From:

Susan Kniep,  President
The Federation of Connecticut Taxpayer Organizations, Inc.
Website:  ctact.org
email:  fctopresident@ctact.org

860-524-6501

November 28, 2004

 

WELCOME TO THE 39th EDITION OF 

 

 

TAX TALK

 

Your update on what others are thinking, doing, and planning.

 
Send your comments or questions to me, at fctopresident@ctact.org  and I will include in next weeks’s publication.   

                           Review previous Tax Talk issues on our website at http://www.ctact.org/ 

 

 

TODAY’S NEWS: A brief summary is offered below. 

 

FCTO encourages you to read the entire news articles at the websites referenced.

 

The Looming National Benefit Crisis

USAToday.com , By DENNIS CAUCHON and JOHN WAGGONER
Contributing: Paul Overberg, Bruce Rosenstein

The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire. Please travel to this website for the continuation of this article which is posted on FCTO’s website: http://www.usatoday.com/news/nation/2004-10-03-debt-cover_x.htm

 

 

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Declaration of Independence Banned at Calif School

REUTERS, By Dan Whitcomb, Wed Nov 24, 2004 04:12 PM ET

 

LOS ANGELES (Reuters) - A California teacher has been barred by his school from giving students documents from American history that refer to God -- including the Declaration of Independence.  The article continues at this website:  http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6911883

 

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Let's Turn the Tide of Secrecy

 

Open the Government.Org - Public access to information arms communities with the tools they need to make our families safer. Parents can partner with community leaders to clean up polluted air and drinking water. Citizens can ensure elections are free and fair. Neighbors can use crime reports to make their streets safer for everyone.  Travel to this website for other interesting information:  http://www.openthegovernment.org

 

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Not Yours To Give

By Col. David Crockett, U.S. Representative from Tennessee

Originally published in "The Life of Colonel David Crockett," by Edward Sylvester Ellis.

One day in the House of Representatives a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support. The speaker was just about to put the question when Crockett arose:  "Mr. Speaker -- I have as much respect for the memory of the deceased, and as much sympathy for the suffering of the living, if there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for part of the living to lead us into an act of injustice to the balance of the living.  Article continued at the following website: 
 http://www.propertyrightsresearch.org/not_yours_to_give_by_col.htm

This researched information provided by Julie Kay Smithson, propertyrights@earthlink.net . Please visit http://www.propertyrightsresearch.org/ today!

 

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Ray Litchfield, roy.litchfield@snet.net

Subject:  New Hartford Taxpayers Group Formation

November 26, 2004

 

Susan: I wanted to let you know what has happened in New Hartford since your
meeting in November. We sent out 146 mailings to home owners whom have had their assessments increased by $100,000 more than the previous year due to revaluation. They
had an average tax increase of $ 2,085 so I though this would get their attention.

Well 25 property owners showed up and listened to my issues with the
assessments and then we talked about forming a taxpayers group.( we also had
5 e-mails of interested property owners) So we have a network of 30.  We suggested that we get together in January because of the upcoming holidays and that I would be sending them e-mail updates. I requested that they think about attending the BOE meeting ( of course no one showed) and the next BOA meeting which will be on the 15th.  If the interest is still there in January then we will go forward. My intention is to send out 2 e-mails prior to each meeting with enticing info to try and keep their interest up.

 

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Ray Chicoine, RDChicoine@msn.com

Subject:  The Connecticut Con

Coventry Taxpayers Association

November 19k 2004

 

Hi Sue:    This bill did pass.  At first I thought of it as a joke.  This was another issue I brought up at the meeting Monday night.  This is pure insanity of our elected officials

 

TCS Tech Central Station

The Connecticut Con

By Sandy Liddy Bourne

http://www.techcentralstation.com/052004F.html

 

 

 

Despite the valiant efforts of a few state legislators to bring fiscal responsibility back into government, the Connecticut state legislature's recent passage of a controversial bill is best described as an exercise in rational ignorance.

 

The bill, SB 595, requires Connecticut to develop a plan that reduces state greenhouse gas emissions to 1990 levels by the year 2010; 10% below 1990 levels by 2020; and 75% to 85% below 2001 levels by 2050. 

 

First there is the little problem of the U.S. Constitution. The legislation cites an agreement between the New England Governors and the Northeastern Canadian Premieres and establishes a regulatory framework under that regional pact. This is arguably an agreement or compact between the New England states and a foreign nation. Article 1 Section 10 of the U.S Constitution explicitly says the Congress has the sole power to establish agreements and regulate commerce among the states and foreign nations.  Continued at the following website: 

http://www.techcentralstation.com/052004F.html

 

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Peter Arcidiacono, PJArcidiacono

East Hampton Common Sense

Subject:  Binding Arbitration

November 4, 2004

 

FCTO was very pleased to have Peter speak to this issue during our November 13 Meeting.  The text of Peter’s comments follows: 

 

Susan - here is what I put together on the subject after the panel discussion. To me it is very discouraging because I now think the basic problem is at the negotiating level. Peter

 

Some Thoughts on Teacher Binding Arbitration

 

The October 18 forum on Binding Arbitration (BA) brought out some new information including some from a CT Education Association (CEA) brochure that I obtained after the meeting from one of the teachers present. I thought I would try to summarize the situation as I see it now. The emphasis is on the education-related aspect of Binding Arbitration.

 

Current situation: The initial negotiating playing field is far from level.

 

1.   The CEA coordinates the positions of the local educator unions. The local Boards of Education (BOE’s) are not similarly coordinated.

