Help us uncover corruption.

As a nonprofit newsroom, we rely on contributions from readers like you to fund our deep-dive journalism and help us uncover corruption in Connecticut. Can we count on your tax-deductible support?

Thank you for subscribing! Keep an eye on your inbox for news and investigations.

An account was already registered with this email. Please check your inbox for an authentication link.

Stay in the know with our free emails

News and investigations you can't find anywhere else. Subscribe to our free newsletter to get the latest news delivered straight to your inbox every Wednesday and Sunday morning.

Support our work

As a nonprofit newsroom, we rely on contributions from readers like you to fund our journalism. Donate today and your support will help make tomorrow's news possible.

News. Investigations. Opinions.

Open Search Home » During public hearing on SEBAC agreement, echoes of the past, concerns about the future

During public hearing on SEBAC agreement, echoes of the past, concerns about the future

by Marc E. Fitch April 19, 2022 August 15, 2023

The Appropriations Committee heard public testimony on the new agreement struck between Gov. Ned Lamont’s administration and the State Employees Bargaining Agent Coalition (SEBAC) that offers bonuses, general wage increases and step increases totaling $1.86 billion over four years for 46,000 state employees.

Hovering over many of the comments, both for and against approval of the contract, was how Connecticut weathered the 2008 recession — notably previous SEBAC concession agreements, budget deficits, poor state economic performance and a declining state workforce — combined with concerns about a retirement wave, fewer state employees to administer services and whether the state can afford the increases.

Subscribe to our free newsletter, delivered to your inbox every Wednesday and Sunday morning.

The Lamont administration and SEBAC representatives argued the wage increases are necessary in light of a coming retirement cliff in July of this year, past concessions and high inflation rates.

“The agreement before you is the first since the recession began in 2008 that was not negotiated not in the midst of a fiscal crisis,” said attorney Daniel Livingston, chief negotiator for SEBAC. “The prior three agreements not only have contributed to ongoing savings of well over $3 billion each biennium but they also specifically involved six hard wage freezes in a ten-year period.”

“For most of the 13 years since the recession began, we chose to balance our budget largely on labor concessions and service cuts including significant cuts in staff,” Livingston said.

“In the past 12 years we’ve had multiple rounds of SEBAC negotiations with the state, we’ve given back several times both in terms of furloughs which are actual pay cuts and wage freezes, said Central Connecticut State University (CCSU) Professor of Chemistry and union president for CCSU professors Thomas Burkholder. “This is the first contract that we’ve seen in a while actually starts without concessions, starts without freezes or givebacks. I think it’s a fair agreement.”

The 2008 recession set off a decade of poor economic performance and near constant budget deficits for the state of Connecticut. Those budget gaps were bridged through a combination of tax increases in 2009, 2011 and 2015 and labor concession agreements, including wage freezes, in 2009, 2011 and 2017.

State employees did receive 3.5 percent general wage increases in 2019 and 2020 and layoff protections under the 2017 SEBAC agreement in exchange for a new retirement tier and increased payments toward employee healthcare.

Connecticut’s massive unfunded pension debt also raised concerns by some speakers, after the state failed to save enough money to fund state employee pension obligations, a combination of decades of underfunding and a deal struck by Gov. John Rowland and SEBAC in 1997.

Connecticut currently has a budget surplus driven by an influx of billions in federal COVID-relief funds, higher-than-expected tax revenue driven in large part by Wall Street gains and a maxed-out budget reserve fund.

Those opposing the agreement, however, raised concerns about how the state will pay for the agreement in the future and its effect on taxpayers.

“My opposition to the agreement is based on the dire financial position of the state which has been masked by the massive federal funding made available in response to the COVID crisis. Those funds are soon to dry up and there’s nothing but billions of dollars of deficits forecast for as far as the eye can see for the state of Connecticut in the out years,” said former Republican State Senator from Meriden Len Suzio. “The SEBAC agreement will only magnify those unending deficits.”

“I’m very concerned with our ability to pay this going forward. Everyone wants to see our public servants do well, everyone wants to see our taxpayers do well, but I’m concerned with the level of remuneration as it exists right now,” testified Kevin Maloney.

New Canaan resident Jan Schaefer, who said she has a background in corporate finance, said she is “very concerned about the State of Connecticut and its financial wherewithal,” due to pension obligations, fiscal concerns and the agreement’s price tag.”

“It’s unsustainable if we stay on this path,” Schaefer said. “I feel strongly this is a bad deal for Connecticut. I think we need to go back to the drawing board and, quite frankly, focus on how we’re going to grow this state, how we’re going to create jobs and attract new people to pay taxes in this state.”

Jeffrey Beckham of the Office of Policy and Management said the 2.5 percent general wage increases were a better deal than the state could have gotten if it had gone to arbitration.

“With the recent budget surpluses and a projected surplus in the current year as well as the current levels of inflation, the state felt that the 2.5 percent was an amount that was affordable and was less than what would likely have been granted at arbitration,” Beckham said.

A number of labor representatives pointed out that Connecticut’s workforce has decreased by 20 percent since 2008, raising concerns over how the state will be able to support services in the future.

With a coming retirement cliff in July, the Lamont administration has indicated they believe the agreement will help retain some employees and sweeten the deal for new hires, after contracting a $2 million study by Boston Consulting Group to determine how the state can function more efficiently with fewer employees.

“The state has to live within its means just like the families and businesses we serve and represent, but this is also a unique situation where state employees did an extraordinary work during a paradigm-altering pandemic,” Lamont said in an April 1 press release. “This agreement provides a clear message to our state employees that we value their contributions to our residents while also providing a solid platform from which to recruit the new generation of public servants to our ranks.”