The city of Danbury has been experiencing a renaissance in the past few years, which has the city moving in the opposite direction as the rest of the state. Although Connecticut has been experiencing a net loss of population, Danbury has increased its population by 8 percent since 2000; while Connecticut’s credit rating has decreased, Danbury recently earned a AAA rating; Connecticut’s state employee pension system is among the most underfunded in the nation, while Danbury’s is nearly fully funded into the foreseeable future.
As Connecticut’s Spending Cap Commission closes in on it’s December 1st deadline to deliver recommendations to the state legislature, committee co-chair, William Cibes, asked that the term “death-spiral” cease to be used when discussing the state’s fiscal health. Cibes also said that he no longer wanted to hear that state spending was out of control.
Connecticut has been meeting its payments for the past few years. This is commendable and responsible behavior. Too many states, fearing the immediate implications of budget crowd-out, choose to pay less than 100 percent of their required contributions. However, the Connecticut pensions systems’ structural problems make even 100 percent payments woefully insufficient. Debt levels are going up, in part because of inflated discount rates.
Connecticut voters overwhelmingly approved a constitutional spending cap in 1992, but lawmakers still haven’t defined the three terms in the amendment that would make it work. Earlier this year, lawmakers created a Spending Cap Commission to recommend definitions. The hope is that lawmakers will adopt them next year. The commission has ...
Connecticut union leaders signed off on pension underfunding each time it happened, according to the state’s top union official and expert testimony before the Spending Cap Commission last month. At the Sept. 26 commission meeting, AFL-CIO President Lori Pelletier said union leaders agreed to underfund the state employee pension in exchange for better benefits for workers, even though they knew it was “not a good idea.” Pelletier said Connecticut is now “left holding that basket.”
An independent arbitrator sided with the town of West Hartford last month in a dispute between the town and the police union over whether overtime pay can be included in pension calculations for officers who retire with 25 to 30 years of service. The decision, issued on August 29, held that pensions for officers hired under the 2006 union contract would be calculated using "average base pay," which excludes overtime compensation.