Governor, enough! Just tell your people to grow up.

Cross-posted from Pelto’s Point (New Haven Advocate)

Arrogance and bullying is not an appropriate leadership style.

Today’s blog post was supposed to be about some additional policy issues facing the Legislature but after reading the latest CTnewsjunkie story, we must unfortunately return to the issue of how the Malloy administration is dealing with state employees, with criticism of their policies and with the responsibilities associated with governing.

According to the news story, Correction Workers To Fight Concessions, when AFCME Local 391, the union that represents Connecticut’s 5,000 correction workers recently held an executive board meeting, there was a consensus that the members would not support the Malloy Administration’s demand for $1 billion in employee concessions.  The minutes read “The members have spoken and we have heard them loud and clear: No!”

In response, Roy Occhiogrosso, Governor Malloy’s closest advisor, once again, came out firing.  He blasted the correctional guards saying “it’s disappointing to see that kind of rhetoric at the same time we’re being told the unions are negotiating in good faith.”

In response the spokesperson for Connecticut’s state employees pointed out that the Local’s minutes simply reflect the employee’s upset and that “Those concerns and frustrations are legitimate, and a product of years of disregard and disrespect from previous administrations.”

The spokesperson reiterated that the state employee unions remain committed to “the good faith discussions SEBAC is having with the Malloy administration” but he reminded Occhiogrosso that “we are a democratic union…Our members have a right to speak their mind.”

While talking of shared sacrifice and the need to have a “grown up” discussion about the difficult choices facing the state, this Administration seems more interested in belittling those who voice reasonable concerns or have understandable disagreements with their policy proposals.

Three months into their tenure and the Malloy Administration continues to appear unable or unwilling to get out of “campaign mode”.  Dismissive and flip rhetoric may work in the heat of campaigns but it is very much out-of-place in the here and now.

For example, the Governor is fond of saying things like: “The smartest thing the legislature can do is pass this [budget] as quickly as possible and then blame me.” Or: “If I were them, I’d pass it as it is … I think what this does is take the pressure off of them to make the tough decisions.”

Cute phrases to be sure but hardly an appropriate thing to say to the 187 state legislators who have the moral, ethical and Constitutional responsibility to represent their constituents in Hartford.

Meanwhile, the Malloy Administration remains unwilling to share some of the most critical details about their budget plans.

Last week we learned that they do have a “detailed plan” to achieve the unachievable – $2 billion in concessions from the state employees – but that they won’t reveal that plan.

The largest single element of the budget and they don’ t feel the need to share any of the details with the public, the legislators or the media so that people have a chance to understand what is being proposed and how it might impact our state?

Sharing information and allowing debate is not a by-product of a functioning democracy, it is the fundamental requirement that produces a successful democracy.

No one has a monopoly on good ideas.  Pushing back on some of the Governor’s proposals does not mean that we don’t care about Connecticut’s future.  In fact, it is exactly the opposite.

These are difficult times. Hard choices must be made.

To succeed, our elected officials must be committed to promoting respect, understanding, dialogue and debate and this Administration would do well to start acting like the leaders they can and must be if we are to have a chance to overcome the challenges that face our state.

Yes, we know it’s a Secret Plan. The question is – should it be?

courtesy of CTMirror

Cross-posted at Pelto’s Point (New Haven Advocate)

The CTmirror has a great, fun profile of Mark Ojakian, the Deputy Secretary of OPM who is one of the most honorable and good guys I’ve ever worked with or met. There is simply no one better to “negotiate” for the Governor and the people.  Article here:  Ojakian Profile

Ojakian is Malloy’s point person in their effort to get $1 billion dollars in state employee concessions for FY 2012 and am additional $1 billion in FY 2013.   

Serious and legitimate concerns have been raised about whether $1 billion can be achieved.  Furthermore, demanding that amount for Connecticut’s public employees is hardly an example of “shared sacrifice”.  In fact, it is grossly unfair and inappropriate to set up the employees like that.

When asked about the issue of achieving $1 billion in concessions, Ojakian is quoted as saying “There seems to be a sense that number was just thrown in there to fill a hole…And actually it was not. There is a way to achieve a billion dollars. So, I don’t want anybody to think that’s a false number or that number cannot be achieved through a variety of savings, ideas and concessions. It can be.”

