March 10, 2011

 

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

 

To:  Members of The Labor and Public Employees Committee
Room 3800, Legislative Office Building
Hartford, CT 06106
Phone: 860-240-0540

 

 

March 10, 2011 Public Hearing Regarding Proposed Binding Arbitration and Prevailing Wage Reforms

 

 

SB 989 -   Exempt fund balances as a criteria for determining municipalities' financial capability to afford awards, 

SB 990 - Adjusts the thresholds that trigger the prevailing wage mandate, from $100k to $200k, for renovations, and, from $400k to $800k, for new construction.

 

 

My name is Susan Kniep.  I had served as the Mayor of East Hartford from 1989 to 1993.  I had also served for several years on East Hartford’s Town Council.  I am currently the President of The Federation of Connecticut Taxpayer Organizations, Inc.

 

On behalf of the Federation, please approve the aforementioned bills.  We suggest that you not take a myopic view of these proposed mandate reforms when listening to the rhetoric of the public sector unions who will encourage you to vote no.   Instead we suggest you factor the following into your decision when you vote.

 

Governor Malloy has announced a $1.5 billion dollar tax increase which has resulted in his standing among Connecticut taxpayers plummeting to 35%.

 

Businesses and taxpayers who now pay the highest taxes in the nation will suffer with some facing bankruptcies or foreclosures, while others move out of Connecticut as some businesses have threatened to do.  

 

According to Connecticut’s latest Fiscal Accountability Report… The state of Connecticut faces significant long-term obligations including debt, unfunded pension liabilities and unfunded post-employment retirement benefits which are estimated to exceed $72 BILLION in total.

 

Connecticut’s debt per capita of $4859 exceeds that of California at $2362. 

 

On July 1, 2010, the State of Connecticut began it fiscal year with a $19.01 billion budget, which nearly equated to the State’s $19 billion bonded debt. 

 

Three months later, on September 1, 2010, then State Comptroller Nancy Wyman certified a budget deficit in excess of $60 million. 

 

Connecticut’s projected near $4 billion dollar shortfall equates to 18% of this year’s spending. 

 

In June, 2010, Fitch Ratings announced that it had downgraded Connecticut's bonds citing the state's tendency to borrow money to cover budget deficits. 

 

As of January 1, 2010 - 7,289 Connecticut Retirees are Receiving Pensions Between $50,000 and $259,000……  4,989 Connecticut Teachers and Administrators are Receiving Pensions Between $50,000 and $183,000. We have requested and are awaiting updated pension information. 

 

Collective Bargaining and Binding Arbitration impact not only wage, pension and healthcare benefits, funded by taxpayers, but also a transfer of management rights at a considerable cost to taxpayers.   This includes, but is not limited to,  the number of students in a classroom, the scheduling of police personnel, and the right to drive a town car to and from work. 

 

Due to Collective Bargaining and Binding Arbitration, property owners within the 169 towns now pay 85% of their property taxes for Town and Board of Education personnel related expenses.

 

Governor Malloy has indicated he will cut school construction grants to towns placing a larger burden for school construction on local taxpayers.

 

As unions take control of municipal reserve funds, funded by local property owners, taxpayers are unable to save money to pay for equipment, school construction, or other necessary, high cost items.  They are instead forced to bond these costs.  Interest payments on the bond are also paid by taxpayers.    

 

Add to the aforementioned, the fact that Governor Malloy has threatened to reduce municipal aid which would result in a significant increase in property taxes for your constituents. 

 

If your constituents cannot afford to pay their property taxes, they will ultimately lose their homes to a Tax Lien Sale. 

 

Again, the Federation urges you to approve SB 989 -   exempt fund balances as a criteria for determining municipalities' financial capability to afford awards,  and SB 990 – Adjust the thresholds that trigger the prevailing wage mandate, from $100k to $200k, for renovations, and, from $400k to $800k, for new construction.