Possibilities for saving our hometown newspapers.

Yesterday, other officials and I met with state Economic and Community Development Commissioner Joan McDonald regarding our efforts to keep the New Britain Herald, Bristol Press and weekly newspapers from closing.  This was the follow-up to the previous meeting we has with the Commissioner.

The newspapers are owned by the Journal Register Company (JRC), which has said that it will close the newspapers very shortly if they are not purchased.  I worked to organize area legislators to bring attention to this situation and seek the assistance of the Commissioner in the hopes that one or more buyers would take ownership of the papers and keep them open.

After hearing the Commissioner's report on her work, I can say that I am pleased with her efforts and that of her department.  They actively informed potential buyers of the fact that the newspapers were for sale and let them know about state assistance that is available to businesses that have a good plan to preserve jobs in the state.

Between efforts of the Department and the publicity, there are now potential buyers looking into purchasing the newspapers:

...McDonald said she sent out 16 letters to perspective buyers in the newspaper industry. ... Since the Dec. 10 letter went out McDonald said her office has received one response from the letter, one from the news reports of the meeting, one referral from state Rep. Tim O’Brien, D-New Britain, and two referrals from Dirks, Van Essen and Murray, the brokerage firm from New Mexico retained by the Journal Register Co. to manage the sale of the papers.  (CTNewJunkie)  

Connecticut's economic development commissioner told local and state officials Monday that her office received responses from five media companies that may be interested in buying some or all the daily and weekly newspapers put up for sale by the Journal Register Publishing Co.  (AP - printed in The Day) 

This is a Channel 61 story about this:

(Just a note of correction: It was the Commissioner who sent the letters to the prospective buyers.)

So we now have potential buyers.  At this point, things are in the hands of the newspapers' current owner and their prospective owners.

Time to revisit my proposal for democratic elections of Senators

Two years ago, I introduced legislation, House Bill 5034 , which proposed that there be special elections when there is a vacancy in a U.S. Senate seat representing Connecticut.  Like most states, Connecticut law provides that the Governor choose a member of the Senate when someone leaves that office, and the Governor's selected person stays there until the next regular election - for as long as two full years.

My proposal was simple - let the people decide who represents them.  It is already the process we use to fill a seat in the U.S. House of Representatives when someone leaves that office.  There is no good reason for why the process for filling vacancies in the U.S. Senate should be any different.

In fact, my reason for proposing this legislation was that, the previous year, as Vice-Chair of the Government Administration and Elections Committee, I worked on some technical, but important, changes in the law affecting special elections for U.S. House.  While I was doing this work, I found it peculiar that there was a completely different area of law concerning U.S. Senate vacancies - with a very different, and much less democratic process.  There was not time to take this issue up that year, but I decided I would bring it up again.  That was where 2007 HB 5034 came from.

At the time, people who favored the idea that Gov. Rell should be able to choose a U.S. Senator, herself, opposed my proposal.  There were a lot of unfair, unreasonable and, frankly, partisan accusations made about what should have been seen as a common-sense idea to replace an archaic and silly system with a law that would let the people choose who represents them in the Senate of the United States.  Neither HB5034 nor a similar bill considered last year were approved against this unfortunate partisan backdrop.

However, the terrible scandal involving Illinois Gov. Rod Blagojevich shows that my proposal should be re-considered this year and approved.  As an article in the New York Times shows, Gov. Blagojevich's apparent attempt to use his sole power to name a Senator as an opportunity to make money for himself is only the latest in a long history of problems that are caused by governors having this power.

As Carl Hulse, for the Times, points out,

Given the prestige of a Senate seat and its magnetic allure to politicians, it is perhaps not surprising that when these vacancies come up, the process of awarding the office has become fraught with malfeasance and political peril.

In the same Times article, Thomas E. Mann of the Brookings Institution had this to say:

“These temporary appointments have often been subject to abuse or tacky behavior,” said Mr. Mann, adding, “I suspect this will lead a number of states to dispense with the temporary appointments and go directly to a special election.”

I suspect Mr. Mann is correct that states will soon begin replacing this silly old, problem-laden system with democracy.  Connecticut should start this trend by approving the legislation I proposed.

I certainly plan to propose it again.