As Mark Pazniokas notes “the administration is relying on concession and labor savings to erase nearly one-third of an estimate $3.2 billion deficit.  The $1 billion sought from labor is nearly 20 percent of the $5.4 billion the state now spends on wages and benefits. Apportioned among 46,000 state employees, $1 billion comes to more than $20,000 each”.

Yes, we’ve heard they have a plan

And yes, we’ve heard it is Secret Plan.

To dismiss the criticism that it can’t be achieved and then claim that Malloy has a plan but he just won’t share it is not okay.

It is not okay for the Governor’s “plan” to be a secret.

Imagine simply saying we are going to cut 20% from the education budget or the health care budget but we won’t tell you how or where.

The Governor and his people are public officials, they are doing the public’s business and they owe the public an explanation of their plan to get $1 billion in savings from employee wages and benefits.

The Missing Memo from the boss to his employees – AKA Gov. Malloy’s letter to state employees

Cross-posted at Pelto’s Point (New Haven Advocate)

A lot of state employees have been whining and crying that their boss, Governor Malloy hasn’t touched base since he wrote that nice email the first day he took office back in January.

Apparently the complaint is they are frustrated and scared because the Malloy Administration hasn’t provided any information about how the proposed $2 billion cut to state employee salaries and benefits will be achieved.

Personally, I don’t know what all the yelping is about.  It’s not like it’s the boss’ job to hold every employee’s hand every time things get a little tough. 

The fact is, as Malloy’s chief advisor said just the other day in the Stamford Advocate “There is a road map to get there…the $2 billion is realistic”.

It’s not like the new Administration doesn’t want to make the “road map” public, they can’t say more because the Administration and the state employee union leadership have agreed not to negotiate through the media. 

Think back, the whole reason the Secret Plan to Bomb Cambodia during the Vietnam War was secret.  If we told the enemy that we were going to bomb them then it wouldn’t be a secret would it?

I mean face it, that’s just the way things work.  Did you expect us to tell Moammar Gadhafi the other day that we were going to fire off 120 ($1 million a piece) tomahawk missiles in the first few hours of our effort to bring him down?   Of course not!

So the state employees and their families are a bit out of line demanding some memo or letter from Malloy laying out his plan for concessions.

That said, considering some of my best friends are state employees and I do feel their pain, I’m going to provide them with a version of the note that they would have received had the Governor been able to take the time to write it himself.

It might go something like this…

State Capitol, Hartford

 To:  Connecticut’s State Employees

From:  [this is where it would say Governor Dannel Malloy]

First let me take this opportunity to wish you a Happy Monday and I know I speak for many in our great state when I tell you that I appreciate the fact that you get up and go to work.

I know some of you are angry that I haven’t written but you need to understand that I am very busy.

 I am the Governor and I inherited this terrible budget deficit.  The 49% of Connecticut who elected me, including most of you, did so because you knew I had the courage and conviction to make the tough choices.  If you didn’t want a governor like that, well, you shouldn’t have voted for me.

Now I want to be clear.  My budget is the best option out there.  Deviating from my plan in any way will only makes things worse.  We need to get this done and we don’t have the luxury of having some protracted debate about getting the rich to pay their fair share.  This is the budget and the legislature needs to pass it as is and go home and blame any bad news on me. Continue reading “The Missing Memo from the boss to his employees – AKA Gov. Malloy’s letter to state employees”

The Silence is Deafening – The $1 billion dollar secret.

Cross-posted at Pelto’s Point (New Haven Advocate)

More than a month ago Governor Dan Malloy released his proposed Connecticut State Budget.  His plan included $1.5 billion in new taxes, $400 million or so in cuts and $1 billion in state employee concessions.

A month later, the Administration has yet to identify any details about how $1 billion in employee concessions in each of the next two years can be achieved.

They may claim that the final concession package is a product of negotiations between the Governor and the state employee unions – and it is – but as chief executive officer, the burden is on Governor Malloy to lay out a proposed list of employee concessions that would amount to $1 billion.

How else is the public (and for that matter the legislature) supposed to have any ability to judge whether those changes would be better or worse for the state and its citizens than cutting more elsewhere in the budget or raising additional taxes.

We know a lot about Malloy’s $1.5 billion tax plan.  It places an undue burden on the middle class while giving Connecticut’s wealthiest citizens a pass at having to pay their fair share.

We know a lot about Malloy’s $400 million in cuts.   Municipal aid is spared (in fact overall support for cities and towns goes up) while focusing the deepest cuts for Connecticut’s colleges and universities.

