Lawmakers talk issues at breakfast
NAUGATUCK — Once the bacon and eggs were finished, it didn’t take long for the discussion to turn to business last Thursday at the Naugatuck Chamber of Commerce’s annual legislative breakfast.
Ion Bank President and CEO Charles Boulier III said 4,500 small businesses are among his bank’s customers. Of that figure, he said, 1,200 borrow money. So, the bank sees the businesses’ balance sheets.
“A lot of those businesses are still struggling,” he said. “Small business is what drives our country and our state, so the balance sheet of our state has a lot to do with the balance sheet of our bank and our customers.”
As far as the state’s balance sheet is concerned, one issue stood out for Boulier — the state’s unfunded pension liability.
According to a handout stating the legislative issues the chamber is focusing on this session, as of Connecticut’s last biennial evaluation, $13.3 billion, or roughly 58 percent of its pension liabilities, were unfunded.
Boulier said Ion Bank had to make the very difficult decision to freeze its pension plan, which impacted many employees. He said the state has to make that kind of decision as well as change from a defined benefit plan for employees to a defined contribution plan, which is similar to 401(k) plan.
State Sen. Joan Hartley’s (D-15) assessment of whether the state would switch to defined contribution plans was, in her words, “brutally honest.”
“I can’t ever see that happening,” Hartley said.
Hartley was joined by state Rep. Rosa Rebimbas (R-70) at the breakfast meeting. State Sen. Joseph Crisco (D-17) state Rep. David Labriola (R-131) and state Rep. Theresa Conroy (D-105) were invited but unable to attend.
Continuing on the pension liability dialogue, Hartley said Gov. Dannel Malloy’s administration put a plan together incorporated in the budget to try and meet the liability and make balloon payments. She said the issue has been a habitual problem that has grown over time. It’ll be a long time before it’s alleviated, she added.
Rebimbas said there’s a lot of discussion on the topic, but there’s a lack of action. Sadly, she added, there’s a political component tied to the issue of employee pensions.
Rebimbas used the unfunded pension liability to denounce the notion that the state has a budget surplus, which has been put forth by some lawmakers. She said if the state needs to meet obligations and still borrow for necessities it doesn’t have a surplus.
“We don’t have a surplus,” she said. “We don’t have extra revenue.”
Boulier rhetorically asked how the state is going to cut spending if it can’t cut benefits.
“I think as a group, as citizens of Connecticut, it’s a major concern,” he said.
As the morning’s discussion continued, Hartley posed a question of her own on paid sick leave mandated by the state for business with 50 or more employees.
Connecticut is the only state to mandate paid sick leave. The measure proved to be controversial and drew strong opposition from business groups.
Naugatuck Economic Development Corporation CEO Ron Pugliese said the opposition derived from the measure being mandated. He said many companies with 50 or more employees already offer similar plans. The concern, he said, has always been that eventually all businesses will be mandated to provide paid sick leave. A step, he said, that would be devastating to small businesses.
Rebimbas said imposing mandates like paid sick leave, even if companies already do it, makes Connecticut unattractive to businesses considering moving to the state.
The matter of businesses already providing paid sick leave was at the heart of Hartley’s question. She referenced a survey that found the mandate had no impact on businesses and wanted to know if it’s true.
Yvette Wilmot, chief financial officer at Sarracco Mechanical Services in Naugatuck and president of the chamber Board of Directors, provided an answer. She said Sarracco Mechanical Services employs about 150 people and the mandate didn’t impact the company.
Although the mandate had no impact, Wilmot said, it’s still frustrating because the state went through the exercise to enact a law that did nothing.
Wilmot said such bills are used to distract people from the real issues the state should be discussing such as the pension liability, the number of states employees, what those employees are being paid and the defined benefit plans.
“We’re being forced to be distracted from the larger financial issues,” Wilmot said.