States have done many things with the federal aid that state governments received under last year’s $1.9 trillion American Rescue Plan (ARP). One thing they are expressly prohibited from doing is pouring that money into pensions for well-paid public employees. Connecticut is doing it anyway.

In February, Gov. Ned Lamont’s released his $48 billion two-year budget proposal. It funnels $2.9 billion in special deposits into the state employee and teacher pension funds. This is an amount equal to all the ARP aid the state received. These special deposits are over and above Connecticut’s regularly scheduled $7.2 billion in state contributions to the two retirement systems.
This month, Lamont has proposed to pay state workers a $3,500 bonus payment, or 4.5% of the average employee’s wage of $77,000. In addition, he intends to pay 2.5% annual wage increases over three years while also paying “step increases,” which average about 2% annually.














