Connecticut governors and legislators have been able to kick the state’s pension obligation nightmare down the road for decades. Some, like former Gov. John Rowland added huge obligations to gain favor from state employees, who actually vote in elections.
But that can – among the biggest of all the states – is going to be difficult to kick much further.
Infact, Benjamin Barnes, secretary of the state Office of Policy and Management and Gov. Dannel P. Malloy’s top budget official, indicated Friday that Malloy may be asking us to start making some hefty payments which we as voters allowed our politicians to get away with.
If you really want to get an understanding of this issues – not just hear sound bites – read today’s story by JC Reindl. in the New London Day, one of the best small daily newspapers in the country.
Here are a few sample graphs:
Connecticut has one of the lowest pension funding levels of all 50 states. According to the most recent audit, the State Employees Retirement System, which covers more than 42,000 retirees, had $11.7 billion in unfunded liabilities last year.
The audit found just 44 percent of the money that’s needed to meet the state’s future obligations, far below the general guideline of 80 percent.
If nothing is done, Barnes said, “It gets spectacularly ugly.”
The state’s required annual contributions could grow from the current $1 billion to a peak of $4 billion in two decades. And that doesn’t include the other contractual payments for retiree health care and teachers’ pensions.
Timely George.
What people aren’t seeing is that pension growth is expected to grow faster than inflation.
The most meaningful numbers are the estimated rise in thepercentage of CT taxes needed in a 3% inflation environment, with estimated pension payments assuming a 6% historical return, and the historical Mediciad growth calculated from the higher spending base of the 2014 Obamacare requirements, and the increase in state employee and retiree health care costs.
The figures are stunning. Will we get locked into 8% tax increases (5% after inflation) just to offer the same goods and services as today with higher energy adn commodity costs? That’s the model. Someplace in the 5 to 7% range after inflation. Coupled with a declining median income and increased bonding and wages which don’t match inflation?
I’d love to see Barnes projections from 2014 under several scenarios.
Historically we will have another recession before 2020. Around 2017 if not earlier as Europe goes into austerity mode. And no one’s modeled a view of the Gold Coast in exodus–world finance markets and hedge funds are less and less dependent on NYC and the new WTC complex will attract NYC residents not CT.
It’s time for Connecticut taxpayers to wake up. Very soon your taxes will be going up 5%-10% PER YEAR to pay for public employee salaries, benefits and pensions. Public sector unions have owned CT politicians for years and it’s bankrupting Connecticut. It’s time to take back Connecticut for the TAXPAYERS. If your local representative supports public sector unions then he/she DOES NOT support you, the taxpayer. There is no grey area. Look at Wisconsin, Rhode Island, San Jose, San Diego, San Bernardino, Stockton for the damage public sector unions are doing to America. Public sector unions declared war on the taxpayer many years ago. It’s time for Connecticut taxpayers to defend themselves. We need politicians that will increase employee pension contributions, increase employee healthcare contributions, increase public employee retirement ages, switch all current and future public employees to 401K plans. Is it fair that public sector employees can retire at 57 with VERY generous lifetime pensions and FREE healthcare while the average Connecticut taxpayer retires at 67 with NO health coverage and little more than a paltry monthly social security check? WAKE UP Connecticut taxpayers. We have the numbers at the polls. There are three hardworking taxpayers for every public union employee/supporter. We need to vote for change. We need politicians that support US not a privileged minority known as public sector union workers.