In those two areas the public at least has some basic information about who will pay more and who will lose more.

But when it comes to the $1 billion in state employee concessions absolutely no information has been put forward.

An analysis from the legislature’s nonpartisan Office of Fiscal Analysis came up with a possible list of concessions that raised more questions than answers and didn’t remotely add up to $1 billion, in fact their list, which was fairly exhaustive could only identify $300 million in possible savings.

Interestingly, despite the hundreds of news articles and stories about Malloy’s budget, not a single reporter has pushed the administration to explain how they propose to take $1 billion out of the state employee salaries and benefits.

I’ve written in this blog that the $1 billion figure can’t be achieved and that the Malloy Administration not only knows this but is using the $1 billion figure as a gimmick to postpone discussions about further cuts or revenue increases that will be needed.   The Malloy Administration (backed by newspaper editorials) claims that the proposed budget is honest and balanced.

It is not.

It is more than a half a billion dollars out of balance but that figure and the Administration’s strategy will remain hidden until they are forced to lay out the facts about the $1 billion concession figure – a responsibility that they have so far successfully sidestepped.

It is time for Connecticut’s chief executive to reveal how $1 billion can be achieved.

Since the administration has failed to do this, the burden falls on Connecticut’s reporters to make them do it.

Now wait just a minute…

Really, Now wait just a minute…

The Hartford Courant is reporting on a Quinnipiac Opinion Poll that reports that Americans Believe Public Employees Should Pay More For Benefits.

The Courant story goes on to caution that although these are national results and not specific to Connecticut it would appear to be “good news” for Governor Malloy who is pushing for $2 billion in concessions from state employees.

Arthur “Jerry” Kremer, a former New York state legislator backs up the premise saying “I think this helps [Malloy’s] efforts to find fresh dollars” in the form of concessions.  Kremer goes on to say that even though these are national results “the feelings are the same in Connecticut and all the adjoining states. This is a viral movement.”

At first glance it is a pretty persuasive argument…except it’s probably not true.

First, there are huge differences between a national sample of voters and a Connecticut sample.

Nationally, 35% say they are Republicans, 34% say they are Democrats and 31% say they are not affiliated with a Party. 

Compare that to Connecticut where 21% are Republicans, 37% are Democrats and 42% are Unaffiliated.

The Courant reports that about “63 percent of Americans say government workers should pay more for their benefits and retirement programs, while 31 percent disagree”.  They don’t break down the number in any way.  A review of the poll however reveals huge differences in opinion by party.

While republicans think public employees should pay more by a margin of 72 to 22 percent, Democrats are split 47 – 45 percent.

Right off the bat, a Connecticut poll, with nearly twice the number of Democrats than Republicans is going to look VERY different since it is the Republicans who believe that public employees don’t, in their mind, pay enough toward their benefits.

Second, and perhaps most importantly, pollsters know that how you word the question and where you place it has a significant impact on the type of answer you get.

It turns out that the in the Quinnipiac University poll, the state employee pay and benefit question came immediately after a set of questions about the possibility of shut down of the national government that would occur if there was an impasse between Obama and the House Republicans.  This section ended with a question that asked “  There is a bill that would prohibit members of Congress and the President from being paid during a government shutdown. Do you think that bill is a good idea or a bad idea? “

Now that is a loaded question if I’ve ever seen one and not surprisingly 78% of voters agree that it was a good idea to stop paying the President and Congress if there was a shut down.

It is only after dealing with the Federal shutdown and punishing the President and Congress, does the Quinnipiac Poll turns to the issue of State Employees and asks

“In order to reduce state budget deficits, would you support or oppose making public employees pay more for their benefits and retirement programs?”

Having worked with public opinion polls in Connecticut for more than 35 year I will assure you that the way this question is worded will get a yes answer.  A question that begins “In order to reduce state budget deficits” will generate a very different answer then one that says “There is a debate about whether State Employees should pay more for their benefits” which would get a different answer still from a question that said “In addition to what state employees are now paying toward their benefits, do you think”.

In fact, I am surprised that the people at the Q-Poll would use a question that is so methodologically flawed.

Finally, in this political environment, to ask voters whether they would support or oppose making public employees pay more without informing them what employees are not paying is like asking whether  you would like the gas companies to charge less for gasoline.

