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March 9, 2016

March 9, 2016



From:  The Federation of Connecticut Taxpayer Organizations
Contact:  Susan Kniep, President
Telephone: 860-841-8032



The Federation offers the following extensive report understanding that a band aid will not solve the state’s $71 Billion Debt and $6.6 Billion Deficits, the costs of which will be passed on to State and local taxpayers.    We must eliminate the drivers of that debt which are Binding Arbitration and Collective Bargaining Laws.  This is an extensive report which we believe will provide insight into the impact the State has had on municipalities and why the public employee unions must be constrained as taxpayers are forced to pay the unions $100 million while New Jersey fought back and won.




The State and Its Capital - Hartford - are Broke!!



BREAKING:  Brad Drazen reports


Hartford May Ask State for Financial Help: Sources | Hartford ...


The NBC Connecticut Troubleshooters have learned Hartford city leaders are looking into the possibility of asking the state for help dealing with their troubled finances. Multiple sources familiar with the Hartfords financial situation tell the Troubleshooters, legislation could be finalized as soon as tomorrow that would open the door for state oversight.   More



The Federation notes that the last time the State stepped in was in Waterbury in 2001 as noted within the following


House Passes Waterbury Bailout Bill -

Breaking News from the Hartford Courant:






Malloy Wants More Budget Cuts


Cuts include $20 Million from Town Aid!







With cuts in State aid, will property taxes be increased?


Check how Connecticuts property taxes compare to other states at 2016's Property Taxes by State | WalletHub


As CTPost notes in their article captioned


Just how high are Connecticut's property taxes?


According to this study, Connecticut has the sixth highest real estate property taxes in the country and the fourth highest vehicle property taxes.




Any cuts in State aid can drive up local property taxes as


Municipalities fear big CT deficits will nix promised state aid.



Malloy and the State Legislature have already enacted an across the board mill rate of 32 mills on cars while also threatening to enact legislation which would allow cars to be registered regardless if car taxes were owed or parking tickets were paid.  This would further erode local property taxes which could in turn force more homeowners and businesses to tax lien sales.


Read more on this issue by at


Malloy: Speed DMV lines by shedding 'collection agency' role














The Catalysts Driving 


Connecticuts $71 BILLION DEBT



Taxpayers from Our State


Flight of the Billionaires - Hartford Courant








On March 1, 2016, Connor D. Wolf of the  Daily Caller Reported


US Supreme Court Deals Devastating Blow In Public Union Pension Case



The U.S. Supreme Court delivered a devastating blow to New Jersey labor unions Monday by declining to hear their case against Gov. Chris Christie for cutting state pensions. The former Republican presidential candidate cut state pensions in 2014 as part of a reform bill designed to address budget problems in the state. A group of public-sector unions, however, were quick to file a lawsuit to stop the reforms. They argued the cuts violated a contractual agreement the state had to fund retirement. The highest court declined to hear the case after a nearly two-year legal fight.   Continue reading at



Connecticut too had a pending lawsuit brought by the state employee unions, but Connecticut taxpayers were not so lucky as those in New Jersey!







The power and influence of the Connecticut state employee unions became evident in January, 2016 when we read in the Hartford Courant article captioned State Begins Paying $100M Tab For Rowland Layoffs.  The Courant notes the following - State officials will spend most of 2016 paying an estimated $100 million tab for last years settlement of a long-running federal lawsuit by unions over Gov. John G. Rowlands 2003 layoff of more than 2,000 state workers. The taxpayer money has already started flowing.  







Visit  OPM: Office of Labor Relations Contracts - which provides the status of the state contracts and their expiration date.



$93.9 million 

Estimated Cost of new University of Connecticut Professional Employees Contract




The Yankee Institute in their article captioned

A Convenient Glitch?

notes that The Connecticut legislature has not rejected

any union contracts since May 1997. reports

Raises for UConn professionals spark broader CT budget debate






Two weeks ago, in a Hartford Courant article by Christopher Keating captioned



Budget Deficit For Coming Year Hits $900 Million As ... Economic Woes Worsen


State Representative David Alexander, a Democrat, asked the following Who the heck is doing our [revenue] projections?'  These numbers shouldn't be this out of whack. You should be able to make projections that are more accurate than they have [been] for the past year.


Mr. Alexander asks a fair question especially when a lot of taxpayer money is at stake as new union contracts are being negotiated.   These legally binding contracts will undoubtedly include increases in salaries and benefits for State employees.   This will translate to also an increase in pensions.  


