Governor Lamont has finally bowed to reality and imposed a de facto wage freeze on unionized state employees.
Yet, did Lamont announce the freeze? No. He remained closeted in his office and left it to Democrat Senator Cathy Osten to “announce” it.
As co-chair of the Appropriations Committee, Osten took the occasion of the Committee’s release of the legislative budget to “observe” that negotiations on a new labor union contract seemed unlikely to conclude with enough time for the General Assembly to approve it before the end of session on June 4th. So, no money is in the budget for a pay raise this coming fiscal year.
Osten said ““Everybody has indicated to me it [a new labor agreement] will not happen this year [before end of session].” Of course, “everybody” can only be Ned Lamont, since it is solely his responsibility to negotiate with labor unions.
Not only did Lamont not take responsibility for the freeze, but no one really acknowledged the reason the freeze was unavoidable, namely that the Democrats are running out of money. They are running out of money allowed to be spent under the constitutional spending cap. We’ll come back to the cap.
Now, unions don’t usually allow employers to miss deadlines to deliver pay raises. What’s going on? The CT Mirror newspaper reported that Drew Stoner, spokesman for the SEBAC labor unions, had no comment on “the timing of contract negotiations.”
So, here comes the inside baseball story. As The Mirror reported ”That doesn’t mean workers would forfeit raises. A pay hike eventually ordered for 2025-26 might be delivered late…” The Mirror continued “In other words, legislators could budget nothing for raises in 2025-26…[but, then,] deliver retroactive raises in 2026-27…” Here’s the crux of it, as The Mirror explained, “It just requires Lamont and the unions to take their time reaching a deal.”
So, Lamont has no intention of zeroing out state employees. He intends to give them raises. He desperately wants to run for a third term, and he cannot win without the unions.
But why the charade?
Because of the spending cap. Lamont and the Democrats have exhausted their bag of tricks to evade the spending cap. Yet, they still want to spend. In the new legislative budget they are outrightly exceeding the cap by $215 million in FY 2026. If they included the $129 million originally reserved for a wage increase, they would be $344 million over the cap, evidently an amount just too big to ignore ($215 million is OK? Really?).
To say the budget is a hot mess is understatement. And herein lies the rub for state employees. Expecting a retroactive pay raise is betting that the hot mess can be cleaned up. That’s a bad bet.
Consider the statements made by the Democrat co-chairs of the Appropriations Committee in announcing the new legislative budget. As CT Mirror reported,
Rep. Toni E. Walker, D-New Haven said “We need to stop looking at the storm down in Washington and look at the storm that’s here in Connecticut.”
Sen. Osten said “There are a lot of things that need[ed] to be addressed.” [She added] that the panel tried to stabilize those programs most at risk before expected federal cuts blast big new holes in numerous state programs.
There are two takeaways. First, there is a storm in Connecticut, despite that Lamont has been crowing about a fabled “Connecticut Comeback” for the last several years, and despite that Democrat legislators, amazingly, think there are “surpluses” available to spend. “Storms” and “Comebacks” and “surpluses” don’t make sense in the same sentence.
Second, even if there were an easy way to make the state’s storm clouds go away, there remain inevitable federal assistance cutbacks coming down the pike.
The de facto wage freeze is more likely to become permanent, if not extended, than it is to be reversed retroactively.
Don’t cry for state employees. They are the highest paid in the 50 states. Already, under Ned Lamont, they have received six annual pay hikes cumulating to 33% — 10% more than average private sector workers and 8% ahead of inflation. Before their sixth raise, their wages ranked second highest in the nation. Their health care benefits, both on the job and in retirement, are tied with California for most generous in the nation. Retired state workers enjoy the highest pension benefits ($45,691 in FY2023), well ahead of second-place Colorado ($41,152).
Nevertheless, do not underestimate the voracious greed of state employee unions and do not fail to understand that it is their business to be greedy. Just like Wall Street expects public companies to maximize growth and profit, unions exist to expand membership and increase members’ compensation. They are not in business to sacrifice for the state. Just the opposite. They will be looking for every way to obtain a retroactive pay hike and robust increases going forward.
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.