A state employee pension fact sheet released by the Office of Fiscal Analysis on Monday showed that, despite efforts to fully fund Connecticut’s state employee retirement system, the funding ratio has dropped from 48 to 38 percent since 2011. Connecticut’s unfunded pension liabilities for state employees totaled $21.2 billion as ...
It’s a Question of Fairness
The study we released today, Unequal Pay: Public Vs. Private Sector Compensation in Connecticut, shows that state employees make an average of 25 to 46 percent more than private sector workers with similar skills and experience.
This isn’t fair, and it isn’t sustainable.
The study highlights one of the primary reasons for our budget crisis, and at the same time provides a concrete solution – it’s time to reform public sector pay and benefits.
We already know that overspending by Connecticut’s state government lies at the the root of our budget crisis. Until this spending problem is addressed, our state’s “permanent fiscal crisis” will only deepen as state lawmakers continue to raise taxes, driving residents and employers out of the state.
In the past year, the cost of public employee salaries and benefits went up 6.6 percent. Meanwhile, tax revenues only increased by 2 percent. Gov. Malloy and the legislature responded to this imbalance by both raising taxes and cutting services. What we need now are solutions. How can we reduce spending while still maintaining the services for important government functions like education and care for our most vulnerable citizens?
Band-aids won’t work anymore. Connecticut lawmakers need to make structural reforms to public employee compensation, like so many other states have done.
These reforms include shifting public employees from defined benefit plans to the 401(k)-style defined contribution plans that nearly everyone in the private sector has. The state should also look at ways to reduce spending on state employee health care, including moving employees onto high deductible plans.
Every month that lawmakers delay these necessary reforms only adds to Connecticut’s fiscal woes. While other states are well past their recovery from the 2008 recession, Connecticut’s economy continues to sputter – raising the question of what will happen if the nation enters another recession. What would Connecticut do then?
The situation is dire, but we cannot lose hope. The solutions, while simple, are not easy – and they require political courage. Only when their constituents demand reform will the politicians get serious about finding a bipartisan solution to Connecticut’s troubles.
If you’re asking yourself what you can do, here’s the answer. Ask your lawmaker, is this fair? Tell your neighbor. Look for others who will join us in demanding the common-sense reforms that are necessary to restore balance and fairness in Connecticut.
Pay increases for state employees outlined in the 2017 SEBAC agreement were projected to cost $353 million annually by the Office of Fiscal Analysis, but emails between former State Senator Len Suzio, R-Meriden, and OFA analyst Don Chaffee show the ongoing cost may be higher. According to the 2017 email ...