The Yankee Institute (YI), Connecticut’s premier economically conservative think tank, is exhorting state lawmakers to reject contracts that the Lamont administration negotiated with the State Employee Bargaining Agent Coalition (SEBAC).
YI began warning against the eventual fiscal consequences of the agreements after the public-employee labor coalition started publicizing its major features in mid-March. Later that month, the SEBAC’s 15 unions approved the agreements and, on April 1, Gov. Ned Lamont (D) requested that the Democrat-controlled General Assembly ratify the deals, characterizing them as “responsible and fair.”
Yet the contracts contain benefit packages for the majority of state workers that far surpass what is generally seen in the private sector. YI says that fact should alert taxpayers to the possibility of higher state taxes, compromised public services, and heightened government debt.
“The tentative SEBAC agreement would significantly increase costs, and put pressure on both the General Fund and the State Employees Retirement System,” Ken Girardin, the institute’s research director, wrote in a policy brief last week. “The General Assembly should reject the deal and instruct negotiators to return to the table.”
Unionized full-time state workers would see bonuses amounting to $3,500 and receive three annual pay hikes of 2.5 percent, which would be made retroactive to 2021. Roughly two-thirds of SEBAC-represented staffers would also get elevated to the next-highest salary level, a mechanism called a “step” raise.
Some classes of state workers would thus see their wages rise over one-fifth over the next 1.25 years. The agreements would also retroactively augment recent retirees’ pensions based on what their salaries would have been under the new contractual terms.
The think tank further notes that the contracts contain no consequential revisions to either current health insurance packages or retirement system contributions; the negotiations therefore missed what the institute saw as an opportunity to control the cost of benefits that are much more generous than private-sector workers typically receive.
Given what data Lamont has released so far, YI calculates that implementation of the deals would saddle the Constitution State’s taxpayers with more than $1 billion in new costs just in the first 2.25 years. And even that figure may lowball the eventual expense to Nutmeggers, insofar as the contracts call upon officials to undertake new salary negotiations as soon as 2024.
YI’s brief noted that the state has repeatedly approved lavish state worker contracts ever since the legislature began ceding major bargaining powers to public-sector unions in the mid-1970s. These contracts have resulted in numerous tax increases in recent years.
In terms of both taxes and debt, Connecticut finds itself in worrisome fiscal straits that generous public-employee contracts would only exacerbate. Last autumn, the state reported $95 billion in unfunded obligations. And research by the nonprofit Tax Foundation reveals that combined state and local taxes in Connecticut are nearly the highest among all states, second only to those in New York; Connecticut residents pay almost 13 percent of their earnings to their state’s government.
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Bradley Vasoli is managing editor of The Connecticut Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
Photo “Yankee Institute” by Yankee Institute.
