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May 1, 2012

 

From The Federation of Connecticut

Taxpayer Organizations, Inc. 
Contact Susan Kniep, President

Website: http://ctact.org/
Email: fctopresident@aol.com

Telephone: 860-841-8032

 

 

Our State and Local Elected Officials have an obligation to consider the results of their actions.  High Taxes are Forcing Connecticut Residents and Businesses Out of Connecticut, while Others are Losing their Homes to Tax Lien Sales or Foreclosure!  

 

 

Hush!  State Legislators Kept this Quiet for 30 Days!

They Didn’t have the Courage to Vote for the 56% Wage Increase but They Will Want Your Vote in November!  

Connecticut State Police Supervisors Get Big Pay Raises - News ... A 56% Wage Increase

 

HARTFORD, Conn. (AP) — A contract giving state police captains and lieutenants pay raises of up to 56 percent has been quietly approved after state lawmakers let the deal take effect without votes in either the House or Senate. The 4½-year contract took effect on Friday because the House and Senate failed to vote on the deal within 30 days of its submission to the legislature, under a process allowed by state law for all state labor contracts.

 

Connecticut is broke!

Governor Malloy and the legislature are out of money and they have buried us in debt – a whopping $71.6 Billion to be exact!

 

The Headlines tell the story…..  Faltering income tax widens deficit, threatens Malloy's budget for coming year.  The solution?  Malloy would use state's credit card payments to cover operating deficit.

 

“Faltering state income tax revenues left Gov. Dannel P. Malloy reporting his largest budget deficit to date on Friday. And unless tax receipts reported this week by nonpartisan legislative analysts improve, Malloy's budget plan for next year -- including a state employee pension fund fix and increased education aid to towns -- could be out of balance now and headed for more than $500 million in red ink by 2013-14. The governor's budget agency, the Office of Policy and Management, reported that the general fund in this year's $20.14 billion budget is $66.9 million in deficit. Malloy needs to finish $75 million in surplus this year to maintain the ongoing conversion of state finances to Generally Accepted Accounting Principles, and the administration now faces a $142 million hole.”

 

 

Other People’s Money

Our State legislators love to spend Other People’s Money – Your Money!   Every dollar our State elected officials give to their pet projects and their voting block - the unions - is coming out of your pockets.  Whether it is to pay off the $1.5 billion in new state taxes, the 56% Wage Increase for Police Supervisors, the 9% Wage Increase for the Other State Employees along with a Four Year Job Guarantee,   higher local property taxes due to the inadequate amount of state funding given to your town, or money to the communist party – IT IS YOUR MONEY YOUR STATE LEGISLATORS ARE SPENDING! 

 

 

 

Communist Party Connection

And there appears to be no end to the irresponsible – rapid fire spending by our State elected officials while adding to the State’s debt as was evidenced by  their recent proposal to give more than $300,000 to a New Haven community center before The Big Reveal – The Center had ties to the Communist Party   resulting in the headlines Proposed aid for left-leaning center sparks bond dispute.

 

 

 

State Employee Union Wants State Retirement Plan for Private Citizens!!!

As you read the following article captioned Steven Malanga: How Retirement Benefits May Sink the States reflect on the fact that “One of Connecticut's largest public employee unions is trying to rally support in the waning days of the General Assembly session for a study of whether state government should offer a retirement plan to private citizens” as noted within the article captioned  Union tries to rally support for study on state-run retirement savings plan.

 

 

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State of Connecticut Employees Earning 250,000 Dollars to 2,403,224 Dollars

In Salary and Benefits During Fiscal Year 2011 Information Obtained from - State of CT Transparency Website

 

 

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State Employee Pensions of $100,000 and More

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

 

From the State Transparency Website: In 2010, payments were made to 41,950 retirees or beneficiaries totaling over $1.26 billion. Additionally, the State administers the Alternate Retirement Program (ARP), a defined contribution program for some higher education employees.

For additional information on state administered pension plans go to the following web link  http://transparency.ct.gov/html/pensionOverview.asp

 

 

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So taxpayers:  Neither the Governor, your State Legislators, nor the State Employee Unions will ask you this question, but the Federation is concerned!  How are you and your family doing?   Can you afford to pay these bills which the Governor and the State Legislators have burdened you with?  Let us hear from you at fctopresident@aol.com

 

But before you answer that question consider the following.   As our Governor and State legislators grapple with the growing deficit and debt, they have locked taxpayers into state employee - legally binding - union contracts which are unsustainable and could ultimately drive up the property taxes of home owners and businesses in the 169 towns within our State.  With 9% state employee wages increases, a 56% wage increase for State Police Administrators, a four year no layoff clause, continued longevity payments, and some state salaries and pensions exceeding $200,000, there is only one more pool of money left to feed their insatiable appetite  – Municipal Aid – which will drive up your local property taxes! 

