HAMDEN — Internal Revenue Service-certified student volunteers from Quinnipiac University will offer free tax preparation assistance to qualified taxpayers on Saturdays from 10 a.m. to 2 p.m., starting February 11 in the Lender School of Business Center on campus.
Students from the School of Business will offer free tax preparation assistance to people with an annual income of less than $50,000. The students will inform taxpayers about special tax credits for which they may qualify including Earned Income Tax Credit, Child Tax Credit and Credit for the Elderly or the Disabled.
The Quinnpiac students involved in the Volunteer Income Tax Assistant (VITA) Program use TAXWISE, the IRS-approved software package for the VITA program for state and federal returns.
The tax assistance will be offered each Saturday through April 15 with the exception of March 10 and 17, when the university will be closed for spring break.
Working-class hero DeLauro among richest members of Congress
NEW HAVEN — That staunch champion of the 99 percent is herself a member of the one percent.
That’s right: New Haven’s über-liberal congresswoman-for-life, Rosa L. DeLauro (D-3), has a personal net worth of $16,626,008, according to a December 27 report by the Washington Post.
That sum places the 11-term New Haven Democrat No. 29 among 435 members of the U.S. House of Representatives. It also places her head and shoulders above her Nutmeg State peers in the lower chamber. Former Goldman Sachs investment banker Jim Himes (D-4) is the only other member of the millionaires club, with a net worth of $4,324,025. The other representatives are of substantially lesser means: Joseph D. Courtney (D-2) has a reported net worth of $364,010; while John B. Larson (D-1) clocks in at $280,004. With a reported net worth of $90,503, Christopher S. Murphy (D-5) is a relative pauper among this crowd.
Among members of the upper chamber, junior U.S. Sen. Richard Blumenthal is the sixth-richest member of that deliberative body, with a net worth of $73,151,590. His soon-to-retire compadre, longtime-Democrat-but-now-independent Joseph I. Lieberman of New Haven, reports a relatively modest (by Senate standards) net worth of $1,981,541.
While the House’s richest member, California Republican Darrell Issa, whose net worth is a reported $448,125,017, is a stalwart conservative, its sixth-richest member, House Speaker and DeLauro ally Nancy Pelosi ($101,123,032), is one of the lower chamber’s most liberal voices.
According to the Post report, between 1984 and 2009 the median net worth of a U.S. representative shot up from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity. At the same time the typical family net worth slid from $20,600 to $20,500.
Members of the U.S. House of Representatives earn a $174,000 annual salary. So how did the 68-year-old DeLauro, the granddaughter of Italian immigrants who has represented the Third District since her 1991 election, amass an eight-figure nest egg?
DeLauro is married to Democratic political strategist and consultant Stanley B. Greenberg, whose corporate clients include British Petroleum, General Motors and the Monsanto Co. Greenberg owns 67 percent of his polling firm, Washington, D.C.-based Greenberg Quinlan Rosner Research. In May 2010 Greenberg was linked to controversy involving then-White House chief of staff (now Chicago mayor) Rahm Emanuel, to whom Greenberg provided free rent while consulting for BP.
In August DeLauro drew criticism in the wake of Tropical Storm Irene, which destroyed numerous homes in East Haven and elsewhere in the Third District and rendered many state residents powerless for days. At the time of the storm DeLauro was vacationing along Italy’s Amalfi Coast and did not return to Connecticut until five days after the storm had passed. A Hartford Courant column rated DeLauro's storm response an "F". Nevertheless, DeLauro told the New Haven Register she had "no apology for taking a vacation" and being out of state during the crisis.
A new analysis says every taxpayer owes $41,000 to pay down Connecticut’s debt, the nation’s worst
Connecticut is in the worst financial position of all 50 states, a “sinkhole” costing each taxpayer a burden of $41,200 to pay down the state’s outstanding debt of more than $63 billion, with only $10 billion in liquid assets available, according to a report recently published by the Institute for Truth in Accounting (IFTA).
