June 27, 2012
From Susan Kniep
President
The Federation of Connecticut
Taxpayer Organizations, Inc.
Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032
Breaking News
Stockton to file for bankruptcy, will be largest US city to
fail
The Stockton City
Council halts bond payments, slashes employee benefits and adopts an emergency
budget as mediation ends. The Central Valley city becomes the largest in the U.S. to seek
bankruptcy protection.
Experts say there are no clear
answers to what comes next for Stockton
or how its fall will affect the rest of the state.
Other cities hit hard by the housing bust and state budget crisis are
negotiating with employee unions for concessions and are watching to see if
municipal bankruptcy proves medicine or poison.
The stated purpose of AB 506 — to forestall a municipal bankruptcy — failed,
but several bankruptcy attorneys said the mediation may help Stockton avoid the
string of lawsuits that faced the smaller city of Vallejo, which recently
emerged from a bankruptcy case filed in 2008.
How Stockton
found itself so mired in debt can be seen everywhere in the city's core. There
is a sparkling marina, high-rise hotel and promenade financed by credit in the
mid-2000s, mere blocks from where mothers won't let their children play in the
yard because of violence. Read entire article at ….. http://www.latimes.com/news/local/la-me-stockton-bankruptcy-20120627,0,2285815.story
News: Stockton bankruptcy will make
history; residents reeling
Find Information on Municipal
bankruptcies, filings and public pensions at the end of this publication.
*************
The
Aforementioned Should Serve as a Wake Up Call for Connecticut’s Governor and
State Legislators Who are On a Wild
Spending Spree with Taxpayer Money!
As
Well As Local Public Officials Who Rely Upon State Aid to Offset Property Taxes
in Connecticut’s 169 Towns!
*************
State
Debt: $71.6 Billion!
State
Employees: Job Guarantees,
9%
Wage Increase!
Millions
of CT State Taxpayer $$$ Continue to be Awarded for Speculative Economic
Development Projects!
$115
Million + $60 Million CT Dollars Included Within
Public Act No. 12-147 - Summary for Public Act No. 12-147
This
Act – Which Has Received Little Recognition from the Press - Establishes A New
State Quasi-Public Agency, entitled Capital Region Development Authority
(CRDA), which can undertake development activities within the “Capital Region”
comprised of The City of Hartford,
Bloomfield, East Hartford, Newington, South Windsor, West Hartford,
Wethersfield, and Windsor and (1)
develop and redevelop property anywhere in Hartford, (2) develop riverfront
improvements anywhere in Hartford and East Hartford, (3) demolish and redevelop
vacant buildings in East Hartford, and (4) develop more housing units
If you live in one
of the towns referenced you should read the Act in its entirety
and determine the power of CRDA over development in your town and possible
impact on your home or business. If you
live in a Town not referenced within the Act, you should determine if a similar
plan is on the drawing board by the State for your town or region.
*************
Connecticut Taxpayers and Property Owners:
It’s time we
looked at the State of our State!
Property owners in Connecticut should be concerned with the fiscal climate
of Connecticut. The Governor and State Legislature are
spending money we don’t have on speculative development projects while legally
binding union contracts are in effect which require taxpayers to fund 9% wage
increases while guaranteeing state employees their jobs. If the Governor needs money while these
contracts are in effect, municipal aid could be reduced which could, in turn,
drive up property taxes within Connecticut’s
169 towns. Consider the following,
In October, 2011 it was reported
that 'Connecticut Has The Nation's Highest
Tax Burden' - Weston ...
This month CTMirror.org reported
in their article captioned Cash flow report sparks fears state may
need to borrow to pay bills ... on time that state Treasurer Denise L. Nappier in her monthly report to the Finance, Revenue and
Bonding Committee noted “……pressures on the state's cash flow continue to
mount. “There has been a ‘significant
decline’ over the past 12 months…..The balance stood at $121 million on May 26,
down from $895 million at the same point in 2011.”
As noted within the following
captioned 10 States With The Highest Debt Per
Person: Report Connecticut leads the nation in the highest debt per capita at
$5,402.
Our State’s latest Fiscal Accountability Report on page 16 details the State’s
debt of $71.6 billion. Taxpayers owe $30 Billion for
State Employee and Teacher Retiree Healthcare and $21 Billion for State
Employee and Teacher Pensions.
On June 22 it was disclosed by
CTMirror.org that State retiree health care funds remain
in cash pool used to cover operating bills . It was reported that “The legislature's nonpartisan Office of Fiscal
Analysis noted that nearly $50 million set aside for retiree health care --
half of which was contributed by employees -- currently earns 1/10th of 1
percent in annual interest in the common pool. But the most recent actuarial
analysis for the retiree health care trust fund calls for average investment
returns of 5.7 percent over the next few decades.” Here is the analysis.
Six months ago it was reported MOODY'S DOWNGRADES STATE OF CONNECTICUT
GENERAL ... OBLIGATION BONDS stating “The rating downgrade is based on Connecticut's
high combined fixed costs for debt service and post employment benefits
relative to the state's budget; pension funded ratios that are among the lowest
in the country and likely to remain well below average; and depleted reserves
with slim prospects for near-term replenishment. “Connecticut's state employees
retirement system (SERS) and teachers retirement system (TRS) had funded ratios
of 44% and 61%, respectively, as of June 30, 2010.”
This month headlines read Report: Connecticut was among nation's
worst at saving for public benefits.
