Connecticut is “poorly poised” to handle a moderate recession when compared to other states, according to a new analysis by Standard & Poor’s Global Ratings.
The ratings agency evaluated the ability of the 10 most debt-burdened states to respond to significant fiscal stress. It determined the first year of a moderate recession would cost Connecticut $1.15 billion in revenue, which far surpasses the state’s reserve fund, currently about $127 million.
“We believe the state has a good history of mid-year budget monitoring and in recent years has made mid-year budget cuts to restore structural balance,” the report said. “However, structural balance may become more difficult to maintain in a recession scenario due to the state’s rising fixed costs.”
The report found that these “high fixed costs” – tax-supported debt service, pension contributions and other post-employment benefits – would consume a substantial portion of revenue.
Hartford: Connecticut’s Supreme Court made a giant change in employment law and potentially changed workplace rules for use of illegal drugs including potentially alcohol.
The court overturned the firing of a state employee for smoking marijuana, an illegal substance at work. The court said the employee could have been suspended but firing of the state employee was unnecessary
The 7-0 vote, made it clear that the court chose to side with an arbitrator’s ruling that Gregory Linhoof, simply be suspended for six months without pay and subject to a year’s worth of drug testing.
The state and a lower court saw the issue differently saying that a suspension would essentially encourage illegal drug use by employees.
The court said that, “by the arbitrator’s estimation, the grievant’s personal qualities and overall record indicate that he is a good candidate for a second chance,” Rogers wrote, adding “moreover, the discipline the arbitrator imposed was appropriately severe, and sends a message to others who might consider committing similar misconduct that painful consequences will result.”
In a potentially complication on future cases the court cited that no potential danger to others were involved in Linhoff’s illegal drug use.
Linhoff maintained his use of the illegal substance was caused by his need to relieve “anxiety” caused by difficulties in his marriage and “a recent cancer scare.”
WASHINGTON: Connecticut’s two Democratic Senators have split over increasing military spending by $18 billion, [$600 billion total budget in 2015].
Senator Richard Blumenthal a member of the Senate Armed Services Committee voted with only 12 other Senate Democrats to increase the spending regardless of increases in domestic programs.
The defense authorization bill was sponsored by Senator John McCain [R] of Arizona. The bill would have increased added thirty six Sikorsky Helicopters to the Army’s purchases in 2017.
Murphy: No defense spending increase without domestic increase.
Blumenthal: Increase too important to Connecticut manufacturing to reject.
Sikorsky was sold in 2015 by Hartford based United Technologies to Lockheed Martin Corp of Bethesda MD for $9 billion. Sikorsky has more than 7,500 employees in Connecticut and nearly 16,000 company wide. The bill also would have added boosted Pratt and Whitney as well which makes engine for the 11 additional F-35 Joint Strike Fighters included.
Connecticut’s Keno sales are up $6 million in its first month of state-wide availability. While the state projected about $17million in the first six months of sales, the first month surpassed expectations. The controversial lottery game is much more widely available than other forms of gambling, with screens set up in various stores, bars and restaurants around the state. Keno winning numbers are projected every four minutes, unlike a traditional lottery in which winning numbers sequences are typically announced a few times a week.
IRS: FUTA to rise to 2.3 percent
EAST HARTFORD — OEM America President David Fernandez is criticizing a newly announced tax that makes Connecticut the most expensive in the country.
Fernandez’s East Hartford-based company provides payroll, human resources, workers compensation and health insurance services to small businesses throughout the state.
The Federal Unemployment Tax Act (FUTA) reimbursement rates for this 2014, just announced by the IRS, charges employers 2.3 percent on employee payrolls. Most states charge 0.6 percent. The next highest states are Indiana at 2.1 and California at 1.8 percent.
Fernandez observes that some Connecticut small businesses were unprepared for this tax increase. “Lots of businesses that use ADP or Paychex for payroll haven’t been withholding enough this year,” he says. “Those companies are going to have to write a pretty big check next month.”
OEM’s payroll clients are somewhat insulated from this action, since the company has been anticipating this higher rate, and has been withholding accordingly, Fernandez adds. They will still have to pay the higher rates, but will not have the pay all at once.
“We see this kind of business-unfriendly attitudes throughout our business,” Fernandez says. “Fees tacked on to workers compensation, fees added to health insurance — the small businesses we work for feel like they’re a government piggy bank. Our products help them some, but there’s always another agency with its hand out.”
Fernandez urges Connecticut’s leaders to repay the federal unemployment fund, so that the state’s FUTA rates will come back down to normal.
WESTBROOK — State Sen. Art Linares has created an online petition at senatorlinares.com where area residents can sound off about electric rate hikes and urge state regulators to oppose future hikes.
“Many people have asked me what they can do to help me to fight rate hikes,” said Linares in a statement. “One way is to take our message to the decision-makers. The signatures on this petition will be delivered to state electricity regulators soon. The message we are sending is clear: We cannot afford higher electricity rates.”
On September 3 Linares joined with area residents at New London City Hall to voice his opposition to the proposed Connecticut Light & Power rate hike. Linares addressed state regulators during a packed public hearing on the proposal.
“I have received many calls and emails on the issue of the rate hike. All of the calls and emails have been from people who are opposed to the rate hike. This rate hike could cost the average ratepayer an extra $150 a year. A senior citizen from Clinton told me there is no way he and his wife can afford to pay an extra $150 a year. There are many, many more people who are in the same situation. Please consider them when you make your decision. Reject this request for a rate hike. There is no way that our seniors, our working families, and our most vulnerable citizens can afford $150 more a year.”
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