---

Update December 15th:

Thanks to Genghis Conn at Connecticut Local Politics for his blog post in support of this proposal.

Also, I offer my thanks for the kind words at NBPoliticus.

To further bolster the need for this, here are some notes about what Republicans in Illinois are doing on this issue (from AP writer Christopher Wills):

The GOP also plans to run television ads pressuring Democrats to approve a special election ... Illinois Republican Party chairman Andy McKenna told reporters the ads will "make the point that this is the people's seat, and the people deserve a special election."

If it is a good idea in Illinois, it is in every state, including Connecticut.

Meeting on keeping the Herald and other papers from closing.

This morning legislators representing New Britain, Bristol, Newington and other towns, as well as Gary Friedle, Chairman of the New Britain Downtown District, met with state Economic and Community Development Commissioner Joan McDonald to discuss the economic development assistance that could be appropriate to find new owners for the New Britain Herald, the Bristol Press and 11 weekly newspapers.

As I wrote previously, I am very concerned about harm that New Britain would experience, both in our economy and our community life, if we did not have a daily newspaper based in our city.  The other New Britain legislators, Sen. Don DeFronzo, Rep. John Geragosian, Rep. Peter Tercyak and Rep. Betty Boukus, share these concerns.  The legislators representing Bristol and the towns covered by weeklies, including the Newington Town Crier, agree.

It was very important that Gary Friedle joined us at the meeting to discuss the concern we share about the negative effect that losing our daily newspaper could have on New Britain's businesses and economy.  He advocated very well for our city.

The meeting was very productive and I am pleased with the proactive approach that the Commissioner is taking.  I offer her and the Governor my thanks for their assistance.

We will be meeting again in a couple of weeks to talk about any progress.

Department of Transportation is taking too long to complete the busway.

I was on the New Britain City Council when the Hartford-New Britain Busway plan was proposed. That was the better part of a decade ago. And the busway was supposed to be complete and operating by now. As time has dragged on, that delay has become increasingly frustrating. The article in today's Courant does nothing but add to that frustration.

Connecticut, especially the greater Hartford area, has been hurt economically and in terms of quality of life, by the sorry state of our public transit system. New Britain has been especially harmed because the highways that went up in decades past have largely cut New Britain out of our regional economy. Having New Britain as the primary starting point for a new, regional public transit system can be a major development in the economic renewal of our city. Plus, especially in as global warming and other environmental concerns become more pressing, public transit is important for a low-pollution future - and if it needs to happen anyway, it should be done so that New Britain benefits from it.

The reason the busway idea was chosen by the state DOT over rail transit had to do with cost. As I recall, the original proposal said that the busway would cost $80 million, perhaps $100 million. A lot of money, but much less, the DOT told us, than commuter rail. And since a busway, the state DOT said, was as a favored idea in the federal "New Starts" program, most of that money would come from the federal government.

But now, not only is this project many years behind schedule, but its cost has also vastly increased - with new projections in the area of $600 million. I consider this to be an enormous failure on the part of the state DOT, and I can find no excuse for it. It reminds me of how the state DOT handled a different project - the train maintenance facility in New Haven - which increased in cost from the $300 million is was supposed to cost when it was approved to $1.2 billion. I am also reminded of the DOT's failure in the Rt. 84 upgrade - failures that required redoing much of the project at great cost.

I agree with Mayor Timothy Stewart that there needs to a change in "the culture of the DOT, which is to mire these projects in bureaucracy." I also agree that getting the busway project completed is a high priority. To help get it done the Mayor needs to work with the New Britain state legislative delegation - which has long been pushing for completion of this project. The state DOT answers to Gov. M. Jodi Rell, not to the legislature - as the Rell administration is quick to point out when the legislature has insisted on action from state agencies. Pressing his frustration with the DOT to the Governor is the best way that Mr. Stewart can be supportive of the delegation's efforts on behalf of New Britain.

The future of whole state requires that state departments get the priorities of the Connecticut's people done quickly, efficiently and well. Now, more than ever, with our economy worsening and people losing jobs and homes, administrators of state agencies need to get things done. Connecticut's future, economically and environmentally, must include greatly increased transit. And we need a state DOT that will make that happen.

