Markley: Claimed Savings Rest on an Outrageous Assumption

In a lengthy recent letter to the editor (entitled “Taxpayers Are Getting a Bargain with Public Employee Compensation”) Sean Goldrick charges that a February column by Red Jahncke (“Lamont’s Budget: A Game of ‘Caps,’ Except for The Privileged Few”) presents “a fallacy based on falsehoods.”

In fact, the fallacies and falsehoods are in Goldrick’s own piece.  One I can rebut from direct experience.  I was serving in the Connecticut state senate in 2017, when then-governor Dannel Malloy claimed that the state employee contract he negotiated that year saved the state $24 billion, including $9.7 in wage savings. Jahncke’s column focused on that $9.7 billion. 

Goldrick asserts that the state’s official actuaries, Cavanaugh McDonald, “estimated that unionized state workers agreed to give-backs under Democratic Governor Malloy that will total more than $24 billion over a 20-year period.” That is simply not true: Cavanaugh McDonald offered no such estimate. The claimed $9.7 billion in wage savings was a figure arrived at by Malloy’s own Office of Policy and Management.

In a column which appeared in this newspaper last summer under the headline (“Claimed $24 Billion in Savings on State Compensation Based on Outrageous Assumption”), Jahncke explained the spurious method by which Malloy concocted his outrageous claim of wage savings. I quote from Jahncke’ column:

The falsity in Malloy’s claim is not buried in complex numbers. It rests upon an outrageous assumption, namely that 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.

Obviously, Malloy’s $9.7 billion claim was fraudulent, and Goldrick’s criticism of Jahncke is simply wrong.

Joe Markley
Plantsville, CT

Joe Markley is a former State Senator, District 16, and Republican candidate for Lieutenant Governor in 2018

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