The Red Line

Lee Elci: Your recent column discusses Governor Lamont’s quiet implementation of a hiring freeze on state employees. You describe this as a stealth move. Why is he doing this silently?

Red Jahncke: Well, I think he's been caught off guard. State employee compensation has skyrocketed, consuming a large portion of the budget and squeezing out other spending. The question becomes: What do you cut? Lamont is under significant pressure from progressives in his party, so he halted hiring within the state workforce for the remainder of March, April, May, and June to remain within the budget—at least temporarily. However, this is just a preview of a much larger impending problem.

Lee Elci: You have to admit, this seems like a small victory. You've been addressing the 33% wage increase over the last five or six years. This hiring freeze appears to be a win.

Red Jahncke: Yes. Labor costs are determined by two factors: the pay rate and the size of the workforce. We've criticized the state for both significantly increasing pay rates (a 33% raise) and simultaneously expanding the workforce. That's the classic double whammy. Over the past two years, the cost of the unionized workforce has risen by 18%. Many people are confused about fiscal guardrails, particularly the volatility cap. However, the key issue here isn't the fiscal guardrails themselves but rather the excessive compensation of state employees crowding out other spending.

Lee Elci: Lamont has a Yale background he often references. Still, he didn't seem to anticipate the combined impact of pay rates and workforce size on labor costs. What does this suggest about his fiscal acumen?

Lee Elci: All right, so I have a question for you. You were mentioned at the Yankee Institute for adding to the massive body of evidence of favoritism by Connecticut Democrats toward government employees and unions. Could you elaborate on some key pieces of evidence from that body that you found most compelling?

Red Jahncke: Well, I think what you're referring to is noteworthy. A couple of weeks ago, this issue of state employee compensation and how extraordinarily generous it is broke into the news cycle. I'm happy that last week, Hearst newspapers ran two editorials of their own suggesting that state employee compensation should be reviewed and a wage freeze considered.

To answer your specific question, this began back in the 1930s and '40s when Franklin Delano Roosevelt went on the record saying that unions had no place in government. The function of a union is to negotiate across the table from an employer, which works in the private sector but not in the public sector, where both sides are on the same side of the table.

Lee Elci: All right. Red Jahncke is with us, and we're chatting again. He's been a major driving force behind conversations about employee wages, Governor Lamont, and everything associated with that. So let me ask you this. One of the editorials in Hearst was about Governor Lamont’s decision to offer special treatment to employees affected by DOGE reductions. What's your take on this?

The Cost of State Employee Compensation

Lee Elci: What’s the simplest answer as to why Governor Lamont has rewarded state employees with six consecutive annual wage increases?

Red Jahncke: I think he doesn’t care. He sees it as a distant problem. If he even pays attention, he has this wonderful little mantra: “I have to pay our state employees these wages and benefits so I can hire the best and the brightest.” Well, does that mean the other 49 states are hiring only dim bulbs and deadbeats?

The real issue is that state employee compensation is by far the largest component of the budget—over $10 billion a year. You can have an enormous impact simply by holding the line on state employee pay. If you institute a two-year wage freeze, you free up money that the governor claims he doesn’t have.

This isn’t just an accounting problem—it’s a political one. The administration is making a deliberate choice to prioritize public-sector raises over fiscal responsibility.

Lee Elci: All right. What are you focusing on again today?

Red Jahncke: Well, I think it's noteworthy that last week, the news media—not the commentary segment, such as yours and mine, right?—the news media asked Ned Lamont about unfair wage increases for state employees. So we have punched through. We are in the news cycle. Ned can no longer ignore this issue, which has always been his preferred approach.

Lee Elci: So, and he's hiding away right now. He's MIA.

Red Jahncke: Isn't he? Yes, he is. He's M.I.A. We are not. Down here in lower Fairfield County, I understand the Greenwich RTC discussed this very issue in its meeting last night. I was invited to Kent, Connecticut, over the weekend to speak about it to the Kent RTC at their Lincoln Dinner. You had Ben Proto on Monday. Ben tells me he discussed it with you. We're beginning to raise the consciousness of the public.