 

You can read more about the State of our State at  Hold State Legislators Accountable for Property Tax Increases

 

Now let’s return to the State’s latest Fiscal Accountability Report where you will learn to whom you owe the majority of the $71.6 Billion which our State legislators over the years have pledged YOUR MONEY to.   If you click on the following link and travel to page 16 you will see that the majority of the money is promised to State retirees and Teachers in both pension and healthcare benefits throughout their lifetime as noted in the Chart below.     http://www.ct.gov/opm/lib/opm/budget/fiscalaccountability/fiscal_accountability_report_final.pdf

 

 

 

 

In conclusion, the Governor nor the State Legislators have begun to pay the 9% wage increase for the state employees they are required to pay under the legally binding contract they have signed committing your money to pay these wage increases.  So if they can’t find the money to give the state employees their raises,  they will be forced to cut municipal aid which will drive up your local property taxes!  This on top of the $1.5 billion just imposed in new state taxes.  And on the local front, approximately 85% of your property taxes pay for your Town and Board of Ed employees who themselves are getting wage increases in their contracts.  So the spending of your money has only just begun……

 

 

Steven Malanga: How Retirement Benefits May Sink the States

Illinois is a lesson in why companies are starting to pay more attention to the long-term fiscal prospects of governments.

By STEVEN MALANGA  April 28, 2012 Wall St Journal

Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, "You won't recruit a business, you won't recruit a family to live here."

 

We're likely to hear more such worries in coming years. That's because state and local governments across the country have accumulated several trillion dollars in unfunded retirement promises to public-sector workers, the costs of which will increasingly force taxes higher and crowd out other spending. Already businesses and residents are slowly starting to sit up and notice.

 

"Companies don't want to buy shares in a phenomenal tax burden that will unfold over the decades," the Chicago Tribune observed after Mr. Emanuel issued his warning on April 4. And neither will citizens.

Government retiree costs are likely to play an increasing role in the competition among states for business and people, because these liabilities are not evenly distributed. Some states have enormous retiree obligations that they will somehow have to pay; others have enacted significant reforms, or never made lofty promises to their workers in the first place.

 

Indiana's debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois's accumulated obligations for the same benefit average $3,399 per person.

 

Illinois is an object lesson in why firms are starting to pay more attention to the long-term fiscal prospects of communities. Early last year, the state imposed $7 billion in new taxes on residents and business, pledging to use the money to eliminate its deficit and pay down a backlog of unpaid bills (to Medicaid providers, state vendors and delayed tax refunds to businesses). But more than a year later, the state is in worse fiscal shape, with its total deficit expected to increase to $5 billion from $4.6 billion, according to an estimate by the Civic Federation of Chicago.

Rising pension costs will eat up much of the tax increase. Illinois borrowed money in the last two years to make contributions to its public pension funds. This year, under pressure to stop adding to its debt, the legislature must make its pension contributions out of tax money. That will cost $4.1 billion plus an additional $1.6 billion in interest payments on previous pension borrowings.

 

Business leaders are now speaking openly about Illinois' fiscal failures. Jim Farrell, the former CEO of Illinois Toolworks who is heading a budget reform effort called Illinois Is Broke, said last year that the state is squandering its inherent advantages as a business location because "all the other good stuff doesn't make up for the [fiscal] calamity that's on the way." Caterpillar, the giant Peoria-based maker of heavy construction machinery, made the same point more vividly when it declined in February to locate a new factory in Illinois, specifically citing concern about the state's "business climate and overall fiscal health."

 

California is another place where businesses have come to view three years of budget uncertainty and huge pension liabilities (not to mention the state's already high taxes and complex regulatory regime) as an inducement to migrate elsewhere. The state and its municipalities already face unfunded pension bills that now top $500 billion, according to studies by Stanford University's Joe Nation, and several of the state's cities, including Stockton in the Central Valley, face the prospect of insolvency.

 

Executives at Stasis Engineering, a formerly Sonoma, Calif.-based auto design firm that left the state for West Virginia in the midst of an unfolding budget crisis in 2009, told the Press Democrat newspaper that the "budgetary bedlam gripping Sacramento" seemed to portend, as the paper characterized the company's concerns, "a future filled with tax increases and service cuts." More recently, in December 2011, Ron Mittelstaedt, the chief executive of Waste Connections, a recycling company formerly based in Folsom, Calif., told the press that the state's "structural [budget] mess" was a contributing factor in its decision to relocate to Texas.

 

Meanwhile, Oakland Tribune columnist Daniel Borenstein notes that his city has levied what he calls a "hidden pension tax" on property owners for decades to pay off a municipal pension fund that went bust in 1976. Today, the average Oakland home with an assessed value of $266,267 pays an additional $419 a year in property taxes to finance the benefits of the defunct system, Mr. Borenstein estimates, while a home assessed at $1 million pays an added $1,575 in taxes.

 

Bigger bills will fall due elsewhere. Earlier this year, the Massachusetts Taxpayers Foundation examined unfunded retiree health-care liabilities in 10 midsize municipalities, including Worcester and Springfield, and found the debt averaged $13,685 per household. To pay those commitments over 30 years would require adding $565 a year to property tax bills on average, the group estimated. In one community, Lawrence, the tab was $1,209 annually, a 50% increase over current taxes.

 

Back in Illinois, Dana Levenson, Chicago's former chief financial officer, has projected that the average city homeowner paying $3,000 in annual property taxes could see his tax bill rise within five years as much as $1,400. The reason: A 2010 Illinois law requires municipalities to raise the funding levels in their pension systems using property tax revenues but no additional contributions from government employees. The legislation prompted former Chicago Mayor Richard Daley in December to warn residents that the increases might be so high, "you won't be able to sell your house."

 

Mr. Malanga is a senior fellow at the Manhattan Institute and a contributor to PublicSectorInc.org.

http://online.wsj.com/article/SB10001424052702303592404577361891800868180.html