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The State of our State

The State of our State

 

 

Connecticut Nonpartisan analysts: $1 billion deficit awaits winner of CT's ... gubernatorial election

 

 

Getting Connecticut's books in order requires half a billion in state bonds

Washington Post | by Reid Wilson | November 7, 2013




 

 

College officials to get Christmas raises ... but amounts will be kept ... Secret

 

 

 

A Good Economy Doesn't Always Mean a Popular Governor

 

By Governing.com:  A prime example is Connecticut, a state where the economy ranks 49th on our list. Gov. Dan Malloy is a Democrat in a solidly blue state and has won plaudits for his handling of the Newtown school shooting and for his leadership during several weather emergencies. However, his poll numbers from Quinnipiac University are mediocre -- a 47 percent to 47 percent split in job approval, with only 44 percent of voters saying he deserves re-election, compared to 46 percent who say he does not. http://www.governing.com/blogs/politics/gov-good-economy-popular-governor.html

 

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December 1, 2013

 

 

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

 

Connecticut Taxpayers!

 

Our Ship of State is Sinking!

 

 

Dragged Down by Heavy Debt;  Excessive State Spending; the Payment of 9% Wage Increases to State Employee Unions Over Three Years Under a No-Layoff, Legally Binding, Job Guarantee Contract; and Betting Millions of State Taxpayer “Bonded” Dollars on a Speculative “First Five” Jobs Creation Program!

 

 

 

Translation:  Increased Property Taxes in 2014! 

 

 

Solutions:  Enforce the Spending Cap, Freeze State Bonding,

End or Dramatically Reform State Mandates!

To Include Collective Bargaining, Binding Arbitration, and Prevailing Wage Laws!

 

 

 

From the State’s Office of Legislative Research in 2010

comparison of connecticut's state employee collective bargaining

Massachusetts, New York, and Rhode Island law explicitly prohibits state employee retirement benefits from collective bargaining.

 

 

Pandemic of Public Pension Woes Is Plaguing the Nation's Cities (John W. Schoen / CNBC)

 

 

Wisconsin Collective Bargaining Reforms Do Not Violate Workers ...

Constitutional Rights: Judge

 

 

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As the State focuses on bankrolling businesses  Connecticut Taxpayers are Already Taxed to the Max as the Summary of State Revenues by Fund, Tax Type and Account for Fiscal Years 2007 through 2012 illustrates as prepared by Robert Young, Secretary,  of the Federation of Connecticut Taxpayer Organizations. 

 

For months, the Federation has been alerting Connecticut taxpayers to what we perceive to be the unrestrained spending by the Governor and our State legislature which could lead to a reduction in State aid to municipalities.  This would in turn drive up  local property tax which are now dedicating approximately 80% to 85% to municipal and Board of Education personnel costs. 

 

 

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In July, 2012, CPA Marcia Marien, past president of the Connecticut Society of Certified Public Accountants, authored an op-ed captioned Connecticut must face true pension liabilities - Hartford Courant.  Therein she wrote the following ……Hartford, we have a problem. And, as with Apollo 13, fixing the problem — reporting the state government's full pension liability — begins by acknowledging it. We must admit it. We must quantify it. We must deal with it.  Last month, the Governmental Accounting Standards Board, which sets the standards for U.S. state and local governments' financial statements, changed the rules. Governments must now report how much they owe in pension promises on their financial statements as a liability. This would be calculated starting with the total dollar amount that the actuaries have determined would be needed to fund the pension promises minus the total dollars that have been put aside……….If we look at what is actually reported on the balance sheet, we see a liability of $2.4 billion. We are only reporting $2.4 billion of our actual $20.9 billion pension shortfall on our balance sheet. We are not reporting $18.5 billion of our pension liabilities. The new accounting rules would correct this and cause us to report the real and larger liability on our balance sheet. The article can be read in its entirety at http://articles.courant.com/2012-07-09/news/hc-op-marien-connecticut-must-count-all-liabilitie-20120709_1_pension-liability-balance-sheet-financial-statements.

