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.
The “one big beautiful bill” is poised to clean up a financing scheme that lets states abuse the Medicaid program for extra money.
Forty-nine states use so-called healthcare provider taxes to siphon money from the federal Treasury, supposedly to fund health coverage for the poor.
State governments tax providers—mainly hospitals—but return much of the money right back to the hospitals, labeling it a “supplemental payment.” Under 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. The state continues to rely heavily on the gimmick.
Some public sector union abuses are not only alive and well, but more egregious than ever.
In Connecticut, state employees are retiring with pension benefits higher than their last salary. How? It's a classic scheme known as "spiking."
Tens of thousands of Connecticut state employees enjoy the unlimited right to spike overtime —— that is, to work enormous hours of overtime just before retirement for the sole purpose of boosting the pensions calculation, which includes overtime pay in immediate pre-retirement years.
Senator Ron Johnson and others gave the One Big Beautiful Bill a cold reception when it arrived in the Senate, warning that the bill will balloon deficits and debt, which are already ginormous. Jamie Dimon, J.P. Morgan Chase CEO predicted a crisis – not if, but as soon as six months from now.
There’s no greater contributor to the recent rapid growth in deficits and debt than Medicaid under the Democrats, and, thus, no more appropriate GOP target financially and politically.
Medicaid’s explosive growth results both from recently expanded enrollment and from long-running problems in the Medicaid provider tax scheme that forty-nine states employ.
The Bill controls enrollment somewhat by imposing work requirements on able-bodied single childless adults. Yet, House Republicans punted on the Medicaid provider tax scheme, which a 2018 Senate report called a “shell game.”
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:
Governor Lamont rolled out a stealth hiring freeze last week. There was no press release. Lamont’s office declined to comment.
Lamont has been on a hiring binge. The unionized workforce has swelled by about 5% over the last two full fiscal years, according to figures in the latest pension fund valuation report as of June 30, 2024.
On top of that, of course, unionized state employees have received a 33% pay raise, That’s a double whammy.
The total payroll cost for unionized state employees has ballooned $700 million from $3.8 billion in fiscal 2022 to $4.5 billion in FY2024, or 18% in just two years? That would be an embarrassment to anyone claiming to be a fiscal moderate. Thus, Lamont’s silence.