We need to see a stronger push in this direction from the leadership in the DOT.

New Britain should have a local newspaper.

Yesterday, New Britain and Bristol legislators sent a joint letter to the state Commissioner of Economic and Community Development, Joan McDonald asking for her assistance in finding a way to keep the New Britain Herald and the Bristol Press from closing down.

Representative-Elect Chris Wright of Bristol added his voice to these efforts.

The founders of our country considered having a free press as essential to democracy.  I think we need to keep that tradition and maintain that value to keep democracy alive and well.

Naturally, the Internet is changing the way people get their news, and I do not think anyone really knows what news media will look like in the future as a result.  So far, the Internet has expanded participation in the democratic process.  People are taking a direct role in getting news and creating it.  Most newspapers have online editions, now, and it may well be that paper editions of newspapers will disappear completely.  But people are also taking a direct role in news, as with blogs and social networking sites.

But I also know that there are many things that a community loses when it is not home to its own daily newspaper.  A daily newspaper is a central community forum, a place for local businesses to advertise and where major events in ordinary people's lives are recorded (like in marriage announcements and obituaries).

If New Britain loses the Herald, I am concerned that we may have nothing to fully replace the role it has played in our community for so long.

Here are some news stories on our efforts:

• Legislators petition state for local papers (Herald, Nov. 26, 2008)  
  
• State Legislators Trying To Save Newspapers In Bristol, New Britain(Hartford Courant, Nov. 26, 2008) 

Education Funding Increases

I have advocated strongly for increased support for our local schools. Here are estimates of the increases in Educational Cost Sharing grant funding for the city and town I represent, New Britain and Newington, in just the past two years.

New Britain                      
year prior            First year                                               Second year
to 2-year             of 2-year                                                   of 2-year
state budget    state budget       INCREASE           state budget            TOTAL
FY 06-07             FY 07-08             first year                 FY 08-09             INCREASE
$64,079,306      $70,813,502         $6,734,196         $73,929,296        $9,849,990

Newington
year prior            First year                                              Second year
to 2-year             of 2-year                                                  of 2-year
state budget    state budget       INCREASE          state budget          TOTAL
FY 06-07             FY 07-08             first year               FY 08-09              INCREASE
$10,386,893        $12,100,397      $1,713,504         $12,632,814         $2,245,921

Of course, I have advocated for significantly larger support than even this, which is why I plan to continue my efforts to advocate for quality education for our kids.

Why property tax reform is needed.

Here is a summary of importance of property tax reform that I put together a few years ago. Some of the information is a bit dated, but the discussion is very much relevant to the debates on this at the State Capitol.

Information on Property Taxes and Why Reform is Needed.

The property tax system is unfair. It is an unreasonable and inadequate way of funding local services and it does harm to cities like New Britain. But the problems that arise from the property tax system in our state are not just limited to New Britain and are even not just limited to central cities. Our over-reliance on property taxes causes problems for towns like Newington and, in fact, the whole state.

Here is a quick overview of these problems:

1. 
   
   Sprawl. The property tax system encourages a pattern of development that undermines the quality of life in Connecticut and stresses our infrastructure. With 169 municipalities competing for property tax revenue that comes from development, small towns change from rural locations into suburbs. The same process stretches urban development beyond the borders of our central cities and into existing suburbs. Meanwhile, more and more economic vitality is drawn out of the established cities – especially as their tax rates increase – leaving them increasing isolated and poor. Central cities, especially, reach a breaking point in which their overtaxed middle class – who have mobility – move out, leaving behind senior citizens and poor residents – who do not have the same mobility – who are then forced to pay even higher taxes.
2. 
   
   Setting generations against each other. In towns and cities across the state, the politics of local budgets are astoundingly similar. Parents, who want a quality education for their kids are set against seniors on fixed incomes who cannot afford to pay more property taxes. It is all too common for towns to have to run multiple referenda before passing a budget, and cities are forced into increasingly precarious budgeting with the growing disconnect between the need to fund schools and basic public services (like public safety) and urban taxpayers’ shrinking ability to pay.
3. 
   
