While reforming the state bonding process is a very good idea, it has received a lot of unfair treatment lately - frankly, because I think Democrats have not really done a good job explaining why it is needed. So I wanted to take a few moments write down some of the very good reasons this important part of the state budget process needs to be reformed.
State bonding is the process of the state borrowing money for construction, renovation and other capital needs for schools, state facilities, city and town governments and other organizations in communities across the state. Naturally, it is a good idea to keep state debt low but, since bonding is the way construction and other capital projects get done by our state government, access to this funding is critical in so many areas of need.
Technically, the legislature "authorizes" bonding and then the State Bond Commission approves what projects actually get done. But, except for with school construction, the decision by the governor of what projects make it onto the agenda of a State Bond Commission meeting is the real point at which the decision is made for what gets approved and what does not. So, what really happens in the state bonding process is that the power to decide is vested in just one person - the governor.
Of course, it is never a good idea for one person to have such vast, nearly unchecked power over anything. Vest hundreds of millions of dollars in funding that is critically important to everyone in the hands of just one person, and you are just asking for a corruption scandal.
And that is exactly what happened to Connecticut.
Former Gov. John Rowland used the power to grant or deny access to state bond funding as a tool to silence his critics and shore up support, especially in the legislature, for what we would later come to know were hopelessly corrupt policies. Even in parts of the Rowland corruption scandals that did not directly involve state bond funding, the power to control bonding was the hammer that he used against those who raised legitimate objections to his administration. For example, the town of Rocky Hill had sued the state over the costs to the town from the $220 million CRRA-Enron scandal, but it withdrew the lawsuit amid rumors that town officials were told that they would lose opportunities for state bonding if they did not.
The main reason offered against state bonding reform is the theory that getting the legislature involved in this part of the budget-making of the state would drive up the amount of borrowing the state does. But it is not factually true that the current system keeps state borrowing down. In fact, our state's debt has gone up greatly under the present system, and I would argue that this is specifically because it a system that is largely unaccountable to the public. Speaker of the House James Amann, in a recent Op-Ed in the Courant, had it right:
One proposal is very modest. It would require that the decisions of what projects get on the Bond Commission agenda for approval be approved by the Speaker and the President Pro-Tempore of the Senate, in addition to the governor. I think that this would actually decrease the amount of state debt, since any one of three people could block something. But, I do not think this would go far enough as a reform, since we would only be expanding the number of people who make these very important decisions from one to three.
The other proposal would the take power over bond funding for community projects away from the Bond Commission, and create a new commission, under the aegis of the legislature, to control that portion of state bonding. This would take total control over some of state bonding away from the governor and transfer it to the legislature. This may be too far in the other direction, though.
What I want is more openness in the process and more accountability to the public for how decisions are made. Personally, what I would prefer would be that the final decisions on state bonded projects be a part of the state budget, like all other spending decisions. That way, the decisions would be made jointly between the governor and the legislature, so no one person would have unchecked power. With this system, the public would be able to hold all of their elected officials, the governor and legislature, alike, accountable for what gets done and what does not.
Cities, towns and other organizations would know their projects will receive funding because they appear in bonding part of the state budget. And, as opposed to the present system in which the governor may, at will, spend from vast, obscure, bonding "authorizations" that never disappear from year to year, taxpayers will get a clear and honest answer for how much is to be borrowed in the name of the state in any given year.
There is good reason for making state bonding a part of the same system of checks and balances that the rest of the state budget follows. One of the reasons John Rowland's ability to defraud the state on such a vast scale was that the legislature was not adequately doing its job of providing oversight and exercising its role in our Constitution State's constitutional system of checks and balances. Amann makes this point, too:
Of course, the governor does participate in the budgetary process of the state, even though it is a legislative power under the Constitution. She proposes a budget at the start of the legislative session and, unless the legislature overrides her veto, her signature is needed for a budget to be approved. And, with the reform I prefer, the governor would retain this very important leadership role.
And bringing the process of checks and balances into state bonding decisions does another critically important thing - the whole process becomes public. The people of the state would be able to see what spending is being proposed, and politicians would be forced to defend it. Corruption would be made more difficult under the scrutiny of the press and the public. And the fact that the politicians would be forced to defend, year in and year our, why it is a good idea for the state to borrow the amount approved that year would ensure that public can hold their elected officials accountable if they feel that the public debt is too high.
State bonding reform is one of the huge, remaining areas of post-Rowland government reforms that have not yet been acted on. Hopefully, this is the year that it happens.
State bonding is the process of the state borrowing money for construction, renovation and other capital needs for schools, state facilities, city and town governments and other organizations in communities across the state. Naturally, it is a good idea to keep state debt low but, since bonding is the way construction and other capital projects get done by our state government, access to this funding is critical in so many areas of need.
Technically, the legislature "authorizes" bonding and then the State Bond Commission approves what projects actually get done. But, except for with school construction, the decision by the governor of what projects make it onto the agenda of a State Bond Commission meeting is the real point at which the decision is made for what gets approved and what does not. So, what really happens in the state bonding process is that the power to decide is vested in just one person - the governor.
