January 26, 2012
From: The Federation of
Connecticut Taxpayer Organizations
Contact: Susan Kniep,
President
Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032
Bloomberg Businessweek
Reports:
Withdrawn: $114 Billion From Big US
Banks
More than $114
billion exited the biggest U.S. banks this month,
and nobody’s quite sure why.
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As Sen. Rubio rallying conservatives behind comprehensive
immigration reform, The Hill Reports:
Immigration reform could add millions under Obama
health law
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From the Federation: As,
CTNewsjunkie.com reports Speaker Focuses On Property Taxes; Malloy Looks For
Efficiencies, taxpayers and public
officials are awaiting the release on February 6, 2013, of Governor Malloy’s
two year-budget which is expected to close a budget deficit greater than $2.2
billion over the next two years. As we
had written previously, Governor Malloy’s budget will have a significant impact
on the budgets of the 169 towns throughout Connecticut as town officials await news of
what their town can expect to receive in State aid which will in turn impact
local property taxes.
Ctmirror.org recently reported Nonpartisan analysts say state budget deficit approaches
$140M noting: The state budget
deficit is more than twice the size Gov. Dannel P.
Malloy's administration reported this week, according to a new analysis
released Friday by nonpartisan legislative analysts. The $138.6 million shortfall
projected by the Office of Fiscal Analysis still falls short of the threshold
needed to force Malloy to draft another mitigation plan, but it does exceed
funding in the state's emergency budget reserve. The new forecast also comes
just five weeks after the legislature and Malloy teamed up to wipe $365 million in red ink off the
state's books. Like the earlier deficit, the new shortfall is largely a product
of declining state revenue projections and surging demand for Medicaid-funded
health care services. But while Malloy's budget office reported a $64.4 million deficit
Tuesday to Comptroller Kevin P. Lembo, legislative
analysts expect greater cost-overruns this year in social services, mental
health and addiction programs and in the prison system. Continue reading at http://www.ctmirror.org/story/18895/nonpartisan-analysts-say-state-budget-deficit-approaches-140m
The State Comptroller will certify the State budget numbers
on Friday, Feb 1.
The Day of New
London in their article captioned The Day - Legislators concerned about spiraling state pension
...Obligations. noted: State pension costs increased more than 580 percent in the
past 20 years, to $900 million annually from $130 million annually, while Connecticut's population has increased only 9 percent,
the Connecticut
Business & Industry Association reported on Wednesday. Union contracts and
state employee perks need to be evaluated again, said state Rep. Diana Urban,
D-North Stonington, a member of the Appropriations Committee. "I think we
need to get people to come back to the table," Urban said Wednesday. Health
benefit costs for state employee retirees increased more than 980 percent in
that 20-year span, to $640 million annually from $60 million annually,
according to the association's report. The governor and state legislature have
increased taxes, negotiated with unions, combined state agencies and cut
spending in various sectors, but the state's budget deficit continues to grow.
Just last week, this year's budget deficit increased to $70 million from $40
million based on decreased revenue projections. The governor and legislature
have an estimated $2.13 billion budget deficit to tackle in the 2014-16
biennium. No one in the governor's administration would be commenting on the
upcoming budget proposal or pensions and retiree health benefits specifically,
said Steve Jensen, director of communications for the Office of the Lieutenant
Governor, in an email Wednesday. The
article continues at http://www.theday.com/article/20130124/NWS12/301249540/1070/SPORT10
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From: CBIA: The Connecticut Business & Industry Association.
CBIA is Connecticut’s largest business organization, with
10,000 member companies. For more information, please contact Joe Budd
(860.244.1957; joe.budd@cbia.com)
or visit cbia.com/newsroom.
Avoiding a Cliff of Our Own - CBIA
Why the state
must set a new course for fiscal responsibility
By Bill DeRosa January
1, 2013 By CBIA
Excerpt: A report published in September by the Connecticut Policy Institute
(CPI) puts the state’s total long-term debt at more than $80 billion, the
third-highest debt per capita in the country, and argues that the state
underestimates the amount of its long-term obligations because it uses an
unrealistically high assumed discount rate (the return on invested funds)—8.25%
or higher—which allows for a lower valuation of unfunded liabilities.