The following is an example of what is currently transpiring with the The University of Connecticut Professional Employees Association contract which was withdrawn due a technicality as noted within the news article by captioned In Face of Democratic Opposition, Labor Withdraws Contract. Therein, the following is noted - The University of Connecticut estimated it would cost $55.9 million over five years, but Malloy administration Budget Director Ben Barnes and the legislatures nonpartisan Office of Fiscal Analysis pegged the cost at $93.9 million over that same period of time, a difference of nearly $40 million.  Lori Pelletier, president of the AFL-CIO, said they were disappointed in where the process was headed, but its a glitch. She said the statute calls for a supersedence appendix to be filed and it wasn’t attached to the contract.  


Taxpayers are currently paying UConn staff  $670.3 Million. 


To see what is already being paid to each employee go to Compensation - Transparency Connecticut -, Click on Advanced Search, click on Agency then go to University of Connecticut, next go down to the Search button, click it, and then go over to the last column and click the word Total twice.  This will bring you to the highest to lowest paid.  The top ten range from $427,018 to a high of $2,968,505.



Governor Dannel Malloy and the Democrat Controlled State Legislature must end their charade to drive down the States multi billion dollar debt ($71 Billion) and deficits ($6.6 Billion) while continuing to pander to the unions and protect Connecticut Binding Arbitration and Collective Bargaining Laws.



The Red Ink flowing through the States Budget needs more than a Band-aide.  Removing Binding Arbitration and Collective Bargaining will put the State on the Road to Recovery! 



It is the influence of the very powerful public sector unions which has brought our state to record deficits.   The failure of Governor Malloy and state Democrats to curb that influence will drive our state and its taxpayers further into debt.  


The following provides insight into the negative impact of arbitration on taxpayers.  Although written in 2011, it is very relevant today


Arbitration's intolerable bind - The Boston Globe -



Therein, Jeff Jacoby notes the following -  Perhaps the worst effect of binding arbitration is the way it erodes self-government. It takes away from citizens and their elected officials the power to shape local budgets and to establish wages and working conditions for public employees. Those essential civic decisions are made instead by an outside arbitrator who likely has no ties to the community and who will not have to live with the consequences or be taxed to pay the costs of the settlement he imposes.   Continue reading at ….



But realistically, can we anticipate any reforms to Binding Arbitration or Collective Bargaining an issue raised by the Federation within the following headlined article in 2012 when Governor Malloy described himself as the Son of Organized Labor 



Too Cozy a Relationship Between the Governor, the State ...Legislature and the State Employee Unions?  You Decide!





So What Happens When Elected Officials Put the Interests of Taxpayers Above that of the Unions?



When Unions Lose, Public Officials - who rely on the unions financial and moral support during a campaign – Also Lose as highlighted within the following New York Times article by Monica Davey on Feb 27, 2016 captioned



With Fewer Members, a Diminished Political Role for ...Wisconsin Unions

The drop is most pronounced in the public sector: More than half of Wisconsin public workers were in unions before Mr. Walkers cuts took effect. A little more than a quarter of them remain. The shift has shaken the order of election-year politics. Democrats, who most often have been the beneficiaries of money and ground-level help from the unions, said they were uncertain about what the coming elections would look like, and what forces could take the place of depleted labor groups. (read article)





Will CT Taxpayers ever win as they are billed for the

costs associated with lucrative state and municipal public sector union wage and pension contracts?!?



Due to Binding Arbitration and Collective Bargaining Laws, the odds are always in the unions favor as taxpayers are locked out of any negotiations transpiring between management and labor, a fact highlighted by Flo Stahl and as noted within the article captioned The Federation of Connecticut Taxpayer Organizations Recognizes FLO STAHL where  you can read her two excellent editorials.  (pls accept our apology for the symbols intertwined within the words on our website – we are working to correct the problem).



In addition when financial information is released to the public following an agreement on a union contract between management and labor you seldom get the full story.  For example you frequently hear or read of the  NEGOTIATED WAGE increase in a union contract.   What you never hear being discussed nor reported by the press is the amount of the STEP INCREASE increase which when coupled with the negotiated wage increase can be a significant cost driver to taxpayers.



In summary, your elected officials like to keep what transpires between them and the unions secret, behind closed doors,  because they too win in the end through a system of what some call quid-pro-quo politics which can be defined as  You Give to Me, I Give to You.  



Campaign donations keep your elected officials in office. And the unions know how to give. The elected officials show their gratitude by bestowing money in turn to the unions in healthy wage and pension benefits through LEGALLY binding union contracts, which again it is important to note, are negotiated in secret behind closed doors, out of the public eye.  And contracts can in addition to wage or benefit increases also reflect a change in management rights which can benefit the union and also carry an increased cost to the taxpayer. 



The bills for these costs are then passed on to you, the taxpayer, through state taxes and local property taxes.  If you cannot afford to pay the bill then one of your most prized possessions, Your Home or Business, could be on the chopping block through a TAX LIEN SALE.   



