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CT budget chief gave raises to her staff — but not counterparts at other agencies

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State budget chief Melissa McCaw quietly made special arrangements to take care of 13 nonunion management employees in her office by giving them raises between 5% and 10% last December, while their counterparts at other executive branch agencies didn’t receive pay hikes and haven’t for years.

The raises for McCaw’s people have bred resentment, now that word of them has spread among numerous managers of similar status at other agencies. Such managers are part of the state’s merit system, but rank too highly to be eligible for representation by a state employee union that could negotiate bigger raises for them.

Monika Nugent, the president of an association of nonunionized managers, told Government Watch this past week she disagrees with McCaw giving preferential treatment to her 13 staffers.

McCaw — who is the secretary of the governor’s budget agency, known as the Office of Policy and Management (OPM) — arranged for her staffers’ job descriptions to be revised upward to higher classifications that pay more.

Nugent said that her association, called the Managerial and Exempt (M+E) Employees United, “was aware of the job description change made for a group of managerial employees within the budget division of [OPM] that provided these salary raises. Secretary McCaw mentioned during an Appropriations Budget Committee hearing [on Feb. 11] that she needed to ‘retain competent, quality staff.’”

But, Nugent added, “We would expect to see that all state agencies retain the most competent and quality managers. Equitable treatment of all managers would not only make that more likely, it should be the expected norm for state government.”

One nonunion manager, who works in another part of the state government, said in an email: “It was very demoralizing for the rest of managers in state service to find out about this. I know the public doesn’t have sympathy for us, I get it, but to go years without raises (I have seen colleagues turn down promotions into management because of the lack of salary parity) … only to find out OPM took care of their own … very demoralizing.”

The Feb. 11 legislative hearing mentioned by Nugent had a lively moment when state Sen. Cathy Osten, D-Sprague, asked McCaw about the raises inside OPM.

“I think OPM staff do great work, but I think a lot of state employees do great work,” Osten said during the hearing that was conducted by video, adding that “I would really like to understand” why there were “raises for some people and not sort of across the board.”

“I don’t need an answer right now,” Osten said, telling McCaw she could get back to her.

But McCaw, clearly annoyed, said, “I absolutely need to address that, senator. I have my entire team on this call, and they’re being called out in public, and I don’t appreciate it.”

McCaw said some unionized nonmanagers are now making more money than their bosses because they, unlike their managers, have union contracts negotiated through collective bargaining that bring them better pay increases.

“So, yes, my team got addressed, because we are the governor’s staff agency for budget and policy and I need to retain competent, quality staff,” McCaw said.

She said the legislature had already given similar raises to its management employees.

If you’re interested in seeing the exchange between Osten and McCaw, it begins just over 30 seconds after the 2-hour-and-23-minute mark of the CT-N Network on-demand video recording of the Feb. 11 hearing.

The controversy over McCaw’s move is the latest reemergence of a long-term issue in state government service that’s being called “wage compression.”

The term refers to what happens when subordinates’ salaries start bumping up against, or even exceeding, those of their bosses because the subordinates are represented by state employee unions who negotiate raises for them that the nonunion managers don’t receive.

The managers’ raises engineered at OPM by McCaw last December were not for her agency’s top-level managers. Some have enviable salaries over $140,000, but they are basically midlevel bureaucrats.

Numbers and percentages

The three highest-salaried managers affected, all with the job title “principal budget specialist,” went from $137,814 to $144,705, a 5% increase. The highest percentage raise was 10% for two budget analysts and a “leadership associate” in the same role. Those employees moved from $66,340 to $73,136, or from $63,023 to $69,479.

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The total of the 13 salary increases was $88,089.

Those numbers come from a spreadsheet of the employees’ salaries before and after the raises, which McCaw’s office provided upon request. The Courant also asked for the employees’ names, but McCaw refused to release them, even though by state law they are a matter of public record.

If The Courant were to file a complaint with the state Freedom of Information Commission, it’s probable that McCaw would be found in violation of the FOI Act and be ordered to provide the names.

But that process takes months, and it may not be worth doing in this case — because the point isn’t the names of these relatively anonymous people, but whether what’s happened is unfair to other nonunion managers who don’t happen to work directly for McCaw.

Her salary is $198,000, by the way, according to the state comptroller’s OpenPayroll website.

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(Looking at that same website late Friday, it turns out that several of the highest-ranking management lieutenants to McCaw at OPM got raises of $8,000 to $10,000 about a year ago, to new salaries above $175,000. That’s not likely the result of “wage compression,” so it may become a topic for further inquiry.)

Meanwhile, McCaw issued a statement in response to the inquiries about the December raises, saying: “Let me be abundantly clear, wage compression is a serious issue affecting state government and, when combined with looming large-scale retirements, poses a threat to the continuity and quality of the services we provide for the residents of Connecticut.

“We have been working diligently to identify instances in which we are losing senior-level and experienced staff because their salaries have not only become uncompetitive in the marketplace, but also where their subordinate employees’ pay has eclipsed their own. For instance, in the last two years alone, OPM’s Budget Division has experienced 50% turnover, with the majority of those employees moving to unionized positions in state government.

“By losing these employees, we are also losing their institutional knowledge and expertise, which profoundly affects our ability to serve the residents. As recognized in the CREATES report [a new government efficiency study produced for the Lamont administration by the Boston Consulting Group], we have to evaluate how we are handling the business of the people and take action where we can to retain existing employees and recruit the next generation of state leaders.

“This was my approach with the exceptionally hard-working and tremendous OPM budget staff in December 2020, and the legislature did with their professional staff in October 2020, by increasing their pay in recognition of the volume and quality of their work.”

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