To be fair, consider history behind state pay raises
In 2017, our editorial board endorsed and urged passage of a controversial labor deal worked out by then Gov. Dannel P. Malloy. The deal saved the state nearly $1.6 billion over the next two years, meeting the savings goal Malloy had set at the start of negotiations, thus helping close the gap in a large projected budget deficit the state faced that year.
More importantly, the concessions created a new and sustainable retirement plan for state hires going forward. As a result new employees now receive a hybrid pension and 401(k)-style plan that over time will prove far less expensive and far more manageable than the past, lavish pension deals that have acted as a fiscal anchor on the state budget.
But it was not without controversy, including a no-layoff promise extended to 2021 and substantial raises in the out years, which is why it only narrowly passed the House that year, 78-72, and required then-Lt. Gov. Nancy Wyman to cast a tie-breaking vote in the 36-member state Senate.
On the other hand, the deal provided breathing room for historic bipartisan budget deliberations. That led to a compromise that built in spending and volatility caps that continue to serve the state well and helped create a record rainy day fund which, unfortunately, will have to be expended to get the state through the latest fiscal crisis, this one caused by the pandemic and resulting recession. But the state would have been in much worse shape without it.
Now those promised pay raises come due and, we concede, the timing is terrible. The increases are 3.5%, and they began July 1, plus a 2% step increase for qualified workers. Bottom line is that it is a great raise when few in the private sector are seeing any raises and many are out of work.
Gov. Ned Lamont sought more concessions, but the leadership representing the state’s 46,000 unionized employees, spread over 16 unions, flatly rejected his efforts.
We cannot blame them. Under the two prior administrations, the unions had accepted six years of pay freezes, increased insurance premium payments, higher drug co-pays and the hybrid retirement plan for new hires, among other concessions. Their payoff is now, and they are not backing off.
Some had called on Lamont to use his executive powers, which he has used liberally in response to the crisis caused by the pandemic, to block the pay hikes. That would have been a highly suspect move legally and the state would have likely ended up paying eventually.
The raises will cost the state an additional $130 million this fiscal year, according to budget projections. That could prove to be chump change compared to the projected deficits Connecticut is likely to face in the fiscal years that will follow, with the rainy day surplus fund expended and tax revenues not soon to recover from the economic hit the state has taken.
Meanwhile many Democrats, particularly on the Senate side, are calling for reforms to health care, education, housing and economic development to reverse longstanding racial injustices. That would almost certainly require more government jobs, not fewer.
In the coming election, candidates for the state legislature need to outline their priorities. If it is social reform, how will it be paid for? If its fiscal austerity, what are they willing to give up or not do?
Flogging the unions for insisting on their pay raises is an easy political play. But forgoing those raises would not have fixed things. Placing all the blame on state workers for the challenges that lie ahead would be a cop out.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Managing Editor Izaskun E. Larrañeta, staff writer Erica Moser and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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