However, the SALT cap didn’t so much go after “Democrats” as “affluent Democrats.” It only applied to people who itemize their taxes, which meant the 90% of Americans who take the standard deduction were unaffected. The deduction raised over $70 billion in just the first year, and roughly 56% of that money came just from the top 1% of taxpayers, living in a few states in particular.
The tax nastygram seemed directed at Trump’s hometown delegation. Congresswoman Carolyn Maloney in April of 2017 complained about the cost of protecting “Trump and his family here in NYC”; the SALT cap affected 19% of Maloney’s constituents in Brooklyn and on the Upper East Side, and taxpayers in that 19% each lost an average of $100,405 in breaks. Chuck Schumer, one of Trump’s fiercest critics, personally took over $58,000 in SALT deductions just in 2016.
Overall, 39 of the 40 districts most affected by the SALT cap were represented by Democrats. Of those, 28 came from New York, New Jersey, and Connecticut. Also affected: Nancy Pelosi’s San Francisco district, where residents lost an average of $53,471 of write-offs. Trump’s campaign promises to take on “elites” proved phony, except when he was able to effect this targeted partisan strike at the people he knew and hated the most: rich, socially liberal Democrats, especially ones from the tri-state area.
Because Connecticut employees contributed so little to their own pensions, the cost to the state was actually higher than the average cost of pension benefits in the 50 states, Here are the numbers from the center’s study (page 17). In 2014, Connecticut contributed 8.0% to SERS, while the 50-state average contribution was 7.0%. These percentages are pension cost as a percent of payroll cost.
The higher level in Connecticut was necessary because state employees contributed only 2.2% to their own pensions, while the 50-state average employee contribution was triple that amount, or 6.6%.
The differential between Connecticut’s 8% and the national average of 7% amounted to a 14.3% higher level in Connecticut. Either way you look at the extra 14.3% – as a higher state cost or as a larger employee benefit – it was overly generous. So how did the center make its mistake? Instead of recognizing the impact of the level of employee contributions, the center glossed over them and only looked at the gross unallocated cost of pension benefits, namely 10.2% in Connecticut versus an average of 13.6% in the 50 states. This creates an illusion opposite to reality. The fair and accurate measure is net cost for the state and net benefit for employees, which, in Connecticut, was 8%. The gross cost of the benefit of 10.2% was offset by the employee contributions of 2.2%, leaving both the state’s net cost and the employee’s net benefit at 8%. Nationally, a gross cost of 13.6% was offset by employee contributions of 6.6%, leaving a lower net cost/benefit of 7%.
Connecticut’s neighbors have also prioritized age in their rollouts after prioritizing health care workers and nursing homes, though they have also made teachers, essential workers and people with underlying conditions eligible in tandem at different points in the pandemic. New York announced that teachers and some essential workers were eligible in January along with individuals 75+; Massachusetts included people with co-morbidities in its 65+ rollout in late February. Rhode Island deviated from an age-based strategy around mid-March when it opened up eligibility to teachers, and later to individuals with co-morbidities.
Week 1 Monday, May 10: (General) Actuarial Transformation: Trends & Insights across Data, Processes, Models, and People
Tuesday, May 11: (Life) Consolidated Appropriations Act, 2021: Changes to IRS code Section 7702 Wednesday, May 12: (General/Professionalism) Emerging Professionalism Issues in 2021 Thursday, May 13: (Investments) Macro Economic & Market Update
Thursday, May 13, 4pm EDT: (General) Networking Session Friday, May 14: (Health) The Role of Behavioral Health‐Now and in the Future
Week 2 Monday, May 17, 9am EDT: (General) Actuaries Working in International Landscape Tuesday, May 18: (Health) Health Technology, Consumerism and the Explosion of Telehealth Wednesday, May 19: (Pension) New Pension Relief under ARPA: Its Implications for Pension Plans Thursday, May 20: (Life/Annuities) Mortality Differential by Socioeconomic Categories in the US Friday, May 21: (Life/Annuities) Life Reinsurance 101 Panel Discussion
A study of Connecticut’s state government in advance of an expected wave of retirements next year has identified as much as $900 million in potential savings in executive agencies with total budgets of $14 billion, while acknowledging the significant obstacles to making changes in one of the most heavily unionized public-sector workforces in the United States.
The report released Wednesday by the administration of Gov. Ned Lamont says 8,000 of the 30,000 executive-branch employees are eligible to retire by July 1, 2022, when retirement benefits will be reduced under the terms of a 2017 concession deal. A survey found about 70% of the eligible workers were leaning toward retiring.
The highest percentage of expected retirements is among employees responsible for public safety and caring for at-risk children and people with intellectual disabilities and mental illnesses. As such, the exodus poses daunting challenges to maintaining essential services and perhaps offers once-in-a-generation opportunities for fundamental change.
