The
Democrats’ approval of State employee union agreements that extend rich
benefits for ten years to 2027 is a tragic lost opportunity to change the
direction of our state.
Governor
Malloy and Democrats tout savings in this deal but fail to recognize new costs
that may create more instability for our state budgets and increase future
unfunded liabilities. This agreement guarantees significant tax increases, more
burdens on cities and towns and deep social service cuts.
THREE MAJOR PROBLEMS
WITH LABOR DEAL
1) Ties the hands of future
lawmakers and governors by:
- Locking the state into an extended
contract that prohibits privatization of services
- Eliminating any opportunity to
streamline state government. That means the legislature can’t consolidate
administrative functions, close prisons or move services to private
nonprofits to enhance and preserve care.
- Even more unsettling, language contained
in the agreement arguably could eliminate the legislature’s current
ability to make changes to pension and health care benefits in its
entirety, thereby stripping us of any legislative control we have now to
rein in labor costs in the future. If our financial problems
worsen, this deal will not only lock us in to a contract for 10 years, it
will also eliminate the legislature’s statutory authority to do anything
about it after any contract expires. The result will be devastating and
force lawmakers to turn to cutting services or implementing layoffs in
tough financial times.
2) While the administration is
quick to tout the savings in this deal, there has been little discussion about
the costs contained in the agreement that could create more instability and
increase unfunded liabilities this state cannot bear in future years such as:
- A
one-time payment to state employees of 2.5% of salary plus $1,000.
For an average employee this will result in a payment of $2,850.
- Guaranteed
wage increases and step increases beginning in 2020.
- No
end to longevity payments, rather just a delay.
- No
capping or elimination of overtime from current state employees’
pensions.
- Allowing
hazardous duty employees to purchase service time to count towards
eligibility for retirement, an idea that was rejected in 2015 due to its
potential to “dramatically increase” costs and unfunded liabilities.
- New
costly provisions that a) extend maternity and paternity leave for months
beyond federal law and b) allow state employees to use an unlimited amount
of their sick time to care for another which could result in an employee
leaving work for months or even years and the state being unable to refill
that position.
3) The deal also continues to
perpetuate and in some cases increase inequities in the current benefits system
favoring certain state employees.
- For example, the deal allows the state
to spend significantly more on those employees with the highest wages by
continuing to go above and beyond federal law to cover Medicare Part B
higher premium costs for high earning state employees.
- The governor’s deal would also ask more
of non-hazardous-duty state employees, while allowing hazardous-duty
employees to pay less in health care premium costs even though they retire
at a younger age and receive benefits for a longer period of time.
- The deal also extends increased costs
onto non-unionized employees but offers them no job security protections
and continues to require non-union state employees to pay more for health
care premiums. This incentivizes unionization of managers.
OUR ALTERNATIVE
- Senate Republicans have offered a
different concession plan that would achieve greater savings, reduce our
unfunded liabilities, and create the stability our state employees who
work hard every day deserve.
- Unlike other proposals, it does not
include harmful wage reductions, excessive furlough days and does not
change benefits until after 2022 once the current contract expires.
- Instead, it would put state employee
benefits more in line with the benefits received by municipal union
employees such as firefighters, police officers, and teachers and
non-government union workers.
- It would create a fair system, with
lower premium costs for those who make less.
- It could also be implemented by
legislative action alone once the current labor contract expires because
we are not interfering with existing contracts.