   Inequality. The property tax system produces gross inequality in the way taxation is done in our state. It is seriously unequal in two separate, but closely related ways:

INEQUALITY #1:

The middle class and poor bear more than their fair share of taxes, statewide.

While much ado is regularly made the amount that the wealthiest people in our state pay in the state income taxes, these exhibitions always seem to conveniently leave out certain important facts:

FACT: The state income tax is not the largest tax:

l Income tax revenue: $5.7 billion - 29.9% of state-established taxation.

l Property tax revenue: $6.2 billion - 33.2% of state-established taxation.

FACT: The income tax is not the largest tax burden for most people:

l For only the wealthiest 5% is the state income tax the largest tax burden under state law.

l About three-quarters of Connecticut families pay more in property taxes than they do in the state income taxes.

FACT: Middle class families pay four times as much of their income in property taxes as the wealthiest 1%.

Senior citizens on fixed incomes tend to pay an even larger burden. (I often meet seniors who pay 10%, 20%, even 30% – or more – of their incomes in property taxes, alone.)

FACT: Even with income taxes taken into consideration, the middle class pays twice as much of their incomes as the wealthiest 1% in our state after federal tax offsets are taken into account.

Even without the federal offsets, the middle class pays a 60% more.

INEQUALITY #2:

Property tax burdens are vastly different among municipalities.

There are many reasons for these differences, but there is no question that the differences in income among municipalities is a large reason.

Is it fair that the residents

of these towns pay more . . .

Municipality	Estimated property tax burden for a typical homeowner as a percent of median household income	Median Household Income
HARTFORD	15.3%	$24,820
NEW HAVEN	15.1%	$29,604
NEW BRITAIN	10.8%	$34,185
WATERBURY	13.1%	$34,285
BRIDGEPORT	13.5%	$34,658
NORWICH	7.4%	$39,181
EAST HARTFORD	9.3%	$41,424
TORRINGTON	7.6%	$41,841
WEST HAVEN	7.9%	$42,393
ANSONIA	8.4%	$43,026
MERIDEN	7.8%	$43,237
DERBY	8.0%	$45,670
WINCHESTER	7.4%	$46,671
VERNON	7.0%	$47,816
EAST HAVEN	7.3%	$47,930

. . . while the residents of these towns pay less?

Municipality	Estimated property tax burden for a typical homeowner as a percent of median household income	Median Household Income
DARIEN	6.2%	$146,755
WILTON	6.5%	$141,428
EASTON	6.9%	$125,557
AVON	6.5%	$90,934
NEWTOWN	6.8%	$90,193
MADISON	6.8%	$87,497
MONROE	6.2%	$85,000
BURLINGTON	5.6%	$82,711
BROOKFIELD	6.1%	$82,706
GRANBY	6.2%	$81,151
KILLINGWORTH	5.8%	$80,805
GLASTONBURY	6.7%	$80,660
CHESHIRE	6.1%	$80,466
MARLBOROUGH	6.1%	$80,265
TRUMBULL	6.8%	$79,507

[4]

With the largest tax that most people pay being levied at the local level, municipal boundaries divide responsibility for paying for many public-sector services. Often, people benefit from public services provided in municipalities where they work or visit, but do not have to pay for these services because they do not live in that municipality. Then there is the fact that the greatest social needs tend to appear in a completely different set of municipalities than the municipalities where those of the greatest means live. The net result is a shifting of tax burden down the income scale, from people who can well afford to pay and onto people who cannot.

The Plan for Reform That I Wrote.

I've been working since I was first elected to the legislature in favor of property tax reform. Since there were no comprehensive plans for property tax reform, I took on the task of writing a plan for comprehensive reform. I am happy that there are a number of ideas being considered, now, for property tax reform, and I look forward to voting to approve real change. But, here's a summary of the original plan I wrote.

My original plan, would reduce the property taxes owed in about 75% of the households in the state by cutting people’s property taxes by three quarters of the difference between their state income tax liability and their property tax bill.

Perhaps three out of every four of Connecticut's households pay more in property taxes than they do in State income taxes. This proposal would provide much-needed property tax relief by limiting residents’ property taxes to an amount tied to their State income tax liability.

Here's how it works:

1. 
   
   If you pay more in property taxes (on your primary residence and up to two motor vehicles) than you do in State income taxes, then you are eligible.
2. 
   
