Legislative Session Collaborative Meeting Recap

On Friday, February 10th, CAHS hosted our Opportunity Connecticut Legislative Session Collaborative Meeting. The meeting was very successful and we enjoyed learning about other organizations’ top legislative priorities. We look forward to continuing to collaborate and further all of our legislative agendas.

In order to continue this work, CAHS is scheduling a weekly follow up call, beginning this Friday, February 17th from 9:30 am-10:00 am. If you would like to join this call, please email gpastor@cahs.org.

Meeting notes and links to more resources: 2-10-2017 Legislative Session Collaborative Meeting Notes

Chart of the day: disconnected youth

“Disconnected youth” are young adults between 16 and 24 years old that are neither working nor studying.  This is a population that has been poorly served by the education system, often failing to retain them as students. As a result, they reach the labor force without the academic and soft skills that would enable them to become self-sufficient.

Disconnected youth are twice as likely to live in poverty, three times as likely to have left high school without a diploma, and half as likely to hold a bachelor’s degree. Disconnected female youth are more than three times as likely to have a child. Nationwide, the cost to taxpayers was $26.8 billion in 2013 alone, just taking into account increased use of public benefits.Connecticut currently has more than 46,000 disconnected youth, with a disproportionate overrepresentation of racial minorities:

if the numbers for the state as a whole are worrisome, the gap is even large in two of our largest metro areas, New Haven and Hartford. These cities are ranked third and fourth nationwide on percentage of disconnected Latino youth:

Disconnected Youth Hartford Disconnected Youth NewHaven_Milford

CAHS has long worked in programs that support this population (developmental and adult education, apprenticeships). Now with Opportunity Connecticut we will be looking at the structural causes behind theses disparities.

Federal payday loan rule: why it is important, and how can you help

6793826885_d3b6befb99_zConnecticut does not have payday loans. This is actually a very good thing, as the experience in other states shows: payday loans more often than not put borrowers in debt spirals that are really hard to break free from. Connecticut consumers save $133 million, every year, on fees thanks to this.

Right now, the Consumer Financial Protection Bureau (CFPB) is considering a new rule that will greatly limit payday lending at the federal level. This is important for two reasons. First, it will ensure that Connecticut will no longer face out-of-state lenders trying to litigate their way in. Second, this might help prevent working families to pay outrageous interest rates in short term loans. Just some examples: the typical APR for a two week loan in Texas is 662%; in Ohio, 677%; California, 460%.

So what can we do?

The CFPB has opened a comment period for their proposed rule – and we need you to speak up against payday lending.  Use this website to submit a comment to the CFPB against payday lending.
It is easy – it will take you less than five minutes. Here is some suggested language:
I am writing to ask you to strengthen your proposed national payday loan rule to rein in abusive high-cost loans. Your proposed payday rule sanctions dangerous levels of triple-digit interest rate loans. Our state does not even legalize these triple-digit interest rate loans and we worry that payday lenders will use your rule to seek a green light to come into our state. We ask that you strengthen the rule to close any loopholes and provide states like ours with additional tools to keep unfair and abusive payday loans out of our state. Families in our state are much better off without these unaffordable, debt trap loans.
These comments make a difference. The CFPB knows that Connecticut does not have payday lending. Reminding them how this helps families in the state is important. Make sure to make your voice heard!

Is there anything else we can do?

Yes! Has your organization spoken up against payday loans? It should! 

The CFPB greatly values comments from advocates and direct service organizations. E-mail us as soon as possible for more details on how, or if you need information, templates or you have any questions.

Our New Report: Children with Incarcerated Parents

On May 26 CAHS and our partners at the Children with Incarcerated Parents Initiative (CTCIP) presented a new report (press release) on the impact that parental incarceration has on children in the state.

