Company acknowledges improper billing; will pay $105M


Connecticut will receive just more than $268,200 as part of a broader $105 million global settlement reached with telecommunications giant AT&T Mobility, LLC.


The settlement, announced earlier this month by state Attorney General George Jepsen and state Department of Consumer Protection Commissioner William Rubenstein, resolves claims that AT&T Mobility engaged in “data cramming,” or tacking charges onto customers’ bills without their permission or knowledge.


Connecticut, the 49 other states and the District of Columbia are all part of the settlement with AT&T Mobility. In all, the company agreed to pay $105 million to pay participating states as well as provide refunds to affected customers, state officials said.


The states, along with the Federal Trade Commission and Federal Communication Commission, claim that AT&T billed consumers for premium text-message subscription services when they had not signed up for or agreed to them. The charges typically were $9.99 a month, according to Jepsen’s office, and often were for services provided by a third party, such as daily horoscopes, trivia and sports updates.


The $105 million settlement includes $20 million in payments to the states, of which Connecticut is getting $268,252. The company also agreed to make an $80 million payment to the Federal Trade Commission to fund a claims-based restitution program the FTC will administer, and will pay $5 million to the U.S. Treasury on behalf of the Federal Communications Commission.


Under the agreement, AT&T will notify all affected consumers who were charged for premium text-message subscriptions to let them know how they can seek refunds.


Consumers who think they have been billed incorrectly because of data cramming can submit claims online at The claims process will be open until May 1, 2015, Jepsen said.


As part of the settlement, AT&T is required to bill for third-party charges only if the charges have been authorized by customers, as well as to improve the way such charges are shown on customer’s cell phone bills.

 Largest funds outpace projections




HARTFORD — Positive investment returns for the state’s two biggest pension funds constituted “great news” for Gov. Dannel P. Malloy, who credited the fiscal-year development to state actions and the investment plan of state Treasurer Denise Nappier.


Over the 2013-14 fiscal year ending June 30, the Teacher’s Retirement Fund (TERF) posted a net investment return of 15.67 percent. That exceeded actuarial projections of 8.5 percent, and represents more than the “customized benchmark” of 15.25  percent, according to Nappier’s office.


During the same period, the State Employees’ Retirement Fund (SERF) marked a net investment return of 15.62 percent. The actuarial projection for this fund was 8.0 percent, and the customized benchmark is 15.41 percent.


The sum of investment gains was $3.8 billion.


“This is great news and I want to commend Treasurer Nappier for her good work,” said Malloy in a statement. “Over the past three and a half years, we have cut the state’s long-term obligations nearly $12 billion by reducing post-employment costs and increasing the state’s contributions to the pension fund. Our actions, together with the Treasurer’s investment strategy, have us on the path to get our long-term obligations under control.”


The two funds represent 91 percent of the state’s pension and trust fund portfolio.


Nappier noted that earnings for both funds have been in the double digits for four years of the last five. As of fiscal year end, the market value for TERF was $16.2 billion. For SERF, it was $10.5 billion.


As for the performance of TERF and SERF for the most recent fiscal period, “We are rightly proud of it,” according to Nappier. “The soundness of our strategic, diversified approach to portfolio design has enabled us to achieve returns that approach double their actuarially assumed rates of return.”


Overall, Connecticut Retirement Plans and Trust Funds increased in investment gains by $4.15 billion for the 2014 fiscal year. After factoring in net withdrawals, the net increase over the previous year was $3.5 billion.


“What is noteworthy about our investment experience over the past five years,” said Nappier, “is that pension fund assets have grown at a faster pace than the payment of benefits and other expenses. In light of the state’s significant unfunded pension liability, the substantial growth of the fund assets is good news for its beneficiaries and taxpayers. Our overall pension fund portfolio is positioned to perform well in a variety of economic environments.”

In addition to TERF and SERF, the remaining nine percent of CRPTF consists of assets held on behalf of the following: Connecticut Municipal Employees’ Retirement Fund; Probate Court Retirement Fund; State Judges’ Retirement Fund; State’s Attorneys’ Retirement Fund; Soldiers’ Sailors’ & Marines’ Fund; Endowment for the Arts; Agricultural college Fund; Ida Eaton Cotton Fund; Andrew Clark Fund; School Fund; Hopemead Fund; Police & Fireman’s Survivors’ Benefit Fund; and State of Connecticut Other Post-Employment Benefits Trust Fund.

 NAUGATUCK — Workers for a Valley contractor performing abrasive blasting during the renovation of a Massachusetts mill were overexposed to lead and silica and faced other health hazards due to their employer's failure to supply legally required safeguards. As a result, the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited Maher Industries, doing business as A Fast Blast, for 17 serious violations of workplace health standards.

