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CT State Employees 5th Highest Paid in U.S. – Raises and Bonuses on Top of That?

Connecticut Governor Lamont has proposed to award state employees significant wage increases and bonuses over three years. But before moving ahead, policymakers should consider whether public employee pay increases are warranted.

A recent study authored by one of us finds that the average Connecticut state employee already receives total pay and benefits roughly one-third higher than is received by comparable private sector workers in Connecticut. This 33% premium is the fifth highest compensation premium out of the 50 U.S. states. Lamont’s proposal would likely widen that gap.

According to state employee union documents, Lamont is proposing to award all unionized state employees three annual base salary increases of 2.5% and, for about two-thirds of employees, annual “step increases” of 2.0%. The wage and step increases are retroactive to July 1, 2021. On top of these increases, every employee will receive bonuses of $2,500 this coming May and $1,000 in July. The bonuses are pensionable.

The new study of compensation for state government employees, authored by Andrew Biggs, examines wages and benefits of state government employees in the 50 states, in each state comparing their compensation to that of private sector workers with similar levels of education, experience and other characteristics.

The use of the same methodology in all 50 states establishes a level playing field and produces genuine comparative results among the states. Moreover, comparing state and private workers in the same state eliminates the need for any cost-of-living adjustments.

State employees may not seem overpaid. But salaries are only part of the story.

The study also finds that fringe benefits are dramatically higher in state government than in the private sector. State employees in Connecticut accrue pension benefits that are roughly six times more generous than the employer contribution to 401(k) plans which predominate in the private sector.

Connecticut’s retiree health program for state employees is by far the most generous in the country. According to state accounting disclosures, the future benefits accruing to current Connecticut state employees are worth an extra $16,000 for each year of work. Retiree health coverage is nearly extinct for private sector workers.

Overall, total fringe benefits for Connecticut state government employees are over three times higher than for similar private sector workers, which more than makes up for slightly lower salaries in state government.

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CT Gov. Lamont Violates Federal Law With Pension Bailout; Then, Offers Sweetheart Deal To State Unions

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.

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The West Should Establish a No-Combat Zone in Western Ukraine

The U.S. and key NATO members should occupy western Ukraine and establish a no-combat zone. They should take action despite Putin’s nuclear threats, and they should act immediately, because the window of opportunity is closing.

A full NATO occupation of western Ukraine would preserve a free and independent nation in the west, while diminishing chances of Ukrainian success in the east. Yet those chances seem low at present, despite President Zelenskyy's incredible leadership.

In order not to provoke Vladimir Putin into direct conflict with NATO/U.S. forces, it would have to be a two-sided no-combat zone, off limits to both Ukrainian and Russian aircraft and ground troops and the transit of arms supplies to Ukrainians fighting in the east. It could not be a protected zone from which Ukrainian troops and planes could launch attacks on Russian forces to the east.

Suspension of arms support for Ukrainian fighters in the east would be a bitter pill for President Zelenskyy. Yet in the absence of any NATO action, the crisis is likely to end in total defeat for Ukraine (and the U.S., NATO and the West).

The east-for-the-west dynamic might offer a welcome off-ramp to Putin who has bitten off a lot, if not too much, to chew.

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Putin’s Nuclear Threat Has Worked So Far – What Now and in The Future?

On the first day of his invasion of Ukraine, Russian dictator Vladimir Putin warned Western nations not to intervene lest they face “consequences greater than any you have faced in history.” Three days later, Putin put Russian nuclear forces on some kind of elevated status.

No nations are intervening.

Five days into the war, Putin launched a long-range missile with near-nuclear destructiveness. What looked like a thermobaric missile hit Freedom Square in the center of Kharkiv, Ukraine’s second largest city.

Putin’s nuclear threat has succeeded in scaring off the West, allowing him to employ non-nuclear weapons that are nearly as horrific.

While the West cannot ignore the risk of a nuclear confrontation, it should not be frozen by fear of it in face of Putin’s monstrous acts, those already committed and those in prospect.

