Connecticut’s public sector unions have voted to reject a $1.6 billion concession package that was previously agreed to by both their union leaders and Governor Dannel Malloy, the first Democratic governor the state has had in 20 years. Just one year ago, as union leaders worked tirelessly on Mr. Malloy’s campaign, one union president, Catherine Osten, issued a statement calling his candidacy a “once-in-a-lifetime opportunity to elect a governor who will be a true partner.” The governor nurtured the relationship between himself and the unions, while he criticized other governors who were confronting the continued demands of union leaders in order to balance their state budgets.

The concession package, that seemed to pale in comparison to the concession plans agreed to by unions in other liberal states, guaranteed no layoffs for four years and no furloughs. Wages would have been frozen for two years, then followed by three annual 3 percent raises. Though cost-of-living increases for pensions would have been eliminated, the retirement age would have been raised by only two years, and not until after 2022. Changes in health benefits included mandatory annual physician visits and mail-order prescription plans, a detail that seemed to hurt local pharmacies more than union members.

As a result of the rejection of the agreement by the unions, Governor Malloy says he will now have to lay off 7,500 state employees in order to balance the state budget. In addition to the direct loss of jobs, in a state in which the unemployment rate is already at 9.1%, citizens will undoubtedly be dealing with the closing of state offices, elimination of services, and cuts to municipal aid.

The governor’s Democrat-controlled legislature already passed a budget, in advance of the unions’ vote on the concessions plan, that included the highest tax increase in the history of the state, scheduled to go into effect on July 1st. Also initiated in the budget was an earned income tax credit of about $1700 for those who do not pay taxes.

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In response to the results of two recent polls of Connecticut voters which found that there is considerable dissatisfaction with Democratic Governor Dannel Malloy, the governor’s special advisor said that Mr. Malloy has “made the tough decisions necessary to clean up the financial mess he inherited when he took office in January.” Roy Occhiogrosso added, “You can choose to be popular, or you can choose to lead. Governor Malloy has chosen to lead … he’s not trying to win a popularity contest.”

Yet, a Quinnipiac University poll showed just the opposite: that while Connecticut voters give Governor Malloy a 38% job approval rating, with 43% polled particularly “dissatisfied,” and 16% “angry” with his state budget, 48% of voters “like” him “as a person.” It would seem that, indeed, Mr. Malloy is winning more of the popularity, or “likability” contest. What most Connecticut voters do not appear to like is his leadership, which embraced the largest tax increase in the history of the state, one that included a retroactive income tax hike, and an aggressive legislative session that contained  a state version of the “Dream Act,” which allows in-state tuition rates for children of illegal aliens, a “transgender rights bill,” an “Early Release” for prisoners bill, and an “Amazon” tax bill.

Douglas Schwartz, the poll’s director, commented, “”Gov. Dannel Malloy should be doing better in a blue state like Connecticut, but he gets only a 52 percent approval rating among his base of Democrats.” Ironically, his high tax package was viewed as fair by more Republicans (27%) than Democrats (10%) or independents (19%).

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Jeff Mapes in The Oregonian:

At the behest of Service Employees International Union, Oregon Senate budget chief Richard Devlin sought to stifle criticism of an organizing drive that added more than 7,700 workers to the union’s membership and turned it into the largest in the state.

During a drive to organize workers who help care for developmentally disabled Oregonians, Tualatin Democrat wrote a letter to officials who help employ the workers, warning them not to say anything even “mildly” critical of unionization. He also suggested that a successful union drive would help boost legislative support for services for Oregonians with developmental disabilities. .

Several officials who received the letter said it appeared Devlin tried to tip the scales in favor of the union’s expansion. Devlin said that wasn’t his intent.

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Some media outlets in the state of Connecticut, as well as residents, are questioning the judgment of Democratic Governor Dannel Malloy, who is leading his Democratic-led state legislature on a whirlwind drive of dubious legislation that is creating an atmosphere of insecurity, and making the prospects of more private business and jobs in the state increasingly less likely. Questions of concern, if not outright criticism, are being drawn from state residents and conservative Republicans who view much of the legislation passed as rushed through, without sufficient debate, and endangering an already extremely vulnerable business climate in a state in which unemployment is over 9%.