In addition to the benefits question, the Courant story also goes on to report that “The new survey also said American voters are split on whether collective bargaining for public employees should be limited — 45 percent say they support limits on the employees’ negotiating rights and 42 percent say they oppose such limits.”

Again, the interesting point for Connecticut’s public officials is not the generic number but what happens when you remember that the percentage of Democratic voters is far greater in Connecticut than in the nation.

The differences based on party affiliation are even more stark on this question.  While Republicans nationally support limitation on collective bargaining as a way to reduce budget deficits by a margin of 59 to 25 percent, Democrats oppose limitations on collective bargaining rights by 56 to 33%.

Once again, a Connecticut survey on this issue would look very different from a national survey.

To suggest that the results of this flawed national poll shows that the people of Connecticut support Governor Malloy’s efforts to go after Connecticut’s state employees is simply not true. It is  just as inaccurate to say that this poll would suggest that Connecticut’s voters support limiting bargaining rights and there is no evidence of that either.

Public opinion polls can be a useful tool when looking at the political environment in which decisions are being made, but this particular Quinnipiac Poll doesn’t shed light on the situation in Connecticut and is, in fact, of limited use nationally because of the way in which the questions are worded.

Connecticut is not Wisconsin… Right? Right?

Cross-posted from Pelto’s Point (New Haven Advocate)

(As the Malloy Administration and Connecticut State Employee Unions prepare to meet today… )

Connecticut is not Wisconsin, right?  Right, Connecticut is not Wisconsin.  But let’s not fool ourselves – read on…

Unlike Wisconsin, Connecticut has a Democratic Governor who supports the right of people to join unions and collectively bargain and we have a Republican Party that is not following in the footsteps of the ultra-right, ultra-crazy tea-baggers and their post-modern Republican converts.

That is good news for Connecticut’s unions, their members and society as a whole.

But recognizing the American right to join unions is not a progressive or liberal position. 

As has been widely reported in recent days, when Ronald Reagan stood up for the people of Poland in 1991, he reminded that world that “one of the most elemental human rights [is] the right to belong to a free trade union”

American leaders across the political spectrum have recognized that the right to collectively bargain is truly a requirement for a civilized society.

So Governor Malloy does deserve credit for attending the recent State Capitol Rally in support of Wisconsin’s state employees.  He deserves credit for doing something that every reasonable American politician should be doing.

But before we think that Connecticut and Wisconsin have nothing in common when it comes to the rights of workers, let us remember that efforts to undercut unions and the rights of employees to join together for their common good come in a variety of forms.

Like bullying, anti-union efforts can be overt, covert or both. 

Bullying occurs when a “person intentionally inflicts injury or discomfort upon another person, through physical contact, through words or in other ways”.  It is behavior that seeks to intimidate, offend, denigrate or humiliate a person or group of persons. 

As we know, now more than ever, bullying is a form of abuse that is often perpetrated on another as a way to intimidate someone to take some particular action.

Governor Malloy’s entire budget is based on state employees agreeing to make $2 billion dollars in wage and benefit concessions. 

Anyone familiar with Connecticut’s state budget knows it is a number that literally cannot be achieved and the Governor purposely put out a number that is designed to fail.

Disguised as shared sacrifice, the Governor’s proposal is scapegoating of the worst kind since he has repeatedly connected his demands to the state employees with the warning that if the state employees fail to provide $1 billion in annual savings, he will be forced to shred the safety net and lay-off thousands of employees at a time the unemployment rate makes it clear that many of those laid off will not be able to find jobs. 

Malloy has been very clear. If state employees don’t come up with a billion dollars in concessions – this year – the most vulnerable and needy people among us will be hurt and the fault will lie squarely with the state employees and no one else.

Even today, as the Malloy Administration and the state employee unions prepare to officially sit down for the first time, Malloy’s chief political advisor said that the “governor hopes and expects the talks to be productive and will produce the money that’s necessary to help balance the budget,”

The money necessary to balance the budget?

The facts could not be clearer. 

Take away any and all pay raises for state employees.  Institute a dozen furlough days to cut their pay by 5 percent, blow their healthcare co-pays and deductions through the roof and the budget savings comes to about $388 million next year. 

Cut pay by 10% and you still don’t top $500 million in savings – far, far short of the $1 billion Malloy says he must have this year, yet alone the other $1 billion next year.

Saying that his budget is balanced when he knows it is not and then setting up Connecticut’s state employees to take the fall is more than a gimmick, it is nothing short of a mean-spirited form of bullying.