With his invasion of Ukraine, Putin has changed the Post-World War II strategic calculus. Until now, nuclear powers have followed the rationale of mutual assured destruction (MAD), namely that, if no one can survive nuclear war, much less win it, then no one will engage in it or even threaten it. This reality has served to channel military confrontations into conventional warfare for three-quarters of a century.

Putin has changed that. He is using nuclear threats and blackmail to create an umbrella under which to conduct one-sided conventional warfare, with his threats immobilizing any conventional military response by opposing nuclear powers.

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Biden in Retreat

President Biden sounded full retreat in his State of the Union address last night.

March 2, 2022

On the domestic front, that was a welcome development, since it signified the complete defeat of the radical socialist wing of the Democrat party.

On the foreign policy front, it was a sad day for America, the Free World and freedom loving people around the globe. Under Biden, America has led from behind on Ukraine, with the result that democratic Ukraine is all alone in its valiant fight against unprovoked, unjustified Russian aggression launched by a totalitarian dictator.

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Things Happen

After three years in office, Governor Lamont’s profile has become clear. He does not make things happen; he just lets things happen.

He has a growing scandal in his administration. He has called it a new development. We just learned that he was alerted to the problem in 2020.

February 16, 2022

He let the situation fester until an FBI investigation became public and forced his hand.

Also in 2020, yet in very public fashion, Lamont commissioned Boston Consulting Group to conduct a study of state government staffing and to recommend how to deal with a long-expected retirement wave that is now upon us.

BCG submitted its very worrisome findings almost a year ago. Since then, there is no evidence that Lamont has done much to deal with what is now a crisis.

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Ned Lamont Plays ‘Hide the Pension Bailout’

State governments can do many things with the federal aid they 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.

February 14, 2022

Gov. Ned Lamont’s just-released $48 billion two-year budget proposal funnels $2.9 billion in special deposits into the state employee and teacher pension funds. This is an amount equal to the federal aid the state received under ARP. These special deposits are over and above CT’s regularly scheduled $7.2 billion in state contributions to the two retirement systems.

February 16, 2022

Mr. Lamont outlined his plan for the federal stimulus money in February 2021, before ARP became law. “If additional federal aid for state and local governments is not enacted,” Lamont's budget proposal last year read, the state would draw down its rainy-day “budget reserve fund” (BRF) to fund its budget. But if “unrestricted” federal assistance came through, the state would use that money—rather than the BRF—to shore up the general budget. That would leave the BRF overstuffed. Under state law, when the BRF exceeds 15% of the annual budget, the excess must be moved into the pension funds.

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Blue State Blues: Connecticut’s Jobs Problem

Connecticut is a blue state, with a serious case of the job market blues.

In December, the state added just 600 jobs, a sad number, and even sadder because the likely cause is abandonment. That is, workers are leaving the state.

The December number leaves state employment at about 1,625,000, still about 75,000, or 4.4%, below its pre-pandemic level of 1.7 million in February 2020, according to the Connecticut Department of Labor. National employment is only 1.8% below its February 2020 level.

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The Pandemic Is Over. Pivot to the Economy.

In the early days of COVID, the key objective was herd immunity. Today, we are there, or very nearly so. We should declare victory. It has been a costly victory. It may be a Pyrrhic victory, unless we pivot rapidly from COVID to the economy.

It is time to address the economic damage wrought by the wholesale shutdown of the economy in response to COVID. At the outset, many observers, including this writer, expressed grave reservations about the shutdown.

The national debt has increased $5.3 trillion, or more than 30%, during the pandemic.

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The Big Apple Exodus to Connecticut Never Happened and Here’s Why

The suburban myth of a mass exodus from a virus-plagued New York City to the supposedly safe environs of Connecticut died with the recent release of Census Bureau interstate migration data.

While New York State lost over 400,000 residents to other states from April 2020 to July 2021, Connecticut attracted a mere 226 net new residents from other states. Incoming New Yorkers passed fleeing Nutmeggers.

And that’s the good part. Connecticut’s labor force plummeted by 100,000, or more than 5%, from February 2020 through November 2021, according to the U.S. Bureau of Labor Statistics. Only two state workforces contracted more.

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