Governor Malloy’s legislative agenda appears to be right out of the Obama-Pelosi-Reid “every day another stunning bill” play book. And much of the legislation seems, in one way or another, connected to Mr. Malloy’s close relationship with the public sector unions which worked hard to elect him.

The legislature passed the largest tax hike in the history of the state, and then secured a deal, though still “tentative,” with union leaders for $1.6 billion of the $2 billion in concessions needed to close the state’s budget gap. Many are skeptical of the “concessions,” since it appears little was really given up, from the private sector perspective, and the package relies heavily upon retirements. In addition, the governor said he would make up the difference primarily with spending cuts. However, in true Pelosi-Reid “let’s pass the bill on Christmas Eve” fashion, Mr. Malloy gave the news to lawmakers, Friday night before Memorial Day weekend, that he would, instead, make up the remaining hole in the budget with none other than projected “surplus” monies. Thus, the “surplus” is only to help the unions, who apparently couldn’t reach their $2 billion goal, not the taxpayers, who are bearing the brunt of the “shared sacrifice.”

According to a media blog of the Yankee Institute for Public Policy, the General Accepted Accounting Principles (GAAP), which Governor Malloy said he would implement for his state, would erase 2012 projected surpluses which he and the state legislature are now relying upon to balance their two-year budget.

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Several current and prior Connecticut Republican lawmakers have joined the Roger Sherman Liberty Center, a conservative think tank, in a lawsuit against Governor Dannel Malloy and Democratic state leaders. The suit challenges the constitutionality of the new budget, passed last week by Mr. Malloy and the Democrats, which includes the largest tax increase upon citizens in the history of the state, as well as an earned income tax credit for those who pay no taxes.

Mr. Malloy, who likes to refer to himself as the “anti-Christie,” urged his lawmakers to pass his budget, based on his philosophy of “shared sacrifice,” without the $2 billion in union concessions that he used to balance it, arguing that he and the state unions, who largely helped to elect him, would engage in “talks,” behind closed doors, to achieve the concessions. The lawsuit asserts that, according to Connecticut’s constitution, the state’s expenditures must match its revenues, a requirement that was violated when the budget was adopted with the $2 billion hole.

Once the budget passed, Governor Malloy said he was giving union leaders a deadline of Friday, May 6th to come up with a concession package, a date that came and went with no agreement. Talks between the governor and union leaders apparently continued through the weekend and Monday, but on Tuesday, Mr. Malloy announced that he will move on to “Plan B,” in which he begins more than 4,700 layoffs and cuts to various state services and programs. However, even with this announcement, both the governor and union leaders say they will continue to engage in “talks” to close the budget gap, a situation which suggests that “Plan B” is still not final. In fact, the secretiveness of the negotiations has been as much of a news item as the content of the talks, with union locals holding strictly verbal briefings on the concession meetings for union members, without distributing any paper handouts containing information.

Regarding the failure to reach an agreement, the State Employees Bargaining Agent Coalition (SEBAC) issued the following statement:

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Even as other liberal states face the music of unfunded union pensions and benefits, Connecticut’s governor plans to do things his way. Democrat Governor Dannel Malloy, and his majority in the state legislature, have agreed on a budget that will represent the largest tax hike in the history of the state. The fact that the constitution of the state of Connecticut requires a balanced budget also seems a minor detail to Malloy, who initially said he would balance his two-year, $40 billion budget by obtaining $2 billion in concessions from the state’s unions. The only problem is that Malloy wants his leaders to pass their budget with no union concessions on the scene. And Governor Malloy wants it now.

Malloy’s governing philosophy is in stark contrast to that of neighboring New York governor, Andrew Cuomo, a liberal, but pragmatic Democrat, who insisted on a budget that did not raise taxes yet demanded, and received, union concessions. Similarly, fellow New England states, Massachusetts, which recently voted to restrict collective bargaining, and New Hampshire, likely to become the 23rd “Right to Work” state in the nation, are clearly moving in step with the rest of the country, by addressing the costs of unfunded public sector union pensions and benefits, as well as the conflict-ridden collective bargaining system.

