February
1, 2016
From:
The Federation of Connecticut Taxpayer Organizations
Contact: Susan Kniep, President
Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032
We warn
you, this report is long. As such, we
have reduced the report to Part 1 and Part 2.
In Part 2 we explore The Negative Impact of Public Sector Union
Contracts to include how the Board of Regents for Higher Education gave one
full time professor a promotion while he was in jail at the Hartford
Correctional Center – a move that helped boost his annual salary from
$83,200 to $96,900.
Part 1
Connecticut’s Ship of State
is Sinking
Under the Weight of High Debt
and
Deficits of $71 Billion!
See
Chart Below
And a Major Wall Street Rating Agency
is taking notice!
As today we read Breaking News from
CTMirror.org that
Malloy to
seek greater executive branch control over budget
Feb 01, 2016 05:00 am
After struggling to extract spending cuts from legislators
last year, Gov. Dannel P. Malloy will propose a new
state budget that gives departments much greater discretion to decide how their
money is spent. Sources familiar with the governor’s 2016-17 budget proposal say it won’t assign agency funding to many specific
programs, moving instead toward the block-grant system used for state colleges
and universities. Continue reading at
…..
View
as "Clean Read"
And Breaking News from CTNewsJunkie.com
that
State Finance Committee Struggles With Some of Tax Panel’s
Conclusions
Feb 1, 2016 5:30am
Posted to: State Budget | Taxes | State Capitol
Members of the Finance, Revenue, and Bonding Committee were
uncertain Friday about how many tax reforms they could implement this year and
which ones will have to wait… Former Sen. William Nickerson, a Republican from Greenwich who co-chaired
the tax panel that spent two years studying the tax system, said taxes are one
of the reasons wealthier individuals are moving. “That outmigration is at a critical stage for
us here,” Berger said. . Continue reading "Finance Committee Struggles With Some of Tax Panel’s Conclusions" »
********************
But
that hasn’t stop Governor Malloy and our State Legislators from indebting us
even more, as Christine Stuart of CTNewsJunkie
reported last week
State Bond
Commission Poised To Approve $505M
listed on its Friday’s agenda
On Jan 25, 2016 Keith Phaneuf of
CTMirror.org reported
Red ink
awaiting CT lawmakers outstrips rainy day fund by almost $175M
Keith Phaneuf reports….. The red ink legislators and Gov. Dannel
P. Malloy must deal with beginning next week now outstrips Connecticut's emergency reserves by almost
$175 million, based on a new deficit forecast released late Monday. The legislature’s nonpartisan Office of Fiscal
Analysis projects the current fiscal year’s budget deficit is $72.2 million.
Coupled with a shortfall of roughly $507 million in the 2016-17 finances —
which Gov. Dannel P. Malloy and the legislature must
begin to adjust starting Feb. 3 — and the red ink to be resolved approaches
$580 million.
View as "Clean Read"
This latest revelation follows concerns already expressed by
the rating agency Moody’s Investors Service.
As previously reported by CTMirror.org
“While the partisan debate over GE’s departure from Connecticut
continues, a major Wall Street rating agency sees a correlation between the
company's move and the state’s ongoing fiscal and economic woes. “Moody’s
Investors Service cited the impending move as it issued a “credit
negative” -- not a
formal rating downgrade -- but rather a public statement about a development
that could harm Connecticut’s
financial standing in the long run”.
Moody’s goes on to state in CTMirror’s
headlined article captioned Moody’s: GE’s departure ‘underscores’
Connecticut’s fiscal, economic woes, “…Connecticut still grapples with under-performing tax
revenues, budget deficits, low reserves, population loss and an economy that
still hasn’t recovered all jobs lost in the last recession. “Furthermore the state continues to face
budgetary pressure from high fixed costs for debt, pension and retiree health
care.”
But Connecticut’s
troubles don’t end there.
Let’s not forget the Tsunami
of debt which has engulfed our State bringing with it a sea of red ink as
disclosed within the November, 2015
[PDF]Fiscal
Accountability Report - Connecticut General Assembly
This report is required by law,
Specifically Connecticut General Statutes Sec. 2-36b.