Read the
aforementioned article in its entirety at http://www5.cbia.com/cbianews/article/avoiding-a-cliff-of-our-own/
Connecticut's December Jobs Report: 'Economy Stuck in
Neutral'
How many
jobs were created in Connecticut
in 2012?
There's
little to celebrate in today's release of the December unemployment numbers, with Connecticut
losing a net 100 jobs last year.
The
Department of Labor's December report is startling: 1,800 positions lost in the
month, even with the unemployment rate dropping three-tenths of a point to
8.6%.
"It's
pretty grim news," said CBIA economist Pete Gioia.
"And the drop in the unemployment rate to 8.6%, which is still quite high,
was totally due to the fact that we had more workers leave the labor force
because they were discouraged."
Read the
aforementioned article in its entirety at http://gov.cbia.com/inside_the_capitol/article/december-jobs-report-economy-stuck-in-neutral
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The Yankee Institute in their article captioned Rell early retirement plan responsible for $60 million of
current ... deficit; cost of vacation and sick days pile up for
state notes: Taxpayers owe a growing debt to state
employees for their unused paid time off, recently totaling more than $700
million or $11,500 per employee. In other words, if every state employee
retired today, taxpayers would owe them more than $700 million for their unused
vacation and sick days, up from $475 million in 2004. The state will pay off a
portion of this debt – put off in 2009 by then-Gov. M. Jodi Rell
– this year. During the financial crisis, General Assembly and Rell used an early retirement incentive program to
encourage more workers to retire. However, Special Act 09-06, the law that created the
retirement program, delayed payouts to these retirees for their unused paid
time off. Instead of getting the payouts upon retirement, they would get three
equal payments in then-far-off fiscal year 2013. The total cost shifted to this
year is about $59.7 million, contributing to the current deficit of $64.4 million. According to Comptroller Kevin Lembo’s office, the state has paid the first installment of
$19.9 million. Continue reading this
article at http://www.raisinghale.com/2013/01/25/rell-early-retirement-deficit/
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With Public Sector
Unions Accounting for the greatest expenditure of
taxpayer dollars, you may find the following websites of interest:
http://www.publicsectorinc.org/
http://pensiontsunami.com/
http://unionwatch.org/about/
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William Baldwin of Forbes writes Do You Live In A Death Spiral State? - Forbes. noting:
Don’t buy a house in a state where private sector workers are outnumbered by
folks dependent on government. Thinking about buying a house? Or a municipal bond? Be careful where you put your capital.
Don’t put it in a state at high risk of a fiscal tailspin. Eleven states make
our list of danger spots for investors. They can look forward to a rising tax
burden, deteriorating state finances and an exodus of employers. The list
includes California, New
York, Illinois and Ohio,
along with some smaller states like New Mexico
and Hawaii…………..Two
factors determine whether a state makes this elite list of fiscal hellholes.
