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.
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.
Governor Lamont is violating the fiscal guardrails, converting them from a regime of budgetary discipline into a slush fund to pay Connecticut state employees higher wages than in 48 other states and, secondarily, to fund a few priorities of progressive Democrats.
The best way to defend Connecticut’s fiscal guardrails is to freeze state employee wages that are 33% higher today after six consecutive annual pay increases under Governor Lamont.
The guardrails are under attack by Democrats who want to increase spending. They want to lay their hands on the $6 billion in income tax revenue that the guardrails have diverted from spending and channeled into the state employee retirement fund (SERF) over the last six years.
Yet, cumulative annual dollar increases in state employee wages over the last six years total an aggregate of about $3 billion, according to data in the latest report of SERF’s actuary. In addition, since pensions are based on wages, SERF pension liabilities have increased $9 billion over those six years. That’s $12 billion that has been, or will be, spent on increased pay and benefits for state employees that could have been spent on the Democrats’ priorities.
In the simplest terms, had wage increases been limited to half the actual level, the aggregate wage increase would have been about $1.5 billion and, logically, the increase in pension liabilities only about $4.5 billion, freeing up $6 billion within the guardrails for the additional spending desired by Democrats.
Progressives want to bust the “fiscal guardrails” which both limit spending and redirect billions into the state’s drastically underfunded pension funds. They want to get their hands on the money going into pensions. They want to use that money to spend beyond the guardrails, which are designed to keep spending in line with the state’s economic growth.
Progressives have misdiagnosed the problem. Lamont has caused the problem. The obstacle to more spending is not the fiscal guardrails, but rather the 33% increase in wages that Lamont has lavished on state employees.
Under Lamont, unionized state employee wages have grown $1.1 billion from $3.4 billion annually when he first took office in 2019 to $4.5 billion last fiscal year, as catalogued in the latest report of the pension fund actuary.
If progressives want to spend more money, they need to freeze state employee wages.
Connecticut’s public sector is the most heavily unionized of the 50 states. Under Governor Ned Lamont, public unions have secured state employees six consecutive annual pay raises, cumulating to a stunning 33% compound increase.
December 27, 2024
They are the second highest paid state workers in the 50 states.
Their health care benefits are the most robust by far, according to studies in 2021 and 2023.
January 3, 2025
Their pensions ranked in the top quartile of states in the 2021 study.
But how does the state employee union (SEBAC) maintain its unique power?
December 28, 2024
How does it protect such lavish and unaffordable compensation in a state that is in the worst financial condition of the 50 states?
Governor Lamont and the Democrats have increased the wages of Connecticut state employees by a stunning 33%, awarding them six consecutive annual wage increases (two 5.5% raises, then four 4.5% pay bumps). A 2023 study found Connecticut state employee wages to be the second-highest of the 50 states.
December 5, 2024
Yet, Democrats in Hartford claim the state is having trouble recruiting new employees. How so? The active workforce grew from about 47,000 to 49,000 in the last fiscal year, according to the just-released 2024 Report of the Actuary for the state pension fund.
There was much back-patting about pensions in the capitol yesterday, as Governor Lamont congratulated Comptroller Scanlon, who lauded Treasurer Russell, both of whom paid homage to Lamont in turn.
December 3, 2024
Why the celebration? The state employee pension fund (SERS) inched up from 52% to 55% funding of the state’s estimated future pension obligations, according to the just-released report of the pension actuaries. Only in Connecticut would a 3% improvement be a cause for popping champagne corks.
It must have been “opposite day” in Hartford, because the real story is that startlingly little progress has been made on pensions during Lamont’s six years in office.
So, what's going on now in this state is an effort, in the community college system, to pay illegal immigrants to go to college. In an era when we have a nationwide and legitimate outcry about the cost of college and the burden of student loans, we're now looking to pay illegal immigrants to go to college.
