Report by Paula Antolini
July 31, 2017 10:53PM EDT
Senator McLachlan: Connecticut Lost an Opportunity Today…
July 31, 2017
The Democrats’ approval of State employee union agreements that extend rich benefits for ten years to 2027 is a tragic lost opportunity to change the direction of our state.
Governor Malloy and Democrats tout savings in this deal but fail to recognize new costs that may create more instability for our state budgets and increase future unfunded liabilities. This agreement guarantees significant tax increases, more burdens on cities and towns and deep social service cuts.
THREE MAJOR PROBLEMS WITH LABOR DEAL
1) Ties the hands of future lawmakers and governors by:
- Locking the state into an extended contract that prohibits privatization of services
- Eliminating any opportunity to streamline state government. That means the legislature can’t consolidate administrative functions, close prisons or move services to private nonprofits to enhance and preserve care.
- Even more unsettling, language contained in the agreement arguably could eliminate the legislature’s current ability to make changes to pension and health care benefits in its entirety, thereby stripping us of any legislative control we have now to rein in labor costs in the future. If our financial problems worsen, this deal will not only lock us in to a contract for 10 years, it will also eliminate the legislature’s statutory authority to do anything about it after any contract expires. The result will be devastating and force lawmakers to turn to cutting services or implementing layoffs in tough financial times.
2) While the administration is quick to tout the savings in this deal, there has been little discussion about the costs contained in the agreement that could create more instability and increase unfunded liabilities this state cannot bear in future years such as:
- A one-time payment to state employees of 2.5% of salary plus $1,000. For an average employee this will result in a payment of $2,850.
- Guaranteed wage increases and step increases beginning in 2020.
- No end to longevity payments, rather just a delay.
- No capping or elimination of overtime from current state employees’ pensions.
- Allowing hazardous duty employees to purchase service time to count towards eligibility for retirement, an idea that was rejected in 2015 due to its potential to “dramatically increase” costs and unfunded liabilities.
- New costly provisions that a) extend maternity and paternity leave for months beyond federal law and b) allow state employees to use an unlimited amount of their sick time to care for another which could result in an employee leaving work for months or even years and the state being unable to refill that position.
3) The deal also continues to perpetuate and in some cases increase inequities in the current benefits system favoring certain state employees.
- For example, the deal allows the state to spend significantly more on those employees with the highest wages by continuing to go above and beyond federal law to cover Medicare Part B higher premium costs for high earning state employees.
- The governor’s deal would also ask more of non-hazardous-duty state employees, while allowing hazardous-duty employees to pay less in health care premium costs even though they retire at a younger age and receive benefits for a longer period of time.
- The deal also extends increased costs onto non-unionized employees but offers them no job security protections and continues to require non-union state employees to pay more for health care premiums. This incentivizes unionization of managers.
- Senate Republicans have offered a different concession plan that would achieve greater savings, reduce our unfunded liabilities, and create the stability our state employees who work hard every day deserve.
- Unlike other proposals, it does not include harmful wage reductions, excessive furlough days and does not change benefits until after 2022 once the current contract expires.
- Instead, it would put state employee benefits more in line with the benefits received by municipal union employees such as firefighters, police officers, and teachers and non-government union workers.
- It would create a fair system, with lower premium costs for those who make less.
- It could also be implemented by legislative action alone once the current labor contract expires because we are not interfering with existing contracts.