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State's unfunded pension liability hits 22-year high

By Keith M. Phaneuf CTmirror.org

 

 

From The Federation of Connecticut Taxpayer Organizations 
Contact Susan Kniep

Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032

 

 

Tax Talk December 10, 2010

 

CONNECTICUT’S DEBT: $72 BILLION DOLLAR!

 

TODAY THE STATE BOND COMMISSION COULD

TAKE US DEEPER INTO DEBT!!!

 

The Federation of CT Taxpayer Organizations

Has Asked the State Bond Commission to:  

 

VOTE NO ON THE MULTI-MILLION BOND PACKAGE!

 

IMPOSE A MORATORIUM ON BONDING! 

 

CONTROL SPENDING! REFORM MANDATES!

 

*** Please Refer to our Letter Below ***

 

 

December 10, 2010 State Bond Commission Agenda 

http://www.ct.gov/opm/lib/opm/budget/capitalbudget/cy2010/2010dec10_sbc_agenda.pdf

 

Latest Fiscal Accountability Report Released Last Month Reflects Connecticut’s Growing Deficits and More…. http://ctmirror.org/sites/default/files/documents/OFA_Nov%2015%202010%20report2.pdf

 

 

 

 

Spent surpluses loom large against state's budget deficit  ctmirror.org kphaneuf@ctmirror.org  Keith M. Phaneuf State officials ordered as much surplus spending over the past 12 years as the entire deficit looming over the next fiscal year, according to a new report from nonpartisan legislative analysts. Past and present governors and legislators spent $2.76 billion from surpluses as soon as they were available, and took another $696 million left over from annual budgets and allocated it to future budgets a year or two out. Those two allocations combined approach $3.5 billion, or 59 percent of the cumulative surpluses recorded since 1999, according to the annual Fiscal Accountability Report delivered last week by the nonpartisan Office of Fiscal Analysis to the legislature's Appropriations and Finance, Revenue & Bonding committees. Legislative analysts project that the next fiscal year, which begins July 1, faces a built-in shortfall of $3.67 billion, while the Executive Branch's chief fiscal arm, the Office of Policy and Management, pegs it at $3.37 billion. The average, $3.52 billion, represents 18.5 percent of current spending

http://ctmirror.org/story/8557/spent-surpluses-loom-large-against-states-budget-deficit

 

 

For the period FY 99-10, there was $5.87 billion in surplus funds, of which:

$1.47 billion was deposited to the Budget Reserve Fund;

$41.3 million used for reduction of bonded indebtedness, pursuant to the Connecticut Constitution;

$2.76 billion was appropriated for both one-time expenditures and on-going uses;

$96.2 million was used for a rebate to taxpayers;

$800 million was used for debt avoidance; and

$695.7 was used as one-time revenue to balance the budget in subsequent fiscal years.

 

Washington's Next Big Decision: Bailout the States or Not?
Wall Street Journal, Dec 8, 2010,  Peter A. Brown, assistant director of the Quinnipiac University Polling Institute - Amid all the talk in Washington, D.C., about cutting the federal budget deficit, there is little public discussion of what might be among the most contentious issues that will face the new Congress in January – whether to bail out the states. Obviously, sending money to the states to reduce their red ink would make it more difficult for Congress to meet its goal of trying to get the federal deficit under control. But the rough estimate is that the various states face budget shortfalls exceeding $100 billion. Without a bailout from Washington, a large number of states will be forced to endure unprecedented levels of spending reductions or tax increases. Continued at …. http://blogs.wsj.com/capitaljournal/2010/12/08/washingtons-next-big-decision-bailout-the-states-or-not/

 

Cheat Sheet: Where the Fed's Trillions Went by Marian Wang Dec 9, 2010

Following the failure of Lehman Brothers the biggest U.S. banks had tabs with the Fed that ran in the tens of billions on any given day during the worst parts of the financial crisis. Big banks typically got funds through more than one program because they were eligible for different types of loans. As our interactive shows, Citigroup, Merrill Lynch and Morgan Stanley topped the list, with more than 200 loans each, though Bank of America and Goldman Sachs weren’t far behind. (The Wall Street Journal has helpfully graphed this out [3].) Complete article at …. http://www.propublica.org/blog/item/cheat-sheet-where-the-feds-trillions-went

 

 

Mounting State Debts Stoke Fears of a Looming Crisis, See Reference to Connecticut http://www.nytimes.com/2010/12/05/us/politics/05states.html?_r=1&scp=4&sq=michael%20cooper&st=cse

 

 

Wind at their backs: Powerful Democrats help Chinese energy firm chase stimulus money Sen. Reid and Obama donors back company seeking $450 million in U.S. money http://www.msnbc.msn.com/id/40565987/ns/business-going_green/

 

 

Education panel rejects 'money follows the child'
CT Mirror, Dec 6, 2010

 

