Federation of Connecticut Taxpayer Organizations

Promises Made by Public Officials to Public Employee Unions for Unsustainable Pension and Retiree Healthcare Benefits are Driving some Governments to Bankruptcy as noted within After Detroit, Who's Next?� �For years Detroit has been gutting services and sucking taxpayers dry to finance retirement and debt obligations.�� The same could be said for Connecticut�..

Connecticut Pays Pensions as High as $276,000!!!!�

In Calendar Year, the State of Connecticut paid 44,216 Retirees pensions totaling $1.4 BILLION!!!� The following link illustrates those who received from $50,000 to the highest pension at $276,364.

http://www.ctact.org\upload\home\StatePensionFinalFinal.xls

To learn more about State of CT Employee Pensions click http://transparency.ct.gov/html/searchPensions.asp.

Connecticut Among States With Worst Public Pension Deficits � !

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With the State of Connecticut mired in debt, we have little insight into the unfunded liabilities of the State�s 169 individual towns/cities since 2001 when� Waterbury Aldermen Vote to Ask Connecticut to Take Control of City ... Finances as its debt had resulted in its bond rating being reduced to junk status.� On March 27, 2011, the Waterbury Republican wrote in an article captioned� A decade of oversight in Waterbury Republican American that �Waterbury Residents are still paying for the financial meltdown that resulted in a state takeover of the city's finances 10 years ago this month.� �The average taxpayer devotes almost a quarter of his yearly property taxes, or $1,400 out of $5,855, to pay for the city's past fiscal sins, a debt that won't disappear until 2039.�

Perhaps it is now time to assess the financial stability of the 169 towns and cities throughout Connecticut so that property owners will not fall victim to a fate similar to those in Waterbury. ��

And the ultimate question is � If Connecticut towns cannot file for bankruptcy, and our State is mired in debt, then what?

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The Ponzi scheme of Bernard Madoff and the Cook the Books bad boys of Enron pale in comparison to the crimes perpetuated against taxpayers throughout the country by past and present elected public officials in State and municipal governments who have catered to public sector unions and other special interests while putting public finances at risk!

Crippling States and Municipalities throughout the Country is Debt Driven by Promises Made which Must be Paid for Public Employee Pensions and Retiree Healthcare.�

The Connecticut Business and Industry Association (CBIA) in their January, 2013 article captioned Avoiding a Cliff of Our Own - CBIA notes: The state�s response to budget deficits over the years has often been to add and/or increase taxes or fees, while any budget �cuts� have typically just slowed the rate of spending growth. According to a report published by CBIA this month, state spending has grown 184% since 1990, easily outpacing growth in inflation, the state population, and median household income.

The most dramatic spending growth over the last two decades has occurred in five main areas:

State employee retiree health benefits�1,395%
Medicaid�405%
Debt service (paying off state borrowing)�391%
The corrections system�253%
State employee pensions�187%

The September 14, 2012, the Connecticut Policy Institute CPI white paper on Connecticut's public pension liabilities notes �. ��Connecticut�s long term pension and healthcare liabilities for its public employees are the sleeping giant of state policy challenges. �When calculated using private sector accounting methods, Connecticut has more than $60 billion of unfunded liabilities across the state�s three main pension benefit funds and its retiree healthcare benefits fund. When combined with Connecticut�s roughly $20 billion in bonded debt, this is more than $80 billion of total state debt �nearly 40% of state GDP and the third highest debt per capita in the country.1�� The articles continues at the following web link.� http://www.ctpolicyinstitute.org/content/CPI_Pension_Paper.pdf

The demise of Detroit was no surprise to the Fitch rating agency who sounded the alarm as early as 2005.�� Following the recent announcement that Detroit, Michigan is the largest municipal bankruptcy in the nation's history with $18 Billion in unpayable debt, Fitch in a July 19th article captioned BREAKING: Detroit General Obligation Bonds Unlikely to Be Repaid (Fitch Ratings) noted �.. �This action was not unexpected. �We signaled concern about Detroit's long-term prospects and kept the ratings on negative watch or outlook as the ratings declined steadily since 2005. �On June 14, 2013 Fitch lowered both the limited tax general obligation (LTGOs) and unlimited tax general obligation (ULTGOs) to 'C' from 'CC' and 'CCC', respectively, stating that default is imminent or inevitable, when the emergency manager announced the intention to default on and/or execute a distressed debt exchange last month.�

On July 3, 2013 in an article captioned Fitch downgrades CT | HartfordBusiness.com, it was noted� �High debt and fiscal vulnerability were two factors behind one credit ratings agency's decision this week to downgrade Connecticut's general obligation bonds.� �Fitch Ratings downgraded its outlook on the state from "stable" to "negative." �Fitch said the state has "reduced fiscal flexibility at a time of lingering economic and revenue uncertainty." �The agency said the state's budget delays repayment of deficit borrowing, adds to the debt load and fails to rebuild a financial cushion.�

In June, 2012 an AP article captioned Connecticut Among States With Worst Public Pension Deficits � noted ��what states will owe public retirement in the decades ahead ballooned to $757 billion�� The Pew Center on the States found 34 states failed to maintain safe levels of money in the pension funds, which most experts agree is about 80 percent of long-term obligations. �Four states� Connecticut, Illinois, Kentucky and Rhode Island� didn�t even have 55 percent of the money they�ll need in the long run.� Pews Widening Gap Update: Connecticut notes: Connecticut paid its full annual pension contribution just three times from 2005 to 2010. The system was 53 percent funded in ﬁscal year 2010 and faced a $12 billion funding gap. Connecticut had a retirement plan liability of� $71.5 Billion. http://www.pewstates.org/research/state-fact-sheets/widening-gap-update-connecticut-85899399376

The headlines that Detroit Pensions Threatened By Bankruptcy, Retirees Could Lose Healthcare, Retirement Funds should be a wakeup call to every public sector union in the country, to include those in Connecticut.� On June 27th the Federation wrote As State Property Tax Proposed Taxpayers Will Pay 125 Million Dlrs for State Employee Wage Increases !�� Click on Salaries and Benefits Paid to State Employees in Fiscal Year 2012 to see that Connecticut taxpayers paid $5.8 Billion Dollars to 92,197 State Employees some of whom earned salaries and benefits well in excess of $200,000 and more.��

Public officials have long catered to their voting block, the public sector unions while putting the public at risk.� The article captioned Bankrupt Progressive Socialist Detroit Succumbs To Failures Of Big Government Notes �Detroit, however, is dead, and unions and government killed it.� �Labor overhead was an albatross around Detroit's neck. �Until recently, total pay and benefits for a full-time worker at the Big Three averaged $140,000 a year vs. $80,000 for their foreign competitors. �Add an estimated $2,000-plus per car for retiree health care and pensions for the Big Three, and you wonder not why Detroit failed, but why it didn't fail sooner.� �Detroit's response to a declining business climate was more taxes, fewer city services and bloated pensions for workers in the only growth area � government. �The city's $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, members of the public sector unions that helped bring Detroit to its knees.�

The impact of union contracts was evident in Stockton, CA in the article captioned Police Chief's $204,000 Pension Shows How Cities Crashed ... noting �Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago. �He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 -- the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.�� Bloomberg News compiled data from the California Public Employees� Retirement System for more than a dozen cities facing the financial strains of rising pension costs and declining revenue. �The data show how local governments struggle to support six-figure lifetime benefits for some retirees even as they cut police and fire services for city residents.�

�San Bernardino, a city of 209,000 about 60 miles (100 kilometers) east of Los Angeles, is typical of the phenomenon. Its city council voted July 18 to approve an emergency bankruptcy filing, about six years after the panel unanimously lowered the retirement age for public-safety workers to 50 from 55.�

I addressed this issue in a 2009 article captioned� STATES AND TOWNS IN CRISIS - BAILOUT OR BANKRUPTCY. �How long can California and Connecticut taxpayers continue to support public employee pensions exceeding 200,000 dollars. Susan Kniep - FCTO - June 2009

In the article captioned Avalanche of City Debt Downgrades and Eventual Bankruptcies Coming Up; Numerous Cities Bankrupt Over Pension Promises�

A reference is made to� Zombified Cities which include�.