There are some other problems with Mr Goldrick’s claim. First, he leaves out the actual headcount numbers behind the claimed 14% decline, namely a decline from 29,556 in 2010 to 25,830 employees in 2017.
Here’s why. According to the 2018 Valuation Report of the State Employees Retirement System (page 3) by actuaries Cavanaugh Macdonald, the overall unionized state workforce was 47,778 on June 30, 2011, just a few months after Malloy first took oﬃce and increased to 49,153 on June 30, 2018, six months before Malloy’s retirement.
How does Mr Goldrick turn a headcount increase into a workforce reduction? And why are the Cavanaugh Macdonald numbers about twice as high?
While offering no source, Jahncke claims that, “for more than a decade, state employee compensation has exceeded compensation in Connecticut’s private sector by about 40 percent, the biggest gap in the nation.” That unattributed claim likely came from a 2015 report by the Yankee Institute asserting Connecticut public sector workers earn 25-46% more than comparable private sector workers.
First, consider that the Yankee Institute is not a reputable source of research, but a right-wing, dark money-fueled, propaganda outlet associated with conservative North Carolina billionaire Thomas Roe’s State Policy Network. Roe’s particular objective, as revealed in Jane Mayer’s book, “Dark Money,” was the destruction of public sector unions.
In a meticulous analysis for the respected Economic Policy Institute, Monique Morrissey debunked the Yankee Institute report, revealing it was based on a cherry-picked sample of workers, used nonstandard control variables, and inflated the cost of retiree benefits in the public sector, while minimizing their cost in the private sector. Morrissey concluded that Connecticut public sector workers without college degrees are compensated somewhat more than those in the private sector, while those with college and graduate degrees are compensated somewhat less than in the private sector, even when factoring in more generous public sector benefits. In short, Morrissey writes, “taxpayers are getting a bargain!”
For over a decade, state employee compensation has exceeded compensation in Connecticut’s private sector by about 40 percent, the biggest gap in the nation.
The consequence is that the State Employee Retirement Fund (SERF) is drastically underfunded. It is difficult to fund such wildly overgenerous benefits, especially since the state didn’t even start to fund them until years after beginning to award them.
What now is an ongoing gravy train for state employees is ultimately a train wreck for them and the state. There are only three ways to avoid the wreck: (1) massive tax increases and/or service cuts, a disastrous option (2) significant cuts in state employee benefits and/or (3) a federal bailout.
Indeed, Jahncke provided public testimony before the Connecticut General Assembly in January 2020 in which he cited the two 50-state studies and then explained why he relied upon multi-state studies rather than single-state studies: “when you are being compared to 50 other states, there is no way that anyone can complain that somebody is jimmying the numbers about Connecticut… these are across-the-board, level playing field [results.]”
Goldrick is just such a complainer, seeking to discredit Yankee’s 2015 study, by stating that “Yankee is not a reputable source of research but rather a right-wing, dark-money fueled, propaganda outlet…”
Then, Goldrick cites “meticulous analysis” supposedly “debunking the Yankee Institute report” – analysis conducted by the Economic Policy Institute, which even The New York Times calls “a left-leaning research group.”
Goldrick’s extreme bias has colored his view of Jahncke’s column and led him to make baseless criticisms while omitting important facts supporting Jahncke’s argument.
But the state has its terms for success defined backward, said Saad Omer, Yale School of Public Health epidemiologist and the director of the Yale Institute for Global Health. “That’s a process metric,” he said. “It’s not an outcome metric.”
How important is speed in the COVID-19 vaccine rollout? To Connecticut, it’s an important enough consideration to partially justify bucking CDC guidance on prioritizing people with co-morbidities, though experts suggest that it is the best way to prevent deaths in younger populations.
But by rolling out vaccine through an age-based process, the state will effectively de-prioritize younger adults with co-morbidities that put them at higher risk of dying from COVID-19, Omer said, because in those younger age groups, those with existing health issues will be part of a much larger crowd of eligible residents.
Gov. Ned Lamont said Thursday that Connecticut will eliminate capacity limits on restaurants, houses of worship, retailers and most businesses on March 19 but will retain mandates for social distancing and masks as a precaution against a resurgence of COVID-19.
The rollback comes as about 60% of Connecticut residents 65 and older have been vaccinated against the coronavirus, helping to drive down hospitalizations, new infections and deaths to their lowest point in 2021, though still higher than last summer.
The governor’s announcement was expected. It comes after Texas, Mississippi and three other states took more aggressive steps to end mask mandates and business restrictions, a move denounced as premature by President Joe Biden.