While Governor Malloy was speaking at a rally in support of Wisconsin’s state employees, the Malloy Administration was effectively setting up Connecticut’s state employees to become public enemy #1.

The definition of bullying is clear.  A person or group is being bullied when “exposed, repeatedly and over time, to actions that seek to intimidate, offend, denigrate or humiliate.  

Let’s face it, today the Connecticut’s Public Employee Unions will be sitting down with representatives of an Administration that would be expelled from school or fired from the workplace for the intentional bullying that they have perpetrated.

Now let’s ask the question again, is Connecticut really that different from Wisconsin?

No more gimmicks – well okay, one more, but then no more after that!

Cross-posted from Pelto’s Point (New Haven Advocate)

The gubernatorial campaign of 2010 was marked by a universal condemnation of the budget gimmicks and irresponsible fiscal maneuvering that got Connecticut into its present fiscal disaster.

Candidate Malloy was probably the most outspoken critic of the fiscal shenanigans that had become the norm in Connecticut state government and earned praise across the board for his commitment to put an end to governance by gimmick.

So although many were shocked by the magnitude of Governor Malloy’s proposed tax increases and budget cuts, newspaper editorial writers have showered the Governor with accolades for having the courage and conviction to put an end to fiscal gimmicks and finally provide the state with a balanced budget.

And the new Governor’s commitment to balancing the budget is, indeed, impressive but there is one huge problem with the picture.

Although Malloy’s budget contains hundreds of millions in new income taxes and hundreds of millions in program cuts, the single biggest change in the entire state budget is his decision to include $1 billion dollars in concessions by Connecticut’s state employees. 

The number the Malloy Administration has used to “balance” the budget is not achievable and everyone “in the know” knows that. 

Without this faulty number, the Governor’s proposed budget is more than a half a billion out of balance.  To address that massive hole up front would have required even more taxes and program cuts.  From the anger and frustration that is presently sweeping Connecticut as a result of the size of the taxes increases and program cuts he did propose, one can certainly understand why the Governor and his people would do everything possible to postpone the understanding that even more taxes and cuts will be needed.

So instead of providing a true balanced budget, Governor Malloy made it very clear.  If the state employees fail to provide $1,000,000,000 this year – and another $1 billion next year – he would be forced to shred the state’s human and social service safety net and lay off thousands of people.

So a billion dollars from the state employees or else all Hell breaks loose.  Let’s examine the facts:

The economy is bad, most people aren’t getting increases or bonuses (unless you work on Wall Street) so let’s start by cutting out the money that would be needed to give state employees a raise of 3% or so.  Easy to defend, easy to do and saves the State $160 million dollars. 

Next, furlough days are another good way to save money.  Many states and even some private employers are using them.  Employees are told to stay home a certain number of days and that way the employer doesn’t have to pay them for that day. For each furlough day, Connecticut saves $14 million dollars.  Each of the past two years state employees have been given 3 ½ furlough days for a savings of about $48 million a year.  Let’s double or triple or even quadruple the number of furlough days.  We’ll tell state employees to stay home 1 day each month.  True some critical work may not get done, but budget cuts are needed and the net effect of 12 furlough days is cutting pay by 5%.  The good news is we save another $168 million. 

 So we’ve frozen pay and effectively cut wages by 5% with furlough days and we have saved a grand total of $328 million.  We only have $672 million to go to meet the $1 billion dollar mark.

We can increase the amount of money that state employees must contribute to their pensions.  Over the long run that will help put the State Employee Retirement System (SERS) on better footing but unfortunately it will have not save the taxpayers any money now.  Why? Because when Governor Rell and the Democrats decided not to make the required payments to the Pension Fund over the last three years, the fund became so underfunded that we now have to make those payments just to ensure the Fund stays afloat.  That said, if we require state employees to contribute 3% more of their salary, it will get an extra $96 million into the Fund.  A worthy step perhaps but doesn’t count toward the $1 billion Malloy has demanded.

Connecticut state pensions, like Social Security and most other public pension funds have a Cost of Living Adjustment that is tied to inflation.  That said, Connecticut could cap or even eliminate COLAs for future Tier II and Tier IIA retirees.  Again, it wouldn’t save any tax money now but would save the Pension Fund almost $50 million a year going forward.

