Letter: Facts, figures show state is slipping

By Peter I. Berman

To the Editor

A recent article in Investment News (Feb. 17) highlighted the effects of high taxes to support the public unions — our most politically active class — on wealth concentration. Connecticut, the wealthiest state in the nation, now ranks only fifth in numbers of millionaire households (100,754) or 7.32 percent of its population (the third largest proportion). New York, site of the world’s financial capital, doesn’t even make the nation’s top 10 list.

Millionaires have substantially moved to New Jersey (242,647) — highest number in the nation. Not surprisingly, Virginia, the favored home of highly paid Federal employees has the second highest number of millionaires. And, Maryland, another favored home for Federal employees, has the highest ratio of millionaires to its population anywhere, almost 8 percent or 1 in 12.

These tabulations evidence the great new growth “wealth industry” in America — public employment. Gov. Malloy’s historic tax hikes to reward our public unions have sharply reduced jobs growth in Connecticut to the lowest in the nation. Jobs have declined 22,000 under his term. Even the state’s labor force has declined by 43,000. We see the same effects here in Norwalk. Over the last 20 years per capita income has barely moved — up only 10 percent. But per capita taxes are up 50 percent, financing the highest-paid public unions of any city in the state. One in four city employees earns six-figure salaries — higher than the city’s median household income of about $70,000.

Here in Norwalk we’re seeing one of the great population transformations in modern Connecticut — wealthier residents are moving out, lower income residents moving in mostly to rental housing and the single family housing market stagnating amidst a national housing boom. Even our well-paid city employees have largely moved out of Norwalk to avoid its punitive taxes and high rents. Come the next national recession, Norwalk’s population transformation will likely increase with further declines in its already depressed housing market. Its share of rental housing, now one-third, will only increase. And, the city’s reputation as the most transient community in Fairfield County will only solidify.

Without a determined effort by its citizenry to roll back the onerous costs of local government, the odds are increasing that once proud Norwalk’s future will follow the same spiral into Connecticut’s once great cities of Bridgeport, New Haven and Hartford. After all, who wants to buy a house or condo where onerous property taxes are financing the salaries of the highest paid public servants of any city in the state and where’s there scant chance of any property appreciation? Norwalk’s long-time residents are becoming increasingly scarce. It’s been quite a while since new homes have been built here.

City politicians are forever projecting a “New Norwalk.” Fortunately we have good historical records of the rise and fall of Connecticut’s 169 towns and understand the dynamics of change. Norwalk is unmistakably spending its way to Bridgeport. Changes in housing values, incomes and population speak clearly here. Avoiding this inevitable outcome requires voters who care enough to elect politicians and appoint city officials who have the skills and determination to restrain city spending in keeping with the modest incomes of city residents.

The “smart monies” have been voting with the feet. Finance is not rocket science.

Peter I Berman



12 responses to “Letter: Facts, figures show state is slipping”

  1. John Hamlin

    Great letter — right on target. Amen.

  2. cc-rider

    NJ has the highest taxes of anywhere in the tri-state. Ever look into property taxes there? They make Norwalk seem like Billings, MT by comparison. This doesn’t seem to fit into his argument very well.

  3. anonymous

    PBerman your editorial is spot on. Municipal salaries far outpace residents average income, and those municipal salaries don’t even figure in the Cadillac benefits. It leaves nothing for taxpayers except pot holes.

  4. Oldtimer

    Can’t help wondering where professor Berman gets his data. Every place I look, I come up with data in forms that make realistic state by state comparisons very difficult. He may be right about this end of the state where prices are heavily influenced by proximity to New York City. He is clearly opposed to the concept of public employee unions because, in his mind, public employee unions are the only reason for high taxes. Boondogles, such as the Rowayton Ave project, in his mind, have nothing to do with high taxes. I can’t understand why he stays, rather than move to a “right to work” (no-unions) State where the taxes, and services, are a lot less.

  5. Taxpayer Fatigue

    So, the city budget is less than half of what our taxes go towards. You are now in full support of the BOE and the multi-million dollar increase they are getting. The next biggest expense is the police force and then the fire department? Are you suggesting cuts there? By the time you get to City Hall, there isn’t much else to go after to make any significant difference in the budget. What do you think a fair salary for a department head living and working in Fairfield County is? $40K, $60k? Really?

    This is like your twentieth letter in the past month about how much the unions are costing us. What are your specific suggestions that are actually implementable? Which unions, how much less, how does that compare to others? When are their contracts open for negotiation? Why don’t you make some realistic, tangible suggestions that our elected representatives can actually go after?

  6. the donut hole

    The reason FDR was opposed to public sector unions is because he knew they would grow out of control like they have. Zero accountability and a powerful lobby that pays off the sleaziest of politicians who they know will raid the coffers for their benefit. Kids, safety, and health be damned. For the rest of us suckers, we get to live by the plain old labor laws on the books. For the unions, they are a protected class of citizenry. None of this will last very much longer. The fun begins when the rash of municipal and state bankruptcies start proliferating in the next few years. Winter is almost over, but inflation is coming to take what you have left.

  7. anonymous

    Norwalk does not get what it pays for.

  8. Bill

    Mr. Berman, how can I contact you so that we can work together for the benefit of Norwalk on this issue?

  9. Taxpayer Fatigue

    Donut Hole, anon, and Berman – I agree with all of your comments. But these continuing “blanket” letters condemning public unions lack any specific recommendations that can be implemented in Norwalk to improve our out of control property taxes or the poor City services we receive and the mediocre school system we have.

