Federation of Connecticut Taxpayer Organizations

Public debt, mandates handicap state
By Susan Kniep, ( fctopresident@aol.com) President of the Federation of Connecticut Taxpayer Organizations Inc.

Connecticut is awash in debt.� Gov. M. Jodi Rell�s November 2006 Fiscal Accountability Report reads: �The state faces significant long-term obligations including debt, unfunded pension liabilities and unfunded post-employment retirement benefits which are estimated to exceed $49 billion in total.�

As Democrats in the legislature are trying to wrest control of the Bond Commission from Gov. Rell, they have left taxpayers with the largest per capita bonded debt in the country, $14.2 billion. As Gov. Rell tries to exert control over the state�s �candy store,� Democrats are flexing their muscles to add more pork-barrel spending, such as $14 million for a new bridge to an isolated beach and $1.5 million for a Jaguar exhibit at a zoo.

The state is projecting deficits in each of the next three fiscal years, and in 2007-08, the budget is on course to exceed the spending cap by $800 million. With borrowing exempted from the cap, many legislators perceive bonding as free money, until they have to factor in principal and interest payments to the state�s annual budget. By the time this $14.2 billion debt is paid, it is anticipated taxpayers will have paid $5 billion in interest.

Connecticut has the second highest property taxes in the nation, trailing only New Jersey. With the impact of revaluation, many will lose their homes because of their inability to pay their property taxes which have become taxes on unrealized capital gains. Further, with the downturn in the real-estate market, home sellers may get far less than the value of the homes on which they are paying property taxes.

Nationally, taxpayers are lobbying their legislators to adopt a Taxpayers� Bill of Rights (TABOR) to bring fiscal austerity, accountability and integrity to the government and constrain their tax burden.

The Federation of Connecticut Taxpayer Organizations Inc. (FCTO) is proposing a TABOR that addresses to bring fiscal accountability and safeguard the interests of property owners from eminent-domain abuse. The goal is to bring these issues to the forefront until November 2008, when the state is constitutionally required to ask voters whether they want to amend the state Constitution.

From property taxes to education to revaluation to government-sector employees and beyond, legislators tell the leaders of Connecticut�s 169 municipalities what they can and cannot do. If the state doesn�t provide funding to a town to sustain these mandates, the cost is borne by property owners through increased property taxes.

With as many as 85 percent of property taxes paying for salaries, health care, pensions and other labor costs, the most costly unfunded mandate to taxpayers is binding arbitration, wherein an appointed arbitrator tells a municipality what it can and cannot do as it relates to union contracts.

When I was mayor of East Hartford from 1989-93, I refused to accept a taxpayer- financed car and told all employees to cease driving town-owned cars home.� This benefit was not spelled out in their contracts, but the unions grieved my instructions. The unions won because of a little-known term called �past practice.�

In December, the Federation testified before the Governor�s Committee on Unfunded Mandates seeking reform of binding-arbitration laws. We urge legislators to:
■ Give local elected officials the same powers state elected officials have to better control their labor costs.
■ Prohibit unions from accessing a town�s savings when negotiating contracts.
■ Give towns the right to suspend binding arbitration for up to three years when affected by negative economic conditions.
■ Remove the veil of secrecy from contract negotiations. Taxpayers pay for union contracts. They should have every right to follow negotiations and comment on terms being negotiated before contracts are adopted. In fact, as union members vote on contracts, taxpayers should be allowed to vote as well.

Most residents work in the private sector, under �at-will� conditions wherein they can be terminated at any time for any or no legal reason. They work in a state of flux, knowing their employer on any given day can demand they pay a greater share of their health-care premium, take on a greater workload or have their pay cut. There will be no debate, no bargaining, no arbitration and no elected official waiting to defend them.

By contrast, state and municipal workers have a state-given right under arbitration to force negotiations and push their agendas behind closed doors. Unions vote to accept or reject their contracts. Taxpayers have no say; they are presented their property tax bills to fund these lucrative contracts. Meanwhile, our part-time legislators are promoting wage increases for themselves as they force us to pay higher property taxes.

Residents should make their voices heard at the legislature for property tax reform and to secure their property rights from eminent-domain abuse.
Susan Kniep ( fctopresident@aol.com) is president of the Federation of Connecticut Taxpayer Organizations Inc.