There has also been talk of basing a retiree’s pension on their average salary over a five-year period rather than the present 3 year system.  This change would make “gaming” the system more difficult.  Again, it wouldn’t save taxpayers now but would mean a savings to the Pension Fund of about $22 million a year going forward.

Finally, increasing medical premiums for active state employees is definitely an option.  Increasing employee premiums by $350 might save as much as $18 million.  If we really want to dump on state employees, lets demand something really outlandish and see if we can jack up their premiums by $1,000.  That will teach them and at that level we might even save $60 million a year.

So where does that leave us.  No pay increase, a dozen furlough days and blowing their co-pays through the roof and we save taxpayers a total of about $388 million next year. 

It’s an impressive amount.  The problem is, if the Malloy Administration is successful in actually bringing state employees to their knees and wins all of those concessions, the budget will still have a $612 million deficit.

And that, in turn, brings us back to Malloy’s pronouncement that if the state employees fail to provide $1 billion in savings, the budget will be out of balance and the fault will lie squarely with the state employees and no one else.

Saying the budget is balanced when it is not is, in short, a gimmick to beat all gimmicks. 

Malloy gets the credit for proposing a balanced budget despite knowing that it isn’t balanced and when Connecticut discovers the budget isn’t balanced after all, the fault is not the Governor’s but those good–for-nothing state employees.

The very state employees, who, as we all know, are already public enemy #1. 

It is a brilliant strategy. 

The Malloy Administration and the state employee unions engage in hard negotiations.  The state employees know that if they don’t give enough they will be laid off.  Then, when they do give, the Administration is “forced” to regrettably announce that the budget is fatally in deficit and the Governor has no choice but to make additional cuts and propose additional tax increases (but at no fault of his own).

 So the era of budget gimmicks is over – just as soon as we get through this last one.

Malloy panders to the talk-show crowd:

Governor Malloy (Photo by Christine Stuart/CTNewjunkie)

 [cross-posted from Pelto’s Point at newhavenadvocate.com]

Yesterday, it was a new tax plan that comes close to coddling the rich at the expense of the middle class.

 Today, it is the announcement that Malloy will seek $2 billion in employee concessions. 

Putting aside the “let’s beat the shit out of state employees,” the Malloy proposal isn’t shared sacrifice – it is scapegoating of the worst kind. 

Malloy has put out a number that is designed to fail.

When state employees end up paying their “fair share,” when they end up paying more than their “fair share,” Malloy’s political maneuver ensures that they still end up losing in the public opinion game.

Take a look at CTMirror’s story; http://ctmirror.org/story/11515/malloy-seek-2-billion-employee-concessions-over-two-years or CtNewsjunkie’s story http://www.ctnewsjunkie.com/ctnj.php/archives/entry/unions_will_be_asked_to_sacrifice_2b/

There is no question concessions are needed — major concessions at that — but anyone in the know, including the governor, knows that $2 billion is a number designed to fail.

During the last budget cycle, the state employee unions and Gov. Rell negotiated a “deal” to save the state almost a $1 billion over three years.  Of that, almost $400 million came out of the pockets of state employees through a wage freeze, a wage cut through unpaid furlough days and higher health care costs for some employees.

Under the deal, the bulk of the savings came from deferring critical pension payments — a move that was penny wise and a pound very foolish.  It was a move that Malloy himself repeatedly called “a budget gimmick.”  In fact, he rightfully said that when he was governor he’d make all required pension payments.

So Malloy knows another round of wage freezes, even more significant furloughs and even greater health care changes amount to about $500-$600 million – not $2 billion.  The $2 billion is nothing but a fraud, one designed to humiliate and punish state employees for – well, for being state employees.

Yes there are significant savings to be had.

Yes, state employee wages and benefits can and will be far more limited in the future.

Yes, the state must address and reform the long-term obligations associated with its present pension and health benefit system, but this tactic does nothing more than attempt to position the new administration on the side of those who blame state employees for decades of bad policy making by previous governors and legislators.

One of the most interesting points the Malloy administration revealed is that its point-person with the unions is Nancy Wyman’s closest aid and advisor.  Wyman, the same person has built a career and a reputation as the voice of reason and facts while serving as a champion for those hard-working, dedicated state employees who get up every day and work hard to provide Connecticut’s citizens with the programs and services they need and deserve to live better, safer and more fulfilling lives.

This Malloy proposal is just about as far as one can get from the work Nancy Wyman has done over the past 30 years.

The Malloy anti-state employee plan is beyond belief.