  10. piberman

    Thank you for the above comments. As to data sources CPEC in Hartford published unusually detailed data for CT’s 169 towns each year up until the late 1990’s when the business community’s funding of CPEC dried up. CPEC’s data was likely the most comprehensive municipal data ever produced for any state in the nation. In the early 1990’s CPEC contracted with me for a very ambitious study on CT Municipal finances. That study, published by CPEC, remains the most comprehensive work done in CT on municipality budgets. And, was widely distributed throughout the state.

    Special attention on large city finances was focused by the CT Commission on Business Opportunity – our first and only blue ribbon business commission funded by the State Legislature in the late 1980’s. Bridgeport was studied in great detail. I served as member of this Commission which held almost 200 meetings across the state. And also served as an advisor to the Legislator’s Export and Commerce Committee at the same time.

    Bridgeport and its dramatic changes has been the focus of special attention given its celebrated status as the “Arsenal of Democracy” during the War. Sometimes called the “Munitions Capital of America”. Hundreds and hundreds of ships in convoys carried Bridgeport munitions to Europe and also to Iceland where they were convoyed to Murmask, Soviet Union – a crucial contribution to Stalin’s war effort against Germany. Many Bridgeport outbound ships did not return. Bridgeport once fielded the largest electric cable plant – 1/4 mile long. Most of the undersea cables laid across the oceans were manufactured in Bridgeport at the GE plant. The equipment was sold to Japan. I had the good fortune of touring that GE plant just before it closed.

    With the demise of CPEC gathering information about the 169 towns requires more work. Basic sources include BLS, Dept of Commerce, US Census and data compiled by the CT Dept of Economic Development. Plus the reports filed by the individual towns. I’ve always found it especially curious the CCM – CT Conference of Municipalities – has never had the desire to compile comprehensive data as did CPEC.
    Maybe no one wants to know.

    Some 30 years ago no one would have predicted the extraordinary development and prosperity of Stamford, the pronounced decent of Bridgeport, the more recent surge of Danbury and the unexpected prolonged stagnation of Norwalk. Indeed, 30 years ago Norwalk was often identified as one of CT’s most well functioning Cities. The pivotal element in my view was the encouragement of Big Box and the subsequent devastation of Norwalk’s once thriving small business community that gave the City its “core” governance and political vitality. Without the small business core effective opposition to unrestrained spending simply vanished. The response to a 55% rise in City spending/taxes over the past two decades – virtually flat income growth says it all. As does a surge in rental housing.

    Finally as to “unions”. Sam Gompers said “unions always want more”. And properly so. Unions don’t create overly generous City contracts. Indifferent and/or inept City elected officials and adminsitrators do . In Norwalk the BET failed its responsibiity as did the BOE. Together with our mayors and Council members. As long as the BET fails its responsibilities there are no practical restraints to excessive spending relative to City incomes. A BET without major league financial expertise to call upon can’t effectively manage City finances.

    And, for those who object to my supposed anti-union bias in my early years I worked in a union shop as a lumber stevedore on the Brooklyn docks. And many years later managed a large all union factory making highly sophisticated mil-spec wire and cable for the US Navy. And, had no difficulty negotiating with both the Teamsters and Local No. 3 Electrical Workers – NY City’s most powerful union.

    The problem is never the unions per se. Its always with the City officials who negotiated the overly generous contracts. And then get re-elected because no one is watching the farm. Not too many decades ago Norwalk had excellent union relations, its members were only modestly paid and most lived here in the City.

    In closing, the real challenge is whether Norwalk can ever again reattain its once vaunted and celebrated well functioning as an attractive City. A city where properties didn’t stay on the market for very long. Sometimes not more than a few days. And, where citizens regularly attended City meetings. And participated. Our current political leaders are unequal to the task. Whether our citizens writ large can rise to meet the challenge remains to be seen. NON is a major assist. Ultimately we get the government we deserve based on our participation.

  11. the donut hole

    @Taxpayer Fatigue. Simple. Just make things fair.
    Buy out and convert all defined benefit plans to 401k type.
    NO ACCRUED sick time. Use it or lose it.
    NO TENURE. Tenure is for University level Professors who publish and bring in $ millions in grant money. IT IS NOT FOR K thru 12 teachers.
    Merit based pay increases. Some get X%, some get 0%, some get fired. Ridding an organization of dead wood is healthy. It motivates borderline candidates and generates a better product for the stakeholders (taxpayers). Rewarding poor work ethic and incompetence actually erodes quality as decent workers tend to slack off and become unmotivated. Bottom line, you reward good. You punish bad.
    Prohibit all collective bargaining from public sector employees. They are already protected by labor laws. Giving them special consideration is un American. They have this protection to protect them from striking. The solution is simple, if they go on strike, fire them. Sure there may be disruption of service, but someone else will be there to do the job whether its volunteer firefighters or deputized marshals or the army of people who are qualified to teach that don’t currently.
    These are just a few measures, but plain and simple government workers are expendable just like anyone else and they should be treated as such. We’ll get better service and balance will return to our economy so we can afford to pay for it. The balance needs to be restored.

  12. Taxpayer Fatigue

    Those are good suggestions dhole, I’m sure our well-functioning BOE will follow them with regard to the school unions – NOT! As far as prohibiting public sector collective bargaining, that would have to be done at the state level, not the city, which is also fine by me. I also agree with pay for performance as well – but it is hard to administer when the city doesn’t even do performance reviews for its employees – and that’s after eight years of supposedly conservative Republicans in power.

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