Posts tagged as “Column of the Day”

Red Jahncke hits the nail on the head: “Falling Markets Will Crush Government Budgets” (op-ed, May 17). He emphasizes declining tax revenues, but the fall in the markets will have at least two other major adverse budgetary impacts worth noting.

First, tens of millions of Americans are receiving income from pension funds... For state and local governments, where many pension funds are already only around 70% funded, this will force bigger employee or government contributions, benefit reductions or both. 

Second, rising interest rates are going to sharply increase the interest payments of the federal government to bondholders.

● Read in Wall Street Journal

● Read and comment here on The Red Line

Anyone paying attention to state government last week might have been shocked by the disclosure from the state Office of Fiscal Analysis that Governor Lamont's proposed contract with the state employee unions will raise state government's labor expenses by nearly $2 billion over four years.

Announcing the contract six weeks ago, the governor said nothing about its likely cost. Had he even calculated the cost? Or did he care only about satisfying the state employee unions and mobilizing them for his re-election campaign and the campaigns of his fellow Democrats for the General Assembly and Congress?

● Read in Journal Inquirer

● Read and comment here on The Red Line

Through SEBAC, state government unions have reached a tentative agreement with the Lamont administration that will cost taxpayers millions. Guaranteed raises — along with a $3,500 bonus — will go out to over 40,000 state employees, regardless of performance. These are likely to be the same state workers who will be working hard for their favored candidate — calling your home, knocking on your door, or working the polls in the upcoming election. 

By law, negotiations between government unions and state management are supposed to be an adversarial process, with both sides advocating for their best position in order to strike an equitable balance of interests. Unfortunately, politicians have too often put their personal political objectives before taxpayers’ best interests in what amounts a betrayal of the public trust. 

● Read in CT Examiner

● Read and comment here on The Red Line

Another day, another study finding that Connecticut state employees are paid so much better than private-sector workers. The latest study was done by a senior fellow at the American Enterprise Institute, Andrew Biggs, who holds a doctoral degree from the London School of Economics.

Biggs' conclusion matches that of similar studies in recent years -- that the nominal salaries of state employees are a little smaller than those of private-sector workers in comparable positions, by about 6%, but their fringe benefits -- pensions and medical care -- are more than three times greater than what private-sector workers get, an average of $44,000 per year against $13,000.

● Read in Journal Inquirer

● Read and comment here on The Red Line

Editor's Note: This article contains mistaken interpretations of the study methodology.

First, there is no need for cost-of-living adjustment of the study results because state employees in each state are compared only to private sector employees in the same state.

Second, there is confusion of job descriptions, which the study does not compare, with employee characteristics, on which the study focuses. For example, judges can be compared to lawyers in private practice in terms of legal education and legal experience, etc. It is employee characteristics which have a market value, not the job.

A new study shows that Connecticut’s state employees receive the highest combined pay and retiree benefits nationwide – significantly more than what is earned in the private sector – and that the state has significantly underfunded those pension plans for more than a decade. 

“Connecticut’s high and severely underfunded state employee compensation leaves the state particularly vulnerable to adverse financial and/or economic conditions. It is in the interest of the state, its citizens and active and retired state employees to reduce this risk,” wrote Andrew Biggs, who authored the report, which was released in February.

Biggs, who has a PhD in government from the London School of Economics, is a senior fellow at the American Enterprise Institute, a conservative think tank based in Washington DC. The report was overseen by The Townsend Group International, LLC, a financial strategy firm in Greenwich, and commissioned by the Nutmeg Research Institute.

Biggs discussed the findings in his report during a Zoom conference call with a number of state representatives  — about 22 Republicans and three Democrats — that was hosted by Red Jahncke, president and CEO of The Townsend Group, on March 22. 

● Read in CT Examiner

● Read and comment here on The Red Line

The topic of Transit Oriented Development (TOD) and the bevy of 8-30g proposed developments in Greenwich and other towns has clearly become an issue of focus. While adding affordable housing and TOD are laudable goals, to what extent it gets done and in whose hands it rests to determine that process is a very complex debate.

This led me to do some research on the main proponent for affordable housing in our state, a group called Desegregate CT. Below, I will present publicly available information about this group, and allow the readers to reach their own conclusions.

According to its website, Desegregate CT relies on funding and logistical support from a group called the Regional Plan Association (RPA), a New York City based non-for profit group. The Chairman of RPA, is also the CEO of RXR Realty which owns more than 30million square feet of residential and commercial real estate valued at over $22billion dollars.

The list of donors to RPA (available on their website) is weighted toward real estate and development companies. More than half of those listed as top donors of $100k or more are a who’s who in the real estate field; The Durst Organization, RXR, SL Green Management, Suffolk Construction, Related Properties, Cushman Wakefield, Edison Properties and others.

● Read in Greenwich Free Press

● Read and comment here on The Red Line