Malloy, however, has openly bragged about his willingness to spend several weeks in packed town meetings, listening to irate citizens of the Constitution State complain about his budget plan. He and his majority party are clearly cut from the same Obama administration cloth that is inclined to ignore the will of taxpaying citizens, while it attempts to instill guilt with the all too familiar phrase, “shared sacrifice.” To them, “shared sacrifice” means that Connecticut’s taxpayers, already among the highest taxed in the nation, will be paying an average increase of $3,000 per family annually to their state. This amount represents tax increases on income, sales, gasoline- up 3 cents per gallon, alcohol- an increase of 20%, cigarettes, an “Amazon” internet sales tax, as well as a lowering of a $500 property tax credit to $300.

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From The Courier Post:

John Willliamson, president of the union representing Camden’s police officers, said he and his members would be at the meeting whether they were invited or not.

“We will be there,” he said. “Camden City needs Camden police officers. As far as firefighters, same thing.

“We know the city, we know the people and we know the terrain.”

In town hall meetings, the Republican governor has chided Camden’s police and fire unions for being unwilling to give up perks such as paid birthdays off. But, Williamson said, his members have never been paid for birthdays off.

Williamson did not say it directly, but he cited an historical figure to imply that the countywide plan is part of a larger plot to dismantle public employee unions in New Jersey.

“‘We must close union offices, confiscate their money and put their leaders in prison. We must reduce workers’ salaries and take away their right to strike,’” he read aloud.

“That was said on May 2, 1933, and the person who said it was Adolf Hitler.”

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Despite the economic climate and anti-tax wave rolling across the country, New York is once again proposing tax hikes on tobacco. Senate Bill S. 2981 would add an additional $1.65 tax to the already staggering $4.35 the state levies in taxes on a pack of cigarettes—a move likely to upset smokers in the Empire State and potentially deliver little additional revenue to the state’s coffers.

Since raising its tobacco tax last year, New York has seen cigarette sales plummet, as of November 2010, by a whopping 27 percent. Meanwhile, both Pennsylvania and Vermont have seen their cigarette sales rise as New Yorkers looking for a bargain have crossed the border to load up on smokes, thus depriving the state of revenue some had hoped would help it close its yawning budget gap.

Some observers believe that this time, if another hike is put through, the state could actually lose money.  Several Northeastern states– New Jersey, New Hampshire and Rhode Island– have been exploring the idea of reducing the tax they levy on each pack of cigarettes to spur economic recovery and enhance revenues.  A recent study conducted in New Hampshire demonstrated that a 10 cent cut could result in additional tax money flowing to the state’s treasury.

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From the Associated Press:

Wisconsin lawmakers voted Thursday to strip nearly all collective bargaining rights from the state’s public workers, ending a heated standoff over labor rights and delivering a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide.

The state’s Assembly passed Gov. Scott Walker’s explosive proposal 53-42 without any Democratic support and four no votes from the GOP. Protesters in the gallery erupted into screams of “Shame! Shame! Shame!” as Republican lawmakers filed out of the chamber and into the speaker’s office.

The state’s Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night, meaning the plan that delivers one of the strongest blows to union power in years now requires only Walker’s signature to take effect.

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In today’s The Wall Street Journal:

The unions say they are ready to accept concessions, yet their actions speak louder than words. Over the past three weeks, local unions across the state have pursued contracts without new pension or health-insurance contributions. Their rhetoric does not match their record on this issue.

Local governments can’t pass budgets on a hope and a prayer. Beyond balancing budgets, our reforms give schools—as well as state and local governments—the tools to reward productive workers and improve their operations. Most crucially, our reforms confront the barriers of collective bargaining that currently block innovation and reform.

When Gov. Mitch Daniels repealed collective bargaining in Indiana six years ago, it helped government become more efficient and responsive. The average pay for Indiana state employees has actually increased, and high-performing employees are rewarded with pay increases or bonuses when they do something exceptional.

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All across the land, it would seem that there is but one story to be written regardless of the locale – and budget cuts are that story.  For years, rational legislators and commentators have warned American voters, and those legislators that have thrown economics to the wind, that spending beyond our means will lead to government meltdowns – and so it is today.