Keith M. Phaneuf noted that “With states' savings
for employee retirement benefits at an all-time low, Connecticut ranked among
the worst of the worst in 2010, according to a new report this week from the
Pew Center on the States. “Reeling from recession-driven investment losses, a
pension raid to prop up state finances and a history of not saving for retiree
health care, Connecticut government had more than $71 billion in liabilities
and less than $24 billion set aside to cover them two years ago.” Click to view the latest report.
Connecticut’s Bonded
Debt is $19 Billion
and growing with every vote by the State’s Bond Commission as they approve many
speculative projects to include a $100,000 grant for a company sponsoring
paintball competitions. However, Welfare for business
may not bring jobs as noted by the Day of New London
which reported that “So far the state has handed out $6.08 million in
loans and $4.8 million in grants to about 70 small businesses. “With $100
million to work with, there will be many more. “But if there is a strategy to
this, outside of giving out a lot of money to generate a few jobs at many
different places, it is difficult to discern.”
In May, it was reported within
the article captioned When jobs don't follow dollars -
Connecticut Post by Bill Cummings, Investigative Reporter, that “Connecticut has
bestowed more than $500 million on businesses in loans and tax credits over the
last decade to create and retain jobs, but many of the deals have not produced
the promised jobs, and penalties assessed by the state when goals are missed
are usually small.”
In Providence, Rhode Island
taxpayers learned what can happen when $75 million in loan guarantees are
bestowed upon a company which then files for bankruptcy protection as noted
within Game over: Ex-Red Sox pitcher Curt
Schilling's company files for bankruptcy; feds investigate
And questions abound when
reviewing Public Act No. 12-147 which includes the The City of Hartford, Bloomfield, East Hartford, Newington,
South Windsor, West Hartford, Wethersfield, and Windsor which have been linked
through a newly formed Quasi-public agency - the Capital Region Development
Authority (CRDA) - with broad powers over development and “the authority to
issue bonds”giving
CRDA authority over millions of state taxpayer dollars. Homeowners and businesses in the Towns
referenced within this act should determine how broad the authority of CRDA is
and its potential impact on their own property and community.
They should determine how CRDA
would carry out its mandates as described within the Summary for Public Act No. 12-147 which includes “demolish and
redevelop vacant buildings in East Hartford”?
Could this mandate be extended to other towns?
Could the power of CRDA override an owner’s intent to retain his well maintained vacant building?
Could CRDA take possession of the building through eminent domain even if there
is no blight on the property? Enter
State Statutes: Sec.
12-65d. Designation of rehabilitation area. Criteria
for deferral of assessment increase. And Sec.
12-65e. Agreements to fix assessments during, and
defer increases following, rehabilitation or construction. Required provisions.
A
Rehabilitation Area is defined by the State as “deteriorated, deteriorating,
substandard or detrimental to the safety, health, welfare or general economic
well-being of the community.” So a
municipality declares their entire town or a section of their town a
Rehabilitation Area which then falls under this blight designation. And this is exactly what East Hartford is now attempting to do in areas of the
Town where there is no blight. Previously, they attempted to apply
this statute to the entire town.
Within the Summary for Public Act No. 12-147 it is noted “The act extends by four years, from June 30,
2013, to June 30, 2017, the deadline for the State Bond Commission to issue up to
$115 million in state general obligation bonds
for DECD to fund specified projects (§22). The projects are the civic center
and coliseum complex reconstruction, riverfront infrastructure development,
housing rehabilitation and new construction, demolition and redevelopment, and
parking. (PA 12-189 authorized additional bonding for CRDA (see BACKGROUND)).”
“PA 12-189, An Act Authorizing Bonds of the
State for Capital Improvements, Transportation, and Other Purposes, authorizes up to $60 million in
bonds for CRDA to encourage new housing in downtown Hartford.”
Two interesting publications on the issue of Eminent Domain and Blight
are
What Kelo Does Not (Necessarily) Change
http://www.duanemorris.com/articles/article3461.html
Model Eminent Domain Law
| The Institute for Justice
*************
Information on Municipal bankruptcies, filings and public pensions
VIDEO: Pension
Shortfalls Force States to Consider Benefit Cuts, Says Pew Study (PBS NewsHour)
Public Pension Cutbacks
Spread Across the Country (blog - Walter Russell
Media / The American Interest)
States Face Pressure on
Pension Fund Shortfalls (Michael Corkery &
Michael Rapoport / Wall Street Journal $)
North Las Vegas:
Financially Strapped Town Declares State Of ...Emergency
Jefferson County
Permitted to Proceed with Bankruptcy,
Judge Says
7 U.S. Cities on the
Verge of Bankruptcy
Providence Agreement
Caps Pension Benefits, Eliminates COLAs for 10 Yrs, Puts Retirees Age 65+ in
Medicare (Erika Niedowski / San Francisco Chronicle)
Municipal
Bankruptcies and Debt-Ridden American Cities
Vallejo's Bankruptcy
`Failure' Scares Cities Into Cutting Costs ...
Small Rhode Island Town
Goes Bankrupt - DailyFinance
Desperate U.S. Cities,
Counties File for Bankruptcy - ABC News
Rhode Island's Central
Falls files for bankruptcy | Reuters
Jefferson County makes
biggest bankruptcy filing ever — RT
Mammoth Lakes, Calif.,
Looking at Bankruptcy - NYTimes.com
Recently bankrupt
Vallejo, California is now a model for other U.S. ... cities
http://pensiontsunami.com/