State Budget Lunacy!

State’s Office of Fiscal Analysis cannot verify $1 Billion in Labor Savings!

 

Where Malloy’s budget is built on speculation,

State employee union contracts

- with a 9% wage increase and 4 year job guarantee -

are legally binding documents!  

 

The Federation of Connecticut Taxpayer Organizations

Contact Susan Kniep fctopresident@aol.com 

860-841-8032, Tuesday,   June 7, 2011

 

 

 

Are Increased Property Taxes on the Horizon?

 

Meredith Whitney, who had predicted the banking collapse, spoke to the issue of State Budgets: The Day of Reckoning in 2010. 

 

Today, in Fortune, according to Meredith Whitney: State finances are worse than ...  estimated.  As noted “Whitney's latest report is even more thorough than last year's analysis that started the uproar. It covers 25 of the largest states, adding ten new ones to the list, including Arizona, Nevada, Connecticut, and Wisconsin. The problem starts with spending. Since 2003, state governments have raised annual outlays from $1.5 trillion to almost $2.2 trillion, or $700 billion, yet tax receipts have risen only $400 billion or $300 billion less, to $1.4 trillion. In fact, spending kept surging all during the recession, while income from sales, income and corporate taxes went totally flat in 2007.” 

 

In reflecting on the aforementioned, State taxpayers can put more faith in a snake oil salesman than in Governor Malloy’s budget as was recently confirmed by the nonpartisan Office of Fiscal Analysis (OFA) in their report issued yesterday as  Analysts lack information to verify $1 billion in labor savings.   Throughout the OFA  memo  there are more questions than answers on the validity of alleged union concessions and savings.     According to CTMirror.org  “Nonpartisan legislative analysts say they can vouch for less than 40 percent of the $1.6 billion in labor savings figured into the next biennial budget, and are unable to assess the rest--more than $1 billion--because of unanswered questions or insufficient data……. Legislative analysts were pressed for answers as the Democrat-controlled House of Representatives debated another omnibus policy bill designed to help implement the biennial budget adopted last month. The bill was passed early Tuesday on an 83 to 63 vote.”

 

It is also apparent that state employee unions are in absolute control as they drive the state budget process keeping the Governor, the state legislature and taxpayers in suspense of their decision to accept or reject Malloy’s lucrative offer on the table. 

 

This is wrong.  The Governor and the State legislature must assume control of our State, its finances, and its operations.  This can only be done by dramatic reforms to Collective Bargaining laws. 

 

We have five years ahead of us as the Governor, the self proclaimed son of organized labor, is eager to lock state taxpayers into a 9% wage increase over 5 years,  4 years of job guarantees, continued longevity pay, and enviable health and pension benefits for state employee unions. 

 

Where Malloy’s budget is built on speculation, state employee union contracts are legally binding documents.   If the Governor’s crystal ball needs an overhaul and his speculations are wrong, he has limited choices he can make to fund these contracts.  Those choices include cutting municipal aid which will in turn lead to increased property taxes and/or possible layoffs of municipal employees in the 169 towns throughout Connecticut.    

 

It is those cuts to municipal aid which the Governor could be anticipating when reflecting on his proposed reforms to state law which now limits his ability to cut municipal aid without legislative approval.   In wanting to end legislative oversight, the question is – when will municipal aid cuts be imposed – this year, next year or in 3 years if the economy has not improved while there is a lock on state employee union wage increases and job guarantees.  

 

The benefactor of the Governor’s budget is no surprise to many as public sector unions spent hundreds of thousands of dollars to put the Governor in office.   In contrast, the victims of Governor Malloy’s budget are many to include private sector workers who have already joined the 9.1% unemployed and the many that can be terminated  At-Will under the existing laws of our State.   Neither the Governor nor the Democrat-controlled state legislature gave them any consideration in this legislative session.    Instead, the Governor imposed $1.5 billion in new taxes.  

 

Adding to this fiscal debacle, CTNewsJunkie.com reports the position of State Rep. Arthur  O’Neill: Budget Sure to Bust Spending Cap.

 

Today, throwing caution to the wind, the  House Passes Last Budget Implementer . which included  language bailing out Bridgeport’s pensions and more.

 

As the House passes bill to balance Conn. budget it included according to the Record-Journal  “a method for the General Assembly to approve the tentative labor savings and concessions agreement, should lawmakers choose to act on it. The approximately 45,000 unionized state employees are not expected to finish voting on the deal until June 24, after the legislature adjourns on June 8”.

 

Taxpayers should demand a vote by the legislature and hold their legislators accountable on this lucrative union deal which could ultimately drive up local property taxes. 

 

As businesses weigh their future in Connecticut, they are confronted with additional costs as Connecticut is the only state in the nation to mandate paid sick leave.    Bonnie Stewart, a vice president of CBIA proclaimed…..This bill is a travesty….. It's an incredible disappointment…..What this measure really does is slam the door in the face of business.

 

Not lost among many concerned taxpayers is that a wave of increased state taxes, property taxes,  shuttered businesses, and private sector layoffs may still be on the horizon if these state employee union contracts are approved based on speculation.   

 

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