More on the issues underling Connecticut’s State Employee Pension System

Here is the problem:  Connecticut’s State Employee Pension fund is significantly underfunded. 

 

Back in 2000 Connecticut had put enough money aside to meet more than 63% of its state pension obligations. 

 

However, repeated decisions by Governors Rowland and Rell with help and support from the Connecticut General Assembly and SEBAC (the state employee bargaining coalition) not to make necessary pension payments or reduce the level of pension payments that were made (along with early retirement incentives that pushed more people into the pension fund) reduced Connecticut’s funded pension ratio down to 44%.

 

Today, the State’s unfunded pension obligation is over $11.7 billion. (Or roughly a debt equal to $3,333 for every Connecticut resident).  Connecticut owes that money.  It will have to pay that money and it has not put aside the funds necessary to make those payments.

 

Connecticut’s system is one of them of the most underfunded systems in the nation. 

 

Despite this situation, much of what we hear about Connecticut’s state employee retirement system is so laced with partisan rhetoric and false statements that makes it almost impossible to have a meaningful debate about the problem and it’s vital that the state engage in an honest discussion about the pension system and its problems based on the facts and not the hype…

The real facts are these.

Connecticut has 57,825 state employees enrolled in the state’s employee retirement system.  Within that system are four separate pension program.  The old Tier 1 state employee pension program, which was closed to new enrollees in 1984.  Next the state adopted the Tier 2 program that began in 1985 and was then replaced by the revised Tier 2A program.  Finally, the Alternative Retirement Program provides a retirement system for faculty and selected staff at Connecticut’s public colleges and universities.  Instead of a pension these state employees receive what is in essence a 401(k) contribution that they can then take with them as their careers take them to other universities around the country.  Members of the Alternative Retirement Program do not receive a Connecticut state pension.

Of Connecticut’s active employees, the distribution of retirement plans is as follows;

 

Tier 1       4,569

Tier 2     19,298

Tier 2A   26,345

ARP         9,613 

 

Meanwhile there are 48,127 state retirees that receive some sort of pension and/or health benefits that they earned by fulfilling their legal requirements when they served as active state employees.  The following breakdown lists retirees by the retirement program the participate in;

 

Tier 1      29,888

Tier 2     10,986

Tier 2A       862 

ARP            391

 

As I reported in an earlier blog post, it is fair to say that the old Tier 1 pension program was pretty generous.  It is also vital to understand that of the 34,457 people participating in the Tier 1 system, 87% of them have already retired.  Only 13% or 4,569 active state employees remain in the Tier 1 system.

The average annual pension for Tier 1 employees is $34,917. 

However, since the benefit is calculated on the total number of years worked multiplied by the employees’ highest three years of income, some employees have managed to acquire large pensions either because they actually had high salaries or they used over-time to push up their salaries prior to retiring.  There are a total of 1,780 retirees with state pensions of $75,000 or more and 365 enjoy pensions of over $100,000.

Of the total 30, 284 people who are in the Tier 2 retirement program, 64% have retired and 36% remain in active service.   The average annual pension for Tier 2 retirees is $21,335.  The way Tier 2 pension is calculated it is more difficult for artificially pushes up one’s pension.  As result, there are 76 Tier 2 retirees with pensions of $75,000 or more and 15 with pensions of over $100,000.

The Tier 2A, the present retirement program for new state employees includes an even more limited pension program.  As of now, only 3% of the 27,207 Tier 2A employees have retired and the annual pension for these 862 individuals is only $11,289.  Of the Tier 2A retires one has a pension of over $75,000 and none have a pension of 100,000.

The bottom line is that new state employees and the vast majority of present state employees will not be receiving so-called “excessive” pensions when they retire. 

And while the state may want to explore creating yet another – Tier 3 – pension category, the real issue facing Connecticut IS NOT “reforming” the level of pension benefits for incoming state employees but how to deal with the obligation the state created under its older and now closed pension categories.

On a related front, there are some who want to explore the possibility of Connecticut reneging on its legal obligations by retroactively changing pension benefits or somehow defaulting on future payments. 

However, it is highly unlikely that the federal courts would allow a state to do that. Legal rulings to date are pretty clear.  While a private company can use bankruptcy to modify or avoid debts, states, with their taxing powers, do not have the ability to do that. (Although some states like California are or may seek ways to put that question to the test). 

