New State Employee Contract Estimated to Cost $1.86 Billion over Four Years


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HARTFORD – A plan to give union state employees 2.5 percent annual raises and benefits will cost the state about $1.86 billion over four years, according to a report just released by the legislature’s Office of Fiscal Analysis.

The deal negotiated between Gov. Ned Lamont’s administration and the State Employees Bargaining Agent Coalition comes as state agencies are facing waves of retirements and the state is looking to recruit and retain employees across its departments.

The agreement, if approved by lawmakers, would give the 46,237 state employees covered by the agreement a 2.5 percent raise this year – retroactive to July 2021 – next year, and in 2024. The state and union have until January 2024 to negotiate pay for the 2025 fiscal year, which is the last year covered by the agreement, according to the report.

Employees covered by the agreement would also receive a total bonus of $3,500 this year – including a $2,500 bonus retroactive to July 2021, and another $1,000 bonus this July, at the start of the 2023 fiscal year. These “special lump sum payments” will be prorated for part-time employees, according to the report.

Combined with annual salary increment increases, pay raises are expected to cost $1.63 billion over the four-year deal, including $626.7 million in the current biennial budget that runs through June 2023, according to the report. That could increase depending on what is negotiated for the 2025 fiscal year.

Added benefits are projected to cost $240.1 million over the four years, including $92.5 million in the current biennium. The increased costs are partially offset by a $60.2 million expected savings in the voluntary specialty drug discount program for state employees, according to the report.