The Middletown Press (Middletown, CT)
The big lie: How we got to where we are with state employee raises
Ever since former Gov. Dannel Malloy announced famously to a state employee union rally in 2014 that “I am your servant,” the general public in Connecticut has grown increasing aware and upset about excessive state employee compensation.
There’s been real anger over the past several months about a large pay raise for all state employees scheduled for, and recently paid on, July 1, a pay hike that Gov. Ned Lamont had called unfair in the context of massive private sector job losses. State employees are protected from job losses by a contractual no-layoff guarantee they have enjoyed since 2011.
Many people called upon Gov. Lamont to use his emergency powers to cancel, suspend or delay the pay raise, including this writer in several columns, including one I wrote in this newspaper on April 21.
The state employee unions have pushed back, raising many objections, none more outrageous than their repetition of an astounding claim made by Malloy in 2017. Malloy claimed a whopping $24 billion in “real savings” over 20 years from concessions allegedly made by state employees in the 2017 agreement that he negotiated with the State Employees Bargaining Alliance Coalition (SEBAC).
This outlandish claim has gone largely unchallenged. Indeed, Democrats codified it in a state law requiring Comptroller Kevin Lembo to prepare an
Office of Policy and Management.
The falsity in Malloy’s claim is not buried in complex numbers. It rests upon an outrageous assumption, namely that state employees are entitled to raises each and every year as if annual raises are the virtual equivalent of a birthright. If employees don’t actually get a raise, the raise they don’t get is called a “saving.”
So, who established the amount of the “raise they didn’t get” in 2017? Malloy did. In his budget proposal, he proposed hundreds of millions of raises. Then, he negotiated wage freezes and called the difference “savings.”
How do we know this? From the documentation that OPM published in support of Malloy’s claimed savings. On page 1, entitled “Source of SEBAC Agreement Savings Estimates,” under a subheader of “Wage Estimates were developed by OPM,” it states “Elimination of potential FY 2017, 2018, and 2019 increases: Removes all of the proposed RSA increase in the Governor’s recommended budget: $300.6 million in FY18 and $486.2 million in FY 2019.” [Emphasis added.]
The raises which state workers “didn’t get” were simply figments of Dan Malloy’s imagination — they were “potential,” “proposed” and “recommended.” There was no existing wage contract between the state and state employees under which workers were legally entitled to actual raises that, then, they gave up in negotiations with Malloy.
Not only did Malloy claim more than $700 million of wage savings in his ultimate budget for the fiscal 2018-2019 biennium, but he claimed almost $9 billion more by claiming that the annualized amount ($492 million) of the “raises they didn’t get” constituted savings in every one of the next 18 years. By this tortured logic, Malloy could have claimed $49 billion over the next century!
Now, returning from fantasy land, let’s consider the raises that state employees did get last year and a few weeks ago on July 1. They’re real money. Together, they amount to $356 million in annual compensation. They constitute real costs now and into the future — $3.6 billion over a decade — as opposed to the illusory “savings” that Malloy conjured.
These pay raises are grossly unfair, given the context of prevailing massive private sector unemployment and in light of the enormous 40 percent to 50 percent compensation advantage state employees enjoy compared to the Connecticut’s average private sector worker — in most recent years, the biggest advantage among the 50 states.
While the immediate focus has been upon a pay raise totaling only about $15 million, the real issue is the massively overgenerous compensation that state employees enjoy. The false narrative — about ginormous $9 billion to $24 billion in false “savings”/concessions that Malloy, the Democrats and unions negotiators have claimed — is designed to hide the opposite reality, namely the uninterrupted gravy train that state employees enjoy.
It rests upon an outrageous assumption, namely that state employees are entitled to raises each and every year as if annual raises are the virtual equivalent of a birthright.
Red Jahncke, a Greenwich resident, is president of The Townsend Group Intl.