Ever since former Governor Dannel Malloy announced famously to a state employee union rally in 2014 that “I am your servant,” the general public in Connecticut has grown increasing aware and upset about excessive state employee compensation.
Late last month, I wrote a column in this newspaper and the Hartford Courant calling upon Governor Lamont to use his emergency powers to cancel, suspend or delay a large pay raise that all state employees were about to receive on July 1st, a pay hike that Lamont himself had called unfair in the context of massive private sector job losses. State employees are protected from job losses by a contractual no-layoff guarantee they have enjoyed since 2011.
The state employee unions pushed back against my column, including in a letter to the editor of the Courant by Ronald Nelson, President of AFSCME Local 749 representing 1,500 state judicial and criminal justice employees, most of whom have to have been idle during recent months because state courts have been closed.
Nelson identified an error in my column while making one of his own. We’ll get to that.
Of far greater significance, Nelson repeated an astounding claim made by Dan Malloy in 2017. Malloy claimed a whopping $24 billion in “real savings” over 20 years from concessions allegedly made by state employees in the 2017 agreement that he negotiated with the State Employees Bargaining Alliance Coalition (SEBAC).
This outlandish claim has gone largely unchallenged. Indeed, Democrats codified it in a state law requiring Comptroller Kevin Lembo to prepare an annual report on the actual savings achieved.
The largest portion of Malloy’s $24 billion claim were wage savings, which cumulated to $9.6 billion through 2037, according to Malloy and his Office of Policy and Management.
The falsity in Malloy’s claim is not buried in complex numbers. It rests upon an outrageous assumption, namely that state employees are entitled to raises each and every year as if annual raises are the virtual equivalent of a birthright. If employees don’t actually get a raise, the raise they don’t get is called a “saving.”
So, who established the amount of the “raise they didn’t get” in 2017? Malloy did. In his budget proposal, he proposed hundreds of millions of raises. Then, he negotiated wage freezes and called the difference “savings.”
How do we know this? From the documentation that OPM published in support of Malloy’s claimed savings. On page 1, entitled “Source of SEBAC Agreement Savings Estimates,” under a sub-header of “Wage Estimates were developed by OPM,” it states “Elimination of potential FY 2017, 2018, and 2019 increases: Removes all of the proposed RSA increase in the Governor’s recommended budget: $300.6 million in FY18 and $486.2 million in FY 2019.” [Emphasis added.]
The raises which state workers “didn’t get” were simply figments of Dan Malloy’s imagination – they were “potential,” “proposed” and “recommended.” There was no existing wage contract between the state and state employees under which workers were legally entitled to actual raises that, then, they gave up in negotiations with Malloy.
Not only did Malloy claim over $700 million of wage savings in his ultimate budget for the fiscal 2018-2019 biennium, but he claimed almost $9 billion more by claiming that the annualized amount ($492 million) of the “raises they didn’t get” constituted savings in every one of the next 18 years. By this tortured logic, Malloy could have claimed $49 billion over the next century!
Now, returning from fantasy land, let’s consider the raises that state employees did get last year and a few days ago on July 1st. They are real money. Together, they amount to $356 million in real annual compensation this year and every year into the future.
My column highlighted the unfairness of these pay raises, given prevailing massive private sector unemployment and in light of the enormous 40% to 50% compensation advantage state employees enjoy compared to the Connecticut’s average private sector worker – in most recent years, the biggest advantage among the fifty states. Mr. Nelson was completely silent on this issue of equity.
Nelson did find an error in my column. I cited the 2019 and 2020 amount of $356 million as the raise Lamont could have cancelled on July 1st. Naturally, he could have cancelled only the 2020 half.
Nelson made a similar error. While citing “six hard wage freezes” since 2010, he overlooked the “one-time payment” paid to employees in lieu of a raise during the 2019 wage freeze. That one-timer totaled $88 to $105 million, according to state reports.
Errors in the $100-200 million range, such as mine and Nelson’s, pale in face of the ginormous $9 to 24 billion in false “savings”/concessions that Malloy, the Democrats and unions negotiators have claimed in order to hide the opposite reality, namely the uninterrupted gravy train that state employees enjoy.