The state is in worse financial shape than New Jersey, Illinois, Hawaii and Kentucky who are listed at Nos. 49, 48, 47, and 46, respectively. Even traditionally “poor” states, including Maine (No. 38), Mississippi (37) and Alabama (34), fared better. Only four states — Utah, Nebraska, North Dakota and Wyoming — were in the black.
The report goes on to say that the Nutmeg State “has $29.4 billion worth of assets, but most of these assets are not available to meet the state’s obligations. Almost $14.9 billion of these assets is infrastructure like roads, bridges and parks, which cannot realistically be used to pay bills. The use of $4.4 billion of the assets is also restricted by law or contract. Only $10.1 billion of the state’s assets are available to pay $63.4 billion of bills as they come due.”
Connecticut state statutes require that the legislature pass a balanced budget biennially, but the report notes that “one of the reasons Connecticut is in this precarious financial position is that state officials use antiquated budgeting and accounting rules (‘political math’) to report Connecticut’s financial condition.” Gov. Dannel P. Malloy had campaigned during his election bid to rid the state of these inefficient accounting methods and convert to generally accepted accounting principles, or GAAP, to more accurately reflect the state’s true financial condition. But implementation of GAAP has been stalled and can’t be implemented for the current budget cycle, according to Watertown State Sen. Robert J. Kane (R-32), ranking member of the Appropriations Committee, who is familiar with the IFTA report.
“For years, we’ve kicked this can down the road as far as we could, but at the same time, we continue to extend the deeds of previous administrations,” says Kane, who pointed out the that 20-year contract created in 1997 as part of the recent concessions by state employees’ unions was extended for another five years. “All we’ve done is extend that bad agreement that we already had in place for another five years.”
Adds Kane: “The point is, we need real reform and when it comes to our pension liabilities, how we offer benefits to state employees, the spikes [in payouts] that occur when individuals get ready to retire — there’s a whole host of things that we need to address and reform that we have yet to do. We’ve never reformed the actual weight that we’re going to collapse under.”
Beyond the existing fiscal sinkhole, big spending projects continue to be added to Connecticut’s debt burden. On September 30, Malloy announced that the state would lend some $400 million, which includes debt service, to Jackson Laboratories of Maine to develop a bioscience facility adjacent to the University of Connecticut Health Center in Farmington (BNH, November). On November 21, Malloy announced that the New Britain to Hartford busway would move forward, with the state covering $112 million of the total cost of $567 million for the project.
Kane agrees that the recently announced $100 million surplus won’t help much to pay down the $63 billion in state debt nor the $53.4 billion of the state employees’ retirement funds and related pension costs that the IFTA report cites.
“We have failed to fund these obligations for many years,” says Kane, noting that last year’s deficit mitigation special session called for $100 million to be set aside to pay down some of the debt. “We deferred that,” notes Kane. “We keep deferring, deferring, deferring, and sooner or later this ‘credit card bill’ is going to come to bear, putting that weight on the next generation and on the next, until each one of us has that obligation of $41,200 cited in the report.”
“I do believe that we are the worst in the country,” says State Rep. Sean J. Williams (R-68) of Oakville, ranking member on the legislature’s Finance Committee. “For all the talk of Connecticut’s new enlightened path, where we’re playing nice with big labor and we ask for more from taxpayers, in order to attempt to sustain an unsustainable level of spending, in that process we add to our ever-growing debt problem.”
Williams notes that other states have gone the route of cutting spending and taxes to create economic activity. “Investors and the business community will never take a state like Connecticut or New York seriously unless and until we start creating an environment where they want to be here to create jobs. Every time we run into a little fiscal ‘hiccup,’ we look to raise taxes instead of looking to cut spending. We had a huge ‘belch’ this year and instead of cutting spending — we not only raised taxes, we raised spending. And that in and of itself adds to our debt problem.”