WikiLeaks cables on Afghanistan show monumental corruption - CNN Hundreds of US diplomatic cables obtained by WikiLeaks paint a picture of corruption in Afghanistan at every level of government and society. http://articles.cnn.com/2010-12-02/world/afghanistan.wikileaks_1_ambassador-karl-eikenberry-cables-afghan-president-hamid-karzai?_s=PM:WORLD

 

 

Malloy warns House Democrats of tough decisions ahead
CT Mirror, Dec 6, 2010

 

 

In Tax Deal, Many Public Employees Will Pay More The union spent $90 million to help elect Democrats during the last election cycle, when Mr. Obama promoted a plan to preserve tax cuts for all but the wealthiest 2 percent of Americans. http://www.cnbc.com//id/40586413

 

 

Senate Republicans Block U.S. Health Aid for 9/11 Workers

The bill provided medical care for rescue workers and residents of New York City who became ill as a result of breathing in toxic fumes from ground zero. http://ireport.cnn.com/docs/DOC-527294?ref=feeds%2Flatest

 

 

 

Tax Appeals Swamp US Cities, Towns as Property Prices Plunge
Bloomberg Dec 8, 2010 The backlog of cases from taxpayers seeking to lower property-tax bills of more than $100000 shot up to 14236 this year from an annual average of about 6000 ... http://www.bloomberg.com/news/2010-12-08/plunging-home-prices-fuel-property-tax-appeals-swamping-u-s-cities-towns.html

 

 

Corruption agency files charges against Cheney By Ifedayo Adebayo

December 8, 2010 The Economic and Financial Crime Commission (EFCC) http://234next.com/csp/cms/sites/Next/News/Metro/Politics/5651299-146/corruption_agency_files_charges_against_cheney.csp

 

 

Is the Golden Age of Education Spending Over? Dec 9, 2010 Time Magazine,  by Andrew J. Rotherham  According to a report issued jointly last week by the National Governors Association and the National Association of State Budget Officers, when federal stimulus funds run out in 2011, states — and, by extension, schools — will tumble off a fiscal cliff, and even an economic upturn won't bring state funding back up to where it was a few years ago. The problem, however, is not just the struggling economy. In 1970 America spent about $228 billion in today's dollars on public schools. In 2007 that figure was $583 billion. True, some of the increase can be traced back to growing enrollments, better programs, and improved services for special-education and other students, but much of the increase is just a lot of spending without a lot to show for it. And given all the various pressures on state budgets (including our aging population, health care costs and the substantial obligations states and school districts owe for pensions and benefits), the golden age of school spending is likely coming to an end. (See what makes a school great.) Read Complete article at http://www.time.com/time/nation/article/0,8599,2035999,00.html

 

 

 Preliminary Summary - NGA/NASBO Fall 2010 Fiscal Survey of States

As State Spending and Revenue Remains Well Below Pre-Recession Levels, Some States Approach a Cliff in 2012 http://nasbo.org/LinkClick.aspx?fileticket=wJKroFj6QDA%3d&tabid=38

 

 

Click here for the full report.

 

House passes Obama-backed doc fix Jason Millman - 12/09/10 01:20 PM ET

 

*********************

 

To: Members of the State Bond Commission

Governor.Rell@ct.gov, Brenda.Sisco@Ct.gov, state.treasurer@ct.gov, nancy.wyman@po.state.ct.us, attorney.general@ct.gov, Daily@senatedems.ct.gov,patrick.nolan@ct.gov, Cam9123@hotmail.com, Andrew.Roraback@cga.ct.gov, Vincent.Candelora@housegop.ct.gov

 

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


 

VOTE NO ON MULTI-MILLION BOND PACKAGE!  

IMPOSE MORATORIUM ON BONDING!   

CONTROL SPENDING! REFORM MANDATES!

 

The State’s Latest Fiscal Accountability Report Released in November Reflects Connecticut’s Growing Deficits at $72 Billion. http://ctmirror.org/sites/default/files/documents/OFA_Nov%2015%202010%20report2.pdf

 

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. 

 

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.

 

As such, we believe it is imperative that no additional bonding be approved and a moratorium on bonding be imposed 

for at least one year or more.

Concurrently, spending must be brought under control through reforms to state mandates to include Binding Arbitration.  

Unlike the private sector, the majority of public sector union contracts in our State allow overtime to be factored into pension benefits.  Taxpayers also pay for the healthcare of many state retirees.   

 

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

 

As many Connecticut state employees collect lucrative pensions with health benefits, others are also reaping financial rewards.  Total compensation paid to state pension investment advisors for 2009 was nearly $89 million compared to $77 million in the previous year.       

 

A recent study by Northwestern University predicts that Connecticut’s state employee pension fund will be broke by 2019 .

 

It is apparent that our State cannot continue on this path to self destruction at the taxpayers’ expense.  Connecticut must get its financial house in order and that cannot be done by driving our State and its taxpayers further into debt which will have to be passed on to our children. 

 

Again, please VOTE NO on all bonding requests, impose a moratorium on bonding, reign in spending and reform state mandates to include Binding Arbitration.