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Six Conflicts of Interest behind Connecticut’s Budget Deficits

Connecticut continues to struggle with budget deficits. In the past five years, our lawmakers passed the two largest tax increases in state history. And every year in recent memory the budget begins the year in balance and slowly falls behind as the year goes on.

Why does this happen repeatedly, year after year? Here’s why: The cost of benefits for government employees is growing much faster than tax revenue. Some categories of benefits are growing nearly 10 percent each year while tax revenue is growing at 2 percent – at best. That means other aspects of government – services for people in need, road maintenance, town aid – face cuts even while overall spending grows.

These benefits could be reformed, but they aren’t because of conflicts of interest present throughout the system.

That’s right, conflicts of interest keep the budget out of balance.

1. Union employees negotiate with the governor for their benefits, but lawmakers automatically get the same benefits that the unions negotiate. That means your representative personally benefits from giving state employees generous health insurance, pensions and retiree healthcare.

2. State managers, including those who assist the governor in negotiations across the table from state employee unions, get the same benefits they negotiate with the unions. Just like lawmakers, these employees personally benefit from the generous benefits they “negotiate.”

3. Lawmakers have the power to approve or reject union contracts. However, if a union contract doesn’t come up for a vote, it automatically goes into effect after 30 days. That means lawmakers don’t have to take a position. And it means union contracts rarely get very much attention at the Capitol.

4. If a union contract conflicts with state law, the union contract takes precedence. Lawmakers passed a law years ago allowing union contracts to automatically amend state statute if the two conflict.

5. The unions have their own representatives at the Capitol. Yes, they have their lobbyists like every other special interest group, but they also have lawmakers working for them. Right now, two state representatives, including the House Majority Leader, and one state senator are union staffers.

6. Lawmakers who don’t get to work for unions while they serve in the legislature sometimes get to work for them after they leave public service. For example, the Speaker of the House and Senate President who served together for many years now serve together again at the Connecticut Education Association, the state’s largest teachers’ union.

These conflicts of interest help explain why we haven’t seen reform yet. Instead, we suffer from ever-present and ever-growing deficits. Let’s speak up and make sure our representatives know we expect a fair playing field.

Yankee Staff

Yankee Institute is a 501(c)(3) research and citizen education organization that does not accept government funding. Yankee Institute develops and advances free-market, limited-government solutions in Connecticut. As one of America’s oldest state-based think tanks, Yankee is a leading advocate for smart, limited government; fairness for taxpayers; and an open road to opportunity.

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