State Budget

  Taxpayers: $1.5 Billion New Taxes

Unions: 9% Wage Increase, 4 Year Job Guarantee

 

Unions Release Language of Tentative Labor Agreement

 

 

 

 

From The Federation of Connecticut Taxpayer Organizations

Contact Susan Kniep fctopresident@aol.com  860-841-8032  May 28, 2011

 

 

In the State budget debate, a question remains – Will State Labor Union Contracts Containing a 9% Wage Increase and 4 Year Job Guarantee Become Law Without a Vote by the State Legislature and public input?

 

State taxpayers should be afforded the right to speak on the state employee union contracts as they relate to the Governor’s budget prior to the contracts being executed.  Historically, it has been the custom of the General Assembly, which can approve or reject union contracts, to instead allow the contracts to go into effect without the benefit of public comment or a vote by the legislature.  The taxpayers of our state deserve better in this budget year.

 

In the article captioned Americans Try to Outrun State, Local Tax Hikes 

an accountant discloses that his clients in New York and Connecticut are asking  “how do I change my residency?” The reason – “High local taxes”! 

 

Under Governor Malloy’s $40.11 billion biennial budget adopted earlier this year, Connecticut taxpayers will be burdened with the highest tax increase in history. 

 

The $1.5 billion in new taxes appears to be the only sure thing in the budget in addition to a $300 million budget gap and $1 billion in surpluses.  As noted within CTMirror.org recent news article captioned Malloy dips heavily into fiscal cushion to avoid more budget cuts

 

“The biennial budget, which would spend $19.83 billion next fiscal year and $20.29 billion in 2012-13, featured unprecedented built-in surpluses of $371 million and $638 million, respectively. “In a two-page summary of the budget reconciliation proposal he will deliver to the General Assembly on Tuesday, the governor recommended using $259.4 million of the projected surplus for 2011-12 fiscal year to fill the rest of next year's gap.”

 

 

The rest of the Governor’s budget is built on speculation as the Governor assumes that the $1.6 billion in savings from the state employee unions will ultimately be realized through a healthier work force and increased retirements.    

 

State taxpayers are already burdened with  $72 Billion of debt, $50 billion of which is dedicated to state retiree pensions and healthcare.    Many state retirees are receiving pensions well in excess of $100,000 and up to $266,295 with health benefits.     

 

For those Connecticut taxpayers and businesses who will feel the negative impact of   Governor Malloy’s budget which yields lucrative gifts to the state employee unions, an unprecedented tax increase,  and recently approved anti-business mandate reforms, the tsunami of fiscal chaos is far from over.     

 

We have five years ahead of us as the Governor, the self proclaimed son of organized labor, prepares 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.  In contrast, among the majority of workers who were employed in the private sector, more 8.75 million jobs were lost as a result of the recession, and the unemployment rate was 9 percent last month.

 

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 of cuts to municipal aid, 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 benefactors 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% 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.    

 

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 taxes, shuttered businesses, and private sector layoffs may still be on the horizon if these union contracts are approved and anti-business mandates are not rescinded.