State commission misses pension aid deadline
HARTFORD — Past the date it was supposed to finish work and disband, a commission studying Connecticut’s massive pension problem on Thursday agreed to continue work in attempt to possibly find properties and other assets that can be turned into cash.
The goal is to help stabilize one of the nation’s worst under-funded pension liabilities, which in some estimates tops $100 billion.
But the vast majority of the 8,400 state-owned properties are fully utilized, so selling off any of them, or gathering into a unusual form of trust to benefit the pension plans of state employees and public school teachers, would necessitate the acquisition of even more property for state offices.
State Rep. Jonathan Steinberg, DWestport, chairman of the Pension Sustainability Commission created in the current year’s budget and was to expire with the start of the new Legislature, stressed that within a few more weeks, the panel of state officials and private-sector experts could agree on a final list of recommendations for the General Assembly.
But the likelihood of suggesting $1 billion in possible assets to fund a possible Legacy Obligation Trust seems less likely, panelists agreed. In particular, trying to convert state parkland or historical properties would be very controversial. Steinberg called that tactic a potential electrified “third rail” for the commission to avoid, while possibly looking closer at state Department of Transportation and Department of Energy and Environmental Protection properties.
The commission is facing stiff opposition from the Connecticut Airport Authority over the possible privatization of Bradley International Airport. In a recent letter, Kevin Dillon, executive director of the CAA, warned the commission that federal rules require all airport revenues to be used to fund aviation, so revenue associated with the airport cannot be diverted from funding airport operations.
While Denise Nappier, the recently retired state treasurer, has suggested funneling money from the Connecticut Lottery Corp. into the pension plans, the pension commission is not yet convinced it will become a final recommendation.
One suggestion the commission supports is the continuation of its work, whether Steinberg, who is also co-chairman of the busy legislative Public Health Committee, continues to head the pension panel, or not. Disposal of properties could come down to a painstaking case-by-case, with title searches and in-depth legal analysis.
“We can go on forever, noodling recommendations and narrative, and this will carry on for another six months,” Steinberg said. “I’m very cognizant of building consensus in a way that’s very fair and everyone’s voice is heard, but ultimately it comes to recommendations that will provide direction. So much of the legal considerations are explicit and pertinent to the particular assets.”
“The question is whether the LOT concept as presented is feasible,” said Erin Choquette, legislative and policy adviser at the state Department of Administrative Services, questioning whether there are enough assets to generate enough money to help prop up the pension plans.
“I’m not sure there are sufficient assets to create a LOT at this time,” said Ted Murphy, a Litchfield real estate professional on the panel.
Steinberg recalled an initial goal of creating $1 billion in value to support the pension plans seemed easy to generate, back when the commission was formed.
“It’s a nice big number, yeah, it would probably move the needle a little bit,” he said. “But I submit if we only had half a billion dollars worth of assets, we’re trying to make a contributory recommendation, knowing that no matter how much assets there are, it’s not solving the whole pension problem,” Steinberg agreed. “This is only small piece of the whole puzzle.”