STATE DEFICITS
$6.6 BILLION DOLLARS
Budget Outlook in
Millions
|
|
Connecticut Budget Deficits for Fiscal Years 2016
through Fiscal Year 2020
|
|
|
FY 2016
|
FY 2017
|
FY 2018
|
FY 2019
|
FY 2020
|
|
Estimated Expenditures
|
$18,199.3
|
$18,863.8
|
$20,253.7
|
$20,939.5
|
$21,840.2
|
|
Estimated Revenue
|
17,944.9
|
18,311.8
|
18,530.9
|
19,066.6
|
19,628.7
|
|
Surplus/(Deficit)
|
($254.4)
|
($552.0)
|
($1,722.8)
|
($1,872.9)
|
($2,211.5)
|
********
STATE DEBT
$71 BILLION DOLLARS
|
STATE OF CT LONG
TERM DEBT OBLIGATIONS IN BILLIONS
|
|
|
|
|
|
|
Unfunded Liabilities
|
Nov. 2014
|
Nov. 2015
|
Difference
|
|
Debt Outstanding
|
$21.3
|
$22.8
|
$1.5
|
|
State Employee Retirement System (SERS)
|
13.3
|
14.9
|
1.6
|
|
Teachers Retirement System
|
10.8
|
10.8
|
0
|
|
State Post Employment Health and Life
|
19.5
|
19.5
|
0
|
|
Teachers Post Employment Health
|
2.4
|
2.4
|
0
|
|
Generally Accepted Accounting Principles Deficit
|
1.1
|
0.7
|
-0.4
|
|
TOTAL
|
$68.4 BILLION
|
$71.1
BILLION
|
$2.7 BILLION
|
It’s
apparent, when reviewing the aforementioned, that Connecticut’s Debt and Deficits are driven
by lucrative Union Contracts.
AND
NOW STATE OFFICIALS WANT TO TAKE ON PRIVATE SECTOR PENSIONS!!!!
Before that happens, let’s review how our State
officials have done so far in managing our State Employee and Teacher Pensions
and Healthcare Costs.
In Nov, 2015
the CTPost published CT State Pension Liability a Result of
Years of Neglect noting “The numbers
look dire, and some experts say they pose a risk to the state’s long-term
economic health. “Connecticut’s
financial obligations to bondholders and pensioners ranks among the highest in
the U.S….”
At the time, we also learned from CTMirror.org that Auditors again find costly problems with state pension
program
Today, the State is promoting their plan to take on the
pension plans of private sector workers.
However, as GE is on their way out of Connecticut, at least 40 business organizations are asking WHY? They have Unanswered Questions: Why a State-Run
Retirement Plan ... for private sector workers which The Connecticut Business & Industry Association
(CBIA) contends would “compete with Connecticut’s financial services
industry”.
And CBIA raises another very relevant question - Who is liable if problems arise? CBIA notes “The plan calls
for guaranteeing a rate of return for participants and having the state purchase an insurance product to cover
any shortfalls. “Unfortunately, no such
product exists and never has. “If the guaranteed rate of return is not met, the
state could be liable to participants for the shortfall”.
As Lawmakers Start Lining Up Support For
Public Retirement Push, we should heed the advice of Robert C. Pozen, a senior fellow at the Brookings Institution, and
former chairman of MFS Investment Management, the oldest mutual fund company in
the US who says “The DOL should be particularly concerned by the serious
discussions among certain state officials about offering "guaranteed"
returns to workers in state IRA plans. “There are few real guarantees in the
financial world. “That's why the Automatic IRA was designed at the federal
level as a defined contribution plan, where retirement benefits would be based
on investment performance. “But
‘guaranteed’ returns would turn state sponsored IRAs
into defined benefit plans -- creating new fiscal challenges for states that
already face large unfunded pension obligations”. You can read more on this issue New state programs must protect
retirement savings for workers.
Again, let’s look at the State’s success rate in managing
the pension and health plans for State retirees and teachers. State taxpayers are now on the hook for
approximately $50 BILLION in unfunded pension and healthcare liabilities.
It’s apparent that Moody’s gets it as they cite – and it is
worth repeating – “the state – Connecticut
- continues to face budgetary pressure from high fixed costs for debt, pension
and retiree health care.” But will
Governor Malloy or any of the Democrats who hold the majority in the State
legislature grasp the seriousness of this issue, and recognize the
solution?
Because there is a solution. That solution may be multifaceted but its
linchpin should be either ending - or - reforming State Binding
Arbitration and Collective Bargaining Laws which have brought our State
to where it is today. BROKE!
State public employee pensions and healthcare benefits far
surpass those in the private sector who are forced to pay the unsustainable
cost of these benefits which are now in excess of $50 Billion.
The State’s Transparency Connecticut website lends insight into the Pension Payments made in 2014
to 49,616 State retirees which total over $1.62 billion. As noted on the website Pensions “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 click here”.
To see what each retiree is paid, after you have clicked on Pensions, click the Search button.
You will then see Retiree names listed alphabetically. Next, go to the last column and click Total
twice. This will provide you with the
highest to lowest paid state retiree.
The following are the Top 10 Annual Pension Payments:
|
Name
|
Total $
|
|
VASNUS, ESTATE OF
|
335,573.71
|
|
VEIGA, JOHN F
|
290,355.24
|
|
BLECHNER, JACK N
|
286,691.88
|
|
PAVLAK, ESTATE OF
|
278,167.91
|
|
DEROSA, VINCENT J
|
254,096.04
|
|
BLANCHETTE, EDWARD A
|
238,132.86
|
|
ROGAL, KURT R
|
236,339.34
|
|
HARTLEY, HARRY J
|
222,367.26
|
|
JUDD, RICHARD L
|
218,882.28
|
|
SIGMAN, EUGENE
|
216,797.28
|
Continued in Part 2 …..