Gov. Ned Lamont’s proposed $55.2 billion two-year budget, released Wednesday (Feb. 5), includes yet another round of pay increases for state employees — quietly tucked away on page 199 and conveniently left out of his budget speech. This move continues the trend of skyrocketing public sector wages which significantly outpaces earnings of the private-sector workers footing the bill.
The proposed budget sets aside $118.1 million from the General Fund in 2025-2026 and a staggering $222.5 million in 2026-2027 for “salary adjustments.” Additionally, the Special Transportation Fund is set to spend another $10.8 million and $19.8 million over the same period for pay hikes.
These raises would be on top of automatic seniority-based step increases, further padding government salaries that have already surged by 33% since 2019 under the Lamont administration.
In an emailed statement to Yankee Institute on Thursday, Senate Minority Leader Stephen Harding (R-Brookfield) slammed Gov. Lamont for refusing to negotiate a fair deal with state employee unions, calling out his lack of interest in crafting a “reasonable, apolitical agreement” on wages.
He emphasized that wage negotiations are central to Senate Republicans’ plan to deliver “$1,000 in tax relief for CT families.” He didn’t hold back in criticizing the administration’s fiscal priorities, declaring, “Fiscal moderation has officially left the State Capitol.” For middle-class families struggling with taxes and soaring electric bills, Sen. Harding said the governor’s message is clear: “‘Go pound sand.’” He accused Gov. Lamont and Connecticut Democrats of prioritizing “government bureaucracy” while Republicans fight to “protect the people.”
Sen. Harding is referring to the proposal Senate Republicans unveiled on Tuesday (Feb. 4) that is aimed at providing tax relief to struggling families in the state. It includes a two-year freeze on state employee wages, a measure that would help offset the cost of the tax cuts that provide the average Connecticut family with roughly $1,000 in relief.
“All of us were elected on a platform to bring more affordability to our neighbors and our districts, and we’re here doing that today with a proposal that I think will make or provide immediate relief to the taxpayers of this state, and on average, in the full phase out of these tax cuts, could provide about $1,000 in relief to the average family,” Sen. Harding said at the Feb. 4 press conference.
The plan also includes income tax cuts, payroll tax relief, property tax caps, and reductions in burdensome licensing fees delivering approximately $700 million in relief — funding would come from freezing state employee raises for two years, interest earned on federal Covid-19 grants, and eliminating tax carve outs that aren’t delivering a positive rate of return.
Predictably, Connecticut’s powerful government unions wasted no time attacking the proposal. The State Employees Bargaining Agent Coalition (SEBAC), which represents more than 45,000 state workers, dismissed the wage freeze as unfair, even though public employees have already enjoyed yearly raises since 2019 — far exceeding what private-sector workers have seen.
Following the GOP press conference, SEBAC spokesman Drew Stoner issued a statement, saying, “State employees have a long and recent history of taking wage freezes and making other financial sacrifices in order to balance the budget and preserve our upside down tax structure.”
He went on to claim, “While the ultra-wealthy have hoarded record levels of income, mostly through capital gains, our public services have been underfunded and understaffed. We need true progressive revenue changes that cut at the heart of our state’s inequitable structure while investing in the programs and infrastructure that lift up our communities and create economic growth for all of our residents across income brackets.”
SEBAC’s argument is as predictable as it is dishonest. They want Connecticut residents to believe that state employees — who enjoy job security, Cadillac healthcare plans, and automatic pay raises — are somehow victims. Additionally, their claim that they have a long history of wage freezes is misleading.
In 2017, Gov. Dannel Malloy negotiated a five-year contract with SEBAC that included a temporary wage freeze to help balance the budget — but it was hardly the sacrifice union leaders claim. In return, state employees secured a four-year no-layoff guarantee, cash bonuses, and automatic step and wage increases in the fourth and fifth years of the deal. The agreement also extended their generous health and retirement benefits through 2027. Not exactly a tough compromise.
With Gov. Lamont’s budget submitted to the General Assembly, the proposal will move through public hearings and committee reviews, where lawmakers, unions, and taxpayers will weigh in on its massive spending commitments. The Democratic-controlled legislature will likely make adjustments, while Republicans push for tax relief and spending restraint. Negotiations will determine whether the state moves forward with another round of costly state employee raises or considers alternative ways to manage Connecticut’s growing fixed costs.
The budget must be finalized before the new fiscal year begins on July 1, but debates over wage hikes, taxes, and spending cuts could lead to a contentious process. As lawmakers negotiate, the key question remains will Connecticut rein in its escalating personnel costs, or will taxpayers be forced to bankroll yet another round of public sector pay hikes.