2.   The CEA has access to information needed to make the necessary strong case needed to win in BA. The local BOE may not.

3.   The CEA is willing to spend money to assemble the necessary information and briefs needed to win in BA. The local BOE does not or perhaps would rather give the money it does have to the local teachers instead of to lawyers and arbitrators.

4.   The local union is clearly intensely motivated in negotiations since they benefit monetarily from the whole process. The local BOE is less motivated because they are spending other people’s money and their allegiance to the education system is probably greater than that to the taxpayer.

5.   The local BOE’s seem to be primarily guided by other settlements. The result is that the vast majority (80%+) of settlements throughout the state come in close to a “magic number” that presumably comes from the CEA and/or perhaps simply from an initial settlement in a wealthy town such as Greenwich.

6.   Few (10-15%) contracts go to BA.

7.   Local boards are told (at least in East Hampton) that not only will it cost money to go through the formal BA process, but also that the arbitration decision may result in a higher settlement. The higher settlement may result from the local board being unable to present the required strong (and expensive) case and/or because the arbitration board tends to favor the union in their decisions.

8.  The public is shut out of the process and cannot tell how strongly or how well their representatives are bargaining or how logical the rationales are that support the last offers each side puts on the table.

9.  When cases do go to arbitration, both sides put forward best and final offers that are undoubtedly fairly close to the “magic number” that other towns have been settling for through negotiation. As a result, arbitrated awards also tend to come in close to the “magic number” regardless of which side the arbitrators choose.

10.  The CEA puts out extensive (sometimes misleading) lobbying literature (with data). There is no similar countering literature from taxpayers or towns or BOE’s or FCTO.

11. The CEA contribute funds to Democratic legislator campaigns. There is little or no contributions from taxpayers or towns or BOE’s or FCTO. It is not known if CABE or CCM provide funding. Both probably just lobby for more state money for education and CABE is part of the education system.

12. Despite claims that arbitration awards are “virtually split” between unions and towns, the salary awards under the Teacher Negotiation Act (TNA) do favor the unions. Clearly, the TNA awards cost the most money and are the primary drivers of increased taxes. Only when awards affecting other municipal unions under the Municipal Employee Relations Act (MERA) are combined with TNA awards is parity in BA awards achieved.

13. A February 2004 CEA brochure entitled “The BA Story” indicates some concern over the activities of FCTO stating (page 4): “FCTO has been aggressive in its circulation of a call to arms on BA. The organization has sent letters to municipal officials all over Connecticut informing them that 75-90% of municipal budgets stem from personnel-related expenses. The letter goes on to say that towns are either settling contracts under the threat of BA or contracts are being sent to arbitration to be decided upon by independent arbitrators with no relationship to the municipality they are financially impacting. Finally, it asks municipalities to pass a resolution to open the debate on BA.”

14. The CEA brochure then goes on to state (page 5) that “Arbitration is a fair and balanced process…” and (page 6) the “arbitrators accepted the school boards’ proposals 379 (50%) times and teachers’ proposals 377 (50%) times” over the 10 year period from1994 to 2003. However, closer review shows (page 6) that “Of a total of 183 salary issues, school board offers were awarded 42% of the time and teacher offers 58% of the time.” Those values significantly favor the union. Yet the impression is left that all is fair and balanced.

15.  More recent data from Office of Legislative Research (OLR) Report 2003-R-0759 shows that of 19 2004-05 TNA salary awards, 74% favored the union. Of 11 2005-06 awards, 91% favored the union. For 70 awards over a 5-year period (2001-2005) 61% favored the union. Despite this, the report summary also leaves the impression that the arbitration process is fair because when the MERA and TNA awards are combined, the awards are “virtually split”. The “virtually split” phrase was used in a Hartford Courant letter of April 3, 2004 entitled “BA Works” by Senator Edith Prague.

16.   The CEA brochure also makes other potentially misleading claims namely:

a.    Figure 1’s title is “Arbitrated Contracts Result in Lower Salary Increases.” While true, the difference is tiny. Data are shown for 7 years. Over these 7 years, arbitrated contracts averaged 0.1 percentage point less than negotiated ones.

b.   Figure 2’s title is “ Arbitrated Contracts Result in Smaller Increases in Town Budgets.” While true, again the difference is tiny. Data are shown for 10 years. Arbitrated contracts averaged 0.24 percentage points less than negotiated ones.

c.    Totally ignored is what I believe is the most important point made by the data presented in these figures, namely that both negotiated and arbitrated contract settlements show a steady rise in settlement magnitude (from the 2.5% range in the mid 90’s to the 5% range in the early 2000’s). This rise happened while the economy and State revenue to towns was declining. The conflict between rising contracts in the face of declining revenues and private sector economic problems is what has caused the current storm over BA.

 

Conclusions

17.   Binding Arbitration TNA salary awards favor the union. TNA salary awards typically

        are the primary driver of taxes.

18.  The entire situation looks very pessimistic.

19.  While BA may have some problems, I believe the principal problem lies in the poor        negotiating job done by local BOE’s. Until this is solved, BA changes will do little good.

20. The negotiating hand of the BOE might be strengthened if they opened the process to the public. But even this is a long shot.

21. Perhaps a law could be passed preventing CEA coordination of local union positions. Is it possible that such coordination is contrary to bargaining in good faith?

22. Perhaps the one single improvement in the binding arb law that might really help would be to require the arbitrators to consider ONLY settlements in the PRIVATE sector. If local boards knew that this was the ultimate standard, they might be more inclined to negotiate based on this standard.