The first is whether it has more takers than makers. A taker is someone who draws
money from the government, as an employee, pensioner or welfare recipient. A
maker is someone gainfully employed in the private sector……The second element
in the death spiral list is a scorecard of state credit-worthiness done by
Conning & Co., a money manager known for its measures of risk in insurance
company portfolios. Conning’s analysis focuses more on dollars than body counts. Its formula
downgrades states for large debts, an uncompetitive business climate, weak home
prices and bad trends in employment……..Conning rates
North Dakota the safest state to lend money to, Connecticut
the most hazardous. A state qualifies for the
Forbes death spiral list if its taker/maker ratio exceeds 1.0 and it resides in
the bottom half of Conning’s ranking. Read entire article at http://www.forbes.com/sites/baldwin/2012/11/25/do-you-live-in-a-death-spiral-state/
Michael Chandler
writes The Next Major Bailout Is The State Pension Crisis - Seeking
Alpha and notes: Just
recently, I was reading an interesting article by William Baldwin from Forbes, entitled
"Do You Live In A Death Spiral State?" Baldwin
compares the states according to the number of "takers and makers"
that live there. A taker is classified as a person who draws money from the
government as an employee, government pensioner or welfare recipient. A maker
is simply someone working in the private sector. He went on to talk about how in
11 states, there are more takers than makers. For example, California has 139 takers for every 100
makers. In Illinois,
there are 103 takers for every 100 makers. In states like these, you find the
highest state tax rates in the nation. Texas, on the other hand, has only 82
takers for every 100 makers. After deciding to drill down into these
"taker-dominant" states to take a look at their unfunded pension
liabilities, I was stunned. I always suspected those liabilities would be a
problem, but I had no idea of the magnitude. For example, Illinois has 66 billion in its pension
coffers to cover pension obligations of $233 billion. In fact, state pensions
in Illinois
are 71% underfunded. From this perspective, the best
state in the nation is North Carolina,
which is underfunded by "only" 37.1 %. Did
you get that? The best is 37.1% underfunded. But we
have 50 states, so you may be wondering what these unfunded liabilities add up
to. According to the Joint Economic Committee for the Republicans, in a report published September 26, 2012, the total
unfunded pension obligation among the states is $2.8 trillion. But according to
their calculations, that's not the total liability. They add $627 billion in
unfunded healthcare benefits, $55 billion in debt, and $25 billion in
Unemployment Insurance Trust Fund Loans, bringing the grand total to $4.2
trillion. Continue reading this article at http://seekingalpha.com/article/1049741-the-next-major-bailout-is-the-state-pension-crisis
Economist: Connecticut's Real Jobless Rate At 14.4 Percent |
CT ... Posted by Dan Lovallo on Jan 18,
2013 | Leave a Comment With Connecticut’s latest
economic picture being described as “dismal,” one economist said even the
jobless rate of 8.6 percent is misleading. Don Klepper-Smith,
chief economist and director of research for New Haven-based DataCore Partners, is quoted in the Day of New London
newspaper, that the state’s real jobless rate is at 14.4 percent, when counting
workers who have given up looking for jobs, are marginally employed or working
part-time. READ MORE
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House Votes to Temporarily End Debt Ceiling - NYTimes.com By JONATHAN
WEISMAN January 23, 2013 WASHINGTON — Avoiding an economic showdown
with President
Obama, the House on Wednesday passed legislation to eliminate the
nation’s statutory borrowing limit until May, without including the
dollar-for-dollar spending cuts that Republicans once insisted would have to be
part of any debt
limit bill. The 285-144 vote
staved off an impasse that could have put the full faith and credit of the United States
government into doubt and potentially set off an economic disaster. Instead,
the next Republican showdown with the president will come in March, when the
subject will be across-the-board spending cuts first and a possible government
shutdown by the end of the month. “We
know with certainty that a debt crisis is coming to America. It’s not a question of if.
It’s a question of when,” Representative Paul D. Ryan of Wisconsin, the
Republicans’ vice-presidential nominee last year and current Budget Committee
chairman, said as he vowed to press ahead with deep spending cuts. Continued at
….. http://www.nytimes.com/2013/01/24/us/politics/house-passes-3-month-extension-of-debt-limit.html?_r=0
The Debt Ceiling
and Playing With Fire By Simon Johnson, former chief economist of the
International Monetary Fund, is the Ronald A. Kurtz Professor of
Entrepreneurship at the M.I.T. Sloan School of Management and co-author of “White
House Burning: The Founding Fathers, Our National Debt, and Why It Matters to
You.” Congressional Republicans are
again threatening not to increase the ceiling on the amount of federal
government debt that can be issued. On Wednesday, they agreed to postpone this particular piece of the
fiscal confrontation, but only until May. The decision to turn the debt ceiling
into a confrontation is a big mistake for the Republicans and extending the
indecision is likely to prolong the agony of uncertainty and have damaging
economic consequences for the country.
