Update: This story in the Connecticut Post is receiving a lot of chatter today. A court complaint was filed against Bass Pro Shops, the company introduced on Sunday as a key piece of the Steelpointe Harbor redevelopment on the East Side. A federal judge dismissed the complaint. What’s all the hullabaloo? The bigger the company the more prone to these types of complaints. The Post overplayed the story. For more read the comments thread.
Bridgeport resident David Walker, the former Comptroller General of the United States, has issued his latest financial report on Bridgeport and the State of Connecticut claiming “Connecticut resembles the Greece of the U.S. from a state financial perspective.” Walker has made Bridgeport a pet fiscal project, after purchasing his Black Rock home from ex Congressman Chris Shays, under his national non-profit Comeback America Initiative. Walker offers no apparent specific solutions to his critical outlook about the city and state, but here’s what he asserts:
The city of Bridgeport and the state of Connecticut are both in poor financial condition. They must restructure their finances in order to improve their competitive posture and avoid a future debt crisis. The numbers are clear and compelling. These two governmental entities need to achieve major transformational reforms soon. Their fiscal clocks are ticking and time is not working in their favor.
Walker’s news release:
Former Comptroller General David M. Walker and the Institute for Truth in Accounting Release “The Financial State of Connecticut” and “The Financial State of Bridgeport, CT” reports
According to data released in the “Financial State of Connecticut” report, Connecticut resembles the Greece of the U.S. from a state financial perspective.
The reports use financial results extracted from the official comprehensive annual financial reports filed by the respective governments for the fiscal year ending June 30, 2011. The burden per taxpayer figures are driven largely by unfunded pension and retiree healthcare benefits. Absent meaningful reforms these amounts will continue to increase over time, and once the new pension accounting standards by the Governmental Accounting Standards Board take effect, the unfunded pension amounts for both entities are likely to increase dramatically.
Connecticut’s unfunded burden per taxpayer as of June 30, 2011 was $50,900, up from $49,000 in 2010. Connecticut is by far the worst of all 50 states in its unfunded burden per taxpayer.
According to the state’s audited financial statements, Connecticut’s unfunded retiree’s health benefits exceeded $29 billion as of June 30, 2011. Based on a subsequent actuarial report issued by the state’s outside actuarial firm, Segal Company, these unfunded obligations were reduced by about $5 billion in the latest round of bargaining and another $6 billion through changes in various assumptions. These new assumptions may or may not prove valid over time. In any event, the remaining approximate $18 billion in unfunded obligations are still too high, and much work remains to be done to make them reasonable, affordable and sustainable.
Bridgeport, Connecticut’s unfunded burden per taxpayer as of June 30, 2011 was $28,400, an increase from $27,100 in 2010. The city’s unfunded burden per taxpayer is worse than 46 of the 50 states, based on the Institute for Truth in Accounting’s latest “State of the States” report. Bridgeport’s unfunded retiree health benefits alone exceeded $900 million, and are four times the amount of its reported unfunded pension obligations. This may be the highest unfunded per person retiree health obligation in the world.
According to David M. Walker, former U.S. Comptroller General and founder and CEO of the Comeback America Initiative, “The city of Bridgeport and the state of Connecticut are both in poor financial condition. They must restructure their finances in order to improve their competitive posture and avoid a future debt crisis. The numbers are clear and compelling. These two governmental entities need to achieve major transformational reforms soon. Their fiscal clocks are ticking and time is not working in their favor.”
Mayor Bill Finch responds:
We have worked hard since I took office to reduce spending, cut department budgets, while delivering excellent service to our residents. Our fiscally responsible actions have earned us positive ratings from Fitch and Moody’s independent financial rating agencies. Mr. Walker, who served as Comptroller General under President George W. Bush while the federal government ran up historic debt figures, should understand that Bridgeport’s situation is not unique. He is right to point out that structural change is needed and that pension obligations at the federal, state and local level are unsustainable. However, our federal, state and local governments made a promise to their employees to provide these benefits and these benefits must negotiated through collective bargaining. At my direction, Bridgeport began structural reform of its employees benefits years ago, to address our rising healthcare costs drastically reducing the city’s cost of health benefits for both current and future employees. We will continue to collectively bargain in the best interests of the taxpayers tackling these issues, including the high cost of pensions, in these hard economic times. And, Bridgeport unlike many other municipalities is addressing its pension obligations head-on. In 2011, we worked with Governor Malloy, the State OPM and the State Legislature to develop a fiscally responsible and comprehensive approach to addressing the challenges of fully funding Pension Plan A.
More on the Comeback America Initiative here.