Putting aside the moral question, the reality is that Connecticut will not be able to modify pension levels for those who have already retired and so we return to the fundamental problem of the fact that Connecticut obligated itself to future pension payments and then failed to set aside the funds to meet those obligations.

Furthermore, even if the state and unions could agree on legally allowable changes for present employees (and that is something the new Governor and the bargaining process can definitely explore) the bulk of the future obligations for retirees and future retirees are already in place. 

The failure of Connecticut state government to put aside the necessary funds simply can’t be undone.  The pennywise and pound foolish decisions of our elected officials have come to haunt us and separate of any discussions on “reforming the system”, the State must act by dramatically ramping up the level of funds it sets aside for obligations that are and will continue to come due.

When it comes to blame, there is certainly enough blame to go around but the burden now rests on Governor Malloy and the Connecticut General Assembly to respond to those mistakes and set things right.

Wait, What? Connecticut has more public employees than most states?

A reasonable and “grown-up” discussion about Connecticut’s fiscal crisis requires that politicians use data in an honest and appropriate fashion and not seek to mislead the public.

Yesterday New York media outlets were reporting that newly inaugurated Governor Andrew Cuomo is “getting ready to announce layoffs of 10,000 to 15,000 employees.”

Meanwhile, here in Connecticut, the CTMirror ran a story two days ago entitled “For the first time, Malloy talks of cutting rank-and-file workforce”.   The CTMirror was covering a conference in which Governor Malloy reinforced his commitment to reduce the number of state managers but then went on to imply that he may be proposing deeper cuts that would reduce the number of non-manager employees. 

At that same conference, Republican legislative leaders once again made the claim that when it comes to the number of state employees, Connecticut is bloated and way out of line compared to other states.  

The Republicans have been making the same claim during the last few legislative sessions and especially during last year’s legislative and gubernatorial campaigns.

The fact is – their statements are simply not true.

That is not to say we shouldn’t demand and expect greater efficiency, but to suggest that Connecticut’s state government is especially bloated or that we have more public employees than most states is a lie.

The U.S. Census Bureau compiles a wide variety of data including information on the number of federal, state, and local government employees.  The most recent data available is for payrolls as of March 2009.

According to that information, Connecticut  had 57,117 full time employees and 24,139 part time employees for a total of about 66,500 full-time equivalent (FTE) public employees. 

This number translates to approximately 19 state employees per 1,000 population.  Of this number 28% work for Connecticut’s colleges and universities and are thus primarily funded from student tuition and fees.

As observers know, the problem about comparing information state by state is that different states utilize different models to provide government services.  Many states use county governments and regional entities, as well as state and municipal governments to provide public services whereas Connecticut only utilizes two vehicles – state government and municipal government.

To get a sense of the real number of state employees involved in providing government services it is more useful to look at state, regional and local spending.  This data provides a more honest assessment of where Connecticut stands compared to other states.

Using the most recent Census data, Connecticut has a total public employee workforce of about 187,000 FTE positions at the state and local level or about 54 public employees per 1,000 population.

Compare that number to New York which has 64 public employees per 1,000 population, New Jersey with 58 public employees per 1,000 and Massachusetts with 49 public employees per 1,000 population.

While the political rhetoric would lead us to believe that Connecticut is especially bloated when it comes to public service workers that fact is we rank in the middle to lower half of the states.

More honesty and less rhetoric is what is needed going forward.

You can access the public employees information at : http://www.census.gov/govs/apes/

FOOTNOTE:  The key problem with comparing states is that here in Connecticut we don’t have county governments — so we “appear” to have a larger state because most states provide some “state-like” services at the county level – that’s why one really has to look at a combination of state and local units. 

A prime example is public safety – Connecticut would appear to have a lot more state police because we don’t have county sheriff departments like NY, etc.

Another example is correctional officers.  CT has 7,931 FTE correctional officers or about 2.3 per 1,000 citizens.  Compare that to NY who have 33,739 FTE state correctional officers (1.73 per 1,000) but you then have to add in the county/local correctional officers to get the picture of how many correctional officers are needed to run their prison systems.  In this case there are another 24,929 FTEs at the County/Local level so in total NY has 59,000 FTEs correctional officers 3.0 per 1,000.  If you did just the state calculation you’d say CT had way too many but we actually have significantly fewer.  

Interestingly if you do the same calculation or MA and NJ they come out with fewer total correctional officers MA is 1.4 per 1,000 and NJ is 2.0 per 1,000.