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May 15, 2023 On The Record | Q&A

Scanlon brings retail politics to comptroller’s office as he preaches fiscal stability, aims to rein in healthcare costs

HBJ PHOTO | GREG BORDONARO Comptroller Sean Scanlon sits on a couch in his Hartford office at 165 Capitol Ave., for an interview with HBJ.
Sean Scanlon
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Most successful elected leaders are good at retail politics, attending local events and meeting with individual constituents to gain their favor.

It’s a style of in-person politics that’s helped make Sean Scanlon a rising star within the Democratic Party.

First elected at age 27, he was a four-term state House of Representatives member before being named executive director of Tweed New Haven Airport in 2019.

In January, he was sworn in as state comptroller, after winning his first statewide elected office over GOP challenger Mary Fay.

In his new role, Scanlon, now 36, serves as the state’s chief fiscal guardian, overseeing various functions including state accounting, financial reports and administering health benefits to state employees, among other duties.

It’s a position that hasn’t traditionally lent itself to a highly public-facing role, but Scanlon is trying to change that.

Since taking office, he’s been on a media blitz, making regular public appearances at businesses, schools, industry events and other places to promote various initiatives from a new state-backed retirement savings program to financial literacy.

Monthly, he also shadows a state employee as part of a new “CompTime” initiative. He’s ridden in a plow at 3 a.m. during a snowstorm, stocked trout in a pond and sat with soon-to-graduate state police cadets.

If he writes checks for state employees, he should better understand what they do, Scanlon said about the job-shadowing strategy.

He also has active social media accounts, including a range of short videos on Facebook. One commemorates his first 100 days in office; another features him making a pizza at Hartford-based Bro’s Dough Pizzeria.

Scanlon’s high visibility thus far might lead some to speculate he has higher political ambitions.

Does he want to run for governor one day?

“It’s not something that I’m making the focus of my life, figuring out whether I do or do not want to run for something else,” Scanlon said. “I just got elected. I’m four months into this. I’m loving it so far. It’s an incredible honor for somebody who is the first person in my family to go to college to get elected to statewide office. What comes next comes next. I’m just focused on trying to do the best job I can in this job.”

Comptroller Sean Scanlon visits Bruce’s Flowers in Norwalk to promote the state’s MyCTSavings program.

Scanlon sat down with the Hartford Business Journal for a wide-ranging interview that touched on three major topics: state finances, healthcare costs and the relatively new state retirement savings plan, known as MyCTSavings.

The program, which originally faced opposition from the business community, was approved by the legislature in 2016, but has been slow to get off the ground.

Scanlon actually voted in favor of it back when he was a lawmaker. Now he oversees the program, which requires employers that don’t offer a qualified retirement plan to register with the new state-run plan.

Businesses don’t have to contribute money to the program, but they must make sure their employees have access to it.

MyCTSavings establishes a Roth IRA for workers, and employee contributions are facilitated by employers through automatic payroll deductions.

Employers with five to 25 employees were required to register for the program by March 30.

Scanlon said he’s made it a top priority to promote and raise awareness for it, which is why he’s been making so many public appearances meeting with small employers across the state.

His marketing efforts have had an effect. When he took office, the program had under 900 enrollees; today it has about 4,000. But thousands of businesses still haven’t signed up, which forced Scanlon to push back the original March 31 deadline to Aug. 31.

“(MyCTSavings) was something that I decided to really prioritize because I was raised by a small business owner who had no retirement plan to speak of, and she’s now at retirement age but can’t retire because she needs to continue working in order to earn the money that she needs to survive,” Scanlon said.

Scanlon’s HBJ interview came a day before the Guilford resident announced a new municipal pension reform plan that is estimated to save 107 participating communities $32.3 million in fiscal year 2024, and $843 million over the next three decades.

The reforms, which still need legislative approval, come from a working group Scanlon convened earlier this year — something he said is his most important accomplishment so far in office.

Here’s what else Scanlon had to say. The Q&A was edited for clarity and length.

What happens to companies that don’t sign up for the MyCTSavings program? Are there penalties?

A. Right now, I can technically sue a small business in Superior Court to compel them to sign up. But I said on my first day in this job that I was never going to take a small business owner to court over not participating.

There is a bill going through the legislature that would give me the power to levy a small fine on businesses that don’t sign up, and that is something I do think is an important tool for us to have in the toolkit.

