Federation of Connecticut Taxpayer Organizations

Govenoremail EMAIL:

TO: Governor.Rowland@po.state.ct.us,
Louis.Deluca@po.state.ct.us,
Kevin.B.Sullivan@po.state.ct.us,
Moira.Lyons@po.state.ct.us,
Robert.Ward@po.state.ct.us,
Mark.Ryan@po.state.ct.us

FR: SUSAN G. KNIEP
   Vice President
   The Federation of Connecticut Taxpayer Organizations, Inc. (ctact.org)

November 24, 2002

As you pursue your state budget deliberations, the members of The Federation of Connecticut Taxpayer Organizations, Inc. respectfully request that you give consideration to the many Connecticut taxpayers who are now paying the highest taxes in the nation. Many of the taxpayers whom you represent include the elderly on fixed incomes, the dedicated worker who is now unemployed with limited or no access to healthcare, or those who can barely sustain themselves or their families on incomes of $7 or $10 an hour. As discussion ensues regarding the possibility of 3,000 State employee layoffs, we ask that you recognize that some government salaries, pensions, healthcare benefits, and job security are disproportionate to the private sector. Certainly, we do not wish to see anyone on the unemployment line. We do, however, expect equity. It is, therefore, necessary to bring government union contracts in line with the private sector. We do not wish to see the deficit closed on the backs of Connecticut taxpayers who are already the most heavily taxed in the nation.

We also believe that leaders must lead by example. We would not dispute that your time is valuable and that you may be worth the tax dollars we are expending on your wages, benefits and healthcare.   However, before asking the unions to give back or asking the taxpayers to give more, we would hope that a public position would be taken by you to also share the pain and give back as well.   We would also ask that a thorough review of management be made to determine if administrative salaries and benefits exceed those within the private sector.   The legislature�s nonpartisan Office of Fiscal Analysis recently reviewed 28 major State agencies and concluded that the total cost of salaries and fringe benefits for commissioners, deputy commissioners, executive assistants, and durational project managers jumped from $7.2 million in 1994 to $16.3 million in 2002.   Certainly, any one individual in State government who is employed at a salary of $185,000, is one too many. This is an insult to the employee unions, and the taxpayers who must fund this employee�s salary.

In summary, we urge you to recognize that you cannot, absolutely cannot, return to the taxpayers of Connecticut through a tax increase, as you attempt to remedy the fiscal problems which have engulfed our State. Although the economy has had an impact, you and other State leaders have had ample time to correct the financial conditions which have placed our State in a fiscal crisis mode. Two years ago, on May 11, 2000, I wrote an Op-Ed piece for the Hartford Courant. I cited the State�s high taxes and significant bonded debt. I referenced the warning from the state's Office of Fiscal Analysis which then had advised that "state government could be facing an $88 million general fund deficit two fiscal years from now". Well, "two years from now" places us at this time frame. It�s apparent that the warning was not heeded. In fact, two weeks into the new fiscal year, the state�s $13.2 billion budget was running an almost $200 million debt.   That debt is expected to grow to $1 billion by mid summer.

We understand that, unlike the private sector, government finances are unlimited due to the deep pockets of the taxpayer to which you can always return, and frequently do.   Whether those taxes are direct or indirect by reducing the allotment to municipalities, Connecticut taxpayers cannot sustain another tax increase. Last year, Connecticut taxpayers paid $297 million for State Employees healthcare and $155 Million for State retirees.   Yet, this year, state unions challenged the taxpayers for a $100 million stock distribution from Anthem Health. Many Connecticut taxpayers have no healthcare. Yet, their taxes are paying for a lucrative healthcare system for State employees which you also benefit from.

Today, the greatest cost for Connecticut families is not their mortgage, their car payments, nor their child�s college education. It is instead the money we send to government which has imposed a tax on nearly every facet of our
lives.

Members of The Federation of Connecticut Taxpayers believe that no state official can fix Connecticut�s state budget, until

(1) BINDING ARBITRATION LAWS ARE REVISED,
(2) CORPORATE WELFARE TO SECRET CORPORATIONS IS PROHIBITED, AND
(3) THE STATE�S TAX STRUCTURE IS OVERHAULED

With the State of Connecticut facing a downgrade from Moody�s, due to (1) the State�s depleted Rainy Day Fund, (2) the state�s ranking as the most indebted per capita in the country, (3) the state�s large unfunded pension liabilities, (4) a shaky state budget with a built in deficit which is expected to grow to $1 billion by next summer, and (5) plummeting revenues, we urge you to address the following issues with your colleagues.   Restructuring state government through legislative proceedings will allow for greater taxpayer oversight, enhanced fiscal management, and ultimately curtail the escalating taxes which burdening both local and State taxpayers.

Please understand that with every tax increase, you are negatively affecting the quality of life of Connecticut families. We urge you to�

(1) Review and revise binding arbitration laws and eliminate "secret" union contract negotiations ��.. Greater control over the costs of government union contracts must be given to the taxpayers who fund them.   Approximately 70% to 90% of municipal budgets pay for government personnel expenses to include salaries, pensions, and healthcare.   Union contract decisions are being made by independent arbitrators with no relationship to the municipality they are fiscally impacting.

Union contracts also continue to chisel away at management rights. A municipal Police Chief is prohibited from developing a cost effective work schedule without union approval in labor negotiations.   Unions have also been successful in winning cases before arbitrators based on "Past Practice." This is when an issue of dispute is not contained within a union contract but the union contends they have been allowed to do it over a period of time. Arbitrators have ruled that due to past practice management cannot prohibit the practice of driving home town owned vehicles.

As taxpayers are forced to fund lucrative government union contracts, the negotiation table MUST be moved out from behind closed doors and into the light of public debate!

Union contracts should also be subject to voter approval. An elected official wishing to win favor with the union, may sacrifice the interests of the taxpayers. In East Hartford, the administration negotiated a lucrative pension contract which allows police personnel to work for five years prior to retirement, receive their full pay with overtime, concurrently assume retirement status, and have 96% of their pension deposited into a savings plan.   At the end of five years, the employee will be given a check for the money which had been accumulating in their savings account.   With some police retiring at $50,000, $60,000, and even $70,000 and more, that check can amount to over $350,000. With one union not wanting to be outdone by another, this perk will be showing up in union contracts throughout Connecticut.

(2) Limit Corporate Welfare and Reduce Connecticut�s Bonded Debt by requiring public financial disclosure of all corporations receiving state tax dollars�. Currently, millions of Connecticut taxpayer dollars have been invested in Corporations not required to publicly disclose their financial status or stability. The State�s bonded debt has increased to support these investments.   We urge you to pass legislation which will require that companies open their books to the public before receiving any State tax dollars.

(3) Establish fair and equitable taxation and control government spending by
supporting Connecticut Proposition CT13�.. We ask that you embrace Connecticut Proposition CT13 (Web site cttaxreform.com) which protects local property taxpayers by restricting the maximum amount of any ad valorum tax on real
property to 1% of its full cash value, restricting property tax increases to a maximum of 2% in a calendar year as dictated by cost of living increases, and eliminating unfunded state mandates.

We ask that you recognize that it is only through government restructuring and more empowerment of the taxpayer, that Connecticut taxpayers will ultimately find tax relief.

We appreciate the time you have extended to reviewing the aforementioned. We urge all of you to embrace our proposals and to begin the process of implementation. We also wish you well in your budget deliberations.

Sincerely,
FEDERATION OF CONNECTICUT TAXPAYER ORGANIZATIONS, INC.

Susan G. Kniep
Vice President
860-528-0323