Here in California, during the recent State of the State by California Governor Jerry Brown – remarkable only for its brevity – Brown demanded more tax increases to “solve” the State’s now perennial budget crisis.  In doing so, he decried politics as usual but demanded policies as usual.  California has become the tax and spend capitol of the world (outside of Washington DC) and its budget next year will feature a $7.65 billion in debt repayment alone – more than it spends on public universities and more than the overall budget of 21 states.  By comparison, Wisconsin’s $137 million deficit seems quaint compared to California’s $20 billion+ deficit.

Brown also falsely claimed in his State of the State that no one was giving ideas on where else to cut and that if Republicans (and voters) didn’t go along with his tax hikes, he would cut deeper into education.  Brown didn’t offer to cut the state bureaucracy – he threatened to cut education funding – as Democrats are wont to do in order to scare voters.

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Now the battle has been joined.

It has long been understood that the 2010 elections were just the beginning of the struggle to reverse America’s current decline. It will take at least two or three election cycles to correct decades of bad policy choices. We aren’t staring into the fiscal abyss because of any single policy or event, but rather the cumulative effect of dozens, if not hundreds, of flawed decisions made by fickle politicians who capitalized on the fact that the American public was largely disengaged. In the end, these decisions created a vast political class who live off the fruits of others’ labors.

When a business wants to increase its future earnings, it has to find new markets and sell more of its product. For the political class its the same, only their markets and products are government services. As a result, every year, public sector unions spend tens of millions of dollars lobbying for bigger government and filling the campaign coffers of the politicians who acquiesce to their demands. In addition to bigger government, they’ve won pay packages higher than the private sector, almost 100% job security and the ability to retire in their fifties with lifetime retirement income and health benefits. All paid for by us. Unlike private sector unions, every dollar funding government employees’ pay, pension and benefits comes out of our paychecks.

In other words, we’ve created an enormous taxpayer-funded lobby whose sole mission is to resist any effort to control government spending. As the old saying goes, we’ve seen the enemy and, while they may not be us, we are funding them.

This is why the current political fight in Wisconsin is critical.

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Oh, those calls for “civility” seem so long ago. Of course, there will be no mention of these signs–or the violence and hatred that inspired them–in any newscasts or reporting of the protest. Still, keep this in mind as you review these signs; a large number were created by teachers, responsible for educating the next generation of Americans. Shudder.

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From LifeNews.org:

Following the release of a video that has received nationwide attention showing Planned Parenthood staff at a New Jersey abortion center helping alleged sexual traffickers cover up their crimes with abortions and STD testing, Governor Chris Christie has vetoed a bill funding Planned Parenthood.

A new undercover video shows Planned Parenthood officials in New Jersey telling a pimp and his prostitute assistant how they can get abortions for young teenage girls who, Planned Parenthood officials are informed, are Asians in the country illegally and forced into the sex trade. The staffer was later fired for her actions.

The Perth Amboy abortion center where the video is filmed is the second-largest Planned Parenthood center operated by Planned Parenthood of Central New Jersey and the abortion business plans to double its number of abortion centers in the state.

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Finally; it seems we may have a Congress that takes seriously the urgent need to rein in the unsustainable deficits and the accumulation of public debt that so threaten the future well being of the nation.  Thank goodness for the most energized electorate in recent memory.  Its collective ire translated into large Republican gains in the Congress . . . gains that were largely attributable to the fact that the GOP made this subject the centerpiece of the 2010 campaign.  Woe is the politician who forgets why he or she was sent to Washington.  President Obama seems also to have gotten the message because he too talks the talk of fiscal prudence.

In addition, at the state level, Republicans had a net gain of six governorships and 19 state legislature changes in which they gained 650 legislative seats.  Clearly, most of the several states now have political leaders who heard, loud and clear, a message, and an expectation, that they must begin reducing the cost of government.  In 2010 and 2011, forty‑four states, that’s 88% of state treasuries, face budget shortfalls.  The combined budget gap for 2010 and 2011 is astronomical, estimated by several economic studies to exceed $350 billion.  California, with one of the nation’s highest sales tax (at 6.25%) and a top income tax rate of 10.56% (highest in the nation) according to the Wall Street Journal faces a budget shortfall of $42 billion in 2011 with a like amount projected in 2012, a whopping 22.2 percent of its total budget.  Bloomberg Businessweek projects $20 billion plus deficits through 2015.

