Federation of Connecticut Taxpayer Organizations

On average, Connecticut taxpayers pay approximately 85% of their property taxes for personnel related expenses.� Some state and local government employees are earning in excess of $100,000 in wages and benefits.� Some are retiring at $100,000 and more as overtime is factored into their pay and full health benefits are provided throughout their retirement.�

The following are links to information on state and local public sector salaries.� Top 50 Base Pay vs Actual Pay� Also, visit the Yankee Institute for More Information on State and Local Spending on Public Employee Salaries, etc.�� http://ctsunlight.org/

As States and towns throughout the country are confronted with these unsustainable costs, the �unions are preparing to launch a multimillion dollar campaign to boost the image of government workers and fend off pay cuts and benefit rollbacks in states� as recently reported by the Associated Press. ��http://www.msnbc.msn.com/id/41079564 .

The majority of government employee pensions, wages and benefits are locked in by union contracts which are sustained through antiquated State Binding Arbitration Laws.�

Jeff Jacoby, a columnist for The Boston Globe got it right when he stated in his recent editorial that �Mandatory arbitration has turned out to be a rigged game � rigged in favor of government employees, and against the taxpayers who supply their wages and benefits�. �His article is captioned �Arbitration�s Intolerable Bind� and is available at the following web link.� http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/01/12/arbitrations_intolerable_bind/?p1=Well_MostPop_Emailed3

Governor Malloy, Lieutenant Governor Nancy Wyman, and our State legislators have a difficult task ahead of them in attempting to solve Connecticut�s budget crisis while facing a deficit of $4 billion for fiscal year �2011-2012.� The State�s long term debt has reached $72 billion, the majority of which is money the State owes to government employee pension funds and healthcare.��

As the state budget has not yet made it out of the gate, we were disappointed in �Governor Malloy�s remarks to the Day Newspaper when recently interviewed.� Therein, the Governor condemned Republicans to include New Jersey Governor Christie for allegedly escalating instability in the bond market for partisan advantage.�� Governor Malloy also chastised Republicans in Congress for suggesting States and towns might have to go bankrupt in lieu of a government bailout.

In addressing Governor Malloy�s remarks, we would turn our attention to Vallejo, California, which many expect other states and towns will follow due to their inability to control spending and the demands of union contracts.�� Further, issues involving instability in the muni bond market were raised� by Meredith Whitney reputed to be one of the top financial analysts in the country.� In October 2008 Ms. Whitney was ranked as one of Fortune 500�s �50 Most Powerful Women in Business.� �Ms. �Whitney recently warned that a muni bond crisis "is the largest threat to the U.S. economy." Municipal bonds, used to finance state and local government spending, are about a $2.8 trillion market. �Ms. Whitney is noted for predicting the 2008 Wall Street meltdown months in advance.

Connecticut has a fiscal crisis to solve.� But this is not news.� �In September, 2009, Bloomberg News announced �Connecticut Debt Balloons as State Readies Deficit Financing�. Bloomberg recognized Connecticut as being �the state with the most tax-supported debt as it prepares to borrow $2.25 billion over the next two years to balance its budget�.

On August 17, 2010, Reuters informed the nation that �Connecticut may have just a week's worth of cash� as noted by State Treasurer Denise Nappier in her August 13, 2010 letter to Connecticut�s Bond Commission in which she requested the sale of $520 million General Obligation Bonds to meet the demands of bills which had to be paid.

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

Recently, the CTMirror reported State's unfunded pension liability hits 22-year high.

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 rather than raise taxes or reduce spending.

Many hope that Governor Malloy, regardless of his alliance to public sector unions, understands that he must look for union cooperation to control state costs or bankruptcy in our state and/or towns could be inevitable.��

Connecticut taxpayers pay one of the highest taxes in the nation.� The solution to our crisis is to reduce spending.� And much of those spending cuts must be born by the unions at the bargaining table.� Their refusal to do so should result in layoffs, a restructuring of government personnel, and offers to those now on the unemployment line from the private sector to fill those jobs.�

If the union�s national campaign extends to Connecticut and convinces the Governor to the contrary, the true tsunami in Connecticut will be caused by the exodus of businesses leaving our state.�

Governor Malloy and the State Legislature must also wrestle control of government from the unions through a speedy reform of State Binding Arbitration Laws.�� This will in turn put the control of government where it belongs, with our elected public officials.�

The unions need to understand that bankruptcy could result in their contracts being placed in jeopardy through the courts. ��

The state is in a crisis.� The solution is that our elected officials must take a brave stance against the unions and not worry about the next election by pandering for their support.�

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