Posts published in “Connecticut Newspapers”

To end the government shutdown, Democrats are still demanding a reversal of Medicaid reforms in the One Big Beautiful Bill Act that shift back to the states about $900 billion of spending that has been assumed by Uncle Sam in recent years in contravention of Medicaid’s original compact as a 50/50 financial partnership between Uncle Sam and the states.

Since states cannot run deficits – most state constitutions require balanced annual budgets, a return to the original arrangement would put a brake on the hyper-growth of the Medicaid program.

This runaway spending has been abetted by the Center for Medicare and Medicaid Services (CMS). Moving decisions closer to the people would curtail the oft-dubious behavior of federal bureaucrats.

The One Big Beautiful Bill is now law. It spells the beginning of the end for an abusive Medicaid financing scheme that states, including Connecticut, have used to siphon money from the federal Treasury, supposedly for health coverage for the poor.

How does it work? State governments tax providers—mainly hospitals—but return much of the money right back to the hospitals, labeling it a “supplemental payment.” With this label, the returning money triggers a federal matching payment.

The federal matching funds have financed both Medicaid’s explosive growth and state spending unrelated to the program.

Connecticut used federal funds from provider taxes to close its enormous state budget deficit in 2017. Connecticut has continued to rely heavily on the gimmick.

Connecticut has continued to rely heavily on the gimmick.

Who are Connecticut’s neediest, Medicaid beneficiaries or state employees?

According to fearmongering State Democrats, the shift of Medicaid spending from Uncle Sam back to the states will overburden the State with many additional hundreds of millions of annual state spending. If so, where will the state find hundreds of millions for simultaneous raises for state employees?

State labor unions want to grab their money before that conflict becomes apparent.

Last week, the media reported that the state is running huge “surpluses.” Yet, Democrats say state programs are being severely squeezed; they want to bust the “fiscal guardrails” and spend more. Republicans say the state is deep in debt, and in danger of falling even deeper; they want to preserve the guardrails.

The public is confused. If there are surpluses, why is program spending being squeezed? If there are surpluses, why is debt growing?

The confusion persists because the elephant in the room is seldom discussed....

Connecticut Senate and House Republicans have proposed a two-year wage freeze for state employees. No surprise. State employees under Governor Lamont have received six consecutive annual pay hikes that have elevated their pay by 33%, a whopping amount not seen in the private sector.

The first test of Republican resolve will come this week when a vote on a proposed wage increase in the fourth “open” year of a very generous contract for state police is expected to be called for a vote.

This vote is an obvious trap, with Democrats suggesting that a vote against the contract is a vote against law and order.

The trap is part of a strategy to maneuver the GOP into approving a robust pay raise for state police in order to justify an equal increase for the rest of state employees.  

That’s the financial dimension. Now to the political dimension. In 2020, virtually every police union in the country at every level endorsed Republican candidates.

Nothing has happened in Connecticut to change that extremely strong sentiment.

Lamont just imposed a de facto wage freeze on CT state employees, but he didn't announce it publicly. Why?

Gov. Lamont is about to submit a new state employee contract to the General Assembly for legislators’ approval. The current wage agreement expires in less than three months.

Yet, with union-friendly Democrats holding supermajorities in both the Senate and the House, approval is a virtual certainty, why waste time on this? Because even free-spending Democrats may not want to go on record approving the largesse that Lamont has ladled out to unionized state employees and seems poised to ladle out again. Herein lies the suspense in this story.

Governor Lamont gave an interview to CT Examiner last Tuesday, in which he was asked: “After annual pay raises for state employees amounting to 33 percent since 2019, would you consider a wage freeze similar to one put in place by your predecessor, Dannel Malloy…” His answers were glib and uninformed.

Number One: His first response was to say, “I have a hard time hiring.”

No. He has had no difficulty whatsoever. 18 months ago in December 2023, Dan Haar of Hearst Media wrote an article entitled “CT state hiring is up sharply.”Haar stated:

“So, in just one year, Connecticut agencies hired a net new 2,000 workers.”

Haar reported that the executive workforce reached 26,600 full-time employees, about equal to its pre-pandemic level. That’s an 8.1% expansion in just twelve months.

Related Content: Trouble Hiring CT State Employees? Really?

Number Two:

Overgenerous Connecticut state employee compensation is attracting increasing attention. After a 33% wage increase under Governor Lamont, Republicans led by Senate minority leader Stephen Harding are calling for a two-year wage freeze.

The GOP is not stopping there. Senator Rob Sampson has proposed a bill eliminating overtime from the calculation of state employee pensions, thereby preventing “overtime spiking,” a pension abuse examined in a just-released Yankee Institute study conducted by The Townsend Group which I head. Representative Tom O’Dea has entered a bill capping pensions at $150,000 per year; many overgenerous pensions result from OT spiking.