Federation of Connecticut Taxpayer Organizations

From the Federation:�� Approximately 85% of municipal property taxes in Connecticut�s 169 towns pay for the wages, healthcare, and pensions of Municipal and Board of Education employees.� When union contracts are negotiated behind closed doors resulting in wage, pension and healthcare cost increases for public employees, those costs are passed on to you through your property tax bill.� ��State and municipal employee contracts are subject to the dictates of State Collective Bargaining Laws which neither the Governor nor the majority of State Legislators are willing to reform.� These laws have given the public sector unions more power and influence over our State, Municipal and Board of Education budgets and personnel than those whom we elect to serve us. �

When formulating the State�s latest budget, Governor Malloy, �threw the dice and gambled with Connecticut�s financial future when he executed legally binding state labor contracts locking taxpayers into paying 9% wage increases and four years of job guarantees while he speculated that the state would yield $4.8 billion in pension savings over 20 years.� ��His gift to taxpayers was $1.5 billion in new taxes!

It now appears that the chasm between his speculated pension savings of $4.8 billion and the actual savings of $1.7 billion, as recently disclosed in the article� - Nonpartisan analysts: Malloy was way off in projected savings from pension givebacks - are as wide as those at the Swiss Alps, which were recently visited by Malloy. ��

As the public grapples with the revelation of a $3.1 billion gap in pension savings, we also learn that Governor Malloy is refusing to support proposed State legislative reforms which would control overtime being factored into pensions which now result in many State Employee Pensions of $100,000 and More which can be accessed at the following link�� http://www.ctact.org\upload\home\PensionNew.xls. �

As the State of Connecticut�s new transparency website at http://transparency.ct.gov/html/pensionOverview.asp depicts, in 2010, pensions payments were made to 41,950 retirees or beneficiaries totaling over $1.26 billion.��

The majority of private sector employees and retirees have pension plans which are driven by the stock market.�

Not so for the majority of public sector employees in Connecticut whose pensions you are financing with your tax dollars and on which the rate of return is guaranteed.� �So when the stock market drives your pension plan down in value your concern is naturally for the money you have lost.�� Not so for the majority of public employees in our state.� Their losses are paid for by you under the guarantees afforded the public employees by our State legislators.��

As we approach municipal budget season, taxpayers must hold our Governor and our State Legislators accountable for what could be substantial property tax increases while state employee union contracts are in effect and as news continues to leak out on the fiscal decline of our State.

Recently we learned State budget plunges into the red with promised savings in question and that Moody�s, the Wall Street credit agency downgrades Connecticut's bond rating ��citing a heavily loaded state credit card, huge debts in pension and retiree health care programs, and a depleted emergency reserve.� The decision by Moody's Investors Service to lower state government's bond rating from Aa3 to Aa2, opens the door for Connecticut to pay higher interest charges on future capital projects, even though its rating remains relatively high.�� This is with some State of Connecticut Employees Earning 250,000 Dollars to 2,403,224 Dollars, in Salary and Benefits During Fiscal Year 2011

The State�s annual Fiscal Accountability Report �page 21,� reveals Connecticut is $72 Billion in debt.� This includes $19 Billion in Bonded debt, and the remainder in pensions and healthcare cost obligations.��

As we learned the State used borrowed funds to meet expenses,� it was then revealed that the Center for Budget Policy Priorities included Connecticut on its list of �Ten States That Cannot Pay Their Bills.� The list contained states with budget shortfalls of 27% or more of their general funds for fiscal year 2011.

Shortly thereafter, Connecticut received the distinction of being rated Number 1 among the 10 Worst States to Retire In: They're Frosty and Costly .

But the most recent revelation may be the most shocking� as we learn state employees want more - specifically $93 million more � and they are going through the courts to get it as the following article describes�� Judge: State Employees' Class Action Suit Against Anthem Can Proceed - $93M In Compensation Sought For 30,000 Workers, Retirees.

The Federation asks - What were these State Employees Paying for their healthcare 10 years ago when they initiated the lawsuit versus the costs to taxpayers. ��In 2010, the Federation published the following.� CONNECTICUT STATE TAXPAYERS ARE PAYING OVER $5 BILLION FOR HEALTHCARE IN 2009. ��As we seek more current figures, the State has published on its website current employee healthcare policy costs vs those paid by the State; i.e. the taxpayers.� �You, yourself, may have limited healthcare coverage or none at all, but your taxes are paying for a lucrative healthcare system for our state employees.� How much are you paying versus what the state employee is paying? Check it out at �..� http://www.osc.ct.gov/empret/healthin/2011hcplan/ActiveBiWeeklyMed-RxRates2011-2012.pdf.�

On the education front, �within the news report Education Week grades the Nutmeg state | The Connecticut Mirror, it is noted � While most states provide rewards to high-performing or improving schools, Connecticut does not. The state also lags behind most states in providing assistance and having state sanctions for low-performing schools. The report also says that in addition to the state's falling short on evaluating teachers, it also fails to evaluate teacher preparation programs and check up on how their graduates perform in the classroom. The state also lacks incentives to get teachers into high-need schools. Here is the link to a snapshot of how the state is doing. The complete report on Connecticut is available here behind a pay wall. The state's overall grade is a C+, ranking Connecticut 16th best system in the country by Education Weeks Standards.��

Our State legislators continue to refuse to reform laws which allow teachers who excel to be terminated during layoffs while underperforming teachers remain on the job due to longevity.�� But our business leaders are fighting back as noted within the article Do education grants work? State rarely checks which notes that ��Business leaders offered a simple, if politically sensitive suggestion Thursday on how to pay for many of the things needed to improve education in the state: link the laundry list of grants that the state dishes out each year to performance.�

But Connecticut taxpayers do not despair.� Because facts and figures will soon take a back seat to the new $22 million image campaign you will pay for which is soon be launched by Governor Malloy as he looks to establish a brand for our State through the New York Company - Chowder, Inc.� ��The Federation has asked the State�s Department of Economic Development if this company is registered with the State to do business in Connecticut.� If not, does it have to be.� We will report on our findings.

There is only one problem with the Governor�s plan to spend $22 million of our money.� �Unless our Governor and State Legislators pull in the reigns on spending and control taxes in our State, image will do little to combat the exodus of over-taxed Connecticut businesses and homeowners from Connecticut.

You can put lipstick on a pig but unless you control its appetite for taxpayer dollars currently allocated to lucrative public employee wages, healthcare, and pension benefits, the little piggy will need to be put on a treadmill which the Governor might consider funding out of his $22 million image campaign.��

Or better yet, the Governor and the State legislature might consider saving the $22 million, reform Collective Bargaining Laws, end over time being factored into pension contracts for public employees, convert the current pension system to a 401K, �and improve the fiscal climate of our State.

In summary, as noted by the Hartford Courant, Real Reform Of State Pensions: Switch To 401(k)s