I made these points at a hearing on Tuesday of the House Ways and
Means Committee, but unfortunately the Republican majority seems determined to
persevere with its destabilizing strategy. (The hearing can be viewed on
C-Span’s Web site; see the playlist on the
right.)
In most countries, decisions about government spending and
revenue bring with them an implied, even automatic decision about how much debt
to issue. Spending minus revenue in a year gives you the annual deficit (a
flow), while government debt is a stock of obligations outstanding. Continue reading this article at http://economix.blogs.nytimes.com/2013/01/24/the-debt-ceiling-and-playing-with-fire/?src=rechp
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Waterbury Tobacco Shop Owner Pleads Guilty to Charges of ...
Conspiring to Bribe State Lawmaker By Daniela Altimari On January 23, 2013 · A Waterbury
tobacco shop owner pleaded guilty in federal court Wednesday to charges that he
and others conspired to bribe a state legislator in an effort to kill a new
tobacco tax at the state Capitol, the Courant’s Ed Mahony
reports.
Paul Rogers, one of eight business, political and union
figures indicted in the conspiracy, pleaded guilty in New Haven to charges of fraud and of causing
phony reports of campaign contributions to be filed with federal election
regulators. . Rogers and the others are accused of bundling
illegal campaign contributions and steering them in 2011 and 2012 to the
congressional campaign of Christopher Donovan, former Speaker of the state
House of Representatives. The payments were part of a failed effort to kill a tax
which has effectively eliminated the competitive advantage so-called roll-your-own
tobacco stores had over the sellers of packaged cigarettes. Continue reading at
http://courantblogs.com/capitol-watch/waterbury-tobacco-shop-owner-pleads-guilty-to-charges-of-conspiring-to-bribe-state-lawmaker/
Exclusive: Ex-Speaker Chris Donovan
Could Challenge John Olsen ... For President Of State AFL-CIO In
Battle Of Labor Kingpins By Christopher
Keating On January 23, 2013 Olsen was noncommital
on his future, but he said he has never backed away from a fight. He declined
to criticize Donovan and said that any member of the AFL-CIO has the right to
challenge him. “From my standpoint, I’ve
always welcomed a democratic process and fair and open elections,’’ Olsen said
in a lengthy interview with The Hartford
Courant. “I haven’t announced anything I’m doing yet, either. You don’t
generally announce these candidacies that far in advance. I’ve never announced
in January that I’m running. I’m serving right now. There’s nine months left in
this term. It’s early for anybody to be saying what they’re doing.’’ With 25 years to his credit in a business
known for its turnover, Olsen is the longest-serving state AFL-CIO president in
the country. He says he is also the longest-serving president in Connecticut history. Donovan, 59, has kept a relatively low
profile recently, and some legislators are not sure what he will do in his
post-Speaker life. But Rep. Peter Tercyak, a longtime
union supporter who is now the co-chairman of the legislature’s labor committee, said that word is spreading among union members
about Donovan possibly taking over the state’s umbrella union organization. Continue reading at http://courantblogs.com/capitol-watch/ex-speaker-chris-donovan-could-challenge-john-olsen-for-president-of-state-afl-cio-in-labor-battle/
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Connecticut's graduation rate slips | The
Connecticut Mirror By Jacqueline Rabe Thomas on January 22, 2013 The percent of high school students who graduate high school on
time in Connecticut continued to slip, the U.S. Department of Education reported
today. Among those who entered high
school with the Class of 2010, three out of four students would make it to
graduation, a 7 percent drop of freshman getting their diploma since 2007. The state's on-time graduation rate is
slightly below the national rate. The national trend is also heading in a
different direction, with a higher percentage of students graduating each year
between 2005 and 2010.Connecticut also has the largest graduation gap in the
country between its boy and girl students.
The achievement gap is also apparent in the graduation rates of white,
black and Hispanic students. While 82 percent of white freshman will graduate
on time, only 64 percent of black students and 56 percent of students will get
his or her diploma in four years. Continue reading at http://www.ctmirror.org/blogs/connecticuts-graduation-rate-slips
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