As if this was not enough, California faces a $500 billion shortfall in public employee pensions with which elected officials have saddled their tax-paying constituents.   The once “Golden State” is not alone in its fiscal woes.  Illinois faces a budget gap of $13 billion in 2011.  On January 11 the Illinois legislature at the urging of Governor Pat Quinn passed a “temporary” 67% increase in the state’s personal income tax and hiked the corporate tax rate from 4.89% to 7%, prompting newly elected Wisconsin governor, Scott Walker, to invite businesses located in Illinois to come across the state line to relocate in Wisconsin.  Moreover, even after these enormous increases, the state still faces a $7 billion shortfall, probably to be covered by more borrowing, assuming there are those willing to lend the state money.  Another fiscal basket case is New York, which according to U.S. News Politics is staring at a projected $8.2 billion shortfall for fiscal 2011, as well as substantial unfunded pension obligations.

Let’s turn the spotlight, again, to California, a state whose citizens seem to be in denial about their plight.

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We’re now 25 billion dollars in the red in California.  The governor along with his Democrat controlled legislature will never do the right thing. They’re the same folks who brought you this mess.  When Governor Brown was previously the governor he signed the Dills Act in 1978 that gave civil servants the right to collective bargaining.  He did this on his very first day in office as governor.  This revolutionary enactment was the beginning of the end or our state. Now, with the power of government labor unions unchecked, state employees, now the largest unionized force of any state, have controlled the legislative agenda for the past 30 years.  Their sweetheart pension plans are a marvel to their political strength and are unmatched anywhere in the private sector.  This is why although state workers’ pensions are the single largest problem in this budget crisis, Brown has not even mentioned it in his new “reform” proposals.   He has however mentioned tax increases, or as he calls them tax “extensions”. A two-thirds margin of Californians overwhelmingly opposes tax increases as a solution.

Here’s the problem, notwithstanding a current state budget deficit of 25 billion dollars, the state has 700 billion dollars in unfunded pension liabilities.   This is ticking time bomb. No matter how much we cut and balance today’s budget, we will never catch up and meet the needs of the ridiculously high unfunded pensions.  This is the problem.   Brown’s budget may take away state workers’ cell phones and some social services dollars, but seriously, big deal.  This is just more smoke and mirrors. It just kicks the can down the road. This will not solve our major structural problem.

Legalizing online poker, taxing marijuana (both proposed) and taxing air (already passed through cap and trade) will not solve the budget problems.  The latter is a way of taxing the few manufacturing industries still dumb enough to be creating jobs in California.  If they hadn’t got the memo earlier, this bill should be a neon sign. Get out of Dodge.  We don’t see many folks clamoring for yet cleaner air, but we see millions looking for work.

Our legislature has been hallucinating for decades. They didn’t see the current budget crisis coming?

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Or, how to turn a dynamic state economy into a basket case in just a few years. As you know, Illinois has raced past California to claim the mantle of most fiscally irresponsible state. Its bonds are just a tad above junk status and it has to patch up a $13 billion hole–half its general fund budget–within days, to pay a back-log of unpaid bills and cover a missed payment to the public employee pension fund. (Then they’ll have to do it all over again next year.)

Because the  state government is dominated by Democrats, the legislators in Illinois have decided to increase taxes. By a lot! Again, because they are Democrats, they plan to hike the income tax by 75% and increase cigarette taxes by $1 a pack. Business taxes would almost double.

Okay…so far, so same-old-same-old. They’re Democrats. Raising taxes is what they do.  Here is the part where Illinois’ budget gurus get into Apple Dumpling Gang territory:

The personal income-tax hike is expected to net the state roughly $6.2 billion, and a corresponding corporate income tax increase could raise an additional $1 billion…

[State Senate President] Cullerton said the state would use the income-tax hike to borrow $12.2 billion. Of that, $8.5 billion would pay overdue bills and $3.7 billion would cover a government worker pension payment lawmakers skipped when putting together the current budget

Brilliant!

