Electoral College, Hedge Funds Targeted

If two local legislators have their way this session, Connecticut will join a nationwide effort to choose presidents by the popular vote and a regional effort to tax hedge fund managers’ income.

The two legislators — Democratic State Reps. Joshua Elliott and Michael D’Agostino of Hamden — are cosponsors of proposals to do that before the Connecticut General Assembly.

The legislators said they don’t expect the two measures to pass. Instead, they hope to start building support for the ideas, along with long-range progressive proposals in general, by raising them during the current legislation session. And then hope that their party, which lost ground in the most recent elections, can rebuild its majority in both houses in part by running on those ideas.

“We’re playing a long game now,” D’Agostino, who’s beginning his third two-year term, said Tuesday during an appearance with Elliott on WNHH radio’s ​“Dateline New Haven” program.

With the state facing a $1.3 billion-to-$1.5 billion budget deficit, they said, legislators will spend much of their time this session trying to protect funding for important local programs. D’Agostino mentioned Hamden’s $22 million in annual Educational Cost Sharing (aid to schools) as well as $4 million in ​“Alliance” grants (to low-performing districts) for teaching, tutoring, science, boat-building, and emotional-support programs that have helped create a 60 percent decrease in ​“disciplinary events” among at-risk students in Hamden schools. (Elliott and D’Agostino are also supporting a bill, cosponsored by six New Haven legislators, to legalize recreational use of marijuana.)

With the State Senate evenly split between Democrats and Republicans, and the Democrats’ House majority expected to be trimmed by eight votes to a seven-vote margin, the two legislators said they don’t expect to see many proposals for progressive systemic change pass this year. But it makes sense to proposal those bills now, they said, to make the case to fellow legislators and the broader public. To ​“lay the ground work.”

Follow The Money

One of those bills concerns ​“carried interest” for hedge fund managers. Elliott, who won his seat in an insurgent campaign waged by fellow former volunteers for Bernie Sanders’ presidential campaign, said he plans to promote the bill in his role as vice-chair of the legislature’s finance committee.

Right now hedge fund managers can declare their earnings from managing clients’ investments as ​“carried interest,” which gets taxed as capital gains rather than income. That means they pay 20 percent rather than 39.6 percent in federal taxes on that income. National candidates from Sanders to Donald Trump have called for eliminating that loophole.

In the meantime, a national organization called the Hedge Clippers is seeking to convince state legislatures to tax the difference between that 20 and 39.6 percent. Elliott and D’Agostino are among co-sponsors for a version of that bill in Connecticut. Elliott said that bill could bring Connecticut $535 million in annual revenues if passed.

Another reason it would take years to pass this measure: Elliott said it would depend on neighboring states — New York, New Jersey, Rhode Island, and Massachusetts — passing similar measures to avoid having hedge fund managers move to a community where they could avoid the tax.

National Elections

Elliott is also pushing, along with D’Agostino, for national electoral reform in the wake of the 2016 presidential election.

One proposal (also being promoted by New Haven State Rep. Roland Lemar) would include Connecticut in a ​“compact with enough other states to collectively represent 270 electoral votes (the number a candidate needs to win in a two-person race) in national elections. The states in the compact would agree to vote as a group for whichever candidate wins the popular vote, meaning that that candidate would not lose in the electoral college.

A second proposal promotes ​“ranked choice voting.” It enables people to assign votes to a variety of candidates, in order of preference. A voter under such a system could, for instance, give five points to, say, Sanders, four points to John Kasich, three to Ben Carson, and two to Trump or Clinton in the 2016 presidential election. Several versions of ranked-choice voting exist. (Click here for a full story on the subject.)

Ranked-choice proposals have gained support as voters increasingly express distaste for the two top candidates in many elections but feel they’re wasting their vote by selecting someone with no chance to win. Ranked choice enables them to give their most votes to their top choice but still support candidates they see as the lesser of two evils.

“Voting for who you want is better than voting against who you don’t want,” Elliott reasoned.

New Metrics?

As Hamden representatives, D’Agostino and Elliott will walk a fine line in what promises to be one of the session’s hot-button issues: how to respond to a judge’s order to change how the state funds its schools.

The judge, Thomas Moukawsher, cited Hamden as an example of wealthier towns that got more money for their schools at the expense of poor districts in the last session. The judge called that unconstitutional.

D’Agostino argued that the state should change the metrics it uses to characterize school district needs to reflect poverty, say, among the public school populations rather than among the town at large. Such a state formula could give more weight to how many enrolled students receive government-subsidized lunches, how many receive special education services, how many study English as a second language — as well as the size of a town’s grand list and mill rate.

“If you look at those metrics, we are New Haven, not New Canaan,” D’Agostino said.

In his annual ​“State of the State” speech on Jan. 4, Gov. Dannel P. Malloy signaled that part of his response to the judge’s order will feature a demand for ​“accountability” from local communities as part of education aid. That has been interpreted as in part a call for smaller school districts to regionalize services to save money.

D’Agostino and Elliott embraced that call Monday — and argued that progressives in general should, too.

D’Agostino suggested, for instance, that towns could save money by sending students to Hamden’s under-enrolled Alice Peck Center, a school devoted solely to special education, instead of all operating their own special-ed programs.

Elliott offered a more controversial idea: Consolidating school districts under the leadership of fewer superintendents of schools.

The state has ​“over 100 superintendents who make six figures,” Elliott said. He said that fewer could cover more of the smaller communities.

He acknowledged the political challenge for legislators in eliminating positions of important constituents: ​“It’s hard to tell your friends, ​‘you will be losing your job.’” But the state needs to eliminate ​“duplication” in making tough choices about where to cut. He noted as well that ​“progressives get a bad rap” for opposing smart efficiencies. That doesn’t mean seeing labor as a scapegoat for solving the budget crisis, Elliott said: ​“The state should create good middle-class jobs.” But jobs the state needs to get done.

Click on or download the above audio file to listen to the full episode of WNHH radio’s ​“Dateline New Haven” with State Reps. D’Agostino and Elliott.

Today’s episode was made possible in part thanks to support from Yale-New Haven Hospital.