Even Team Malloy's talented spinmeisters struggled to put a credible face on the recent revelation that the state is really $13.3 billion better off than it thought.
In announcing the windfall May 17, Governor Malloy and Comptroller Kevin Lembo were obviously pleased with themselves but stopped short of claiming the billions were the result of their brilliance. That's a good thing. Because if they'd gone there, the media would have had to ask rude questions about why they didn't anticipate these 'savings' and figure them into earlier calculations.
Actuaries from The Segal Co. poured over the state's long-term obligations to retired state workers and came back with one of those good news/bad news moments. The state has $17.9 billion of unfunded liability for healthcare costs, but that's $13.3 billion less than the state thought it would owe. Nobody's got a clue where to find the $17.9 billion but at least the bill isn't $31.2 billion.
Of the found $13.3 billion, $4.94 billion comes from what seems to be actual savings from plan changes that tilt benefits and co-pays in the state's favor over the long haul. That's real money and Malloy can take credit … if and when the savings are realized. But the rest — $8.32 billion — comes from changes to actuarial assumptions and forecasts of increased returns from stock market investments.
This is the same sorry voodoo that Malloy promised he'd avoid.
This fiscal year, his estimates of billions in savings from state employee contract concessions failed to materialize. His estimates of tax revenues have been overly optimistic. And when push came to shove, he turned to accounting wizardry to balance the budget.
Now we're doing the same thing with the long-term liabilities. And isn't it a strange coincidence that the good news arrives just as Team Malloy was looking for a way to divert attention from the current budget mess while the policy wonks are busily crafting those 'budget implementation' bills for the special session.
That's the short-term effect. The long-term effect is insidious and much worse for society.
Actuaries can project all they want but unless they have clear and rock-solid definitions to build on, they're just guessing. The insurance industry has gotten quite good at predicting death, for example. Governments have been historically awful at predicting behavior because their models always manipulate the data to reach desired political ends.
When voters are battered with wildly swinging multi-billion-dollar estimates, their eyes glaze over. How can we be expected to believe any of it, much less trust the message or the messenger? Worse, how can we trust the next 'sky is falling' crisis is real? The result is the erosion of interest, of engagement with the political process. And that leaves even more room for the manipulation of the process by magicians.
Now, if we've all learned anything from Harry Potter, it's that all magicians aren't evil. But the forces of good must be ever vigilant against those practicing the dark arts.
Mr. Malloy, you're no Harry Potter. Keep your promise, skip the magic and tell us the truth.
The name game
We look with some amusement on the effort to rebrand the busway as CTfastrak. Certainly the busway has been beset by naysayers and carries some unhealthy political baggage. But the solution isn't a new name. It's in results.
We are among those who see the estimate of 16,000 daily riders as wildly optimistic. But we'd be delighted to be proved wrong.
We're committed now. Let's get it built and enjoy the economic stimulus provided by all those federal dollars. And let's give CTfastrak a chance to succeed.