[Mr_250]

Suggestions? The key April receipts are not helping the current budget or future budgets. As of right now the income tax receipts are 20% lower than expected.

With these new figures, CT looks to be heading towards a deficit of $2.2B in 2019.

My bet is that an income tax increase, propert tax and tolls will be added because CT is not growing and adding revenue.

Hold onto your wallets!

https://ctmirror.org/2017/04/24/dram...budget-debate/

[East of the River]

Originally Posted by RunD1987

Wouldn't mind a yearly 5% or less excess rate tax on property taxes and car taxes. Those who own property are exempt from paying double excess tax on their cars. Take school funding out of the mill rate to lower it.

Do away with the income, estate, and gas tax. Exemption of sales tax on cars and boats.

Have a mileage tax, sales tax, used tax on goods over $5,000, excess tax on marijuanna/cigarettes/alcohol to fund universal mental health/substance abuse care at public & non-progit facilities for CT resident's, 2% tax to pay for State funded health care market, 2% tax for universal health care for individuals 70 and older living in the State, and 4% tax to pay for tax paid tuition at the community college's.

Flat business tax of 6%, 4% excess tax to pay for State funded health care market, and a 2% excess tax on businesses with more than 2,000 employees or more in the State.

CT towns already put most of the property tax into schools. So I'm not sure what splitting it into two separate taxes would do, other then create more paperwork. Unless your going for a flat school tax to every resident or some other similar idea other then a property value tax.

[East of the River]

Originally Posted by Mr_250

Suggestions? The key April receipts are not helping the current budget or future budgets. As of right now the income tax receipts are 20% lower than expected.

With these new figures, CT looks to be heading towards a deficit of $2.2B in 2019.

My bet is that an income tax increase, propert tax and tolls will be added because CT is not growing and adding revenue.

Hold onto your wallets!

https://ctmirror.org/2017/04/24/dram...budget-debate/

I say increase sales tax to 6.5 or 6.75%. Other then that no more revenue. Unfortunately start cutting programs, short term.

[East of the River]

I had a conversation with a former legal worker for the state of CT that may be interesting. There has been some legal challenges in other states regarding existing pension and healthcare benefits for existing state workers, and some states had made reductions in payouts. This person indicated that the way CT's contracts with employees work and are worded, there can be almost no changes to the pensions benefits or medical benefits. They said CT's laws and contracts are worded differently, and basically if a worker is vested the benefits can't change unless both sides agree to it and even then they may not be able to change it. The person said there can be small tweaks, but not large ones.

Which basically reinforces what has been said here many times CT is stuck with those sunk costs. They need to have lighter benefits after the next round of negotiations for incoming employees. But they are stuck with the vast majority of other costs they agreed to earlier.

[MrGompers]

Originally Posted by East of the River

I had a conversation with a former legal worker for the state of CT that may be interesting. There has been some legal challenges in other states regarding existing pension and healthcare benefits for existing state workers, and some states had made reductions in payouts. This person indicated that the way CT's contracts with employees work and are worded, there can be almost no changes to the pensions benefits or medical benefits. They said CT's laws and contracts are worded differently, and basically if a worker is vested the benefits can't change unless both sides agree to it and even then they may not be able to change it. The person said there can be small tweaks, but not large ones.

Which basically reinforces what has been said here many times CT is stuck with those sunk costs. They need to have lighter benefits after the next round of negotiations for incoming employees. But they are stuck with the vast majority of other costs they agreed to earlier.

This doesn't make much sense at all, unless you can give us specific examples. Off the top of my head I can imagine some type of clause that would prevent the employer (state of CT) from switching employees who are already vested in a defined pension plan into a different plan such as a 401k. Using the money that they are already vested in.

As an example, if an employee has 100k worth in present value of pension benefits that he is vested in. The state cannot take that 100k and invest it into a 401k plan or something similar. It must remain in the fund its already in. There are probably risk metrics involved as well, such as can the current pension fund invest in junk bonds (for example) whereas a 401k plan may not have that risk defined.

Something like the situation I described above actually happened at a corporation I worked for in the late 90's. They offered a defined non contributory pension plan and a 401k to all employees. They even matched contributions made to your 401k at 100% up to 6% of your salary.

