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Will Union Workers ratify Dan Malloy\'s Connecticut savings plan. Ask SEBAC

Connecticut union members, all 45,000 of them, from university professors to the police force to social workers to snow plow drivers have a state savings agreement to ratify with Connecticut and Dan Malloy.

SEBAC (State Employees Bargaining Agent Coalition ) had posted a summary of the agreement on their website and reaction is strong. Wage increase freezes and no furlough days are some of the hot button topics.

But, the most astonishing piece of this agreement, to me anyway, is a step toward healthy preventative medicine. Employees must sign a commitment to have annual check-ups and take lifestyle and medical steps to improve their health. If they donít there will be a fine, and not a small one: $100 a month for those who refuse the commitment. Whether a watchdog will be checking all the check-ups is another thing. A new job as overseer doesn\'t seem to fit the idea of cost-savings that the administration is touting. But, the idea behind preventative health is sound, even if all the implementation bugs haven\'t been thought through.

The Governor was looking for $2 Billion in savings. This agreement as it is summarized today offers $1.6 Billion in savings from union workers. The private sector can expect the Governor to come back at them to make up the $400 Million difference. Although additional cost cutting measures have been discussed, don\'t lose sight of the fact that Governor Malloy, is increasing government spending 2% over the next two years, not cutting it. While it may seem to private sector professionals that the union member\'s resistance to this agreement is a point of view most heralded down the rabbit hole, the governor who is asking us all to sacrifice, public and private isn\'t tightening the belt of state government too tightly.

For details of the agreement, union spokesman Larry Dorman\'s comments, the details of no layoffs for four years, and end to longevity payments and the rest, click the link to hit up SEBAC.

May 17, 2011

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Tax Hikes. Job Creation? I don\'t see it....

Last night the new budget was passed. The government tells us there are massive cuts in a budget that will increase by $40.1M over the next two years. I answer the standard government line with the standard citizen line. Show me one home in America that can cut its budget and increase spending every year. Arguing against the governmentís shell games and Ponzi schemes is always a loser. Connecticut will lose even more this time because our children wonít come back to work in CT to pay the ever-increasing tax burden. Companies will shutter their doors or flee. The ranks of private sector employees will shrink again. Our anemic economy will buckle under this blow.

This tax hike, the largest in the stateís history will cut everyone. Across the board taxes that penalize us for purchasing essentials like food are regressive, hitting lower income individuals with a greater percentage of the burden.

The State of CT has consistently been ranked between 48th and 50th best state to do business in the country over the last four years. For the last TWENTY years, we have come in dead last, 50th, the state with the least ability in the nation to create new business and expansions. On the bright side, we do rank # 4 in taxed states. How many people in CT realize that not all U.S. citizens work until May 2nd to keep their first dollar of income. Never mind the dollar, their first dime, first penny. Residents of Connecticut work more than 1/3 of the year before we can keep any of our income. Somehow the fact that New York works its resident till May 26th actually makes us feel better.

Itís ironic that Connecticutís nickname is the Constitution State. The idea of a Constitution was born of taxation. Taxation without representation: how many of us felt represented in this tax hike?

Not me as a person, nor as a small business owner. The increased gas tax, taxes on my business equipment, additional sales taxes on services, these might just put my 26-year-old, second generation, company out of business. Yet, Malloy claims that this regressive tax hike is going to create jobs. Where? The government? What happens two years from now when more local businesses, small retailers who for the first time ever tax a baby onesie, close? Where will those government jobs be then? When the companies have been driven out, how will anyone keep their jobs? If there is some other way that Malloy intended to create jobs through these hikes, Iíd like to know.

Dannel Malloy drove the specter of Osama Bin Laden, Al Qaeda, and The World Trade Center Deaths off the front pages of CTís papers quickly and decisively. The Connecticut State Legislature: Economic Terrorist. Do the Legislators realize that they have family businesses, entrepreneurs and all those companies who have been asking themselves, is it time to move our headquarters south or offshore in their cross hairs?

We hunted Osama for ten years because he destroyed thousands of American lives in the towers, yet we elected Malloy. We voted for Malloy to go to Hartford and destroy our livelihoods. The good news is that we canít be lower than 50th so taxing the struggling economy of the 50th best state in the union to do business wonít be change our stats.

Some of my favorite new taxes, in no particular order are: 10% increase in the cost of a ticket for concerts and sporting events. Those sporting and concert venues that had been touted as economic drivers in their region, The Arena at Harbor Yard, The Mohegan Arena, and the rest, theyíll take multiple hits: First from a drop in ticket sales, then from a drop in acts who play the venue because the seats are always empty. Malloy saved us from a $.03/gallon gas tax increase, but Diesel fuel? Thatís a different matter.

Hopefully Connecticut residents donít know that an increase in the cost of diesel will translate into increased costs for products on shelves. Nor will it occur to them that those few companies left manufacturing in Connecticut will become less competitive as Diesel driven distributed goods exported to other states and Canada rise in price due to transportation. Look for Metro North fees to increase along with the Diesel Fuel Tax.

Now that Malloy has taken away that under $50 apparel and shoes tax exemption, maybe you can save a little money by making your own clothes. Nope. Fabric and yarn will be taxed now too.

Donít forget our stateís health. Non-prescription medicine will also be taxed for the first time.

Donít park in the cross walk, speed or renew your driverís license cause all those fees rise too. Of course, if you donít renew your license youíll get one of those nice new high-priced tickets, so you might want to do that.

The guys on Capitol Hill are glowing with achievement right now. They are slapping each other on the back proud of their ability to make the sacrifice equal. Yet, three Democrats in the Senate voted against this budget. Be sure to remember them July 1st not only when you find yourself paying taxes on items that were never taxed before, but when you are paying that 6.35% sales tax.

Tax hikes are pedaled to people by saying they only even the playing field. The rich and big companies are the only ones who take the biggest hits and they barely feel it. With the exception of GE and a few others, Connecticut isnít made up of big companies. Weíre a state of entrepreneurs employing less than 50 people, less than 25 and by the end of the year; I expect weíll have fewer of those companies because this tax increase could very well be a death knell for a hundred companies, including my own.

Of course, this whole budget does depend on unions making a $2B concession. If they don\'t and layoffs begin, does anyone expect that these tax hikes will go down?

May 4, 2011

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