Yankee Institute recognizes the valuable service of many Connecticut state employees during the Covid-19 public health crisis, including doctors, nurses, Department of Correction officers, Department of Labor employees and first responders. We are grateful for their courageous work on behalf of Connecticut’s people.
However, in light of the pandemic’s potential implications for the state budget, Yankee Institute recommends that Gov. Ned Lamont suspend a scheduled wage increase for state employees — totaling roughly $353 million — until the state is in a position to better understand the economic and fiscal fallout of this crisis.
It would be irresponsible for our elected leaders to force the closure of countless businesses throughout Connecticut — jeopardizing the livelihoods of hundreds of thousands of people — while increasing the salaries of state employees, as hard-working and important as some of them are during this difficult time.
The pay increase set for July, which includes a 3.5 percent general wage increase combined with an annual step increase valued roughly at 2 percent, is the second raise state employees will receive in as many years under the terms of the 2017 SEBAC Agreement.
The vast majority of Connecticut state employees are protected from layoffs until June of 2021, under the terms of the SEBAC agreement.
The unprecedented public health and economic crisis posed by Covid-19 has imposed an enormous financial and social strain on families and businesses. It will result in the state of Connecticut confronting multiple challenges, including much lower tax revenue coupled with increased unemployment and Medicaid costs to help those who have been put out of work and those in need.
These extensive costs will inevitably fall upon the taxpayers of Connecticut in the future.
Until state officials have a better understanding of the true fiscal impact of this crisis, it would be a mistake to guarantee a second 5.5 percent increase in the cost of Connecticut’s labor force, thereby placing the state and taxpayers under additional fiscal and financial strain.
Even as nonessential businesses have been forced to close and their employees file for unemployment benefits, nonessential employees who work for the state continue to receive pay and benefits.
Suspending the scheduled pay increase is a sensible measure, one that the governors of New York and Virginia have already implemented. It is a reasonable sacrifice by state government at a time when the private sector workers of Connecticut have been forced to sacrifice much, much more.
All the people of Connecticut – including those working for the government – are in this together and these profoundly uncertain times require shared sacrifice by all, including government.
We share in the hope of many government leaders that when this crisis passes, there will be a robust economic rebound, but fiscal policy cannot be guided by hope. As a state, we must hope for the best but prepare for the worst.
For these reasons, we recommend Gov. Lamont consider suspending the scheduled wage increases until the state better understands the fiscal fallout of this unprecedented pandemic and has devised budgetary solutions that do not involve raising taxes on state residents or businesses, who have already suffered enough.