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Paris Hilton may be able to shop without looking at price tags, but the State of Illinois doesn’t have that luxury—particularly when it already has $4.7 billion in unpaid bills. Even so, state legislators receive precious little information on how much the laws they’re approving will save or cost taxpayers.

A summer 2010 survey by the Illinois Policy Institute found that out of 545 bills pending review by the governor, only 3 percent—or 16 bills—had fiscal notes attached. Fiscal notes are like “price tags” for legislation. They are intended to estimate the costs, savings, revenue gain, or revenue loss resulting from the implementation of proposed legislation.

Many of the fiscal notes found in the Institute’s survey were just a couple of sentences long. Believe it or not, we found a fiscal note that was just one word: “minimal.”

The result of this lack of information? Legislators and the public are unable to conduct a proper analysis of the budgetary effects of proposed legislation, and this has real consequences for the state budget. Indeed, the Blagojevich All Kids Expansion passed in 2005 had no fiscal note, although an Auditor General report found that the program’s net cost was $70 million in fiscal year 2009. The statewide sales tax holiday held this August was passed with no fiscal note, even though it is likely to reduce expected tax collections by tens of millions of dollars. Unfortunately, these examples are the norm, not the exceptions.

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New York, like most states in the nation, is facing a nasty budget hole which Gov. David Paterson attempted to fix earlier this summer by pushing through a tax hike on cigarettes.  A pack of smokes now costs as much as $13 in Manhattan, but the high taxes being levied may not be helping to close the state’s budget gap.  Revenue from cigarette sales following implementation of the 58 percent increase in tax levied by New York State totaled $125 million last month.  During July 2009, it totaled $119 million.

Now, facing ongoing budget problems, New York is moving to impose taxes on a good the state is known for producing, and which many of its residents consider indispensible: The bagel.

An obscure provision in New York’s tax law allows Albany to tax “sliced or prepared bagels (with cream cheese or other toppings),” and the tax collectors are moving on bagel shops across the state.  A particular target appears to be Kenneth Greene, who owns over thirty Bruegger’s Bagel franchises in New York.  Greene’s customers are livid at the eight-cent per bagel tax being levied.  In response to customer outrage, Greene has posted signs reading “We apologize for this change and share in your frustration on this additional tax.”

Other bagel shop owners meanwhile are holding out hope the tax collectors refrain from targeting them next.  “I hope they don’t come after me for that,” said Florence Wilpon, a founding owner of Ess-a-Bagel in Manhattan, per a quote in the Wall Street Journal.

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The debate agitating many in New Jersey right  is whether or not the state’s Governor, Chris Christie, is actually doing much to reform the state as it needs to be. I have to say that I wasn’t impressed with him during his campaign for the Republican nomination against Steve Lonagan. Having no interest in the politics of politic, he sounded like a big government Republican to me.

With that in mind, I was nicely surprised by the turn that Christie’s campaign against Corzine took and by some of his policies. He talked about small government, the need for reforming New Jersey, rejected the millionaire tax, capped property taxes and proposed budget cuts. But now that I am catching up on New Jersey reforms, I am skeptical again.

Let’s start with by comparing Christie’s FY 2011 $29.3 billion budget to Corzine’s FY 2010 budget of 29.8 billion. Given today’s economic climate, a 1.5% cut is not one that deserves immense praise. However, for a second I thought, “spending cuts are spending cuts and better that than nothing.”

That’s until I came across the alternative budget prepared by Americans for Prosperity called New Jersey Taxpayers’ Budget FY 2011. The AFP budget adds up to $25.9 billion. That’s $2.4 billion less than what is proposed by Governor Christie. Plus, they did this, without raising taxes. Unlike Christie’s budget.

That’s right, as part of a compromise on the budget, Christie made a deal with Democrats: he will put back millions into his budget (to buy things such as keeping open Hagedorn Psychiatric Hospital in Hunterdon County, funding for cultural sites including the Battleship New Jersey and the Newark Museum, more funding for projects in Urban Enterprise Zones) in exchange for  a series of new tax and fee hikes are being put forward as supplemental bills.

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