Posts published in “TV/Radio”

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’s 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.

Lee Elci: All right, here we go. Red Jahncke is joining us. National columnist, our Wednesday guest. Good morning sir. How are you today?

Red Jahncke: Hey. I'm good. Well, let's kind of jump into it, okay? You know, the juxtaposition is just jarring. The talk in Hartford, as we know, has been all about surpluses, surpluses, surpluses and why can't we, the Democrats saying why can't we spend the surpluses? And, of course, the surpluses are not surpluses. They are necessary payments into the state pension fund because without the surpluses the pension fund would go backward.

So, the public hears all about these surpluses, surpluses, surpluses. Then what does Ned Lamont do on Monday morning? He declares a financial emergency.

Lee Elci: All right, so let me ask you a couple of Trump related questions. He's basically, touring the Mideast, as you had said, the Trump of Arabia tour. What are your thoughts on some of this stuff?

Red Jahncke: Yeah, modern day Lawrence of Arabia. He's in Riyadh with MBS, and, celebrating to beat the band. He has defacto recognized the new regime in Syria, and he's threatening Iran. I just read that they've had a fourth round of talks that have gone nowhere. Right. So, I have no extra insight on what that means. He's got the deal with the Houthis: If you don't target our ships, we won't blast you to kingdom come. And of course, Israel is upset because there's no mention of the Houthis having to withhold fire on on Israel. He's gone all in, in Arabia.              

Lee Elci: Right. Well, you mentioned Syria. What's your thoughts? Is that a good thing or a bad thing? Have they paid enough of a penance for the things that they've done in the past?

Lee Elci: You’ve written a column “12 ways Lamont Fails to Grasp the Impact of Giving State Employees a 33% Raise.” And I know we've been talking about this a lot. But here's what I wanted to do today. I have a set of dice, Red,. I'm going to roll the dice and whatever number comes up, we'll talk about that particular issue in your column. How's that sound?

Red Jahncke: That's that's great. All right.

Lee Elci: Here we go. The dice are out and the number is six. I would like you to talk to me about number six, Lamont saying, “Remember, we've had a pretty good inflation in the last six years.” Well, inflation over that period was 2.5%. Take it away, Red,

Red Jahncke: First, just a little bit of context. Labor cost, is the largest single expense that the state has.

But, I'll go to number six. Yes, 33% for state employees under Ned Lamont. Six years inflation over the period, 25%. The average private sector worker in the nation 23%. State employees are 10% ahead of their compatriots in the private sector. Just not fair, just not sustainable. I mean, the private sector is what generates the economic activity that supports the government expenditures we make. If the private sector is lagging, we can't sustain a 10% premium for public sector workers.

Lee Elci: That's right, I forgot your regular reminder that Connecticut state employees have received a 33% wage increase under Governor Lamont compared to a 23% increase for private sector workers. So how about a little more details for those of the listeners that are joining us for the first time?

Red Jahncke: I think the key here is the the misunderstanding and the dysfunction at Hartford, that surrounds this whole issue. So Governor Lamont, in his budget proposal issued in February, laid out all the evidence any would one would need to appreciate the calamitous impact of these wage increases and benefit increases for state employees.

So let me roll out a couple of a numbers from the Office of Fiscal Analysis. The governor put $500 million in what's called the Reserve for Salary Adjustments. That is an account where money is put for future wage increases for state employees. And the fringe benefit increase under the governor's budget. That is $740 million. Together, that's $1.2 billion going to state employees.

Also the required calculation of the constitutional spending cap: only $2.2 billion of an increase in allowable spending. So you have $1.2 billion going to state employees [out] of the $2.2 billion. Very little left over to spend on services for citizens.

Lee Elci: I was going to start this, the ghost of Malloy, fiscal discipline, and a haunting legacy. So in your columns, you've contrasted that, Governor Lamont's lavish 33% wage hikes, again, with the former governor's imposition of three wage freezes as a rare act of fiscal courage. Where where are we with that now?

Red Jahncke: If we went back in a time machine -- seven, eight, nine years now? The concept that you and I would be praising Dannel Malloy, an arch Democrat, would, would seem as if we were Rip Van Winkle coming back from 20 years sleep with no idea what was going on. But the fact is Malloy took the action that was required at the time. Lamont is ducking and dodging and bobbing and weaving and will not take responsibility. Lamont is taking one item after another off budget, which is a violation not only of the fiscal guardrails, but it's a violation of good budgeting practice. I mean, what's the point of a budget if every time you want to spend more, you just go off budget and spend it off budget?

Lee Elci: 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.

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. Since the contract has not been announced, 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: Your recent column discusses Governor Lamont’s quiet implementation of a hiring freeze on state employees. You describe this as a stealth move. Why is he doing this silently?

Red Jahncke: Well, I think he's been caught off guard. State employee compensation has skyrocketed, consuming a large portion of the budget and squeezing out other spending. The question becomes: What do you cut? Lamont is under significant pressure from progressives in his party, so he halted hiring within the state workforce for the remainder of March, April, May, and June to remain within the budget—at least temporarily. However, this is just a preview of a much larger impending problem.

Lee Elci: You have to admit, this seems like a small victory. You've been addressing the 33% wage increase over the last five or six years. This hiring freeze appears to be a win.

Red Jahncke: Yes. Labor costs are determined by two factors: the pay rate and the size of the workforce. We've criticized the state for both significantly increasing pay rates (a 33% raise) and simultaneously expanding the workforce. That's the classic double whammy. Over the past two years, the cost of the unionized workforce has risen by 18%. Many people are confused about fiscal guardrails, particularly the volatility cap. However, the key issue here isn't the fiscal guardrails themselves but rather the excessive compensation of state employees crowding out other spending.

Lee Elci: Lamont has a Yale background he often references. Still, he didn't seem to anticipate the combined impact of pay rates and workforce size on labor costs. What does this suggest about his fiscal acumen?

Lee Elci: All right, so I have a question for you. You were mentioned at the Yankee Institute for adding to the massive body of evidence of favoritism by Connecticut Democrats toward government employees and unions. Could you elaborate on some key pieces of evidence from that body that you found most compelling?

Red Jahncke: Well, I think what you're referring to is noteworthy. A couple of weeks ago, this issue of state employee compensation and how extraordinarily generous it is broke into the news cycle. I'm happy that last week, Hearst newspapers ran two editorials of their own suggesting that state employee compensation should be reviewed and a wage freeze considered.

To answer your specific question, this began back in the 1930s and '40s when Franklin Delano Roosevelt went on the record saying that unions had no place in government. The function of a union is to negotiate across the table from an employer, which works in the private sector but not in the public sector, where both sides are on the same side of the table.

Lee Elci: All right. Red Jahncke is with us, and we're chatting again. He's been a major driving force behind conversations about employee wages, Governor Lamont, and everything associated with that. So let me ask you this. One of the editorials in Hearst was about Governor Lamont’s decision to offer special treatment to employees affected by DOGE reductions. What's your take on this?