In summary, your Town can raise your property taxes beyond your ability to pay, then set in motion a mechanism in which you will lose your home or business through a Tax Lien Sale!



We have 169 towns in Connecticut.  The majority of these towns rely on State aid to offset their local property taxes.  And now Municipalities fear big CT deficits will nix promised state aid.  If state aid is cut, property tax bills could escalate for many!  


How Does the Mill Rate in Your Town

Compare to Other Towns?


Check it out at OPM: Mill Rates -



Elected municipal officials are also players in this game which benefits the unions at the expense of taxpayers.  To make it worse sitting on many local legislative boards to include Town Councils, Boards of Alderman, etc are state and/or federal employees.  They are either members of or friends of the brotherhood and sisterhood of public sector employee unions.  And their votes speak volumes as they approve union contracts on a local level. 



And these municipal union contracts – over the years – have resulted in becoming the highest cost driver of local budgets.



On average, local salaries, pensions, healthcare, and insurance benefits account for 70% to 85% of Town and Board of Education budgets in Connecticut!


Many state and local government employees are earning high salaries with overtime factored in.  This overtime is then factored into their pensions.  While many private employers do not provide healthcare for their retirees, State and local taxpayers carry this burden as well for the public sector unions who have lucrative healthcare benefits.     



In Connecticut, some safety personnel to include police and fire benefit from the Drop Program!



Here is how it works.  Upon reaching 25 years of service and becoming eligible for retirement, employees can participate in the DROP Program up to and through their 30th year of service.  


In essence they collect two paychecks during that five year period.  First, their normal pay while working.  Second, while working, 96% of the employees pension is dropped into a saving plan which the employee can manage.  If they benefit from a rise in the stock market, the payout could be greater.   If the market retreats, their payout could be less.   


The following chart illustrates the benefits of the Drop Program to employees.  The Original Monthly Pension Amount multiplied by 96% results in the DROP amount. 

The last two columns reflect what has been accumulated for one year with the last column reflecting the maximum five year period at which time the employee would formally retire and leave the job.  The five year amount could ultimately be affected by how the employee manages his money whether it be fixed income or investments etc. 




Must retire by

Original monthly pension amount

Original DROP amount by Month

Original DROP amount for Year

Original DROP amount for Five Years






































This program exists in East Hartford and is more fully explained within Fire Pension - East Hartford, if you Search the word DROP.


Check to see if they have the DROP Program in your Town.












 As noted within the State’s latest


 [PDF]Fiscal Accountability Report - Connecticut General Assembly



The majority of the state’s debt is due to lucrative pension and healthcare benefits promised by legally binding contracts to public employees as noted below in red….


And Taxpayers Are Forced to Pay the Bill!!!!








Unfunded Liabilities

Nov. 2014

Nov. 2015


Debt Outstanding




State Employee Retirement System (SERS)




Teachers Retirement System




State Post Employment Health and Life




Teachers Post Employment Health




Generally Accepted Accounting Principles Deficit










In 2014, state pension payments totaling over $1.62 billion were made to 49,616 individuals.


Many state employee pensions exceed $100,000; $200,000 and cap out at $335,573.


In Fiscal Year 2015, the state made 78,227 payments totaling $6.3 Billion Dollars in salaries and benefits.


Last week we learned that State Comptroller Kevin Lembo reports $220M deficit, confirms eroding tax receipts.





How Can I find Out How Much the State is Spending on Salaries, Pensions, etc?


Due to the efforts of both State Democrats and Republicans, Connecticut has an excellent Transparency Website at Transparency Connecticut.


Also State Comptroller Kevin Lembo continues to promote Transparency as recently noted within   Lembo Launches Searchable Budget Transparency Website



Check out OpenConnecticut - Financial Information at Your Fingertips





Budget | March 7, 2016 Comptroller Kevin Lembo announced today that 10 out of 12 Connecticut quasi-public agencies have officially confirmed that they will voluntarily provide his office with checkbook-level financial data annually to incorporate in OpenConnecticut, the state’s comprehensive financial transparency website. 

-- read more



The Federation recently asked Mr. Lembo for his assistance in having the MDC and all 169 municipalities place similar information on their websites.  With 75% to 90% of local budgets funding the salaries, benefits, and pensions of town/city employees, taxpayers deserve to know what they are paying for. 


Following my request, I promptly received the following in response - Susan Thank you for your recent email to Comptroller Lembo about additional transparency opportunities.  As you know we will be publishing data on the state’s quasi-public agencies soon.  MDC and the TRB Teachers Retirement are two good future targets.  We will be working on adding real-time pension payments to the site this summer and it might make sense to reach out to TRB at that time.  We are also interested in expanding municipal level transparency an effort MDC might fit into nicely. Thank you for the suggestions we will continue to look for additional opportunities to expand the website. Signed Office of the State Comptroller


We recognize State Comptroller Kevin Lembo for his exemplary efforts in promoting the Transparency of how our tax dollars are spent! 