   If eligible, calculate the difference between your household property tax bill and your household's State income tax liability.
3. 
   
   Three quarters of the difference becomes a credit that you then subtract from your property tax bill.

Here are two examples of how it works:

1. 
   
   A family with a (pre-credit) property tax bill of $5000, who paid $3000 in State income taxes, would get a $1500 credit ($5000-$3000=$2000 and ¾ of $2000 = $1500). The $1500 credit would reduce their property taxes to $3500.
2. 
   
   A senior citizen who would otherwise pay $5000 in property taxes, but who owed no State income taxes, would get a $3750 credit, and would pay only $1250 in property taxes.

An upper-income statewide municipal tax of just 3.95% should be sufficient to pay for this reform plan. Only the richest 1% in our state would pay this – married couples with incomes over $500,000, heads of household over $396,000 and individuals over $265,750.

It is clear that something must to reform Connecticut's unfair property tax system. Whether it is the reform plan I wrote or some other strategy, I will continue to work until property tax reform is passed.

---

Data from a combination of:

• Who Pays?: A Distributional Analysis of the Tax Systems in All 50 States, 2^nd Edition, the Institute on Taxation and Economic Policy, (ITEP, 2003)
• Department of Revenue Services
• “Median Income for 4-Person Families, by State”, U.S. Census Bureau.
• Municipal Fiscal Indicators, Office of Policy and Management
• Kids Count Data Book 2004, Annie E. Casey Foundation; and the 2000 U.S. Census, U.S. Bureau.

Legislation to help with gasoline and oil prices.

Years of federal policy that has allowed the big oil corporations and Wall Street traders to profit at the expense of the family budgets of ordinary Americans are coming to fruition with the unjust and massive increases in gasoline and oil prices we are experiencing. We need reforms in federal policies to reign in the excesses of Wall Street and the big oil corporations in order to bring prices down.

Even though the causes of this crisis are a federal issue, I wanted to take action to help people. That is why I voted to approve Public Act 08-2.

This legislation does several things. It stops major oil companies from using their franchise agreements to block local gas stations from offering to customers who pay in cash, rather than credit. The Attorney General says these discounts could save people 10 to 12 cents per gallon. This legislation also cancels the half percent increase to the gross receipts tax paid by oil companies that was scheduled to take effect July 1st.

In addition to rising gasoline prices, heating oil costs are going up. This raises the concern that people will have trouble paying for heating oil next Winter. That is why this legislation also authorizes the immediate release of $2.5 million from the Oil Conservation Fund, which can be used for the purchase of new, energy efficient boilers.

Hopefully, legislation under consideration at the federal level to reign in speculators on Wall Street who are driving up oil prices. But, either way, I hope that the legislation we approved here in Connecticut offers some relief.

Raising the Minimum Wage.

Gasoline prices are not the only things rising right now - food and many other necessities of life are becoming more expensive, as well. Most people are struggling to make ends meeting right now. But for working people whose incomes are not large to begin with, it can be crushing.

That is why raising the minimum wage is so important.

This is why I voted with most other legislators to approve House Bill 5105. This legislation raised the minimum wage twice: once by 35 cents, to $8/hour on January 1, 2009 and a second time a year later, on January 1, 2010, by another 24 cents.

Even these increases are very small. They are not even enough to keep a worker at minimum wage up with the rising cost of living, as measured by the inflation rate. This is especially true since, because there was no raise in the minimum wage in 2008, it will have been two years since the minimum was increased.

That is why I was so surprised that the Governor vetoed HB5105. I strongly disagreed with her decision, it is very clear to me that her reasons have little or no merit.

Even though prices have been going up dramatically, the last increase in the minimum wage was a year and half ago. That is why I voted in the legislature to approve to raise the minimum wage. 08-92

Fortunately, the legislature came back again in special session and voted to override the Governor's veto, making HB5105 law - Public Act 08-92.

Even after these increases, the minimum wage is not nearly high enough to allow workers to provide for themselves or their families. That was all the more reason why we could not allow the rising cost of living to cut even further into the family budget of people who are struggling to work for a living.

More information on the mortgage assistance legislation approved this year.

