serve those paying directly for health care services and those with traditional Medicare coverage, the companies recently announced.

CliniSanitas has more than 40 years of health care experience with over 200 facilities in South America. In 2015, the first stateside CliniSanitas centers were opened in Florida. The company explains that their  model is focused on improving access to quality primary care services, and delivering the best health outcomes while preventing unnecessary high medical costs, encouraging longer appointments aimed at strengthening the doctor-patient relationship.

CliniSanitas Medical Centers is a joint venture between two leading health care organizations – GuideWell Mutual Holding Company and Organización Sanitas Internacional. GuideWell is a U.S.-based not-for-profit mutual holding company and the parent to a family of forward-thinking companies focused on transforming healthcare.

"We're excited to start our journey in Connecticut in partnership with ConnectiCare and GuideWell to bring our proven model of patient-centered care to the diverse community of Connecticut. These new medical centers will build on our successful centers in Miami, Florida, and our experience transforming healthcare in South America," said Dr. Fernando Fonseca, Chief Executive Officer of CliniSanitas.

"The CliniSanitas Medical Centers will help us deliver on our brand promise to make it easy for our members to get the care they need. ConnectiCare is pleased to help bring the people of Connecticut access to the high quality and culturally relevant health care provided by the CliniSanitas Medical Centers," said Michael Wise, ConnectiCare's President and Chief Executive Officer.

A local company for 35 years, ConnectiCare, a subsidiary of Emblem Health,  has a full range of products and services for businesses, municipalities, individuals and those who are Medicare-eligible.  In September, ConnectiCare, the single-largest insurer on the state’s health exchange, announced it would participate in the exchange in 2017.

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