Connecticut has spent $13.9 million more in overtime for state employees during the first half of this new fiscal year than it did in 2017, according to a report by the Office of Fiscal Analysis. Connecticut had been making headway in reducing overtime spending since a high of $256.1 million in 2015. In 2017, Connecticut spent a total of $204.4 million.
Connecticut has the most underfunded pension system in the nation, amassing more than $127.7 billion in liabilities, according to an annual study by the American Legislative Exchange Council.
There are only a few states that generally rank lower than Connecticut in terms of fiscal stability and outlook and New Jersey is usually one of them. Like Connecticut, New Jersey is saddled with high taxes, major pension problems and fiscal mismanagement, but a new study released by the Garden State Initiative uses Connecticut’s history of raising taxes to solve those problems as a “cautionary tale."
Connecticut state employee unions threatened a lawsuit against the state if future reforms to state employee benefits are included in a bipartisan budget.
Connecticut would have to pay 35 percent of its tax revenue over 30 years in order to meet all its pension and retiree healthcare liabilities, according to a report by financial powerhouse JP Morgan. In their ARC of the Covenants 2.0 report, which examines credit risk for municipal bond holders, JP Morgan listed Connecticut as one of four states including New Jersey, Illinois and Kentucky, as having the highest retirement liabilities.
According to the new budget proposal released today, state employee fringe benefit costs - including pensions and retiree health benefits - will grow by more than $222 million. Overall, the new general fund budget will grow $214 million and a number of agencies took multi-million dollar cuts to make up for the increase in fringe benefit costs, including a $14 million cut to the Office of Early Childhood’s Care 4 Kids program.