January 21, 2012
From The Federation of Connecticut
Taxpayer Organizations, Inc.
Contact Susan Kniep, President
Website: http://ctact.org/
Email: fctopresident@aol.com
Telephone: 860-841-8032
Wall Street credit agency downgrades Connecticut's bond
rating
One of the
leading Wall Street credit rating agencies downgraded Connecticut's rating
Friday, citing a heavily loaded state credit card, huge debts in pension and
retiree health care programs, and a depleted emergency reserve.
The decision by Moody's Investors Service to lower state
government's bond rating from Aa3 to Aa2, opens the
door for Connecticut
to pay higher interest charges on future capital projects, even though its
rating remains relatively high.
Moody's cited
"pension funded ratios that are among the lowest in the country and likely
to remain well below average," referring to retirement programs that serve
state employees and Connecticut's
public school teachers.
The state
employees' fund, which had enough assets to cover just 44 percent of its
obligations in June 2010, had climbed to nearly 48 percent by mid-2011,
based on a new report filed earlier this month with the comptroller's office.
But fund analysts typically cite a funded ratio of 80 percent as a healthy
level.
The teachers'
pension fund is in somewhat better shape, with enough assets to cover 61 percent of its
obligations. But it was in much worse shape nearly four years ago until state
government borrowed $2 billion to shore up that
pension program, another debt Connecticut
will be repaying for about two more decades.
The health care
program for retired state workers is in far worse shape than either pension
fund. According to Gov. Dannel P.
Malloy's budget staff, the state's
long-term obligation in this area is $26.6 billion. http://ctmirror.org/story/15129/wall-street-credit-agency-downgrades-connecticuts-bond-rating
Congress's Six-Figure Benefits Add to $674 Billion
U.S. Pension ... Gap By Charles R.
Babcock and Frank Bass - Jan 19, 2012 Almost 15,000 federal retirees, including
former leaders of Congress, a university president and a banker, are receiving
six-figure pensions from a system that faces a $674.2 billion shortfall. About one of every 125 retired federal
civilian workers collects more than $100,000 in benefits annually. They include
physicians, postal workers and presidential candidate Newt Gingrich, according
to data obtained by Bloomberg News under the federal Freedom of Information
Act. “We don’t want to bash federal employees,” said Jim Kessler, vice
president for policy at Third Way,
a Washington-based research organization. “Still, when you have today’s
economy, public sector jobs look better and better. And there are some pensions
that make you question the system as a whole.”
About half of all private-sector workers have no retirement plan other
than Social Security, according to figures from the Employee Benefit Research
Institute, a Washington-basednonprofit
that studies pensions. About 16
percent are in plans similar to the federal system, which guarantees payouts
based on workers’ earnings. Some private employers offer so-called
defined-contribution plans, including 401(k) plans, in which benefits depend on
employees’ contributions and how they’re invested. The federal retirement system has emerged as
a cost-cutting target as the government faces a budget
deficit exceeding $1 trillion. A 2010 Congressional Research Service
study reported that U.S.
government pension programs had a shortfall of $674.2 billion, mostly due to
insufficient funding for workers hired before 1984. Employee Contribution The U.S. Treasury pays about $4.9 billion every month
for about 1.8 million retirees, an average of $31,633 annually. Federal
employees contribute $1 of every $14 toward retirement, according to the
National Commission on Fiscal Responsibility and Reform, a bipartisan panel
created by President Barack Obama. Public
employees at the state and local levels already have faced moves to cut future
benefits, as officials seek to address a cumulative pension gap that exceeds $4
trillion. Dallas Salisbury, president of the benefits institute, said in an
interview that federal pensions might be “richer than we can now afford.
Something’s going to have to give.” The number of current federal employees
eligible to retire and collect a pension will grow to 956,613 by the end of the
2016 budget year, a 35 percent increase from the 707,750 who could have retired
at the end of September, according to a 2008 study by the Office of Personnel Management.
Read the entire article at …..
http://www.bloomberg.com/news/2012-01-19/congress-s-six-figure-benefits-add-to-674-billion-u-s-pension-shortfall.html
REPORT: Which
Governments Pay Public Employees the Most? (pdf - Diana Lopez / Sunshine Review)
Connecticut mayors
seek help from Washington
By Ana Radelat Jan 18, 2012 CTmirror.org Washington -- The Occupy protesters huddled
in McPherson Square and the 250 U.S. mayors meeting a block away this week have
at least one thing in common: They are both reacting to the economic hardship
wrought by the recession.