Of course, it is never a good idea for one person to have such vast, nearly unchecked power over anything. Vest hundreds of millions of dollars in funding that is critically important to everyone in the hands of just one person, and you are just asking for a corruption scandal.
And that is exactly what happened to Connecticut.
Former Gov. John Rowland used the power to grant or deny access to state bond funding as a tool to silence his critics and shore up support, especially in the legislature, for what we would later come to know were hopelessly corrupt policies. Even in parts of the Rowland corruption scandals that did not directly involve state bond funding, the power to control bonding was the hammer that he used against those who raised legitimate objections to his administration. For example, the town of Rocky Hill had sued the state over the costs to the town from the $220 million CRRA-Enron scandal, but it withdrew the lawsuit amid rumors that town officials were told that they would lose opportunities for state bonding if they did not.
The main reason offered against state bonding reform is the theory that getting the legislature involved in this part of the budget-making of the state would drive up the amount of borrowing the state does. But it is not factually true that the current system keeps state borrowing down. In fact, our state's debt has gone up greatly under the present system, and I would argue that this is specifically because it a system that is largely unaccountable to the public. Speaker of the House James Amann, in a recent Op-Ed in the Courant, had it right:
As noted in [the governor's] own testimony before the legislature's Finance, Revenue and Bonding Committee, Connecticut has the third highest bonded debt in the nation. HELLO - the governor, and the governor alone, has been setting the bonding agenda for years, so who do you think is responsible for getting us in this situation?And, as much as the governor tries to frame the Democrats' reform proposals as a partisan power grab, her real concern seems to be that she would lose the ability to use her unchecked power to reward her political allies and punish her opponents. As Amann points out:
Frankly, this governor's so-called "fiscally prudent" decision-making on bonding appears to be based on the same old partisan political favors and retribution used by her predecessor. Former Gov. John G. Rowland knows what happens when too much power is in the hands of a sole authority.There are a number of ideas for reforming the state bonding process. The two plans that came out of the legislature's Finance Committee, I think, represent two opposite approaches.
One proposal is very modest. It would require that the decisions of what projects get on the Bond Commission agenda for approval be approved by the Speaker and the President Pro-Tempore of the Senate, in addition to the governor. I think that this would actually decrease the amount of state debt, since any one of three people could block something. But, I do not think this would go far enough as a reform, since we would only be expanding the number of people who make these very important decisions from one to three.
The other proposal would the take power over bond funding for community projects away from the Bond Commission, and create a new commission, under the aegis of the legislature, to control that portion of state bonding. This would take total control over some of state bonding away from the governor and transfer it to the legislature. This may be too far in the other direction, though.
What I want is more openness in the process and more accountability to the public for how decisions are made. Personally, what I would prefer would be that the final decisions on state bonded projects be a part of the state budget, like all other spending decisions. That way, the decisions would be made jointly between the governor and the legislature, so no one person would have unchecked power. With this system, the public would be able to hold all of their elected officials, the governor and legislature, alike, accountable for what gets done and what does not.
Cities, towns and other organizations would know their projects will receive funding because they appear in bonding part of the state budget. And, as opposed to the present system in which the governor may, at will, spend from vast, obscure, bonding "authorizations" that never disappear from year to year, taxpayers will get a clear and honest answer for how much is to be borrowed in the name of the state in any given year.
There is good reason for making state bonding a part of the same system of checks and balances that the rest of the state budget follows. One of the reasons John Rowland's ability to defraud the state on such a vast scale was that the legislature was not adequately doing its job of providing oversight and exercising its role in our Constitution State's constitutional system of checks and balances. Amann makes this point, too:
As a co-equal branch of government, the legislature has a responsibility to taxpayers to ensure that our bonded resources are used in the most efficient manner. As speaker of the House, I must ensure that the checks and balances spelled out in our constitution are not compromised.I actually think Amann comes short of the significance of this point. In the Judiciary Committee hearings on the nomination of Supreme Court Chief Justice Chase Roger, I asked Rogers to tell me whether the constitution provides that the power over the budget is an executive branch power or a legislative branch power. Of course, I knew the answer from high school civics, but her answer was that it is clearly a legislative branch function. This, however, is exactly the opposite of what the governor has tried to say about the state bonding part of the budget. They have repeatedly said, incorrectly, that it is an executive branch function.
Of course, the governor does participate in the budgetary process of the state, even though it is a legislative power under the Constitution. She proposes a budget at the start of the legislative session and, unless the legislature overrides her veto, her signature is needed for a budget to be approved. And, with the reform I prefer, the governor would retain this very important leadership role.
And bringing the process of checks and balances into state bonding decisions does another critically important thing - the whole process becomes public. The people of the state would be able to see what spending is being proposed, and politicians would be forced to defend it. Corruption would be made more difficult under the scrutiny of the press and the public. And the fact that the politicians would be forced to defend, year in and year our, why it is a good idea for the state to borrow the amount approved that year would ensure that public can hold their elected officials accountable if they feel that the public debt is too high.
State bonding reform is one of the huge, remaining areas of post-Rowland government reforms that have not yet been acted on. Hopefully, this is the year that it happens.