OSHA found that employees were exposed to airborne concentrations of lead and silica generated by the abrasive blasting, which was in excess of permissible exposure limits. Feasible engineering or administrative controls to reduce the exposure levels were not in place or in use. The lead exposure hazard was compounded by the lack of a shower facility and protective clothing and eye protection for exposed workers. The company failed to monitor lead exposure levels and allowed employees to consume beverages adjacent to abrasive blasting.

A Fast Blast had 15 business days from receipt of its citations and proposed penalties to comply, meet with OSHA's area director, or contest the findings before the independent Occupational Safety and Health Review Commission.

 State, local income taxes consume 12% of Nutmeggers’ income



A new report places Connecticut third among states with the highest tax burden.

Residents shelled out more than one-tenth of their income — 11.9 percent — to pay state and local taxes in 2011, according to the Tax Foundation, a policy research organization based in Washington, D.C.

That is well above the national average of 9.8 percent, according to Elizabeth Malm and Gerald Prante, authors of the report.

“Since 2000, state-local tax burdens as a share of income have grown slightly, from 9.5 percent to 9.8 percent in 2011,” Malm and Prante report. “During that period, however, there has been some slight fluctuation. From 2005 to 2010, burden as a share of income slowly increased, hitting a high of 10.2 percent in 2010 and dropping to 9.8 percent in 2011.”

The April report, titled “Annual State-Local Tax Burden Rankings FY 2011,” is based on Census information as well as other data.

The Tax Foundation releases a comparative report of state income tax payments each year. Connecticut has placed in the top three each year since 2005. New York and New Jersey, which were No. 1 and 2, respectively, for 2011 residential taxes, also have held one of the top three slots since 2005. In addition, authors of the report say the three states stand out from the rest of the nation because of their relatively high tax burdens.

“The residents of three states stand above the rest: New York, New Jersey and Connecticut,” report the authors. “These are the only states where taxpayers forego over 11.9 percent of their income in state-local taxes, one half of a percentage point above the next highest state, California.”

Authors calculated tax burden by adding state and local taxes paid by residents, then dividing those totals by each state’s total income. The emphasis was on taxes paid by residents, not taxes collected by the state. For example, New York taxes paid by a Connecticut resident working in New York would count towards the Connecticut tax payment, since it is part of the Connecticut resident’s total payments for state/local taxes.

“Nationwide, over a quarter of all state and local taxes are collected from nonresidents,” Malm and Prante note. “As a result, the residents of all states pay surprisingly high shares of their total tax burdens to out-of-state governments.

The report listed Wyoming as the state with the lowest tax burden for residents, 6.9 percent. That state’s per capita income is $50,805.

Connecticut’s per capita income is $60,287, highest in the nation, according to the report.


 HARTFORD — One of the last-second laws approved by the General Assembly as the 2014 legislative session expired was a measure that eliminates the fee for a business entity registered with the state to dissolve as of July 1, 2015. The bill passed the state House by a vote of 140-0 on May 2 and was approved by the State Senate on the consent calendar as the 2014 legislative session expired May 7, 2014.


If signed into law by Gov. Dannel P. Malloy, the bill will restore the authority of the Secretary of the State to administratively dissolve a business entity that has not complied with state laws to file annual reports for at least one year. It gives the Secretary of the State the authority to administratively dissolve any non-stock (non-profit) corporation after two years of failure to comply with the legal requirement to file annual reports.


The bill’s goal is to clean up the database of businesses registered with the Secretary of the State’s office, reducing the number of listings from defunct businesses and encourage companies that have long since gone out of business to take the legal step to dissolve their corporation.


Having thousands of defunct companies listed as active in our public database harms consumers and also leaves those businesses on the hook for years of back payments for the state business entity tax,” said Secretary of the State Denise Merrill.

 J&B charged with flouting wage laws


NEW HAVEN — J&B Deli, 1147 Chapel Street, was issued a stop-work order by the state’s Department of Labor in March for allegedly failing to comply with wage laws.


A DOL investigation concluded that deli operators John and Cheong Rhee violated statutes include not paying minimum wage or overtime, paying workers in cash, failure to make legal deductions, and failure to maintain payroll records.


“This is a case where an employer is taking unfair advantage of their employees and also cheating the state by not paying the proper taxes or protections, such as unemployment insurance and workers compensation,” said state Labor Commissioner Sharon Palmer in a department release.


The order was issued by DOL’s Wage & Workplace Standards Division. An investigation was launched after two employees claimed they worked about least 60 hours per week but were not paid at least minimum wage or overtime. Other findings surfaced after that initial complaint.


Palmer said such alleged practices are “a loss for our entire state” and upsets its economic equilibrium.


“While we want to keep Connecticut’s economy strong and help employers stay in business, our first obligation is to ensure that people are paid fairly for the work they do, and have the proper protection should they get injured while on the job,” Palmer stated. “Only by creating a level playing field can we help those employers that are doing the right thing to remain competitive.”


Companies that violate state wage laws can be fined $300 for each week an employee has worked while not on the payroll.