The Darien League of Women Voters recently held its annual Legislative Coffee at the home of League members Joyce and Mike Critelli. Three of Darien’s four state legislators attended: state Sen. Carlo Leone, D-27, Rep. William Tong, D-147, and Rep. Terrie Wood, R-141. State Sen. Bob Duff, D-25, was absent due to a conflict.
League members and guests expressed concerns about Connecticut’s fiscal health, specifically the increasingly severe challenges to local towns caused by our continuing annual state budgetary deficits. Legislators were open and thoughtful in discussing these challenges, and the ways they are trying to deal with them, including the projected $4.6 billion operating deficit projected for this and next year.
Much discussion centered on the state’s unfunded liabilities in pension and retiree health, now 30 percent of annual expenses. These are expected to quadruple by the early 2030s, clearly jeopardizing both state and local ability to fund education, transportation, health and other necessary social services.
Massachusetts and Rhode Island governors have recently taken the lead in bringing health and retiree benefits of unionized government workers into line with those of private sector employees. Connecticut, being the largest employer in the state, has so far failed to take these steps. League members noted lower housing prices, increased taxes, and many residents and business relocating to other states as probable consequences.
Several Leagues members expressed concerns about the state legislature’s most recent efforts to address the resulting severe fiscal challenges now faced by both the state and local towns. These concerns focused on last summer’s legislative enactment of a new salary and benefits package for one of its largest unions, that of state employees.
That package (“SEBAC”) provides a 3.5 percent increase in pay for all state employees, honors a no-layoff pledge for the entire contract, and locks in pension and health care benefits for 10 years. State government employees are required to increase their pension contributions slightly. New employees were not placed under a defined contribution plan, but will continue under a hybrid plan that caps, at 60 percent, overtime inclusion in pension calculations.
Legislative Republicans proposed legislation to allow re-opening of state union contracts and to set benefits by statute, which offers states the budgetary relief of being able to balance budget revenues with budget expenses, thus bringing Connecticut into alignment with some 45 or 46 states which budget this way.
This legislation failed to pass, and legislators offered economic growth as a means of dealing with the severity of fiscal results that follow this and other similar legislative impasses.
Discussion was equally lively on other topics. Members supported the funding of transportation by enacting electronic tolls, provided there could be a trustworthy “lockbox” to permanently segregate revenues thus raised exclusively for infrastructure and other transportation uses.
Several League members were concerned to learn that Connecticut now requires that state income taxes on pension, annuities, and IRA distributions must be withheld from each payment rather than being paid quarterly or when the 2018 Connecticut State Income Tax Return is filed next year. While Connecticut benefits from the float, seniors may incur additional tax preparation fees and may consider this another incentive for them to re-locate.
Regarding job creation, legislators were asked why they eliminated over one-half of the Connecticut Green Bank’s funding, given it has brought in over $1 billion of investment and stimulated creation of 14,000 jobs.
To a question about legislative processes in place to prioritize necessary decisions about fiscal changes, legislators discussed the new Commission on Economic Competitiveness. Its goals are to identify ways to support the state’s successful businesses such as tech, health care and sports medicine, and to encourage other businesses to move here, thus providing a better economic environment for fiscal growth and tax base improvement.
Joyce Critelli, Laurie Williamson and Clara Sartori are members of the Darien League of Women Voters.