Despite being rejected by the state appropriations committee and denounced by municipal leaders across the state, Gov. Dannel Malloy’s plan to transfer one-third of teacher pension costs onto towns and cities is still being considered during budget negotiations. However, during a June 22 press conference, House Speaker Joe Aresimowicz, D-Berlin, and House Majority Leader Matthew Ritter, D-Hartford, floated the idea of raising the state sales tax to 6.99 percent and using the increased funds to help municipalities pay for teacher pensions.
In an effort to deal with the skyrocketing cost of teacher pensions, Gov. Dannel Malloy has proposed shifting one-third the cost of the pensions onto towns, a move that will likely drive up property taxes as municipalities scramble to come up with $408 million in 2018. Michigan, on the other hand, has taken step in the opposite direction.
Reports surfaced Monday about a tentative deal between Gov. Dannel Malloy and the state employee labor unions to achieve $1.5 billion in concessions over the next two years and extend the state employee contract to 2027. However, a five year contract extension will mean Connecticut will be saddled with the union deal, negotiated by Gov. John Rowland, for as long as most people have mortgages.
Connecticut’s pension system may be in much worse shape than previously thought according to a new study from the Hoover Institution, a public policy think tank at Stanford University. In 2015, Connecticut reported its pension liability as $30 billion but the Hoover Institute study says that figure was actually $68 billion.
Over one thousand retired state employees are receiving six-figure pensions, a nine-fold increase since 2010 when only 110 retirees received six-figure pensions. According to data from the state comptroller's office the six-figure pensions for 1,030 retired state employees adds up to $120.1 million per year.
Healthcare costs for retired state employees are projected to surpass the healthcare costs for current employees for the first time in 2017, according to the governor’s budget report.