According to recently released statistics from the Department of Corrections, as of April 1, 2016, 53.67% of those currently incarcerated reported being a caregiver – leaving over 17,000 dependents in our state with a caregiver behind bars. An additional 5,000 dependents have a caregiver in a Department of Correction supervised community program (e.g., parole, house arrest).  Black children are 7.5 times more likely to have a parent behind bars than white children. Additionally, 1 in 9 African American children (11.4%), 1 in 28 Hispanic children (3.5%) and 1 in 57 white children (1.8%) have an incarcerated parent in the United States.Jailed

A vast body of nationally published research has found that children with incarcerated parents (CIP) are more likely to suffer a range of emotional, physical and behavioral issues. These issues include anxiety, depression, underachievement in school, aggression and alcohol/substance abuse. Furthermore, separation due to parental incarceration can be just as painful as other forms of parental loss and are often more complicated because of the accompanied stigma, ambiguity and lack of compassion or other social supports.

You can download the full report here. CTCIP has also produced a detailed report with data specific for New Britain that you can download here. If you have time, we highly recommend you listen the hour-long conversation that Erica Dean, our policy analyst, had on WNPR´s Where We Live last week.

These reports represent a first step for CAHS and CTCIP to draft a policy agenda to address the needs of children of incarcerated parents. We will continue working to collect more detailed and precise data on these children and work with advocates, families and state agencies with the aim of creating a policy agenda for 2017 on this issue.

The 2016 legislative session: first recap

 

Yesterday at midnight the 2016 legislative session came to a close. It was a strange year in many ways. Although we will be writing a longer recap soon, we wanted to share some initial notes of what happened, what passed, and what is left to do in this 2016 session. Let´s see.

The main story: no budget yet
The one thing that did not happen yesterday was the budget. The Governor and Democratic legislators did have an agreement (we covered it yesterday), but it was not brought up for a vote.

Why this happened depends on who you ask; some observers say that they did not have the votes in the House to pass it, some say that there was a consensus that legislators needed more time to pore over the numbers. The budget will be voted in a special session next week (probably Thursday), so the session is not really quite over yet.

To tell the truth, not getting the budget through yesterday was probably a good decision, as it allowed the General Assembly to vote on a whole bunch of legislation without having to scramble. Legislators could focus on other priorities, avoiding the pressure of having a messy and rushed budget debate right until the very end.

Namely, we got some good news out of it. See bellow.

Continue reading

The budget agreement – quick takes

CT Stock instagrams (5)The Governor and the Democrats in the legislature have reached a budget deal, with the expectation of voting on it today. This might be better than the alternative, (a long drawn budget fight on an election year), but gives us very little time to look at the numbers in any detail.

After going over the initial budget spreadsheets early this morning, here is our quick take. We will try to update you as we learn more.

Top line numbers

The budget deficit for FY2017 is currently projected to be around $960 million. The agreement closes it by:

  • $830 million in budget cuts (more details below)
  • $50 million in transfers from the Municipal Revenue Sharing Fund. This is the fund created last year to use sales tax revenue for property tax relief.
  • $50 million from the State Transportation Fund. This was also created last year, also setting aside sales tax revenue for transportation projects.
  • $36.2 million in “revenue enhancements.”

Continue reading

Connecticut´s no good, terrible budget mess

Sometimes things just keep getting worse. CT Stock instagrams (6)

We started the session with what seemed to be a balanced budget for this fiscal year (FY16, ending June 30) and a grim but manageable deficit for next year (FY17). The Governor´s budget proposal was short on details and included no new revenue, with $570 million in cuts.

Come March, new budget projections came out. The FY17 deficit almost doubled to $911 million; to make things worse, FY16 was no longer balanced. Governor and legislature had to make $266 million in further cuts to FY16, on top of the ones made in last year´s special session.

Then the Appropriations and Finance Committee released their budget for FY17, and things started to get weird. The Legislature added more detail to the Governor´s plan and softened some of the service cuts, while still not raising taxes. Trouble is, their budget only covered $570 million in cuts, not the whole expected FY17 deficit. Someone needed to find more savings or revenue somewhere.

As a result, a slightly irritated Governor presented an updated budget proposal covering the whole shortfall, with yet more cuts. Legislative leaders were not really happy about this and vowed to draft, consider and pass a budget proposal on their own, without negotiating with the Governor, sending it to his desk even if he might veto the bill.

It gets worse. As both sides were talking past each other, this year´s budget got back in the red, with a $141 million deficit. Corporation taxes and fees are coming in below expected, and savings targets are not being hit. In total, the FY16 budget was more than $1 billion off-mark.

