What Connecticut needs now, say residents, is a smaller, more effective state government that takes care of its core responsibilities. That’s according to two recent Quinnipiac University polls—and it’s good advice, especially in this rough economy.

Even so, some lawmakers continue to promote the idea of bigger state government, allowing bureaucracy to intrude further into areas in which the people of Connecticut are already well served by the private sector.

•During an Appropriations Committee hearing last week Senate President Pro Tem Don Williams (D-Brooklyn) introduced a proposal that would resurrect—again—a plan to expand state government into the private-sector business of retirement plans.
•Meanwhile, the Energy and Technology Committee approved a measure (HB-6510) to expand state government and create a new agency that would overlap services already provided by energy utilities in the state.
Each proposal would expand state government, increase taxpayers’ costs and compete where Connecticut employers and their employees are already operating. These proposals fail the people-of-Connecticut test, as revealed in the Q Polls: Smaller government? No. More efficient government focused on core missions? No.

Retirement rerun
Introduced by Sen. Williams, a proposed amendment to SB-1 would allow the state comptroller to offer tax-qualified, defined contribution retirement plan options to small businesses (with fewer than 100 employees), employees of nonprofit organizations, and self-employed individuals.
A similar proposal failed last year in the legislature because, despite the claims of advocates that it would offer savings in administrative costs, many lawmakers saw that it actually would:

  • Increase taxpayers’ costs
  • Increase the state bureaucracy
  • Fail to deliver promised savings because it didn’t address employers’ real cost-drivers in offering 401(k) plans (the cost of employer contributions)
  • Offer nothing new to the retirement planning market that’s already well-served in Connecticut

Last year, Connecticut’s Office of Fiscal Analysis estimated Connecticut’s start-up costs of $500,000, with no firm idea of how long it would take to recoup the outlay. Several other states have considered such a plan—and rejected it—because they saw the same costs.

Energy excess
HB-6510
would create a costly new Connecticut Electric Authority to procure power, own generation, and borrow and bond money in order to meet the electricity needs of some Connecticut customers—roles better served by the electric distribution companies under the regulation of the state DPUC.

Creating this new state bureaucracy will also be costly, requiring millions of dollars to create the Authority and billions of dollars in collateral to purchase power.

Ironically, legislators this year formed a commission to explore how to streamline government. These are costly detours. This year especially, lawmakers should focus on making state government better—not bigger.