Connecticut’s teachers may be better off with a 401(k) style, defined contribution retirement plan than under Connecticut’s massively underfunded pension system, according to some number crunching. Assuming a 6.5 percent employer match and adjusted for inflation, a defined contribution plan could yield similar retirement savings to that of the existing ...
Agreed, State Employees Are Not The Problem
The recent op-ed in the Courant is correct on one count: state employees are not the problem.
If not state employees, then who is to blame for the seemingly perpetual state budget deficit? The problem is politicians who, and this won’t surprise anyone, made promises they couldn’t keep.
For decades, Connecticut leaders failed to show, well, leadership. Instead of being real with state employees, politicos promised them more and more benefits, especially benefits for which taxpayers wouldn’t see a bill for decades. That is why retiree healthcare and pensions make up such a large portion of the cost of paying state employees.
Retiree healthcare and pensions increase risk to taxpayers and have difficult to predict costs, but the ultimate reason why they are ill-suited for the public arena is that they are easy to manipulate. We all know that politicians prefer ribbon cutting to bill paying. Overpromising retirement benefits for state employees is the ultimate example of cutting the ribbon and running, leaving the rest of us to pay the costs.
I sympathize with the desire to improve the income and benefits of everyone in Connecticut. Absolutely, let’s do it. To bring every middle class household (excluding the ones that already include state and local employees) up to the level of benefits enjoyed by state employees would cost something like $17 billion dollars. To put that into perspective, that’s more than $11,000 per family in Connecticut.
Now, why do so many average citizens care about state employee benefits? All taxpayers share in the cost of state employee benefits. (Yes, this includes state employees who pay the same taxes.) While the costs are shared by all, the unique benefits are not.
It isn’t fair that an office worker in Bridgeport pays more taxes so that a state employee doing similar work in Hartford can get better benefits.
How valuable is the engineer who designed the road you are driving on? How about a social worker? Since individuals have infinite value, not measured by their incomes, a better question is “how much would it cost to find someone else to do the same job?”
By changing the question, we can identify a fair and sustainable level of pay for state employees. After all, they aren’t the problem.
Read more about fair and sustainable pay for Connecticut state employees in the latest Yankee Institute study, Unequal Pay.