Last month, in a post entitled, Define fiscally and morally irresponsible? Malloy’s plan for older, retired teachers. Wait, What? readers had a chance to learn about Governor Malloy’s budget proposal to eliminate the state’s contribution to the retired teacher’s health insurance fund.
The fund pays a portion of the health insurance premiums of retired teachers. The bulk of the cost still rests on the individual teachers.
The Legislature’s Appropriations Committee will be holding a public hearing on Malloy’s proposal tomorrow.
Malloy’s plan would force the Connecticut Teacher Retirement Board to spend the existing fund down to almost zero over the next two years.
According to an article in yesterday’s CTMirror, while Malloy’s plan would “save the state” $70.7 million in the upcoming FY14-FY15 biannual budget, but it would “put the plan’s funding at a ‘dangerous level in two years.”
Why take such a fiscally irresponsible action you ask?
Because eliminating the contribution would make the state budget look more balanced during the next gubernatorial election cycle, although the “rob Peter to pay Paul” approach would require a massive boost in the state contribution to the teacher’s retirement fund in FY 16, the year after the next election.
However, as the CTMirror notes, without that massive increase in FY 16, the state would be unable to pay its share of the teacher’s health premiums starting in the summer of 2015.
The CTMirror story explains that, “In the last four fiscal years, the state contributed nothing in two of those years. In the current fiscal year, the state is set to provide $17.7 million. If the state were to fully funding its share, the contribution would be $36 million.”
As the Vice President of the Connecticut Federation of Teachers explained at a public hearing last month, “This proposal amounts to a breach of the contract entered into…It’s cruel. Balancing the budget on the backs of retired teachers is just plain wrong.”
While Malloy’s decision to eliminate funding is a complete and total reversal from his previous statements on fiscal responsibility, the CTMirror article reveals that he isn’t alone in his thinking. Representative Toni Walker, the House Chair of the Appropriations Committee explained, “In this fiscal time, I can’t say one way or another what we’ll do…It is very important, but how do we pay for it? Everybody needs to be asked to give a little more.”
The return to the “shared sacrifice” argument is interesting considering the Democrats in the legislature are all well aware of the fact that those making more than $1 million a year were spared any increase in their income tax rates in the $1.5 billion dollar tax package that Malloy proposed and the Democrats adopted during Malloy’s first year in office.
The CTMirror goes on to provide additional background on the Teacher Retirement Fund. The article can be found here: http://ctmirror.org/story/19484/budget-knife-hits-retired-teachers-heath-care