Kevin Rennie: With the General Assembly now in session, beware of job-destroying legislation

There are signs life in Connecticut is returning to normal. We each have developed our own indicators of the state of the pandemic. In the spring, I knew as long as there was plenty of Spam on my grocery store shelves we had not become desperate food hoarders. Now I see the bad idea factory has returned to work. The state legislature has begun churning out of job-destroying legislation.

The state’s economy ended 2020 with more than 100,000 fewer jobs than it had at the beginning of the bleak year. November and December jobs reports revealed the post-lockdown recovery stalled, with Connecticut shedding 7,000 more jobs in those two months.

Gov. Ned Lamont may have thought the distribution of vaccines would require less attention than tracking and tracing worrisome infection trends. Now, however, the legislature will require tracking and tracing of its own.

In the first month of the new session, the legislature’s hefty Democratic majorities have taken aim at the private sector with unusual virulence.

In 2019, Lamont and his health care advisers learned how complicated it is to create a health care system. A Democratic plan to create an unregulated state-sponsored health insurance program is once more before the legislature. It would compete against private policies offered by, among others, those offered by three of Connecticut’s largest employers, Aetna, Cigna and United Healthcare. The state plan would be free from the obligation to maintain hundreds of millions of dollars in reserves each year for actuarial miscalculations. It would rely on taxpayers to cover any losses, which could be considerable.

Another cost has yet to be calculated. Companies do not like to compete with government under rules the government refuses to apply to itself. Many employers have discovered they can operate out of state with a far-flung, home-based workforce. Companies, especially large ones, expect their home-state government to be their ally, not their relentless adversary. Some will fight bad ideas; others will make plans to leave.

The legislature’s production line has more tools to punish state residents. There’s a proposal to add a tax to private health insurance policies, allegedly making health care more affordable for some. It will make many policies more expensive. The tax also opens the prospect of tax retaliation by other states where Connecticut-based giants Aetna and Cigna do billions of dollars in business.

Heath insurers are not the only targets. There’s a proposal to have state government offer worker’s compensation policies to businesses. The misbegotten idea cannot have been born of escalating premiums on private policies. State employers have enjoyed nearly a decade of falling premiums. Connecticut — for now — is home to the nation’s two largest worker’s compensation insurance companies, Travelers and The Hartford, which are also among the state’s top 20 private employers.

Connecticut government’s experiment as a worker’s compensation insurer ended in tears more than a quarter century ago. State government ran a fund to provide coverage for workers who had suffered a previous work-related injury. When its unfunded liabilities reached $6 billion in the early 1990s, the program was closed to new claimants and replaced with private coverage.

Plans hatched in cuckoo land are expensive here on the ground. A bill before the legislature proposes the state create a bank. That’s right, a bank. A state long derided for poor financial management may dive into the banking business. Under any credible financial standards, Connecticut’s scores of billions of dollars in unfunded liabilities and promiscuous borrowing would bar it from banking. But those who make the laws hold themselves to different standards — or none at all — in the Constitution State.

The governor delivers his annual budget address Wednesday. It is an opportunity to welcome the legislature back to work after almost a year of pandemic recess. That will be the easy part. The challenge for Lamont is to deliver a forceful message that bad bills that require him to use his veto power come at a cost. One cost is worry by employers that the battle will be lost next time. Other states pay attention to these struggles and woo the businesses our state government demonizes and competes against.

Creating conditions in a post-pandemic state economy that provide jobs with rising wages is Lamont’s continuing challenge. Success requires he begin by shutting down the bad idea factory.

Kevin Rennie is a lawyer and a former Republican state legislator. He can be reached at kfrennie@yahoo.com.