By Maria Wringerten and Jan Schaefer
CT residents’ and businesses all suffered quite an initial shock (no pun intended) at the magnitude of the July and August electric bill increases.
Increasing costs on residents and businesses is a truly vicious cycle, because the only sustainable way to improve affordability in CT is if our state’s anemic economy once again begins to thrive with better jobs and higher salaries which, in turn, create better opportunities for our residents statewide. But an economic turnaround would require a reversal from the anti-business policies of the Majority Leadership, which each session pushes more and more onerous requirements and mandates on even the smallest of businesses in CT. At least for now, the Majority Leadership is not considering a special session to address Connecticut’s high energy costs or to consider any of the bipartisan solutions offered every year by the Minority party for a more strategic and sustainable energy policy that does not exacerbate these cost burdens on CT’s residents & businesses.
As of May 2023, Connecticut had the third highest energy costs in the United States, and this is before the additional “Public Benefits” charges were tacked onto residents’ and business electric bills. In July, the Public Utilities Regulatory Authority (PURA), as directed by legislation, tasked Eversource and United Illuminating to start collecting reimbursements for the state’s reckless four-year moratorium on electricity shut offs by pushing those costs directly onto residents’ electric bills under the “Public Benefits” charge. In August, PURA voted to pass through yet another legislative cost for subsidizing EV charging stations onto the “Public Benefits” charge onto electric bills.
So how exactly does this gaslight the so-called “housing crisis” in Connecticut? These “Public Benefits” fees inflate residents’ electric bills, which increases their total utility costs and inflates the Census/ACS metric of “Housing Cost Burdened” number of households. “Housing Cost Burdened” is defined as households spending greater than 30% of their income on Housing Costs; Housing Costs is the sum of Mortgage Principal + Interest or Rent, UTILITY Costs, Local Property Taxes and Insurance. This very same metric is mandated to be used by the Fair Share Study contractor, which will set the total units of “housing need” and draft a report by Dec. 2024 and it’s the same metric pointed out as indicating the so-called “housing crises” in Connecticut.
The “Public Benefits” charge increases overall UTILITY costs and thereby increases CT’s “Housing Cost Burdened” just as available housing supply is increasing, and as mortgage interest rates are expected to continue softening, which would have, all other things being equal, lowered housing cost burdens. Intended or unintended, political policies can and do assist in creating and exacerbating the housing “crisis”. Interest rates, inflation and labor shortages might not be state policy drivers, but state income taxes, loss of earnings opportunity, outmigration of population and of businesses in CT, utility charges, the third highest local property taxes in the United States (after New Jersey, the only state to have enacted Fair Share decades ago, and Illinois) and the fifth highest overall state tax collection amount per capita at $6,221 per person, make Connecticut a challenging place to afford.
Unfortunately, this is how the majority party leaders now operate, and it has only been getting worse: they are not inclusive, not collaborative and not transparent. They stack committees with self-interested, developer-funded advocates and lobbyists who will then rubber stamp the majority leaders’ already preordained outcomes. They fail to consider the very foreseeable consequences of their policies: like programs that result in unfunded mandates on municipalities, which raises the local property taxes on residents and businesses, and the “Public Benefits” pass-through of costs directly to residents’ and businesses’ electric bills, which raises housing cost burdens. Such policymaking is completely reckless and irresponsible and is regressive as it has the highest adverse impacts on the lowest income earners in CT.
Rather than focusing on workable solutions to housing affordability and pro-business policies to turn around CT’s anemic economy and coming together on a bipartisan basis to create a sustainable and strategic energy policy that does not overburden residents and businesses, Majority Leadership is exacerbating housing cost burdens by passing the costs of their policy initiatives directly onto businesses and consumers’ electric bills.
Ironically, the proposed Fair Share proposal to address affordability in CT is an unfunded mandate on municipalities to build all their “fair share” of housing units when the private sector does not step in to build it within state mandated deadlines. If Fair Share is passed this coming session, it will be the largest unfunded mandate on municipalities since education. It will have the net effect of increasing local property taxes as municipalities struggle to comply with Fair Share’s onerous affordable development provisions, infrastructure burdens and legal costs. As indicated above, increased local municipal real estate taxes have the net effect of increasing the “Housing Cost Burdened” numbers. So Fair Share public policy in attempting to solve CT’s affordability problem would worsen it instead.
Have the residents of CT had enough yet? It’s high time for real checks and balances with state leaders who will focus on creating a vibrant economy and improving affordability for ALL our residents. We need legislators that will stop listening solely to the self-interested and related party developer advocates proposing top down, onerous, and unworkable bills like Fair Share that undermine local zoning decision making, overwhelm local infrastructure, and adversely impact the environment and our state’s natural resources. Most importantly, their feckless Fair Share policy will take CT even further away from affordability – let’s not make the same mistake that New Jersey has made.
Maria Weingarten is Co-Founder, CT169Strong and Jan Schaefer is President, CT169Strong