State Retiree Pension Payments


To see what each state 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: 



Total $






















And also check the attached list of pensions paid to teachers and administrators as provided to the Federation by the State.





What about the State Budget and Deficits? 




It appears that with each day, comes a new revelation regarding shortfalls within Governor Malloys budget.  Such was the case on Feb 16, 2016 when State Treasurer Denise 


Nappier: Malloy's budget doesn't cover state's credit card bill ...


noting that Gov. Dannel P. Malloys new budget proposal could be $50 million to $74 million out of balance if state Treasurer Denise L. Nappier and the State legislature nonpartisan analysts are correct about what Connecticut owes on its credit card. Continue reading at "Clean Read"




 As noted within the State of Connecticut latest



 [PDF]Fiscal Accountability Report - Connecticut General Assembly








 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






Estimated Revenue
















When the State Budget was initially proposed by Governor Malloy, an article in FORBES by Rex Sinquefield put the State budget in perspective in June, 2015



Fiscal Suicide: Connecticut Governor Malloy's $40 ... Billion Budget- Forbes




The state legislature in Hartford is at it again. Despite Connecticut being an object lesson in how not to tax, Governor Dannel P. Malloy and top Democratic leaders introduced a two-year $40 billion budget that further cements the states growth averse reputation. Voting mostly along party lines, the Connecticut Senate approved the budget 19-17 . With that approval comes tax hikes on corporations, successful small business owners, and middle-class families. 


Last week we learned that State Comptroller Kevin Lembo reports $220M deficit, confirms eroding tax receipts



In January, 2016, we read Moody's: GE's departure 'underscores' Connecticut's fiscal ... economic woes noting the following - The news is a credit negative for the state of Connecticut and it underscores the challenges the state faces as its revenues and economy continue to underperform, Moody’s wrote in its weekly credit outlook. 


On March 3, 2016, wrote Malloy suspends $140 million in payments to CT hospitals  Noting that Responding to shrinking tax revenues, Gov. Dannel P. Malloys administration suspended about $140 million in payments to Connecticuts acute-care hospitals this week. The decision drew angry responses from the Connecticut Hospital Association and the legislatures Republican minority.  and Legislature considers furloughs; judiciary cancels raises noting Underscoring the fiscal crisis facing Connecticut, the General Assembly is considering furloughs of legislative staff, a rollback of staff raises, and a rare rejection of a negotiated contract. Meanwhile, the Judicial Branch has canceled raises for non-union employees that were to take effect Friday. 



On March 2, 2016, wrote Malloy urges rejecting UConn labor pact noting After nudging legislators to reject a labor deal granting raises at the University of Connecticut, Gov. Dannel P. Malloy gave them a hard push Wednesday, publicly urging rejection of a contract the university negotiated with its Professional Employees Union. Senate leaders quickly indicated they will comply. 





On Oct 5, 2015, the Wall St Journal reported Connecticut, America's Richest State, Has a Huge Pension ...Problem noting the following - Connecticut has roughly half of what it needs to pay future retirement benefits for its workers, meaning the home to scores of hedge funds and some of the countrys wealthiest towns is wrestling with financial distress rivaling that of Kentucky or Illinois.



But unions should be careful when they ask for more because some are asking the question



PENSION PULSE: Are U.S. Public Pensions Doomed? (blog - Leo Kolivakis)





There is a wide disparty between the Connecticut private sector employees working at-will versus protected state and local government sector union employees.



The $100 million lawsuit initiated by Connecticut State employee unions helps to illustrate the wide disparty between the Connecticut private sector employee working at-will versus protected state and local government sector union employees.  



The at-will private sector employee can be terminated at any time, for any legal reason, or for no reason at all by their employer.   They are an unprotected class.   They work in a state of flux knowing that their employer on any given day can demand that they pay a greater share of their health care premium, take on a greater workload, receive a minimal salary increase, no salary increase or have their pay cut.   There will be no debate, no bargaining, no arbitration, and no elected official waiting to defend them.  


Yet, the majority of Connecticut taxpayers work at-will while they are forced to pay many exorbitant public employee union salaries and pensions locked in by union contracts! 


It is obvious that the band-aid approach to solving our State budget problems over the years has failed as the state sinks deeper into debt. 


Now is the time for true reform.  Time to eliminate the control the public sector unions have over taxpayer funds.  And there is only one solution


Eliminate Binding Arbitration and Collective Bargaining Laws!