In an e-mail response to questions submitted by BNH, state Treasurer Denise L. Nappier noted that “The Institute for Truth in Accounting (IFTA), in its characterization of Connecticut as a ‘sinkhole’ state, may succeed in prompting a comprehensive response to the issue of Connecticut’s debt burden. That kind of attention is a long time coming.”
Nappier said she has raised concerns “about one of the fastest-growing aspects of our state’s debt burden, its obligations to fund pensions and other post-employment benefits. For example, in 2001 I testified that ‘No single issue facing our state pension system — and the fundamental integrity of future state budgets — is more important than fully funding the state’s annual pension contributions.’ Since then, Connecticut has taken important steps to correct its debt profile going forward.”
Nappier noted that the IFTA’s assessment of Connecticut’s total bonded indebtedness at $22.7 billion was more than what she had found it to be: $19.2 billion, or “some $3.5 billion less than stated.”
Nappier pointed to the fact that when Connecticut’s high per-capita wealth, the most in the nation, is compared with other states in terms of total debt, “We actually are about average and in the middle of the pack. Given that Connecticut has no county form of government, and most of the bonding, particularly for schools, is done at the state level, we think that comparisons with other states should take that into account. So by comparing apples to apples, so to speak, we believe that the total amount of debt our government has borrowed against our citizens’ revenue is a key credit consideration and better measure of our ability to pay.”
“I am a proponent and have always advocated for truth and transparency in the budget process, including the use of Generally Accepted Accounting Principles [GAAP],” added Nappier. “Connecticut is currently transitioning to GAAP accounting and beginning this fiscal year, a portion of the budget surplus is directed to funding the GAAP conversion.” She noted that GAAP will afford a more accurate reporting method of the state’s fiscal situation “and give policymakers and citizens the best information with which to debate and determine our future.”
“Is there room for additional improvement? Absolutely,” she added. “The new administration headed by Gov. Dannel P. Malloy has, in a short period of time, demonstrated the will and discipline to chart a more fiscally sound future for Connecticut.”
“I applaud the desire of the governor to implement GAAP. It’s something that we should have done many years ago, but he hasn’t done it yet,” counters Williams. “That’s because he recognizes that implementing GAAP will show an even larger deficit than we show now. He claims that his budget contains no gimmicks, but by not implementing GAAP, his budget inherently contains gimmicks.
“Now that this budget has been passed into law,” Williams adds, “we are finding that many of the savings we expected will not exist so we’ve gotten ourselves into a worse problem. We have a no-layoff clause built into the budget [for unionized state employees]. If the savings doesn’t materialize and we can’t lay off a single employee, what do you think is going to happen? We’ll have tax increases.”
As for the Malloy administration’s focus on the shortcomings identified in the IFTA report, Kane says, “Let’s hope that they’re noticing this report and willing to address it, because that’s where the real reform is going to come from. Because the legislature certainly doesn’t have the wherewithal to tackle it.”
Community Foundation’s Ginsberg earns chamber’s highest honor
NEW HAVEN — One of the nation’s oldest business groups held a party last month to fete an old friend.
The 217-year-old Greater New Haven Chamber of Commerce held its 2011 Annual Awards Luncheon October 13 at the Omni-New Haven Hotel. The event, which drew some 600 to the hotel’s Grand Ballroom, exists to honor chamber members for achievements in small business, manufacturing, the non-profit sector and the like.
But its flagship is the Community Leadership Award, which since the 1960s has confirmed community-pillar status on a couple of scores of Elm City grandees. Like Republican nominees for President, the naming of Community Leadership Award-winners each year causes few heart attacks (it is difficult to imagine a troublemaker such as Steve Jobs receiving an award from the New Haven chamber), the 2011 honor likewise was conferred on an individual whose worthiness few would debate.
William W. Ginsberg has been president and CEO of the Community Foundation for Greater New Haven since 2000. With some $320 million in assets, the foundation is the largest charitable organization in south-central Connecticut, placing the 56-year-old Ginsberg in a position to do much good. In that role he has seldom disappointed.