Here is some information, sent to legislators by the Connecticut Housing Finance Authority (CHFA), with some of the details of Public Act 08-176, "An Act Concerning Responsible Lending and Economic Security". I hope this information is helpful:

Summary of P.A. 08-176

“An Act Concerning Responsible Lending and Economic Security”

Emergency Mortgage Assistance Program (EMAP),

Homeowner’s Equity Recovery Opportunity (HERO) Loan Program,

Foreclosure Mediation and CT FAMLIES Program

P.A. 08 -176 “An Act Concerning Responsible Lending and Economic Security” takes effect on July 1, 2008 and includes several components relative to homeowners who are delinquent and/or facing foreclosure.

Emergency Mortgage Assistance Program (EMAP)
The Emergency Mortgage Assistance Program is available to provide emergency mortgage assistance payments to eligible homeowners. Funding in the amount of $64 million has been provided for EMAP and will be administered by Connecticut Housing Finance Authority (CHFA).

• All lenders are required by law to take specific actions prior to commencing a judgment of strict foreclosure or foreclosure by sale for one-to-four family, owner-occupied residential real property located in the State of Connecticut, including condominiums.
• Lenders who start a foreclosure process upon a borrower, are required to give written notice to the borrower by registered or certified mail indicating that the borrower has 60 days from the date of the notice to confer with the lender or have a face-to-face meeting with a consumer credit counseling agency to attempt to resolve the delinquency or default. (A list of CHFA-approved counseling agencies is attached for your reference.)
• In the notice, the lender must also inform the borrower that the EMAP Program is being administered by Connecticut Housing Finance Authority (CHFA). If the lender and borrower are unable to resolve the delinquency or default, the borrower will have 60 days from receipt of the written notice to obtain information and apply for the EMAP Program.
• EMAP is not available to borrowers who have FHA-insured loans.
• Homeowners may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at EMAPinfo@chfa.org
  

WorkPlace, Inc., in conjunction with other regional workforce development boards, will establish a mortgage crisis job training program for eligible borrowers if they are at least 60 days delinquent on their mortgage, are referred by the CHFA lender or demonstrate an imminent need to increase earnings in order to avoid delinquency or foreclosure.

Homeowner’s Equity Recovery Opportunity (HERO) Loan Program

The purpose of the HERO Program is to permit CHFA to purchase eligible mortgages directly from lenders and place those borrowers on an affordable repayment plan. Funding in the amount of $30 million will be available for this program. There are several options currently being developed. Anyone with questions may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at HEROinfo@chfa.org.

Foreclosure Mediation
All lenders are required by law to attach to the front of the complaint that is served on the borrower a copy of the “Notice to Homeowner: Availability of Foreclosure Mediation” form and a “Foreclosure Mediation Request” form. In the mediation process, EMAP, HERO and the CT FAMLIES Programs will also be discussed with the borrower as alternatives to saving the borrower’s home from foreclosure. Inquires regarding Foreclosure Mediation may be directed to Roberta Palmer, Superior Court Operations at (860) 363-2734 or via e-mail at: roberta.palmer@jud.ct.gov.

CT FAMLIES Program

CHFA continues to offer the Connecticut Fair Alternative Mortgage Lending Initiative and Education Services (CT FAMLIES) Program, a refinancing mortgage loan that is at a fixed rate for a term of 30 years. Eligible homeowners who have an Adjustable Rate Mortgage (ARM) or their current mortgage is no longer suitable for their financial situation may qualify for a CT FAMLIES Loan. Homeowners may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at CTFAMLIES@chfa.org.

CONNECTICUT HOUSING FINANCE AUTHORITY

EMAP COUNSELOR LISTING

AGENCY INFORMATION

Co-opportunity, Inc. 20-28 Sargeant Street Hartford, CT 06105 (860)236-3617 (860)808-1757

Housing Education Resource Center 901 Wethersfield Avenue Hartford, CT 06114 (860) 296-4242 (860) 296-1317

Neighborhood Housing Services of New Britain 223 Broad Street New Britain, CT 06053 (860) 224-2433 (860) 225-6131

Urban League of Greater Hartford 140 Woodland Street Hartford, CT 06132 (860) 527-0147 (860) 293-2621

Energy assistance and efficiency legislation.