Like the Occupy protesters, the nation's mayors are seeking
action from Washington.
But with congressional gridlock and a shrinking federal
budget, that may be very hard to find.
"It's very disheartening to see the impasse,"
Pedro Segarra, the mayor of Hartford, said Wednesday. "But we'll
just keep on trying."
Segarra is one of nine Connecticut
mayors registered at the U.S.
Conference of Mayors winter meeting in Washington.
The others are Bridgeport Mayor Bill Finch, New Haven Mayor John DeStefano Jr.; Norwalk Mayor Richard Moccia;
Mark Lauretti, from Shelton; John Harkins, from
Stratford; Torrington Mayor Ryan Bingham; Timothy Herbst,
from Trumbull; and Waterbury Mayor Neil O'Leary.
They belong to the largest group of mayors ever to attend
the winter conference, a result of increasing concerns about the lingering
impact of the recession.
"Mayors are looking for innovative ways to create jobs.
That's why they're here," said Kathy Amoroso, assistant executive director
of the U.S.
Conference of Mayors. The event is being held at The Capital Hilton.
A conference report released Wednesday said that less than a
tenth of the nation's metropolitan areas have regained the jobs they lost in
the recession.
The report also said that most U.S. cities are suffering from
falling median household income.
Greater Hartford's
median household income dropped from $67,200 in 2008 to $63,100 in 2010, the
report said. The city of Hartford's median
income is much lower; for individuals it was $26,032 in 2010, according to U.S. Census
figures.
The Bridgeport area's median
household income dropped from $84,500 in 2008 to $74,800 in 2010, New Haven-Milford's from $61,600 to $57,100 and Norwich-New London's from $68,600 to
$62,400. Full report at
http://www.ctmirror.org/story/15103/connecticut-mayors-seek-help-washington
Canada Pledges to Sell
Oil to Asia After Obama
Rejects Keystone Pipeline
School finance panel finishes interim report
Thu, 01/19/2012 - 4:14pm By Jacqueline Rabe Thomas
The task force
charged with providing a solution to the problems in the way the state funds
education has approved an interim report.
The
"consensus recommendations" are two pages.
The
recommendations include providing greater access and enhancing early education
programs, providing "fair and reasonable" funding for the state's
nontraditional school choice programs, using more accurate data to measure a
town's wealth and need.
See the full report here and a story about the task force's work here.
PAC Track By
Al Shaw and Kim Barker, ProPublica. Updated Jan. 19,
2012, 4:00 p.m. EST Two federal
court rulings in 2010 paved the way for the ascent of “super PACs,” political
action committees that can raise and spend unlimited amounts of money on
political races, as long as they don’t coordinate with a specific
candidate. And so far, they’re spending heavily on the
Republican race. This app, part of our long-term investigation into "dark money," keeps
track of where super PACs are spending their cash to influence the presidential
race. Continued at ….. http://projects.propublica.org/pactrack/
PAC Track: What and Where
are the Super PACs Spending?
In DC loan program,
mortgage defaults abound http://www.washingtonpost.com/investigations/in-dc-loan-program-mortgage-defaults-abound/2011/11/29/gIQAPt4Z1P_story.html
Oregon taxpayers must
bail out state fund that made bad loans for ...
renewable-energy projects By Richard Read,
The OregonianThe Oregonian January
18, 2012, Taxpayers will have to bail out a state fund that made bad loans to
increasingly speculative renewable energy projects. The fund loaned $18 million to a Clatskanie
ethanol plant that quickly went bankrupt, $12.1 million to a Linn County solar company
crippled by plunging global prices, and $1.4 million to a glitzy central Oregon
resort plagued by the real estate crash.
In all, state officials estimate the Oregon Energy Department's Small Scale Energy Loan Program will cost the Oregon
general fund, and taxpayers, as much as $20 million over five years. Continued at ……. http://www.oregonlive.com/business/index.ssf/2012/01/oregon_taxpayers_must_bail_out.html
The Center for Public
Integrity: Feds investigating possible fraud at GE's former subprime
unit... By Michael
Hudson and E. Scott Reckard, iWatch News Federal authorities
are investigating possible fraud at General Electric Co.'s former subprime mortgage arm amid increased public pressure to
hold Wall Street accountable for its role in the financial crisis.
