Lee Elci: All right, sitting in that seat of honor is a very good friend, Red Jahncke. He joins us every Wednesday. Red, Good morning. How are you, sir?
Red Jahncke: Good morning Lee.
Lee Elci: Listen, before we get to, more talk about the Governor, the Mirror has a story this morning. I don’t know if you’ve got a chance to read it yet, but basically, CSCU [Connecticut State Colleges & Universities] saved hundreds of millions of dollars, while asking for more and more money. Apparently they’ve amassed $600 million in their coffers. They squirrel away what they don’t spend, and they keep asking for more. I just wanted to get your general thoughts on that.
Red Jahncke: Yeah, my general thought is the reaction of any citizen upon hearing that, which is to be appalled. It’s reminiscent of the Lamont administration hiding $300 million of interest on the federal Covid assistance that the state received. They socked that away in a bank account. And, it took a while to expend it all. And while it sat in the bank account it generated three hundred million dollars in interest. Never reported that. Never entered that into the budget. So it begins at the top. Lamont does this, the state university system seems to have done it. It seems to be a pattern of behavior and sense of entitlement that runs throughout the entire administration.
Lee Elci: Okay. All right. Well, listen, we’ll follow that up. I know that story broke this morning, but maybe down the road we can get into that a little bit deeper because I think that’s a huge controversy and a scandal that needs to be exposed. That’s a big deal. All right. Where did you want to start today?
Red Jahncke: With what I call the 12 point indictment of our governor. As you know, I’ve been writing about state employee compensation for over six months now. Calling for a two year wage freeze. I’m happy to say that the Republican leader in the Senate, is also calling for a two year wage freeze, as are other Republicans. All been going on, you might say, somewhat in a vacuum. Everybody knows that Lamont has been negotiating a new contract with the state employees. He has not released it yet. So no one knows what’s in it. So, The only telltale sign of what’s in it is an account in his proposed budget, which is called the Reserve for Salary Adjustments. That’s where he puts money in the budget to be available for the wage increases in the new contract that he has not yet announced. But there’s a half billion dollars in there for the two years. So there’s clearly a substantial wage increase coming. But since the contract has not been announced as yet, there hasn’t been a news event around which to query the governor about the 33% wage increase he’s already given state employees over the six years that are in the books. There hasn’t been any real focal point for this issue until last week, when he granted an interview to the CT Examiner. The Examiner asked him point blank “After a 33% wage increase, would you consider a wage freeze such as your predecessor, Democrat Daniel Malloy, imposed?” when confronted directly with the question, Lamont revealed himself to be completely unprepared and had no answer. He revealed his ignorance in what I have classed a 12 point indictment. State employee compensation is the largest cost in state operations. It’s over ten billion dollars a year. How can anyone be ignorant in his position of the largest cost of operation?
Lee Elci: Right! Red Jahncke, by the way. If you want to read that, you can go on the-red-line.com . Since you mentioned those points, let me just, throw out a couple here for you as time permits. Here. Number three, you suggest that offering better pay for specific jobs, like nurses or transportation engineers is a better solution. That does seem like it makes sense. Are they entertaining that?
Red Jahncke: Well, it it boggles the mind that he has to award a wage increase across the entire workforce in order to allegedly be able to attract new applicants to 2 or 3 different departments, 2 or 3 different job functions. Yet, they’re hiring.
Lee Elci: They’re hiring in what specific? Do you know what specific area that they’re that they’re hiring the most in? Because, again, I always thought we were overloaded. We had too many employees. And now you’re telling me they’re hiring more? And I know the Lamont has said that he you know, he can’t find good workers. Right. That was one of his excuses months ago. So, can you explain that to everybody?
Red Jahncke: Well, yeah. He is hiring, at a fast clip overall and this is not new. Dan Haar of Hearst Media wrote a piece in December 2023. He said that the state had been hiring at an 8% annual clip over the prior 12 months at that time. Right. So they’re having no trouble. As of the time, the workforce was back to the level at which it had been pre-pandemic. So, no trouble hiring.
Lee Elci: He’s had no trouble. My guess is, and this isn’t necessarily in your piece, but I would think that there are departments within the state of Connecticut where there might be too many people. And then he’s claiming that there is, you know, departments where there’s not enough. So what about we just move, folks, from an overloaded department where people are sitting around half the day doing nothing to a department in need? I mean, it seems like that makes sense. And that way you’re not having to have this hiring blitz and and continue to increase the budget. No?
Red Jahncke: All right, Lee, we’re going to send you to Hartford with that idea because I’m sure if you mentioned it to the Lamont administration, it will be the first time they’ve heard that.
Lee Elci: And number six, you highlight the Connecticut state employee wages have outpaced both inflation and private sector wage. We’ve talked about that again over and over again. But how do you think that disparity affects the state budget priorities. And the public perception of the government spending?
Red Jahncke: Well, of course, it is fundamentally unfair. I mean, the number one issue for every citizen in this country over the last four years has been inflation. And everybody’s been pressed to keep up and keep their family budgets balanced in the context of this inflation. And lo and behold, Connecticut state employees have outpaced inflation by 7 to 10%. The private sector has lagged behind. The specific numbers are, as we’ve said innumerable times, state employees 33% wage increase, inflation has been 25% and private sector wage increases have been 23%.
Lee Elci: Again, Red Jahncke is our guest the-red-line.com. Red is on with us each and every Wednesday. As he mentioned earlier, he’s been focusing like a laser beam on state employees and their compensation package. He’s got a piece out on his website. Let me ask you about the nine billion dollar increase in liabilities. We have huge asset growth, but in your view, what specific policies could Lamont implement to effectively address the state’s pension challenges?
Red Jahncke: This is really one of those instances where, to torture an analogy, all roads lead to Rome. All these different problems come back to one very simple fundamental issue: when you award a 33% wage increase, pensions, which are calculated off wages, also increase by 33%. Thus, pension liabilities under Lamont have increased by nine billion dollars. The estimated future pension liability that the state taxpayers have to fund has increased $9 billion. Now we’ve put $11 billion. There’s been an $11 million increase in pension assets. So the net of the two is we have made two billion dollars worth of progress over six years. And that progress has had a benefit of $6 billion of extra infusions into the pension from the fiscal guardrails. That’s not progress. And if we ever reverse it in the stock market and we have been in reverse territory over the last month, that $6 billion of extra money coming via the fiscal guardrails is not going to be there. We will make negative progress. We will wreck progress on the funding of the pension fund. And this is all going back to awarding wage increases that we simply cannot afford.
Lee Elci: Red Jahncke, I’m out of time for this segment, any last quick thoughts?
Red Jahncke: Last week, the governor announced a hiring freeze for the remainder of this fiscal year to stay within the constitutional spending limit. How can he claim he’s having trouble hiring while simultaneously needing to slam on the brakes because he’s hiring too many people too fast?
Lee Elci: Yeah, I don’t think they know what they’re doing. All right, Red, thank you. The-red-line.com. I’ll catch up with you next week. Appreciate it.
Red Jahncke: Great, Lee.
Red Jahncke is a nationally recognized columnist, who writes about politics and policy. His columns appear in numerous national publications, such as The Wall Street Journal, Bloomberg, USA Today, The Hill, Issues & Insights and National Review as well as many Connecticut newspapers.