Philadelphia: 5th Largest City in US is Effectively Bankrupt; Mayor Holds Closed Meeting With Wall Street to Discuss Asset Sales
Houston: CPAs state Houston is Bankrupt
LA: Mayor of Los Angeles Says "Bankruptcy is Not an Option" (Of Course It Is)
New York Cities: Public Pension Ponzi Scheme - New York Cities Borrow From Pension Plan to Make Contributions
Baltimore: Time for Baltimore to "Pull a Vallejo" and Declare Bankruptcy
Miami: Miami Commissioner Says Bankruptcy is City's Best Hope; Chris Christie Says New Jersey Careens Towards Becoming Greece
Chicago: Chicago's Mayor Daley Discusses Bankruptcy For City Pensions
Scranton: Scranton Mayor Slashes All Public Worker Wages to $7.25 per Hour, Including Police, Fire, His Own; City Effectively Bankrupt
Harrisburg: Pennsylvania State Capital Files for Bankruptcy
Zombified Cities Roundup: Detroit Becomes Dumping Ground for the Dead; Financial Urgency in Miami; Oakland Pension Time Bomb; How Pensions Crashed Stockton and San Bernardino

The author notes �There is absolutely no way Chicago, Oakland, Baltimore, Philadelphia, LA, Houston, and numerous other cities can meet pension obligations without a major restructuring of promises.� �Given that public unions seldom if ever agree on even the smallest of pension concessions, expect many of those haircuts to happen in bankruptcy court.�� Continue reading at �.� http://globaleconomicanalysis.blogspot.com/2013/07/moodys-downgrades-chicago-debt-citing.html

In May, 2013 in an article captioned States sinking in pension plan debt: Column - USA Today it is noted �.�Taxpayers nationwide are staring down a swelling tidal wave of government pension debt. �Recent estimates put the combined unfunded liability of state pension systems at $2.5 trillion. �Nearly every state has tried to reduce these unsustainable costs, but most reforms have proven to be baby steps or worse -- leaving future generations up to their necks in waves of debt.� �One inescapable fact remains: Without meaningful reform, paying down these liabilities would cost the average American household an additional $1,385 in taxes every year for the next three decades.� Continue reading at �. http://www.usatoday.com/story/opinion/2013/05/28/state-pension-bankruptcy-column/2355793/

In The List of Lasts | Yankee Institute for Public Policy notes �Barron�s rated Connecticut�s debt situation as the worst in the country in 2012.�

As a recent REPORT State economy headed for crisis notes �Connecticut's massive long-term debt, deep pockets of poverty and more than 20 years of stagnant job growth threaten to sink the state's economy for decades unless major reforms are enacted, according to a report Wednesday from a national fiscal responsibility group and the University of Connecticut's economic think-tank. �Comeback America Initiative founder David M. Walker and UConn economics Professor Fred V. Carstensen, who outlined their report at the Hartford Marriott, called for dramatic new reductions on public worker retirement benefits, deeper investments in transportation, education and economic marketing, and an enhanced "culture of transparency" that will drive greater efficiencies in state spending.�� Each CT resident owes more than $50,000� �Though Connecticut has one of the highest bonded debts, per capita, of any state in the nation, that represents just a fraction of the crippling debt taxpayers must answer for the in near future, said Walker, a Bridgeport resident and former U.S. comptroller general under President Clinton. He launched his Comeback America campaign for fiscal responsibility in 2010.�� Continue reading at �.. http://www.ctmirror.org/story/report-state-economy-headed-crisis

The Federation notes that past and present State elected officials have buried Connecticut taxpayers in unsustainable debt and they continue to do so as evidenced by the State�s monthly Bond Commission meetings.� The next meeting is scheduled for July 26, 2013 in Room 1E of the Legislative Office Building in Hartford at 10:30 AM� where millions more $$$$ will be put on the table for a vote. To review previous 2013 Bond Commission Agendas and Minutes click http://www.ct.gov/opm/cwp/view.asp?a=3010&q=400886.

Connecticut at Risk: Will the State Navigate to Prosperity?