The FBI and the U.S. Justice Department are looking into
potentially criminal business practices at Burbank, Calif.-based WMC Mortgage Corp. during the home-loan boom, according to four people with
knowledge of the investigation. They declined to be identified because of the
sensitivity of the investigation.
The government is asking whether WMC used falsified
paperwork, overstated borrowers' income and other tactics to push through
questionable loans, two of the people said. They said the probe appears to be
focusing on whether senior managers condoned improper practices that enabled
fraudulent loans to be sold to investors. Full
report at ….. http://www.huffingtonpost.com/the-center-for-public-integrity/feds-investigating-possib_b_1218755.html
Problems Plague Cleanup at Hanford Nuclear Waste Site By Peter Eisler, USA Today HANFORD SITE, Wash.–Seven decades after
scientists came here during World War II to
create plutonium for the first atomic bomb, a new generation is struggling with
an even more daunting task: cleaning up the radioactive mess. The U.S. government is building a treatment plant to stabilize and
contain 56 million gallons of waste left from a half-century of nuclear weapons
production. The radioactive sludge is so dangerous that a few hours of exposure
could be fatal. A major leak could contaminate water supplies serving millions
across the Northwest. The cleanup is the most complex and costly environmental
restoration ever attempted. And the project is not going well. Continued at …. http://www.usatoday.com/news/nation/environment/story/2012-01-25/hanford-nuclear-plutonium-cleanup/52622796/1
In the Gusher of Super PACs, Even One Named 'The Internet'
Listen
to …Romney Parks Millions in Cayman Islands
- ABC News and Spokesperson of Citizens for Tax Justice By MATTHEW
MOSK, BRIAN ROSS (@brianross) and MEGAN
CHUCHMACH (@megcourtney) Jan. 18, 2012 Although it is not apparent on his financial
disclosure form, Mitt Romney has millions
of dollars of his personal wealth in investment funds set up in the Cayman
Islands, a notorious Caribbean tax haven. A spokesperson for the Romney
campaign says Romney follows all tax laws and he would pay the same in taxes
regardless of where the funds are based. ……. But tax experts tell ABC News
there are other reasons Romney may not want the public viewing his returns. As
one of the wealthiest candidates to run for president in recent times, Romney
has used a variety of techniques to help minimize the taxes on his estimated
$250 million fortune. In addition to paying the lower tax rate on his
investment income, Romney has as much as $8 million invested in at least 12
funds listed on a Cayman Islands registry.
Another investment, which Romney reports as being worth between $5 million and
$25 million, shows up on securities records as having been domiciled in the
Caymans. http://abcnews.go.com/Blotter/romney-parks-millions-offshore-tax-haven/story?id=15378566
In the super PAC era, do handshakes even matter? - Boston.com January 17,
2012|Jack Gillum, Associated Press The AP’s study of
advertising purchases, campaign stops and demographic data offers the first
tangible signs of how new super political action committees, which can spend
unlimited amounts of cash to influence elections, are poised to remake
presidential politics this year. So far, those groups have paid for at least
$10 million in ads — and GOP voters haven’t even decided whom they want to
challenge President Barack Obama
for the White House. …… Candidates and outside groups have spent not only
mountains of cash on television; they’ve also hit their opponents with
direct-mail leaflets and Internet ads. The Newt Gingrich-supporting Winning Our Future PAC — bolstered earlier this month by a
$5 million donation from casino mogul Sheldon Adelson
— recently disseminated a 28-minute Web movie and shorter TV spots slamming
Romney for his record at a private equity firm. Continued at …… http://articles.boston.com/2012-01-17/news/30636186_1_political-advertisements-super-political-action-committees-election-results
A
Message from the National Taxpayers Union Data from NTUF's BillTally
project was featured in Investor's Business Daily. The article is entitled "Lawmakers Proposed
$1 Tril In New Spending Last Year." Also check
out the Most Expensive and Least Expensive Bills of the week….. http://action.ntu.org/site/MessageViewer?dlv_id=12801&em_id=9802.0
Giants' Fight to Avoid Property Tax Spurs
New Jersey Town Rating Downgrade Bloomberg By Aaron Kuriloff - Jan 18, 2012 3:41 PM ET The
New York Giants’ dispute
with hometown East
Rutherford, New Jersey, over whether