 

 

On November 25, 2013, the Government Accounting Standards Board issued a statement in a headline report captioned GASB RESOLVES TRANSITION ISSUE IN PENSION STANDARDS noting: The Governmental Accounting Standards Board (GASB) today issued a Statement regarding the transition provisions of GASB’s new pension standards for state and local governments. GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68, eliminates a potential source of understatement of restated beginning net position and expense in a government’s first year of implementing GASB Statement No. 68, Accounting and Financial Reporting for Pensions



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The news of Connecticut’s crippling economy has made the national news circuit in 2013!

 

Forbes - Puts a Spotlight on Connecticut !

 

How Did Rich Connecticut Morph Into One Of America's Worst Performing Economies?

 

 

EXCERPT:   Jim Powell writes:  When investors and entrepreneurs consider important decisions like where to establish a residence, where to operate a business and, yes, where to die, they compare their options.  From a financial point of view, Connecticut turns out not to be a great option.  For instance:

  • Connecticut ranks #50 – the worst — in annual economic growth.  According to the Department of Commerce’s Bureau of Economic Analysis, Connecticut’s economy contracted for the second year in a row.  “Connecticut is the laggard,” reported Connecticut Department of Labor economist Daniel Kennedy.
  • Between 1996 and 2006 – before the financial meltdown and recession — the number of Connecticut small businesses declined by 2.2 percent, while the average experience of all 50 states was a 10 percent increase.  Only Ohio and West Virginia did worse than Connecticut.  Its small businesses account for about half of the state’s private sector jobs.
  • Government spending is out of control.  Two years ago, Connecticut Governor Dannell P. Malloy signed a $1.8 billion tax hike, the biggest in the state’s history, that supposedly would generate enough.  But it wasn’t enough for the next budget, enacted this year.  It was balanced mainly with gimmicks like shifting some $6 billion of Medicaid spending off-budget.
  • State Budget Solutions, a think tank monitoring state finances, reported that among the 50 states Connecticut has run up the fourth largest pile of debts per capita — $27,540. This includes unfunded liabilities for government employee pension funds.  The total is almost double the per capita debts of financially-strapped California.  Higher debts imply higher taxes in the future.  
  • Barron’s considered Connecticut to be in the worst financial shape – with debt and pension liabilities a higher percentage of GDP (17.1) than any other state.  The financially strongest state: South Dakota where debt and pension liabilities are only 1 percent of GDP.

According to the Yankee Institute, 2011 was a banner year when Democrats – who now control both the governor’s mansion and the legislature – pushed through 77 tax hikes 

 

Read entire article at ….. http://www.forbes.com/sites/jimpowell/2013/08/01/how-did-rich-connecticut-morph-into-one-of-americas-worst-performing-economies/

 

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As described at the following web link.  http://www.statedatalab.org/state_data_and_comparisons/detail/connecticut

According to the analysis by Truth in Accounting, Connecticut does not have enough assets available ($11.0 billion), to pay the state's bills, ($69.6 billion). The difference between assets and bills is $58.6 billion. That debt divided by the number of taxpayers reveals Connecticut's per-taxpayer burden of $46,000 in 2012.  Only eight states--Alaska, North Dakota, South Dakota, Utah, Nebraska, Iowa, Tennessee, and Wyoming--achieved a per-taxpayer surplus in 2012….More detail on

Connecticut’s assets and liabilities can be found at the

Connecticut State of the State (2012).

 

Link to CT CAFR:    Connecticut Comprehensive Annual Financial Report

Publishing Entity:  Connecticut Comptroller

Related Links:        Bridgeport State of the City 2012

 

 

 

 

 

In a Survey of all 50 States,

 

Connecticut ranks 9th from the bottom among

 

The Worst-Run States In America: 24/7 Wall St.

 

 

Every year, 24/7 Wall St. tries to answer this question by conducting an extensive survey of every state. To determine how well states are managed, we examined their financial data, as well as the services they provide and their residents’ standard of living. This year, North Dakota is the best-run state in the country for the second year in a row, while California is the worst-run for the third year in a row.

