As state residents and conservative-leaning groups pushed back in testimony today on the $1.86 billion price tag of a four-year agreement between the state and unions representing 46,000 public sector employees, both the administration of Gov. Ned Lamont and union representatives warned that it would cost more to reject the deal.
The agreement negotiated between Lamont’s administration and the State Employees Bargaining Agent Coalition would give covered employees a 2.5 percent raise this year and each of the next three years. It would also pay union state employees who were employed in July 2021 a bonus of $2,500, and pay those employed this July another $1,000.
The Appropriations Committee approved the proposals along party lines, and they will now go to the full House and Senate for approval.
Office of Policy and Management Secretary Jeff Beckham told lawmakers on the Appropriations Committee in a public hearing Monday that, considering recent budget surpluses, a surplus projected in the current fiscal year, and the current level of inflation, a 2.5 percent annual raise was affordable and less than what the unions would likely have been granted in arbitration.
SEBAC attorney Dan Livingston told lawmakers that before the unions agreed to this deal, an arbitrator had already ordered the state to pay the union employees a 3 percent raise in the first year. Livingston said the unions agreeing to 2.5 percent raises in exchange for the two bonuses saves the state general fund $29 million a year compared to 3 percent raises without bonuses – about $150 million in total.
And, Livingston said, that 3 percent is less than the unions might be seeking now given the current rate of inflation.
He told legislators this was the first labor deal since the 2008 recession that was negotiated while the state was not in a fiscal crisis. The three agreements negotiated in that time included six wage freezes in the 10-year period between 2010 and 2019.
“Some may say this was to avoid layoffs, but the truth is the vast majority of members who voted for these agreements were at no risk of layoff at all,” Livingston said. “They voted for their sacrifices to protect their junior sisters and brothers, but equally to protect the critical public services upon which people depend.”
Beckham and Livingston said the two sides agreed on everything except the final year raise, and decided to move ahead without that piece, which they have until January 2024 to negotiate.
“We will have the opportunity to assess where the economy is, where the state’s fiscal position is, and see whether or not there’s any adjustment we will be able to make that year,” Beckham said.
Opponents say costs unsustainable, and taxes already too high
Ken Girardin, research director with the conservative think tank Yankee Institute, told lawmakers that the proposed deal would “radically diminish” the legislature’s control over state dollars, since it can’t easily make corrections like it can with other appropriations.
“Instead, you’re facing veiled threats,” Girardin said. “That’s a nice budget you have there, it would be a shame if someone took it to arbitration.”
Girardin said that the fact the final year of the contract hasn’t been negotiated is a major concern, since lawmakers don’t know the true cost of it. Girard said Lamont is under pressure to hire more state employees, which would cause the cost to increase.
Len Suzio, a former Republican state senator, told the committee that the administration was misrepresenting the state’s financial picture, which he said is “dire” and being masked by massive amounts of COVID-related federal funds. Suzio said the pay increases included in the deal aren’t sustainable, especially in the later years when Connecticut won’t be benefiting from COVID-related funding.
State Rep. Mike France, R-Ledyard, who voted against the deal, said that he was also concerned the costs were not sustainable – especially the additional pension obligations created by the raises and bonuses.
“There are questions outstanding, in my mind, related to actuarial costs going forward that I think are not resolved,” France said. “And unfortunately, we won’t really know until January of next year when the actuaries assess this.”
Members of the public who were not lawmakers and or did not identify an affiliation with any political group expressed frustration with the price of the deal. The tax burden in Connecticut is already too high, some said, and it wasn’t fair to award state employees raises using money from Connecticut residents who are struggling to pay high taxes.
Members of the public also warned Connecticut lawmakers that simply increasing pay is not going to solve the staffing issues in state government, given, they said, that the private sector is dealing with the same issues. Dennis Crowe said that the pay raises were not fair to private businesses that will have to compete with higher public sector salaries to hire workers.
“Gov. Lamont said he’s trying to compete in the marketplace for people to take the jobs, and so is everybody else,” Crowe said. “And simply saying, well, the government’s going to win in hiring people is not going to be fair to the taxpayers of the state.”
Unions: Raises needed to address staffing issues
Sean Howard, a corrections officer and president of the American Federation of State, County and Municipal Employees Local 387 – which represents staff at the Cheshire Correctional Institution – told the committee that staffing at Connecticut’s prisons is at an “all-time low.”
The prisons have a smaller, but tougher population now, and assaults against both inmates and corrections staff have increased, Howard said. The short staffing is creating a dangerous situation, he said.
“There’s a facility where 25 percent of the staff has less than six months on the job,” Howard said. “Staff has been ordered into overtime to an exhausting and unhealthy extent. I see officers who have foregone retirement to stay and train new officers, because their sense of duty won’t allow them to leave the new officers and the public vulnerable.”
Anthony Soto, a Department of Labor wage and hour investigator, told lawmakers that in the past 15 years, the state workforce has been reduced by more than 20 percent, and the state is facing a wave of retirements on top of existing staffing shortages.
Last year, average weekly salaries increased 6 percent, while those of state employees remained flat, he said. And the state employees had conceded pay increases and benefits that saved the state $24 billion over the past 12 years, Soto said.
“That’s $24 billion that we could have used to put food on our tables, fuel in our vehicles, and have an opportunity to retire with dignity,” Soto said. “To say anything other than these contracts have been earned is a lie.”
Nicole Krassas, political science professor at Eastern Connecticut State University and president of the school’s chapter of the American Association of University Professors, told lawmakers that members of that union had agreed to wage freezes in the past “to maintain the integrity of the education” it offers.
But now salaries at state universities aren’t competitive compared to other universities, she said. The universities need wage increases to continue to recruit, especially at a time when people are leaving education as a result of the COVID-19 pandemic, she said.
Krassas said that, in her opinion, the Office of Fiscal Analysis estimate that pegged the contract cost at $1.86 billion was likely overstating the cost, because it’s based on the assumption that people will remain on staff and earn their raises.
“However, we know that several thousand state employees are going to, or have already, retired this year. We also know that many of those positions won’t be refilled,” Krassas said. “And we know that the positions which are re-filled will be refilled at lower pay scales which create different pension liabilities.”
Editor’s Note: Ken Girardin’s name was misspelled in the original version of this story.