Beyond that, his New Haven roots run deep. Just four years out of Columbia Law School, Ginsberg was lured from the world of New York corporate law to the rough-and-tumble of New Haven politics, joining the administration of then-Mayor Biagio DiLieto as development administrator. He remained at City Hall for four years before being tapped to head the Science Park Development Corp., a non-profit technology incubator, for six years before heading to Washington in 1994 to join the Clinton administration.
In accepting the award, Ginsberg noted that communities such as New Haven ought to measure prosperity by “How we take care of our needy.” The strength of the community, he added, is a function of “people being connected — and by this measure New Haven is an unusually strong community.”
In the 27 years since he arrived in the Elm City, Ginsberg said, “New Haven has emerged as an urban success story.”
But not all the bon mots at the luncheon were Ginsberg’s alone. Said Allison Schieffelin, CEO of the West Haven-based Lighting Quotient, which earned an award for Achievement in Manufacturing, “Manufacturing in New Haven, despite the rumors, is not dead.”
Observed Francis McCarthy, whose Marrakech Inc. was cited for Leadership in health Care & Non-Profit Partnership, “The non-profit community in New Haven would not exist without the for-profit community.”
And finally this from Michael Iannuzzi, whose Tyco Printing earned honors for Small-Business Achievement: “Our work ethic is the foundation of our achievement.”
ORANGE — The U.S. Department of Labor's Occupational Safety & Health Administration has cited Valley Tool Inc. for 13 alleged violations of workplace safety standards. The metal fabrication shop faces a total $46,970 in proposed fines following an OSHA inspection prompted by an employee complaint. OSHA's inspection found improper storage of materials in a flammable storage cabinet, failure to provide annual training and fit-testing for all employees who use respirators, and failure to provide chemical hazard communication training to employees working with chemicals. OSHA had cited the facility for similar hazards in 2009 and 2010.
The employer had 15 business days from receipt of its citations and proposed penalties to comply, meet with OSHA's area director or contest the findings before the independent Occupational Safety & Health Review Commission.
Growing budget deficits tied to pension, insurance costs
NEW HAVEN — Confronting yawning budget gaps of $4.2 million this year and nearly $6 million next year, Mayor John DeStefano Jr. wants to recast city workers’ health insurance and pension benefits.
In a April 28 City Hall press conference, DeStefano noted that employee health insurance and pension costs have skyrocketed from 12 to 22 percent of the city budget. He called those costs the “Pac Man” of the municipal budget with an unquenchable appetite for dollars.
To fill this year’s gap, the city will have to dip into its rainy-day fund. The fund war at $9.2 million, now it will fall to $5 million, DeStefano said. That is far below the level — five percent of the operating budget, or $23 million in this year’s budget — that city auditors recommend.
The mayor forecasts that next year’s $475.4 million budget will have a $5.9 million shortfall, with gaps ballooning to $15 million, $27 million and $39 million in fiscal years 2013, 2014 and 2015, respectively.
Among the reasons for this year’s deficit, according to DeStefano, were higher-than-budgeted police and fire overtime costs (accounting for $1.65 million of the deficit) and $1 million in planned union concessions that were never achieved.
On the revenue side, more “aggressive” tax collections increased revenues by $2 million. But state aid for education fell by $2.1 million, and parking meter revenue declined $1.3 million because, the mayor said, “for part of the winter, the meters were literally covered with snow.” (In January and February alone, meter receipts were down 22 percent).
DeStefano discussed changes to the fiscal 2012 budget, including a reversal of the decision to sell the Temple Medical parking garage. The property was appraised at $9 million, and listed for $7 million, but the only offer for the structure and land was $2.5 million. “We were viewed as a distress seller,” DeStefano explained.
With regard to pension and health-care benefits, which now account for nearly a quarter of the city’s budget, DeStefano said, “I don’t see a way to manage down that budget gap” without changing the benefit structure.
Thus he proposed a defined benefit pension plan with new eligibility and benefit rules, and changing to a new base health care plan with higher deductibles but free preventative care — a proposal one union official later called “out of touch with reality.”
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