As I meet the people I represent, many tell me about the difficulty that they have making ends meet because of the shock that is caused by the rise in energy costs. With winter coming, many people are really worried, and I have been advocating for action to help people.  I have been pleased that there is a broad bipartisan agreement between legislators and the Governor about the need for action. The legislature came into session this summer to approve energy assistance legislation.

In addition to the need to increase the amount of the assistance for people who are currently eligible for energy assistance (because fuel prices have increased), the rising costs of oil and other energy has created a problem for people whose incomes are over the current limits that needs to be addressed.  The legislature approved two items to items in order to address these issues.  The first, SB1101, does a few important things to help with this.  It provides:

• $4 million to assist people state residents 65 or older with incomes up to $48,787 for a single person or $63,789 for a couple. This home heating assistance includes deliverable fuel, electricity and natural gas.
• $8.5 million to Operation Fuel for assistance to households with incomes between $15,600 for a single person and up to $42,400 for a family of four. This home heating assistance also includes deliverable fuel, electricity and natural gas.
• $5 million to expand Operation Fuel’s assistance to households greater than 200% of the federal poverty level but equal to or less than 100% of the state median household income – this home heating assistance includes deliverable fuel, electricity and natural gas

SB1101 also:

• Helps our local schools by allocating $6.5 million for our local school districts to heat school buildings
• Lowers the minimum delivery from 150 gallons to 100 gallons
• Ensures that companies have the resources to honor prepaid contracts
  
  

The other legislation that was approved (SB1102) is meant to raise the amount of money available for people who are currently eligible for energy assistance by adding up to $35 million into an energy contingency account to:

• Provide emergency home heating assistance
  
• Supplement federal funding to the Connecticut Energy Assistance Program (CEAP)
  

And it does a number of important things to increase energy efficiency and save people money by allocating:

• $3 million added to the furnace or boiler replacement program
  
• $2 million to provide eligible state residents to repair or upgrade their existing boilers or furnaces to make them more efficient
  
• 0% loans through the Energy Conservation Loan Program to replace existing furnaces and boilers with more efficient ones
  
• $2 million to DECD for additional funding to their loan program for insulation, alternative energy devices, energy conservation materials and replacement furnaces and boilers
  
• $7 million to subsidize the cost of an energy audit to households that heat by means other than natural gas or electricity (currently the program is free to those households but cost $300 to all other households)
  
• $2 million to DSS to provide funding for weatherization programs to households in the CEAP program
  

And it also allocates:

• $3.5 million for heating assistance grants to non profit organizations that are human service or public health providers
  

I hope that this legislation goes a long way to help people this winter and increase our energy efficiency for the long run.

Rising prescription costs - with a lot spent on advertising.

There was an informational hearing recently in the legislature's Public Health Committee on the effect of marketing on the prices of medications. Drug prices have been growing over time, so it is important to understand why.

What is astonishing, as you can see in the slide presentation below, is just how much we pay for drugs goes to pay for advertising and marketing.



This report says that 32.8% of the price of medications we pay for goes to advertising, marketing and general administration. The report says that, by comparison only 14% of what we pay goes to drug research and development and 25.3% goes to the actual manufacturing of the medications.

Most of us have seen all of those expensive, polished television commercials promoting different drugs. It looks like we are paying, and paying a lot, for those commercials when we buy our medications.

This information is from the Prescription Project (www.prescriptionproject.org).

Mortgage crisis relief bill.

One of the most important things we approved at the State Capitol this year was sweeping legislation to address the mortgage crisis, help thousands of Connecticut families weather the economic crisis that is still unfolding and guard against abusive sub-prime mortgage practices.

In addition to placing a priority on helping families to avoid losing their homes, this legislation makes good economic sense. When the mortgage crisis sends large numbers of homes into foreclosure and abandonment, it means the quality of life of whole neighborhoods would be at risk. And the mortgage crisis, itself, hurting the economy and costing jobs.

Action is needed and both the federal and state level. And the State of Connecticut is taking action.