 

 

41. Connecticut


Debt per capita: $8,531 (4th highest)


Budget deficit: 17.1% (12th largest)


Unemployment: 8.4% (tied-14th highest)


Median household income: $67,276 (4th highest)


Pct. below poverty line: 10.7% (4th lowest)

 

 

Connecticut’s economy was the only one in the country to contract in 2012. The state also had the 4th highest debt per capita in fiscal 2011. Moody’s and Standard & Poor’s rate the state’s credit as relatively poor. This may be due to the state’s poorly-funded pension. The state’s pension obligations were less than half funded as of 2012. Connecticut’s crime rate was better than the national rate, although it varied considerably across the state. In Stamford, the violent crime rate was under 300 incidents per every 100,000 people. In New Haven, on the other hand, it was close to 1,500 — among the highest rates for any metro area.

http://www.huffingtonpost.com/2013/11/24/worst-run-states-america_n_4333621.html




 

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In November, 2013 Connecticut State Sen. L. Scott Frantz wrote the following article captioned Connecticut's Economy: Stuck in neutral - Greenwich Citizen  He wrote: 

 

It should be stunning to us all that Connecticut's economic recovery is so anemic that it earned the distinction of being the only state in the nation last year to show negative growth.

Hand-in-hand with that statistic is a stubbornly high unemployment rate of 8.1 percent that in all likelihood underestimates the problem throughout the state in that thousands have decided not to look for work or are significantly underemployed.

We continue to lose manufacturing jobs at an alarming rate, particularly in the aerospace and defense sectors. We have been downgraded by the credit rating agencies numerous times, received last place in the country in terms of credit quality by at least one firm and been identified as the most heavily indebted people on a per capita basis in the nation.

Given that Connecticut used to be the go-to state when it came to starting or relocating a company, especially in manufacturing, financial services and defense, we should all be shocked that we are today consistently ranked between number 45 and 50 in far too many important categories.

Then again, if we take the time to connect the dots as to how we could have gotten here, it becomes very clear.

The unacceptably high fixed cost structure of state government combined with imprudent fiscal leadership for over a generation in the legislature, which is where the purse strings lie, has pushed the cost of government beyond the capabilities and willingness of the tax base to pay for excesses in current spending and for up to $81 billion of unfunded liabilities that exist today.   The article continues at http://www.greenwichcitizen.com/opinion/article/Connecticut-s-Economy-Stuck-in-neutral-4996550.php

 

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The Hartford Courant has reported that Connecticut Ranks Last Among 50 States In Credit Quality Analysis By Hartford-based Conning Inc.

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TAXPAYERS PAID OVER 5.7 BILLION DLRS FOR STATE OF CONNECTICUT HEALTHCARE COSTS IN 2012 .

 

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Read Barron’s State of the States where Connecticut is Ranked at the Bottom

 

http://online.barrons.com/article/SB50001424053111904881404577603301566976464.html#articleTabs_article%3D1

 

Excerpt:  By the measure we use, which looks at the combined debt and unfunded pension liabilities relative to GDP in each of the 50 states, South Dakota comes out on top. The state has a strong agricultural economy and a low jobless rate of 4.4%, about half the national average. Debt and unfunded pensions add up to just 1% of GDP. Connecticut, which ranks at the bottom of the list, has a combined score of 17%. Yet the bonds in both states are priced alike, at 28 basis points above the 10-year AAA-rated benchmark, which yields around 1.8%. A basis point is one-hundredth of a percentage point…………….Moody's downgraded Connecticut's general-obligation debt in January, to Aa3 from Aa2, citing "high combined fixed costs for debt service and post employment benefits relative to the state budget" and pension funding ratios that are "among the lowest in the country" at around 50%.........its former status as a top-rated state -- an idea that the whole state is one big version of Fairfield County, the wealthy region that includes tony towns like Greenwich, Darien, and Westport. Connecticut's major cities, including Bridgeport and New Haven, are depressed and a drain on the state's coffers. Once known as a low-tax alternative to neighboring New York, Connecticut now has the third highest state and local tax burden in the country at 12% of per capita income, behind New York and New Jersey, according to the Tax Foundation……….New York has a reputation for excessive government spending and onerous taxation. That's borne out by the state's enormous Medicaid tab, but New York's pension funding level of 94% is one of the best in the country, putting it in much better shape than neighboring New Jersey or Connecticut………..

 

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