Speech -  Brad Davis Luncheon

By Susan Kniep, President,

The Federation of Connecticut Taxpayer Organizations, Inc.

April 4, 2004

 

Good afternoon.  Let me begin by thanking Brad Davis for inviting me here today and that very nice introduction.  

 

I am very pleased to be here among such important dignitaries.  VIPs – Very Important People – I ask that you look to your right – look to your left and you will see you are sitting among the most influential people of Connecticut – No movie stars, no executives paid millions is stock options or even the Donald as in Trump are more important than you – you see you are a middle class taxpayer – you are the engine which keeps government moving through your tax dollars.  And if you live in Connecticut.  You pay the highest taxes in the nation according to a think tank out of Washington.  They estimate that between Jan 1 and May 31, what you earn, you pay in taxes – that includes federal, state and local.  Taxes on all but the air you breath.   

 

But do you know how important you are?  You are the CEO’s of the largest corporations in the country. Federal, state, and local governments are these corporations which are growing, growing and growing.  Growing  in debt!  Growing in personnel, as private industry in downsizing.   Growing in expenses and debt, as private industry is cutting its costs.      But like any good CEO, you need to understand how your corporation is functioning, the problems which are occurring and you must become involved in the solutions with the goal of creating what should be the most efficient and cost effective organizations in the world. 

 

Today, we are competing in a global economy.   Our children must be well educated to compete and our workers must be highly skilled to produce a product at a competitive cost.  Our school systems therefore must be restructured and given the tools to excel.  Suggestions include early graduation from high school with a monetary reward to be applied to continuing a student’s education.  A voucher system which stimulates competition among school systems, both public and private.   

 

Today, our jobs are going overseas and many good people are on the unemployment line or are being forced into menial jobs.   They are losing their health insurance and if lucky enough to find a job are working at reduced wages.  Our taxes are high and good people are being forced out of their homes through foreclosure.  You must understand that nearly every facet of your life is affected by what those whom you elect to office do while in office.   That is why your vote is so very important.  It should not to be given to any one individual without careful thought and consideration of how they will represent you while they are in office.      

 

And like shareholders in a corporation with a focus on management and solid stock values,  you must vote.   But only if you are an informed voter.  That means, not because the person looks good, or said the things you want to hear, but because that person has already demonstrated what they are willing to do to make your corporation succeed and has made the hard choices, not political choices.    You must be forever vigilant and ask questions and seek answers as to how improve the operations of your government and to rid it of corrupt business practices while instilling a system of checks and balances and decreasing expenses through cost effective management strategies.  But you cannot do that by sitting on the sidelines.  You must become active participants in your government.   

 

And that is what taxpayer groups do.  And that is what The Federation of Connecticut Taxpayers Organizations, Inc. is doing.   We were founded in the mid 80s as a watchdog of government.  We provide an umbrella under which concerned taxpayers and taxpayer groups merge, exchange ideas and information and collectively seek to provide a better standard of living for families and their children within individual communities and the State as a whole. 

 

With Budget Season upon us and taxpayers facing a $1.3 billion State budget deficit,  The Federation of Connecticut Taxpayer Organizations took the following position on various issues which we proposed to Governor Rell and our State Legislators…

 

 

First, we suggested a freeze of the salaries of all state employees, to include their own.  We proposed extending the legal authority to freeze salaries to municipal leaders, while instituting changes to the state’s  Binding Arbitration laws. 

 

Next, we proposed Governor Rell would do well to purge the State’s quasi-public agencies of appointees who are managing these agencies as political fiefdoms.  CRRA’s loss of $220 million is history.  What’s new is the revelation of the Lottery Corp’s double-digit "incentive payments" totaling $160,926 to 17 lottery officials.   Heads of taxpayer financed State quasi-public agencies have taken bonuses which resulted in their salaries jumping in one year from $131,465 to $228,123 and another from $127,019 to $197,912.   Of 28 major State agencies, the total cost of salaries and fringe benefits for politically appointed commissioners, deputy commissioners, executive assistants, and durational project managers jumped from $7.2 million in 1994 to nearly $20 million. 

 

These quasi public agencies  have given our money through Corporate welfare to companies which cannot get bank loans and have questionable finances.   These companies can keep their books secret from us, but we pay the price as  State auditors reported that in 3 years, $3 million tax dollars were written off in bad loans.  

 

Governor Rell and all State legislators must fix the widening divide they have created between “at-will” private sector employees and government sector union employees.   Today, we have a two tiered employment system  in Connecticut between the haves and have nots.  Government sector unions who have the elected officials wrapped around their finger, and as such, they refuse to change state Binding Arbitration laws  versus “at-will” private sector employees who are trying to pry the fingers of their state and local elected officials from their wallets as more of their tax dollars are channeled to fund union contracts, which account for 70% to 90% of your local budgets. 

 

The majority of Connecticut residents work in the private sector under “at-will” conditions wherein they can be terminated at any time, for any legal reason, or for no reason at all by their employer.     They work in a state of flux knowing that their employer on any given day can demand that they pay a greater share of their health care premium, take on a greater workload, receive a minimal salary increase, no salary increase or have their pay cut.   There will be no debate, no bargaining, no arbitration, and no elected official waiting to defend them.   The words “out-sourcing” and “visas” have become a part of the Connecticut worker’s vocabulary as the agenda of many corporations is to put their stock at the top of the portfolios of Wall Street analysts.   

 

As an unprotected class, private sector, at-will employees are losing their jobs, their homes and their health insurance.   They are being forced into jobs which are below their educational and skill levels and at salaries which are a fraction of what their previous jobs paid.  

