Waste or pork, but you still pay

Hearst Connecticut Media today begins an occasional series, ‘Your Money, Your State,’ looking at how state government spends taxpayer money, from stories that reveal wasteful spending to stories that explain why and how spending decisions are made. It's your money, and our goal is to give you a clearer picture of how it is spent. We'd also like to hear from you. Send thoughts, questions and suggestions to yourmoney@hearstmediact.com.

In state government, there’s pork and then there’s waste.

Either way you pay.

Pork is $50,000 in the new state budget for Stamford’s bustling Downtown Special Services District. It’s one in a list of recent handouts from the General Assembly totaling $10 million, including $25,000 for structural improvements to a landmark Greek Orthodox Church in Bridgeport and $100,000 for New Haven’s International Festival of Arts and Ideas.

Waste is tens of thousands of dollars in expired pharmaceuticals locked away, forgotten, with next to no inventory controls, in a closet at the state Department of Public Health.

Waste was the University of Connecticut’s milliondollar contract for software that wasn’t installed until the final year of a threeyear contract, at an unnecessary expense of about $700,000.

Between political payoffs and lax bureaucratic oversight, millions of tax dollars literally fly out the window every year at a time when the state might be better off tightening its belt in anticipation of the inevitable next recession.

But members of the General Assembly are always under pressure to bring home the bacon to their districts. Few will turn down support for local arts, entertainment and athletic facilities, or anything for that matter.

Little Leagues in the urban neighborhoods of Groton, Hartford and New London scored $140,000 in this year’s state budget earmarks. Political favors

Politically motivated favors are the timehonored grease in the wheels of the legislature and state government. Seats on the bonding subcommittee of the taxwriting Finance, Revenue & Bonding Committee are littleknown, powerful posts.

And while Gov. Ned Lamont proclaimed a “debt diet” this year, in attempt to cut $600 million in annual capital expenditures, lawmakers generally ignored the idea in the biennial budget that took effect July 1.

During the June meeting of the State Bond Commission, which allocates funding for capital projects and which Lamont controls, the agenda was generally limited to affordable housing construction, emergency dam repairs, bridge and highway work and asbestosremoval projects.

But last December, during thenGov. Dannel P. Malloy’s final meeting, millions of dollars in specialinterest projects were approved, from a $300,000 memorial garden for gunviolence victims in New Haven, to $400,000 for the historic Goodspeed Opera House in Haddam to repair flood damage, and $463,000 for the Long Wharf Theatre (CQ)in New Haven to perform a planning and marketing study. Then there is waste.

The state Auditors of Public Accounts in recent years went back and forth with the Department of Public Health over the storage and handling of expired drugs to treat tuberculosis and sexually transmitted disease.

“There was no accountability on how the department ordered pharmaceuticals,” said state Auditor John Geragosian, a former Democratic state representative, describing the finding as lowhanging fruit.

“We report to the legislature and the powers that be,” he said. “We bring it to their attention, and we followup on the next audit.” Geragosian and his colleague, Auditor Rob Kane, a former Republican state senator, are responsible for overseeing performance audits of every state agency, including quasipublics such as the Connecticut Lottery Corporation. A traditional problem

Loss at the department and agency level are regularly found in state audits. Memorably, the state Department of Banking purchased 65 laptop and desktop computers back in 2008, under Gov. M. Jodi Rell, along with docking stations and replacement batteries worth more than $75,000, plus a $150,000 software contract. Nearly two years later they remained unopened in their boxes. A required business plan for the equipment was never generated.

In a threesentence response to the audit, banking officials blamed an early retirement incentive program for the excess hardware falling between the cracks.

Last month, auditors reported that the Connecticut Green Bank, formerly the Clean Energy Finance and Investment Authority eliminated three jobs and made severance payments of 26 weeks salary for all the former workers, at a cost of more than $148,000, without approval of its board of directors.

In recent years, auditors have also found several examples of waste including:

The Department of Administration Services missed opportunities to open as many as 9,000 insurance claims that could have raised $13 million in revenue.

The Connecticut Housing Finance Authority awarded $251,000 in severance to an employee with only twoandahalf years on the job.

TweedNew Haven Airport Authority processed more than $28,000 in payments without proper authorization.

The Connecticut State Library & Museum was unable to verify the existence of two out of 20 pieces among their collection items. In its database on the items, seven were inaccurately described.

In 2003, thenSpeaker of the House James A. Amann of Milford ordered a task force called Operation ACE, for accountability, creativity and efficiency, which was a followup to a similar, earlier panel in 1992.

The ACE report recommended tactics including the privatization of some state services; a reorganization of the highereducation system; alternatives to nursinghome care; better effectiveness of fiscal controls; and the creation of a chief operating officer position to work closely with the governor and the budgetsetting Office of Policy and Management.

Higher education was finally reorganized under former Gov. Dannel P. Malloy, while Lamont appointed Paul Mounds, a legislation liaison under Malloy, to become the state’s first COO.

The Department of Administration Services missed opportunities to open as many as 9,000 insurance claims that could have raised $13 million in revenue.

* The Connecticut Housing Finance Authority awarded $251,000 in severance to an employee with only twoandahalf years on the job.

* TweedNew Haven Airport Authority processed more than $28,000 in payments without proper authorization.

* The Connecticut State Library & Museum was unable to verify the existence of two out of 20 pieces among their collection items. In its database on the items, seven were inaccurately described. “The eye of the beholder”

There are also more subtle wastes of money. In the twoyear $43billion budget, there is a requirement that $90 million in savings be found, plus another $20 million in spending cuts. Gov. Ned Lamont’s budget chief has to implement a schedule of fee increases totaling $50 million; and the governor himself has started to raise funds to match hedge fund billionaire Ray Dalio’s $100million education grant.

Senate Minority Leader Len Fasano, RNorth Haven, said recently that while the traditional politicalpork grants are blatant, the tens of millions of dollars in unstated savings, called “revenue transfers” in legislative language, are a more ominous, unseen threat to taxpayers.

“They’re hoping that Connecticut’s economy can outpace the national rate,” Fasano said of majority Democrats and the governor. “If we didn’t have $50 million in pork, they wouldn’t have to seek higher fees.”

He is particularly concerned that a projected $300million surplus cushion, under the budget’s socalled volatility cap, could be raided next year to help Democrats run their House and Senate elections by siphoning more state money down to local projects to make incumbent Democrats look better.

Ronald Schurin, a professor of political science at UConn, said legislative rhetoric on the need to cut costs often stops when state funding extends to their own towns and cities. “Frivolous spending and worthy investments in special projects are often in the eye of the beholder,” he said, stressing that the mantra of opposing “waste, fraud and abuse” are often situational.

“No one with good intentions sets out to waste government funds, unless there is corruption involved,” Schurin said. “This is an effort to run a multibilliondollar enterprise, so sometimes it looks like waste in retrospect. You make a set of decisions and some don’t play out.”

He said that the role of the auditors in shining a light on agencies is crucial to informing both taxpayers and department heads. He warned that too much control from above could hinder longterm planning.

“To some extent you want management to take appropriate chances with things,” Schurin said. “You never know what will work out. You want prudent managers. You want transparency, and you want people in the press who are in a principal position to report it. You also need to put things in a larger context.”