Federation of Connecticut Taxpayer Organizations

The State of Connecticut has been taking center stage among the national news networks as state officials encumber taxpayers with increasing debt and sleight of hand finances.��

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.�

According to Connecticut�s latest Fiscal Accountability Report� The state of� Connecticut� faces significant long-term obligations including debt, unfunded pension liabilities and unfunded post-employment retirement benefits which are estimated to exceed $61 BILLION in total.

On July 1, 2010, the State of Connecticut began it fiscal year with a $19.01 billion budget, which nearly equates to the State�s $19 billion bonded debt.�

Three months later, on September 1, 2010, State Comptroller Nancy Wyman certified a budget deficit in excess of $60 million.�

Connecticut�s Office of Fiscal Analysis is projecting a $3.37 billion dollar shortfall for the fiscal year that begins next July 1 which equates to 18% of this year�s spending.�

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.

For years the state has raided state pension funds to meet its budget obligations.� As of Connecticut�s 2008 actuarial valuation, the state�s pension fund had $19.2 billion in liabilities versus $10 billion in assets.� This 52% ratio is well below the 80% actuarial recommendation.��

The catalyst driving our debt is state employee pay and pensions solidified in union contracts. These contracts are approved by our elected state officials who pass the costs of these contracts onto taxpayers, many of whom are standing among the 9% unemployed as the private sector continues to shed jobs.�

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.�� Without reforms to state mandates such as Binding Arbitration and Prevailing Wage Laws our state will sink into the abyss from which we will never climb out before Connecticut towns and our state are driven to bankruptcy.��

For more information on this and other taxpayer related issues, visit the Federation's website at http://ctact.org/ or email fctopresident@aol.com.