Economic commission co-chairs: ‘It’s about what’s good for Connecticut’
Jim Smith and Robert Patricelli are the co-chairs of the state Commission on Fiscal Stability and Economic Growth. The 14-member panel recently delivered a sweeping series of recommendations designed to help Connecticut tackle huge retirement benefit and other debt costs and also enable more robust economic growth.
Smith, 69, is chairman of Webster Bank and recently retired as its chief executive officer.
Smith’s father, Harold Webster Smith, started the First Federal Savings and Loan Association in Waterbury during the Great Depression in 1935 to help people buy and build homes.
Smith joined the bank as assistant secretary in 1975, became president in 1982 and CEO in 1987. It was renamed Webster Bank in honor of his father in 1995. Smith and his wife, Cathy, live in Middlebury. They have two children.
Patricelli, 78 was born in Hartford. His father, Leonard, was a 50-year employee and eventually co-owner of WTIC radio.
A White House fellow in 1965, Patricelli would hold several positions in the administrations of Presidents Lyndon Johnson, Richard Nixon, Gerald Ford and Jimmy Carter between 1965 and 1977.
These included serving as deputy undersecretary for the Department of Health, Education and Welfare from 1969 through 1971, and as head of the Urban Mass Transportation Administration from 1975 through 1977.
Patricelli founded and built up three healthcare companies. He sold the last of those three, Womens’ Health USA, last year.
He and his wife, Margaret, live in Simsbury. They have two children and five grandchildren.
Smith and Patricelli both served on policy committees that assisted the administration of former Gov. John G. Rowland.
In this Sunday Conversation, Smith and Patricelli spoke with The Mirror about their work on the Commission on Fiscal Stability and Economic Growth, civic engagement and Connecticut politics.
Do you see a need in general for greater business involvement in governing Connecticut? And if there is a lack of business engagement, how did that trend develop?
Patricelli: Historically it’s incontrovertible. Business people in the ‘40s and ‘50s and even the ‘60s used to run for office, used to participate in the General Assembly. Beginning in the ‘70s, I would think, if not earlier, that trend virtually disappeared. We have now, out of 187 members in the General Assembly, only three that work for any material company.
… Even business participation in commissions and boards has fallen off, in part because there are fewer of those.
John Rowland did quite a bit of it, but after Rowland, it seemed to disappear.
I think our commission is a bit of an effort on the part of the private sector to say, ‘This is our problem [too] at the state level and we’ve got to show up and be counted and try to make a difference.’
Smith: One of the things that brought us together is the sense of responsibility and an equally strong sense that the business community needs to take more responsibility, because there is a gap between business and policymaking — that it’s happening to them, instead of with their engagement.
The private sector hasn’t been close enough to the policymaking to have the influence it could and should have.
Companies function differently now than they did. Executives have to be 24/7 looking at their companies. They rely more and more on other people, on intermediaries [to track government.]
It’s not just an honor to chair the commission. We feel a high responsibility to do it.
How do you think business will try to reverse this trend?
Patricelli: I would like to wish or hope a combination of retired and active businesspeople getting involved, such as we have had on our commission.
Smith: A lot of those big company CEOs have businesses that are sprawling, national or international. So it’s natural they spend a little less time on [civic engagement], but they can be more involved with their fellow executives from time to time so business still speaks with a united voice.
The full report of the Commission on Fiscal Sustainability and Economic Growth.
Now they are only relying on a third party to represent them and aren’t even talking amongst themselves.
The business community, CBIA aside, does not tend to speak with as united a voice on their own behalf as they need to, or as they would if they engaged with their fellow executives.
You’re both successful and retired. Some would ask, wouldn’t you rather be off relaxing somewhere warmer than spending your winter volunteering on a time-consuming study commission?
Smith: I’d say love, passion and responsibility. The things we have in common. We were born here and lived here almost all our lives. We’ve led our businesses from here. We’ve raised our families from here.
We believe in Connecticut, and we want Connecticut to thrive.
Patricelli: I had a particular, enormous stroke of good fortune as a young person. I was all set to go practice law on Wall Street, and I was chosen as a White House fellow in a program that John Gardner had created.
[Editor’s Note: John W. Garnder served as secretary of the U.S. Departmentof Health, Education and Welfare under President Lyndon Johnson in the mid-1960s. During his tenure the department launched Medicare. He founded the White House Fellowship and two influential organizations: Common Cause and Independent Sector.]
And all of us who have been chosen for that program over the years feel a heavy sense of responsibility to pay it back. Gardner drilled into us that the country was founded by citizen participation in government.
Our founders weren’t career politicians. They were printers and planters and the rest of us. To me its been a lifelong passion of having to be engaged.
When this commission started its work, some people — particularly in labor — looked at two former business executives and assumed you would approach this task with a pro-business bias, from an elitist point of view. Could you talk about that?
Patricelli: Everybody seems to think it’s a business commission, but count them. I think there are seven business executives of C-suite and up level.
Smith: “We believe in Connecticut and we want Connecticut to thrive.”
Smith: Chief financial officer, chief executive officer, chief information officer, etc.
Patricelli: But there are four people out of big companies. I’m out of big and small companies. There are two women out of small companies. There’s an employee of a not-for-profit company, and the rest are all over the lot.