Here is a summary of the legislation prepared by the House Democrats office:

AN ACT CONCERNING RESPONSIBLE LENDING AND ECONOMIC SECURITY

With the number of foreclosures on the rise in Connecticut, the General Assembly has taken action to protect homeowner’s rights and keep families in their homes without having a chilling effect on responsible lending.

HB 5577 includes a comprehensive set of reforms that (1) will provide mediation and financial assistance to individuals and families whose homes are at risk of foreclosure, (2) reform the practices of lenders and mortgage brokers, and (3) make sure that nothing is done that will negatively impact the availability of lending for prospective homeowners.

This legislation represents a months-long collaboration between both chambers, both sides of the aisle, the Department of Banking, the banking industry and consumer advocates.

MORTGAGE PROGRAMS

HB 5577 establishes a $140 million multi-tiered mortgage assistance program. The bill specifically authorizes the Connecticut Housing Finance Authority (CHFA) to (1) continue the CT FAMILIES refinancing program and (2) implement mortgage refinancing and emergency mortgage assistance programs. These programs will be funded without requiring any new revenue. Eligibility requirements vary from program to program.

Low and moderate income borrowers may be eligible for the CT FAMILIES refinancing program if they took a sub-prime loan and are no longer able to make their monthly payments.

HERO loans are meant to address the situation where homeowners owe more on their homes than the house’s appraised value. CHFA will purchase mortgages directly from lenders and restructure the mortgage to the satisfaction of lenders and borrowers. Eligibility criteria include the ability to pay back the HERO loan and a proven effort to have made good on financial obligations in the past. Property taxes and insurance will be included in the borrower’s monthly payment amount.

Generally, homeowners may apply for EMAP (1) if they have fallen behind in mortgage payments because of hardships like unemployment, illness, and divorce and (2) if they are likely to be able to resume payments within years. EMAP requires participating homeowners to pay 5% of their income to CHFA. CHFA will make the full mortgage payment.

FORECLOSURE MEDIATION

By July 1, 008, the Judicial Branch must establish a foreclosure mediation program in each Judicial District. Two million dollars is appropriated to the Judicial Department from the State Banking Fund for FY 09.

The goal here is simple: identify homeowners whose homes are at risk and try to point them in the direction of appropriate community-based resources and/or governmental relief programs including, but not limited to, the programs in this legislation.

When the commissioner commences foreclosure proceedings, the lender must notify the borrower about the availability of the mediation program and must send the mortgagor a mediation request application.

The Judicial Branch believes that this program will be up and running by July 1, 2008.

MORTGAGE REGULATION

When lenders issue non-prime loans, the bill prohibits lenders from engaging in misleading, deceptive, or untruthful practices and imposes a duty of good faith on lenders and brokers. Lenders must now, among other things (1) reasonably believe that borrowers will be able to repay the loan; (2) refrain from making non-prime refinance loans unless the loan provides a tangible net benefit to the borrower; (3) collect monthly escrow for property taxes and homeowner’s insurance; and (4) disclose by letter the terms of the loan and provide notice of subsequent material changes for first mortgage (non-prime) loans.

Like lenders, mortgage brokers now cannot offer a non-prime home loan that refinances any mortgage unless the loan provides a tangible net benefit to the borrower. Brokers must also examine the level of credit worthiness of a borrower before securing a loan for that borrower.

HB 5577 establishes a private right of action for violations of the bill’s loan provisions. The borrower may sue in court within three years of the mortgage closing (1) for the greater of actual damages or $1,000 and (2) for attorney’s fees. For a six year period, the bill also allows the borrower to raise as a defense, in any foreclosure action, that the lender has violated provisions of the bill.

Finally, the commissioner may use his existing statutory powers to (1) seek a court order for injunctive relief, (2) seek restitution for the borrower, (3) impose a civil penalty of up to $100,000 per violation, or (4) issue a cease and desist order to punish those who violate provisions of this bill.

House Bill 5577 (Approved by both the House of Representatives and the Senate.)

Of course, it will be important for the legislature to monitor how all of the parts of this legislation are working to see if there are changes that are needed so make sure this it works well in helping people. But it is my hope that this legislation will help many Connecticut families keep their American dream of homeownership alive. And I hope it will help our state as a whole avoid, as much as possible, the full effects to of the deepening economic problems.