the National Football League team should pay property taxes on its training
center led Moody’s Investors Service to downgrade the credit rating of the
borough of about 8,900. The ratings firm
downgraded $16 million in general obligation debt from the borough one level to
A2 from A1, saying the lawsuit between the town, the team and the state entity
that owns the land beneath the stadium has worsened financial operations. A2 is
Moody’s sixth-highest investment grade, and the shift may result in increased
borrowing costs for the town because investors may see it as less able to repay
debts. “The negative outlook reflects ongoing litigation related to the Timex
Performance Center’s tax status and the impact on the budget of non-payment of
a material amount of property taxes for two years,” Moody’s said in a Jan. 13
ratings report, noting that the facility is the borough’s second-largest
taxpayer by assessed value. Continued at ….. http://www.bloomberg.com/news/2012-01-18/giants-fight-to-avoid-property-tax-spurs-new-jersey-town-rating-downgrade.html
Deutsche Analyst Sounded Alarm When Asked to
Alter Numbers
by Carrick Mollenkamp, Special to ProPublica | @ProPublica Jan 19, 2012
A junior analyst at Deutsche Bank protested when a mid-level
executive asked him to adjust a spreadsheet to make a mortgage-backed security
look less risky. The 2007 episode raises questions about whether the SEC has
looked closely enough at the bank's practices leading up to the financial
crisis.
More coverage: The Wall Street Money Machine
State
Department Delays Oil Pipeline, Officials Say John
M. Broder and Dan Frosch,
The New York Times News Service: "The [Obama]
administration has until February 21 to decide the fate of the 1,700-mile
[Keystone XL] pipeline ... Officials are expected to announce that they cannot
meet that deadline and that they are looking for ways to complete a thorough
environmental review before making a final decision on the project. The action
for now means the permit for the pipeline is rejected although the pipeline
company will be allowed to submit a new proposal with an altered route."
Read the
Article
By PETER EAVIS and SUSANNE CRAIG
Goldman Sachs and Morgan Stanley’s weak results cast doubts
on Wall Street returning to its high-rolling ways. Some of the forces that
weighed on earnings last year — like Europe’s government debt crisis and a sluggish
United States
economy — could go away. Yet Wall Street still faces permanent pressures on
profitability, particularly stricter regulations aimed at making the financial
system safer. For instance, Wall Street firms cannot borrow such large amounts
of money and make bets with it. With much less of this kind of leverage, the
game is changed — perhaps forever.
“No matter how you
cut it, the Goldman Sachs of tomorrow is not going to be the Goldman Sachs of
1999, when it did its I.P.O., or the Goldman Sachs of 2006, when it was at the
high point of the cycle,” said Brad Hintz, a senior analyst with Sanford C.
Bernstein & Company.
As profits fall way short of internal targets, the
executives who run Wall Street may have to cut back hard, to stop profits from
falling even further. When asked by an analyst on Wednesday whether Goldman
Sachs was thinking of downsizing to deal with the difficult business
conditions, David A. Viniar, the bank’s chief
financial officer, said, “That is one of the most critical questions and a very
difficult one to answer.”
Wall Street employees are feeling the squeeze this bonus
season, which is going on right now. In 2011, Goldman set aside $12.22 billion
to pay compensation and benefits for its 33,300 employees. That comes out to around
$367,000 per person. In 2006, the firm paid out $16.46 billion in compensation
and benefits, or roughly $621,000 per employee. At Morgan Stanley, which lost
money in the fourth quarter, cash bonuses were capped at $125,000 per person. http://dealbook.nytimes.com/2012/01/19/the-new-normal-on-wall-st-smaller-and-restrained/?hp
For-Profit Kaplan University
Pays Executives a Quarter Billion Dollars, Courtesy of Students and Taxpayers Danny Weil, Truthout: "For-profit colleges have been paying lavish
and grotesquely huge compensation to executives, both former and current, using
money from student loans and government grants for decades. For-profit college
executive compensation is currently under scrutiny by Congress because nearly
all revenues that constitute the exorbitant and scurrilous executive pay
packages come from federal grants, such as Pell Grants and loans, and such as
Stafford Loans under the Title IV program." Read the Article
Justices Block Election Maps Drawn by Court in Texas