August 30, 2004
Dear Concerned Municipal Leader:
As the former Mayor of the Town of East Hartford, I know the
impact Binding Arbitration can have on municipal budgets. I am, therefore,
writing to ask if you would consider joining other towns in proposing the
following Resolution to your local legislative body to encourage stimulating
the debate on Binding Arbitration. A Resolution has already been passed by
several towns (Tolland, East Hartford, Wethersfield, North
Stonington, Watertown, New Britain, Brookfield, Berlin, East Hampton) and forwarded
on to their legislative leaders at the State capital.
I ask that you reflect upon the recent lawsuit initiated by a union
representing public employees. The union
is suing more than 200 cities, towns, school districts and public agencies for
a share of the stock distribution from Anthem Blue Cross. Connecticut taxpayers pay
hundreds of millions of dollars for State employee and State retiree
healthcare. In some
municipalities, local taxpayers are picking up 100%, 95% or 90% of town
employee healthcare costs. Yet, a lucrative, nearly free, taxpayer
financed healthcare system is not enough for the public sector unions.
They want more and now they are going to court to get it. Revenue
generated from the sale of Anthem stock should be available to municipalities
to offset operating costs, to include the rising costs of health care for
employees. It should not be used as an
additional windfall to union members who have the best healthcare the taxpayers’
money can buy. This latest action by the
unions should serve as a catalyst for change to State Binding Arbitration
Laws.
The Federation of Connecticut Taxpayer Organizations,
Inc. (FCTO) is a nonprofit organization which seeks to educate taxpayers and
elected officials on issues affecting taxation, government policies and
practices, and voter participation. Through our research, we have determined
that approximately 75% to 90% of local, municipal budgets constitute personnel
related expenses. This includes salaries, healthcare, pensions, workers
compensation, etc. We have also learned that Towns are either settling union
contracts under the threat of Binding Arbitration, or union contracts are being
sent to arbitration, and are being finalized by independent arbitrators with no
relationship to the municipality they are financially impacting.
Due to the aforementioned, FCTO believes that each of the 169 municipalities in
the State of Connecticut should be
encouraging their State representatives to at least open the debate on Binding
Arbitration. In so doing, local officials, state officials and taxpayers can
become better educated on the issue, and can collectively seek a solution to a
system which deprives taxpayers and local elected officials of the necessary
authority to manage their municipal budgets and personnel costs.
We offer the following Resolution for your consideration. Of course, you may
wish to offer your own verbiage.
Also, as we
continue to research and educate the public, I would appreciate learning from
you your Town's current budget, the percentage of your personnel related
expenses to your budget, and in light of the current lawsuit, what the
taxpayers in your town are paying for healthcare costs versus what the
employees are paying. As the data is
collected, we will be posting the information on our website, along with the
status of the Resolution in each town. We believe this information will in turn
be beneficial not only to taxpayers but to municipal leaders such as yourself
as you compare the percentage of your personnel related expenses to other
municipalities.
I look forward to hearing from you. If you have any questions, please contact
me at 860-528-0323, or by return email.
Sincerely,
Susan G. Kniep
President
RESOLUTION ON BINDING ARBITRATION
WHEREAS,
Connecticut Taxpayers currently pay the highest taxes in the Nation and are
burdened with the highest bonded debt, and
WHEREAS, The State of Connecticut has been plagued with annual budget deficits,
which in turn impact local budgets, and
WHEREAS, State lawmakers continue to reduce state aid to municipalities in an
effort to lower the deficit, and
WHEREAS, the majority of the 169 towns and cities throughout the State of
Connecticut rely upon State aid to balance their local budgets, and
WHEREAS, a reduction in State municipal aid by the State legislature has a
deleterious affect upon local property taxpayers, and
WHEREAS, on average, seventy (70%) percent to ninety (90%) percent of municipal
budgets are dedicated to personnel related expenses, and
WHEREAS, independent arbitrators, with no direct relationship to
municipalities, are now the ultimate decision makers on union contracts subject
to arbitration, and
WHEREAS, municipal union contracts are disproportionate to the private sector
in wages, health and pension benefits, and
WHEREAS, the democratic process is weakened by the
present binding arbitration system which deprives taxpayers and local elected
officials of the necessary authority to manage their municipal budgets and
personnel costs,
NOW, THEREFORE, BE IT RESOLVED that the local Legislative Body of
_____(town/city)_____________________ urges our State Representatives to Open
the Debate on Binding Arbitration, which will in turn serve to educate the public
on the effects of Binding Arbitration, and provide a forum wherein a successful
resolution can be reached to allow municipal leaders and taxpayers the ability
to manage their own budgets.