Federation of Connecticut Taxpayer Organizations

From: The Federation of Connecticut Taxpayer Organizations
Contact: Susan Kniep, President
Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032

Of the 10 Most Threatened State Pension Plans, Connecticut Ranks #2

(See Article Below)

BREAKING NEWS:�

In largest-ever US city bankruptcy, cuts coming for Detroit creditors, retirees

By Joseph Lichterman and Bernie Woodall

(Additional reporting by Karen Pierog in Chicago, Ben Klayman in Detroit and Lisa Lambert in Washington; editing by David Greising, Dan Burns and Matthew Lewis)

DETROIT Tue Dec 3, 2013 5:59pm EST

"It could create more bankruptcies because it's a way to get out of pension contracts," said Richard Ciccarone, president of Merritt Research Services. "It more than likely will mean that hard-pressed, stressed credits with legacy liabilities will have to consider the option."

�(Reuters) - A federal judge on Tuesday formally declared Detroit bankrupt, a landmark ruling that clears the way for potentially sweeping cuts to city worker pensions and retirement benefits and for steep and possibly precedent-setting losses to the cash-strapped city's bond holders.

The ruling by U.S. Judge Steven Rhodes, who cited the city's dismal finances and $18 billion owed to a multitude of creditors in support of his decision, marks a watershed in the history of Detroit. Once known as the cradle of the U.S. auto industry, the arsenal of democracy and the birthplace of Motown music, Detroit now adds an ignominious new title: largest bankrupt city in U.S. history��. Detroit is burdened by $18.5 billion in debt as it struggles to provide even the most basic services to 700,000 residents. About 40 percent of the city's streetlights do not work and about 78,000 abandoned buildings litter the city, whose population peaked at 1.8 million in 1950.

"The city no longer has the resources to provide its residents with basic police, fire and EMS services," Rhodes said. He noted the average police response time is 58 minutes, more than five times the national average of 11 minutes.

"Without the protection of Chapter 9 the city will be forced to continue on the path it was on before this case," Rhodes said later in his ruling.

The judge declined to stay the bankruptcy proceedings as potential appeals proceed through the courts. He also turned down an effort to allow any appeals of his ruling to go directly to the 6th Circuit U.S. Court of Appeals. Rhodes declared that motions to appeal the case must first be filed in bankruptcy court. He previously stayed all state court action in the case.� Read entire article at http://www.reuters.com/article/2013/12/03/us-usa-detroit-bankruptcy-judge-idUSBRE9B20PZ20131203

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Connecticut Ranks #2 of the

0 most threatened state pension plans - Slide Show - MarketWatch

http://www.marketwatch.com/story/10-most-threatened-state-pension-plans-2013-09-13

The gap between the promises states have made for public employees� retirement benefits and the money they have set aside is now a staggering $4.1 trillion, or $13,145 per capita, according to a recent research report. And combined, state public pension plans are just 39% funded, according to State Budget Solutions.

There�s much debate over the true size of the funding gap, centering on how public pension plan liabilities are calculated. In 2012, for instance, the Pew Center on the States said the funding gap was at least $1.38 trillion in fiscal year 2010. For its report, State Budget Solutions looked at each state�s total assets, total market-valued liability, overall funded ratio and unfunded liability. In addition, the research group looked at unfunded liabilities by state per capita and as a percentage of gross state product. One big difference in how State Budget Solutions looks at pension liabilities is this. It uses a 3.2% rate of return on pension assets vs. the 8% that some pensions use and that makes pension liabilities at least three times greater than estimates from other institutions. Take a look at the 10 most threatened state public pension plans. �Robert Powell.

2. Connecticut

Connecticut�s funded ratio is 25%, assets are $25.5 billion, liabilities are $102.2 billion, and the unfunded liability is $76.7 billion. Also of note, Connecticut had the 4th largest unfunded liability on a per-person basis. It was $21,378. Alaska had the largest underfunded liability on a per-person basis; it was $32,425. Ohio was second at $24,893.

Also of note, when you look at combined rankings of per-capita unfunded liabilities and unfunded liabilities as a percent of annual gross state product what you find is this: Nine states are present in the top 10 of both lists, showing large unfunded liabilities compared to their populations and economic output. Those states are Illinois, Ohio, New Jersey, Oregon, Connecticut, Nevada, New Mexico, Hawaii, and Alaska.

http://www.marketwatch.com/story/10-most-threatened-state-pension-plans-2013-09-13

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CONNECTICUT

Executive Order Creates Economic Assistance Database

CT Newsjunkie ‎- by Hugh McQuaid

Executive Order Creates Economic Assistance Database

By Hugh McQuaid | Dec 3, 2013 4:27pm

Gov. Dannel P. Malloy took executive action Tuesday to enact a proposal by Comptroller Kevin Lembo to develop a searchable database of the state�s economic assistance programs.

This year, Lembo pushed lawmakers to pass legislation that would have required the state to allow the public to easily access data on the hundreds of millions of dollars the state spends each year on tax credits and forgivable loan programs for companies promising to create jobs in Connecticut.

Since 2011, the state has given more than $475 million in economic assistance to 1,114 companies, according to numbers provided by the administration Tuesday. That does not include tax credit assistance.� Continue reading at �.. http://www.ctnewsjunkie.com/archives/entry/executive_order_creates_economic_assistance_database

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Pension Ruling in Detroit Echoes West to California

New York Times‎ - 5 hours ago By MARY WILLIAMS WALSH

Published: December 3, 2013

The ruling by Judge Steven W. Rhodes, who is presiding in Detroit�s bankruptcy case, that public pensions are not protected from cuts could alter the course of bankrupt cities like Stockton and San Bernardino, Calif., that had been operating under the assumption that pensions were untouchable.

Stockton�s bankruptcy case, for instance, is further along than Detroit�s, and until Tuesday it seemed likely to leave public pensions fully intact. Stockton sought bankruptcy protection last year and has already filed a plan of debt adjustment with the bankruptcy court in Sacramento. Its plan, which is subject to court approval, would leave city workers� pensions unchanged: They would continue to accrue benefits at the same rate as they did before the bankruptcy. (A new state law does permit Stockton to provide smaller pensions to workers hired after Jan. 1.)�� Continue reading at �.. http://www.nytimes.com/2013/12/04/us/pension-ruling-in-detroit-echoes-west-to-california.html?_r=0

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Opinion: How The Unions Killed Detroit - Wsj.com - Wall Street Journal

Video

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20 Cities That May Face Bankruptcy After Detroit - Newsmax.com

Thursday, 08 Aug 2013 10:41 PM�� By Stephen Moore

http://www.newsmax.com/Newsfront/cities-bankruptcy-after-detroit/2013/08/06/id/519081?s=al

Think Motown is the only major U.S. city in a boatload of financial trouble? Think again.

Detroit's bankruptcy filing sent shivers down the spine of municipal bondholders, government employees, and big-city urban residents all over the country.

That's because many of the 61 largest U.S. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer��

Editor's Note: �This Wasn�t an Accident� � Experts Testify on Financial Meltdown

Here is my worry list, based on bond ratings and other data, of the top 20 cities to watch for financial troubles in the wake of the Detroit story:� Continue reading at �..

http://www.newsmax.com/Newsfront/cities-bankruptcy-after-detroit/2013/08/06/id/519081?s=al

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