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February 29, 2016 Editorial

State must restrain government-program growth

The size and scope of state government is often debated when the General Assembly is in session, but the rhetoric has intensified as Connecticut grapples with its ongoing fiscal crisis.

Many agree it's time for state legislators to show restraint by curtailing spending and the expansion of government programs. It's a bipartisan philosophy shared by many legislative leaders, some of whom have sworn off tax increases despite next fiscal year's half-billion dollar projected deficit. Billion-dollar deficits loom in the future.

It's against that backdrop that calls for the state to get involved in several private industries raise alarm bells. Last week, the Hartford Business Journal reported on the likelihood of separate bills being proposed this legislative session that would establish a government-run retirement plan for private-sector workers and use state funds to help expand the availability of affordable, ultra-high-speed Internet to residents and businesses.

While both proposals are well intentioned, they are wrong minded. State government is in no position to launch new benefit programs when it can't control the costs of ones it already offers.

The establishment of a state-run retirement plan is particularly troublesome because Individual Retirement Accounts and other retirement-savings products are already made available by the private sector.

Comptroller Kevin Lembo, a key proponent of the state-run plan, argues the retirement-planning industry is not adequately servicing certain swaths of the workforce, particularly those in lower-paying jobs at small companies.

He's right to some extent. There are an estimated 600,000 workers in the state whose employers don't offer a retirement plan, and the percentage of employers nationwide participating in savings programs is lackluster.

He also makes the valid argument that if people don't save enough for retirement they'll end up on the government dole.

But the solution can't immediately be for state government to fill the void. That philosophy has driven Connecticut to its permanent state of fiscal crisis, and it ends up being counterintuitive. We've overleveraged our balance sheet and now basic services government is supposed to provide to those who need it most are on the cutting board.

State government can't be all things to all people. Instead, the state must think of creative ways to work with the private sector to advance the greater good.

The phrase “private-public partnership” has been bandied around the State Capitol for years and there are some successful examples of it working. For example, in this week's issue, News Editor Gregory Seay reports on the joint efforts of the state's economic development agency, private chambers of commerce and nonprofits in wooing Israeli companies to Connecticut.

Financial planners suggest the state invest in an education campaign to help people who don't have retirement plans understand where they can access them. Maybe new incentives could be offered to individuals who open a retirement account outside their employer.

On the broadband issue, the state needs to partner with telecom companies, rather than compete with them, to expand access to gigabit-speed Internet, which many agree is crucial in Connecticut's efforts to attract technology, bioscience and other companies using large amounts of data.

Connecticut is already a top-ranked state when it comes to high-speed Internet access, so reinventing the wheel seems costly and wasteful. Groton's failed attempt at a government-owned broadband network, for example, cost it $30 million.

The state will never have the expertise of private telecom companies nor should it try to obtain it. What government does have is the power of the bully pulpit and to be a convener of strategic thinking. Policymakers must fully exhaust that strength, before they venture into areas that pose further risks for taxpayers.

Read more

Budget must be focus in short session Hartford must leverage corporate IQ

GE’s departure may be CT’s saving grace

State-run 401(k) wrong approach to retirement crisis

Government can, should act more like business

Malloy’s budget offers Republicans chance to lead

State late to modernizing health industry oversight

No good options for city or state

Let Hartford keep admissions tax revenues

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