Smith: People assume that everybody has a bias of some kind. So we were not surprised, and the beauty of this was the private sector was asked to weigh in on what they thought should be done — not for the private sector but for the good of Connecticut. It was really a challenge for the private sector to think broadly about all rather than what works for them. That’s why I think some people were surprised that there was a proposal to rebalance revenue by increasing taxes on some businesses or to increase the minimum wage.
[Editor’s note: The commission report recommends $475 million in corporation tax increases and a sales tax hike as part of a larger plan to reduce state income tax rates.]
The commission felt those were the right things to do. It wasn’t about an individual company or business’s needs. It was about what’s good for Connecticut.
Patricelli: We took this idea to the governor and the legislative leaders. It didn’t come from them.
OK. Let’s talk about that. What were your expectations as you approached people?
Patricelli: We thought it was an uphill climb. … Speaking for myself, I was optimistic because of the quality of the people we had interested in participating. We had core businesspeople who are well known in the state and others well known and respected in public policy.
This wasn’t your usual political commission with friends of some members of the House or Senate, you know?
… I think we were hopeful, but I for one was happily surprised that we were taken as seriously as we were.
I had no doubt we would produce a pretty heavy document. The people that we had don’t fool around.
Smith: You’d have to expect there would be a little skepticism, a little cynicism about what this commission would produce.
But we knew from the beginning we would be objective, we would be open, inclusive and broad in our thinking. … We therefore thought we would gain credibility through our actions, and I think that’s what’s occurred.
Can you describe your initial pitch for the commission?
Patricelli: “This is going to come down to the willingness of the caucus leaders to exercise the kind of leadership that they did last year…”
Patricelli: When I knew last spring that I was going to be retiring as the head of a company and would have some time to devote to issues, I called Jim and other friends and said let’s have breakfast and talk about what we can do about the state’s problems.
That went on for three or four months. … The governor [Dannel P. Malloy] was approached back in July, and they were in the middle of budget negotiations at that point. The judgment was it wasn’t timely.
But we went back in September of 2017 and the governor said, “Well, I’ll support that idea, but” — and I don’t think he’d mind me saying this — “it shouldn’t come from me.”
He said, “If you can go out and sell it to the [legislative] caucus leaders, I’ll be supportive.”
And we had a meeting with the six caucus leaders … in late September of last year.
To mention Jim’s point about people being cynical about commissions, by then we’d heard quite a bit of that.
So we went into that meeting saying we had this idea … and we’ve got some pretty busy and I think pretty senior, people willing to serve, but only if you promise to take up the recommendations of the commission and vote on them.
… They said, “Yes, this is something we want to do.”
Smith: Before you can fulfill your purpose, you have to exist. And the reason we exist is more of a tribute to Bob than anyone else.
… Bob kept thinking, “there must be something that we can do.”
Once he gets an idea in his mind, he drives it to fruition.
You don’t just want to do the work and put it on a shelf so people can admire it. You want it to go somewhere. And it was motivational to us through the process to know that our work was going to end up in the legislature — and it was going to get attention and debate.
I want to get back to that idea of a legislative vote on your report in a minute. But first I wanted to ask you about the process. There had to be sobering moments as you investigated the depth of the state’s massive debt, its huge unfunded liabilities. Was it ever disillusioning?
Smith: I never wanted to walk away from it. The early recognition was that there was more information than I felt I could possibly absorb. And we knew we had to dig deep.
… We tried to suck up everything we could get our hands on. It was daunting the amount of information — for people who already thought they understood.
… Rather than being off-putting, it was motivating, to want to learn more and more and more.
Patricelli: Like Jim, I guess I wouldn’t be here if I wasn’t optimistic. There’s always a solution. There’s always a solution if you work at it hard enough.
Smith: You have to accept the brutal facts of your current realty while never losing faith in your ability to overcome them. That’s what this was about.
… The last thing I would say is I was surprised at how weak our transportation investment programs are. And that the backbone of our economy is deteriorating right in front of our eyes because of all of these things that have built up over a period of time.
Getting back to the idea of a legislative vote, are you still optimistic this report will get beyond the committee level and that we will see something on the floor of the House or Senate?
Patricelli: Absolutely. Our conversation with the legislative leaders has been constructive since the first day we sat down with them last September and continues to be.
You’ll notice none of them has attacked the report. … They are being careful and respectful, and we greatly appreciate that.
…This is going to come down to the willingness of the caucus leaders to exercise the kind of leadership that they did last year in the ultimate bipartisan budget solution, to create a path for us. If they don’t create a path for us, then this just becomes fodder for the campaign and it’s a 2019 discussion.
Lastly, what type of role do you see for yourselves in Connecticut politics going forward?
Smith: Retirement means different things to different people. And one of the things Bob and I have in common is all of our many years of learning through the work we have done … is that retirement creates an opportunity for us to contribute to the common good in a different way. … So we relish the idea of contributing to the common good, and that’s what it’s about on the commission.
Bob and I will have a continuing responsibility to make sure we get the word out to the legislators, to people, to chambers of commerce, to labor, to CCM [Connecticut Conference of Municipalities] to whatever organizations will have us.
And after that?
Smith: And after that, whatever it is. … I’m interested in contributing to the common good.
I think in the near-term, Jim and I have to stay somewhat out of the partisan political fray, speaking just for myself I should say. I wouldn’t want the work of our commission to fall prey to some partisan reaction.
But after the session is over, we’ll see. I think my own intention would be to stay active on the policy front, whether it’s around the recommendations of the commission or something new.
But this is my next job…
…It just doesn’t pay very well.