According to recent projections, the state is on pace to record a $2.9 billion surplus this fiscal year, thanks to strong corporation, pass-through entity and some sales tax collections.

However, there was a $560 million drop in estimated income tax revenues, mostly tied to investment earnings. Is that a longer-term concern or threat?

A. There are some signs that what’s happening on Wall Street, what’s happening with the national economy, is beginning to have an impact here.

I think it’s something to pay attention to, but I wouldn’t call it a threat because of the fiscal stability we’ve had in Connecticut the last few years.

(Connecticut ended last fiscal year with a $4.3 billion surplus and $3.3 billion rainy day fund.)

And a lot of that stability stems from the fiscal guardrails (a bipartisan group of) legislators put in place in 2017, which have helped the state record surpluses, replenish its rainy day fund and pay down some long-term pension liabilities.

(The guardrails include caps on bonding and spending tied to changes in inflation and personal income.)

How would you characterize the state’s overall fiscal position?

A. Compared to where we were five years ago, incredibly different in a positive direction. We’re not out of the woods, but when you look back 10 years ago, in what I call the lost decade of the 2010s, we had out-migration of companies and people, a persistent fiscal crisis that was killing our budget, no GDP growth, and no job growth.

Last year, our GDP growth (2.4%) was 17th in the country. We’ve had job growth. We’ve had record revenue growth in the state. We’ve had people moving into the state and businesses coming here, so I think it’s night and day to where we were.

Now, the true test is, what’s the next decade going to look like. We need continued economic growth.

Do you have thoughts on what the state should do with its surplus dollars?

A. I think it’s about finding the right balance between saving as much money as we can, paying down our pension debt, and then offering some real relief to the people of Connecticut in the form of tax relief, which is what the governor and both parties in the legislature are trying to do.

But the question is, how much?

You were a strong supporter of the 2017 fiscal guardrails, including the spending cap, and extending them this January. So, what are your thoughts about some lawmakers wanting to work around the spending cap in order to spend more of the projected surplus?

A. I am firmly in the camp with the governor that we should not be messing with our fiscal guardrails.

Right now, for the first time in a long time, people have confidence in Connecticut’s fiscal situation. And I think doing anything that messes with that would be damaging.

The Connecticut Partnership Plan, which is run by your office and provides health insurance to nearly 60,000 teachers, police officers and other municipal employees, lost about $37 million last fiscal year.

What is your assessment of the financial viability of the Partnership Plan, and what measures can you take to curtail the financial losses this year and in the future?

A. Like everyone else in the industry, we really got fiscal 2022 wrong from a claims’ perspective. We were still in the middle of COVID, but people got confidence again to go back to their doctor and to have those surgeries.

And the utilization of medical services skyrocketed, and it wasn’t what we were expecting.

We learned our lesson and changed our assumptions, and therefore we were very cautious and conservative this year (with our premium rates).

One change that I’ve already implemented is that we’ve begun to offer a secondary plan, which is sort of like a narrow network plan. Plan participants can save money by choosing to be in this plan because it limits the providers who are considered in network.

You’re saving money because you are not paying for services that you’ll never utilize. For example, if you live in a market dominated by Yale New Haven Health, you’re never going to go to Hartford HealthCare, so you save money by not having that option.

So, are you projecting a surplus for the Partnership Plan this fiscal year?

A. I think it’s too early to say that, but by next January I think you will see it in a much healthier situation.

As a legislator, you were an advocate for a state public health option, or extending Partnership Plan access to small businesses and nonprofits. Do you still support that?

A. I still support the concept of it, but it’s not something that I decided to make the focus of my time this year. I tried three different years as a legislator to get that through, and it just wasn’t happening.

And I don’t think it’s going to happen in the near future for a number of different reasons.

Are you working on any other initiatives to lower healthcare costs?

A. Prescription drugs are the single biggest source of increasing healthcare costs. We pay a disproportionate burden of the cost of drugs compared to anywhere else in the Western world.

And that’s because we’re the only country pretty much that doesn’t negotiate for drug pricing.

I’m working with Gov. Lamont this year to try to lower those costs by committing Connecticut to joining a multistate bulk purchasing consortium to negotiate prescription drug discounts that residents will be able to access through a discount card at their pharmacy.

We are also working with the governor to allow my office to bulk purchase drugs for the state.

Right now, there are about 16 different state agencies that buy their own drugs. If we can pull all those together and buy drugs under one umbrella, I think that we will save tens of millions, if not hundreds of millions of dollars.

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