Lee Elci: Our very good pal Red Jahncke is joining us, as he does each and every Wednesday. Red. Good morning. How are you?
Red Jahncke: Hey. Good. How are you?
Lee Elci: So, what did you want to talk about today?
Red Jahncke: We’ve done a study here at the Townsend Group. I think we gave a preview last week, and the study’s out. It’s posted on the website. Website upper right-hand corner. It’s overtime spiking by Connecticut state employees. Looking first at the Department of Correction.
We looked at the ten employees in each of the last five fiscal years who clocked the highest overtime pay. You would think that is 50 individuals. It actually runs 28 employees because some repeat year to year.
And we looked at their overtime in relation to their previous years of working overtime. We looked at it in relation to their current or last salary. And if they have retired, in comparison to their pension benefit.
11 of the 28 have retired. They have retired with a pension benefit higher than their last salary. They are going to make more money in retirement than they ever made on the job.
Connecticut State tax payers are paying state employees to work for 20 years and then retire with a higher pension for the rest of their lives than they ever received as salary on the job.
Now, it is well known that overtime spiking goes on. me define that. These employees can include in the calculation of their pension benefit, their overtime pay in their last three years on the job. They work unbelievable overtime hours. No surprise.
We should say right here, you really can’t fault the employees themselves. What they’re doing is entirely legal under the system, but they clock in unbelievable levels of overtime to juice their pensions. They are retiring with pension benefits after 20 years that are higher than their last salary. You and I and everyone listening is paying for this.
Lee Elci: Yeah. It’s, it’s horrible. I can’t think of a better word to put that on this. That burden on the backs of the taxpayers.
I’m glad you said it, because I was going to say it, if you hadn’t. I would never blame anybody who’s in that system, because, if I were working in corrections or a state cop, I’d did the same exact thing. You’d load up on those three years and you try to squeeze as much as you possibly can out of this. It seems like this is 100% the fault of the past legislatures and the past governors who have crafted these deals. Correct?
Red Jahncke: Correct. Yeah. And I think what you need to understand is this is entirely on the governors and on the Democrat Party. Right.
Lee Elci: Explain why if you can quickly.
Red Jahncke: The governors negotiate the contracts, no one else does.
Lee Elci: I know just a friend of mine who’s, you know, a great guy. And he got hazardous pay. You’re talking about a retirement over $100,000 a year. That system is, is broken. Needs to be reworked for sure.
Red Jahncke: Yeah. One of these 11 retired with a pension of $152,000.
Lee Elci: So, essentially he’s making about $3,000 a week somewhere in the vicinity, with all the bells and whistles, all the medical. I mean, it’s just unsustainable, Red. Again, I’m not saying you shouldn’t get it. This is the deal that’s been made. But if this deal is still on the table for people, we’ve got to do something about that.
Red Jahncke: Well, here’s the conundrum that we face — working these last three years. Let’s put some quantitative dimension to this. Dannel Malloy reformed the system going forward. Employees hired after 2017 cannot overtime spike. For their pension calculation. it’s their entire average career over time. So, unless you are going to work humongous hours of overtime for each and every one of 20 years, you’re not going to be able to juice your pension.
Lee Elci: Oh, so this doesn’t happen anymore. This is the end of this, then?
Red Jahncke: But the end of it may be the end of us. 28,000 state employees are pre-2017, right? They can still play this game.
That means corrections and state cops. Predominantly. They have to work 20 years. There’s no early retirement. You have to work the full 20. Right? Okay. All of these people retire immediately when they hit 20 years. Surprise, surprise. Their pension benefit is — average of these 11 — 38% above their final salary rate.
As you know, I named myself in front of you “Mr. 33%,” right?
Lee Elci: Yes.
Red Jahncke: State employees have gotten a 33% pay raise over six years. That’s outrageous. But if you could retire and get a 38% pay raise immediately overnight, why would you work another six years to get this still-outrageous 33% pay raise? You retire right away. Is it any surprise that these workers at Corrections are retiring the minute they hit 20 years? No.
This all goes on past governors; it’s not really the legislatures. The governor negotiates. Over the last six years, Ned Lamont has negotiated contracts that are just complete giveaways, total giveaways. Malloy actually was a tough negotiator on behalf of citizens and taxpayers. Lamont, exactly the opposite.
He submits to the legislature the contract. If it’s not voted on within 30 days, it is deemed rejected. Sounds good right? Except when it’s deemed rejected, it goes out, not for continuing negotiations. The governor, like Pontius Pilate, has just washed his hands of this. It goes to arbitration. Now, if anyone did fall off to turnip truck yesterday, labor arbitrators are in union hip pockets. They don’t work unless there’s a union involved. Arbitration only takes place between an employer and a union. So of course they owe their jobs to the existence of unions. They are in the union’s pocket.
Okay. It goes out for arbitration. The arbitrated deal comes back. If not voted on in 30 days, again, it’s deemed rejected. It goes out, however, for final arbitration and never comes back. One man makes the final decision. The labor arbitrator in question.
The Democrats in the legislature, never go on record voting for the contract. It just comes into the legislature twice and sits there for 30 days and goes out finally for arbitration. So, there are no fingerprints. They can say, I didn’t vote for that contract. And of course they did, because they voted this contract approval mechanism into place.
Lee Elci: Who set that system up?
Red Jahncke: You know, previous to that, it was a one-step, Lee. Contract introduced to the legislature. If not voted on within 30 days, it was deemed approved.
Lee Elci: I remember that. I actually remember that. Yeah.
Red Jahncke: Yeah. Now they’ve got this cute little mechanism. Hey, maybe they hold a vote and all the Democrats vote to reject the contract, so they can play both sides of the game. They look like they’re holding the line, but it’s entirely a wink and a nod. It’s going to go out to a labor arbitrator who’s going to decide in favor of the unions, right. That’s a lead pipe cinch.
Lee Elci: Amazing man. Here. You open up a lot of eyes today, Red, as always.
Red Jahncke: Yeah. I don’t think we can afford 28,000 more to play this game, you know. Just one last point. If you’re less than 17 years, you have not earned your overtime benefit legally. The governor could go to court, challenge this provision and eliminate it. The legislature can pass legislation eliminating it. Those who are within three years of the 20 years service mark could challenge and probably, obtain some relief from the court.
But if you’re at year 15, you’re not within the formula for the calculation of your pension. You have no property right in that overtime portion of the ultimate pension calculation. So, nothing is taken away from you. Reform can take place today and this can be reformed. If there’s a will in the legislature. It will take tremendous will. It will take a Republican governor, and it will take a Republican red wave to get this done.
Lee Elci: So ,you’re telling me it’s not happening? Basically.
Red Jahncke: I think when people look at this stuff. Lee, it changes their vote. I talk to people [about] 33%, changes their vote right. All right.
Lee Elci: Would hope so, Red, but I don’t have a lot of faith sometimes in the folks who cast their votes. I got to run today. Thanks as always.
Red Jahncke: Hey, Lee. appreciate.
Lee Elci: You’ve got Red Jahncke. The-Red-Line.com.
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.