The corporation later took all employee funds that were vested and employees were given the choice of having the money put into a 401 or annuity. I wasn't vested at the time so didn't affect me. However, the critical part is after all was said and done the non contributory defined pension plan no longer existed.

I would imagine that the corporation worded their contract in a way that made this possible, plus there was no union to deal with.

[East of the River]

Originally Posted by MrGompers

This doesn't make much sense at all, unless you can give us specific examples. Off the top of my head I can imagine some type of clause that would prevent the employer (state of CT) from switching employees who are already vested in a defined pension plan into a different plan such as a 401k. Using the money that they are already vested in.

As an example, if an employee has 100k worth in present value of pension benefits that he is vested in. The state cannot take that 100k and invest it into a 401k plan or something similar. It must remain in the fund its already in. There are probably risk metrics involved as well, such as can the current pension fund invest in junk bonds (for example) whereas a 401k plan may not have that risk defined.

Something like the situation I described above actually happened at a corporation I worked for in the late 90's. They offered a defined non contributory pension plan and a 401k to all employees. They even matched contributions made to your 401k at 100% up to 6% of your salary.

The corporation later took all employee funds that were vested and employees were given the choice of having the money put into a 401 or annuity. I wasn't vested at the time so didn't affect me. However, the critical part is after all was said and done the non contributory defined pension plan no longer existed.

I would imagine that the corporation worded their contract in a way that made this possible, plus there was no union to deal with.

That's part of the issue. According to this person (which seems correct looking online) The plans don't have a defined value per say. They say they will pay x for however long you live with COL adjustments and lots of other factors and you can estimate it but its basically a defined benefit plan funded with IOU's.

The state also is required to fund it ( some plans have contributions by employees of 2-5%) but the way it was explained to me the contracts and law are written to guarantee the payments be made to the retirees, but were light on forcing the state to actual save for those payments, so they didn't. So in real terms there is no money to actually convert over to another retirement plan and even if it was the law is written to say that retirement benefits can never be less then what was stated in the contract in place based on employment history.

In theory the law could be changed and the contracts broken but that's alot of if's.

They did say there is more wiggle room in medical as some of the retiree benefits are tied to current worker plans, and can be changed together.

Sorry if I'm not explaining this well (and I may have some things wrong) I have an awful memory and it was a short conversation with a friend of a relative.

[RunD1987]

Originally Posted by East of the River

Unless your going for a flat school tax to every resident or some other similar idea other then a property value tax.

This

[East of the River]

Originally Posted by RunD1987

This

If you lower the millrate and add a flat tax to every building in the town you will almost certainly shift more tax burden onto the middle class while lowering taxes on large homes and commercial buildings.

[Mike 75]

Originally Posted by East of the River

That's part of the issue. According to this person (which seems correct looking online) The plans don't have a defined value per say. They say they will pay x for however long you live with COL adjustments and lots of other factors and you can estimate it but its basically a defined benefit plan funded with IOU's.

The state also is required to fund it ( some plans have contributions by employees of 2-5%) but the way it was explained to me the contracts and law are written to guarantee the payments be made to the retirees, but were light on forcing the state to actual save for those payments, so they didn't. So in real terms there is no money to actually convert over to another retirement plan and even if it was the law is written to say that retirement benefits can never be less then what was stated in the contract in place based on employment history.

In theory the law could be changed and the contracts broken but that's alot of if's.

They did say there is more wiggle room in medical as some of the retiree benefits are tied to current worker plans, and can be changed together.

Sorry if I'm not explaining this well (and I may have some things wrong) I have an awful memory and it was a short conversation with a friend of a relative.

I worked for the state for about 2 years and when I left they gave me the option of cashing out my retirement benefits. It was a piddly amount and I took the cash as I was young and didn't have much money at the time. This was 15 years ago, so maybe things have changed, but they seemed to know exactly what the present value of my accrued benefits were.

[RunD1987]

Originally Posted by East of the River

If you lower the millrate and add a flat tax to every building in the town you will almost certainly shift more tax burden onto the middle class while lowering taxes on large homes and commercial buildings.

Be a give and take. The State not funding school's any more would either have to lower income tax, collect income tax when annual pay goes over say $20,000, or do away with income tax.