What´s next? The date everyone has in mind is tomorrow April 26, when the final budget projections for FY17  will likely come out. That day we will learn exactly how big the deficit is for next year. Best case scenario, income tax collections improve slightly, and we see a deficit below $900 million. Worst case scenario, budget hole deepens, the General Assembly sends the Governor a budget, and he vetoes it.

Suffice it to say, we don´t see best case scenarios often as of late. We might end up in a special session, past the May 4 deadline.

Where does the CT budget crisis come from? (II) : 20th century spending in a new economy

Last week we gave a brief overview of the fiscal challenges that Connecticut is facing, with a focus on the revenue side. We concluded that although Connecticut is not really a high-tax, big spending state if we take into account its wealth, we do raise revenue in very ineffective, outdated ways. The state has a sales tax riddled with loopholes, an income tax that leaves a lot of income untaxed, business taxes that penalize the service economy, and a property tax that steers development out of urban areas while undertaxing wealth. If we want to get Connecticut out of the current state of endless fiscal crisis, tax reform is both necessary and long overdue.

Of course, revenue is only half of the equation when talking about the budget – spending also plays an equal part. As with revenue, Connecticut has some spending practices that are both inefficient and outdated, creating a state and local government structure that is often not up to current challenges. In many areas, we just spend money in a lousy way. Continue reading

Where does the budget crisis come from? A 20th century budget in a 21st century economy

Connecticut has been in a fiscal crisis pretty much non-stop for the past eight years. It is likely that the state would have started looking at red ink before that, but the real estate and financial bubble of the 2000s masked the underlying reality. For close to a decade, and probably for longer, our state has been constantly on the edge of a fiscal chasm, with the General Assembly muddling through with a mix of tax increases and spending cuts.

The thing is, this is not really normal. Connecticut is one of the wealthiest states in the wealthiest country in the world. Even if the state´s economy hasn´t fully recovered, unemployment is relatively low, growth is weak but not anemic and labor productivity is still high. We have an economy in a mild slowdown enough to produce a shortfall that could be sorted out with some tweaks. Instead, we have a Groundhog Day of budget deficits. Continue reading

First look: public pensions in Connecticut

We will be hearing about pensions, pension reform and how pension liabilities are taking over the state budget during the year, so it might be worth having a look at how things look right now.

Truth is, the Connecticut public pension system is a mess. For many years the state had the habit of balancing the budget by not putting money into the pension fund while giving early retirement incentives to many state workers. This went on for more than a decade, leaving a gaping hole in the system.

To the legislature and Malloy´s credit, the state stopped doing this a few years ago, finally starting to put money back in the fund. The problem is, however, that under the current payment and amortization schedule (let’s pretend we understand we know what that means for a second) the state has to make a huge financial effort to plug that gap, and even more worrisome, we have to set aside more and more money every year.

How much? The figures come from this study from the Comptroller’s office – in 2016 Connecticut’s contribution to its pension fund was about $1.5 billion. This will climb to about $1.8 billion in 2017, $2 billion in 2019 and will keep climbing non-stop all the way to 2032, when it will get close to $4 billion. Adjusting for inflation the numbers get a bit less daunting (up to $2.5 billion), but the problem remains – in a roughly $20 billion budget, the pensions are indeed a problem.

This is not sustainable, so we will be hearing more reform proposals in the coming weeks. Kevin Lembo, the Comptroller, just presented his ( PPT ), giving a good outlook of what we can expect to see. His proposal tweaks the amortization method and extends its schedule (translation: changes how inflation is calculated and adds more years to pay for the liabilities) to change the payment structure. The result would be a payment of $1.5B in 2016, $2B in 2017, $2.15B in 2018 and then remain pretty much flat in nominal terms until 2032 (that is, dropping, inflation-adjusted), where they would drop to $1.5 billion.

If you stopped reading halfway through the previous paragraph, I understand completely: this is not exactly fun. It also is really important for the fiscal health of our state in the long run, so we will try to do our best to explain what is going on. Public pensions might not be our agenda, but they greatly affect the rest of the budget, so we will keep track.