 

Yet, the American dream is alive and well for those whom the “at-will” employee is forced by elected government officials to financially support.     In contrast to the “at–will” employee, government workers don’t have to accept what their employer tells them, although taxpayers are their employer.  Whether it is working conditions or salary, healthcare or pension issues they exercise their State given right to force negotiations and push their agendas, behind closed doors, under state Binding Arbitration laws, which leave taxpayers powerless.    Unions vote to accept or reject their contracts.  Taxpayers have no vote on these contracts.   Instead, we are simply presented with the bill for these lucrative union contracts, through our property taxes. 

 

In several Connecticut towns, pensions for personnel are determined by what they earned in three of their final five years on the job, with overtime factored in.   In Hartford, a wage earner took home $131,706.46, or $71,533.14 more than his base salary.   In East Hartford, police can elect a program which will allow them to work 5 years prior to full retirement.  While collecting their pay, 96% of their pension is deposited into a savings account up to 5 years.  With pensions at $50,000 and greater, they can leave the town with $250,000 and more if they elect this program, and then begin collecting their full pension. 

 

The Wall Street Journal on January 13 in their article “No Teacher Left Behind”  labeled the Teachers Union as the most powerful in the country contending they promote their own interests to the detriment of public school systems.”  Yet, our State and local elected officials continue to oppose any form of competition in education to include vouchers.    In most municipalities, 85% of our budget pays for teacher and administrator salaries and lucrative benefits.  2% for our children’s books and supplies, and 6% for building maintenance.   

 

Volunteerism, once a noble cause, has been trampled on by union leadership, whose power  is cemented in State law.  Firefighters working in towns and cities throughout the State were forced to incorporate a provision in their labor contracts which prohibited them from volunteering for fire fighter duties in the towns in which they lived.  

Governor Rell’s proposed Budget of $31.1 billion dollars,  includes an increase on our gas tax, while  proposing discontinuing a health insurance program for working poor adults and higher monthly premiums for their children’s healthcare.  Yet there is no mention of our own State legislators paying more for their health insurance which is the best the taxpayers’ money can buy.  

 

State taxpayers pay approximately $300 million for State employee healthcare and $155 million for State retiree healthcare.   Some state and local retirees pay little to nothing.  Locally, property taxes are increasing to pay the  85% to 95% of healthcare premiums for municipal employees.  This equates to taxpayers paying between   $12,750 to $14,250  for each union member’s family healthcare policy .  But that wasn’t enough for the unions.  They wanted more and went to court to get it.  They sued the taxpayers to take possession of the $100 million in stock received by the State from the Anthem demutualization, as well as the Anthem stock distributed to individual towns.      Many “at-will” workers in Connecticut who pay taxes have no health insurance.   

 

In summary, the increasing divide between “at-will” employees in the private sector versus government sector unions must be immediately addressed through changes to State Binding Arbitration Laws. 

 

Last week, on behalf of the Federation and its members I attempted to convince members of the State’s Planning & Development Committee to pass a bill to protect the savings of municipalities from unions when their contracts went to arbitration.  The State Reps who comprise this committee, some of whom may be from your home town, failed to protect the taxpayers and instead passed a watered down bill to the benefit of the unions.  This affects you because your town leaders cannot save money to purchase big ticket items, for fear your savings could end up at the table of union contract negotiations.  Instead, they have to bond for these items which can ultimately cost  you far more than the initial purchase when interest is factored in.  So did the State Reps who voted against the taxpayers and for the unions deserve your vote in the next election.  You be the judge.   But then again, do you know how your legislators are voting on bills which directly affect you?

 

There is an ongoing battle between taxpayers and public sector unions.     The spoils are the tax dollars of many hard working Connecticut residents who are elderly on fixed incomes or victims of job cuts.    Some taxpayers are unemployed or are underemployed with no healthcare.  With taxpayers outnumbering union membership, one would think that the taxpayers would be in control of their municipal and state budgets.  Yet the opposite is true.  Reasons include weak elected officials who believe that their political future is based upon the power of the public sector unions, antiquated binding arbitration laws which defeat the effectiveness of public officials who do have a backbone, and some taxpayers who just don’t seem to get it, and are willing to remain silent, while their taxes increase to pay for corrupt business practices and lucrative union contracts with salaries, pensions and health care benefits  which they, themselves, will never experience in their lifetime.    

 

As nest eggs become infected with Enronitis, workers have been forced to take a closer look at their own pension plans.  In the private sector, many cannot afford to retire at age 65.   Yet, they are forced to pay high taxes to support some government employees who can retire after 25 years of service and collect lucrative pensions with full health benefits. 

 

Taxpayers must encourage State lawmakers to safeguard our treasury by installing a sound system of checks and balances.  Systematic departmental financial, operational and procedural audits must be conducted to detect corruption.  Lobbyists who boast of connections must be immediately disconnected. Strong Ethic Laws must be implemented.  And State Attorney Morano should be given subpeona power to go after those who are stealing from us.  

 

State costs can be brought under control.  If our elected officials don’t have the wisdom or courage to do so, then we, the taxpayers, are at fault for electing them.  

 

 

CONCLUSION

 

Thank you for allowing me to be with you today.   The strength of our Democracy is dependent upon each and every one of you being active participants in your government, voting, attending meetings, and letting your officials know that you are there watching what they are doing. 

 

Please visit the website of the Federation at ctact.org as noted on your brochures. 

 

If I can assist you with the formation of a tax group or you would like to join with the Federation, I would be delighted to speak with you personally. 

 

Thank you and thank you again Brad for inviting me today.