While a new report shows state employee overtime costs have risen for the second consecutive year, overall salary expenses are way down over the past decade.
The big factor behind both trends: a concerted push during former Gov. Dannel P. Malloy’s administration to reduce the Executive Branch workforce.
Overtime costs across most state departments and agencies cost the budget’s General Fund $234.3 million in the fiscal year that ended June 30, the legislature’s nonpartisan Office of Fiscal Analysis recently reported. The General Fund represents more than 90 percent of the total state budget and covers the bulk of annual operating costs.
That $234.3 million expense is up 2.7% from the 2018 fiscal year, and 14.6% since 2017, when the state spent $204.4 million on OT.
But overall General Fund salary costs, including regular wages and overtime, stood at $2.43 billion in the just-completed fiscal year. That’s $133 million — or 5% — less than they were in June 2009, 18 months before Malloy took office.
And if 2009 wage costs are adjusted for inflation, according to the U.S. Bureau of Labor Statistics’ inflation calculator, the drop over the past decade stands at nearly 21 percent.
Gov. Ned Lamont, who took office in January, also is looking to control overall wage costs, said Chris McClure, spokesman for the governor’s budget office.
“Governor Lamont is committed to keeping our state’s fiscal and operational house in order, which includes monitoring overtime use and staffing levels at our agencies,” McClure said. “In addition, we must examine the total costs related to employee compensation to include base salary expense rather than focusing on one metric such as overtime in isolation.”
For example, McClure added, law enforcement and other agencies with round-the-clock responsibilities often incur high overtime costs if too many vacancies exist. These departments also need additional time to replace staff, since significant initial training usually is required.
“We will continue to right-size staffing and maximize resources to reduce the demand for overtime, make government operate more efficiently, and deliver high quality services,” he said.
Malloy reduced the Executive Branch workforce by nearly 10% during his eight years in office. He also obtained union concessions twice, packages that included wage freezes in the 2013, 2018 and 2019 fiscal years.
The former governor relied on attrition, not layoffs, throughout most of his tenure to reduce the workforce, though legislative policy also drove that process.
Lawmakers routinely built huge, loosely defined savings targets into the annual budget, requiring the administration to achieve hundreds of millions of dollars in savings once the fiscal year was underway.
As Connecticut struggled for much of the past decade with a sluggish recovery from the last recession and annual budget deficits, this was a popular tool to limit the growth of state spending.
Labor unions, some legislators and other critics often charged this led to understaffing in some key agencies.
“The right-wing myth about the state workforce being the cause of Connecticut’s budget woes is simply nonsense,” said David Glidden, executive director of CSEA/SEIU Local 2001. “Our [past] budget shortfalls are due to an antiquated tax system which relies too heavily on the hardworking middle class and not enough on the wealthy who are capturing so much of the state’s economic growth.”
Glidden called efforts to constrain the state workforce “misguided,” adding it weakened Connecticut’s economy and lead state government to spend dollars inefficiently. “Increasing the size of the state workforce would reduce the need, both for overtime and for expensive outside consultants,” he added.
According to legislative analysts, the Department of Correction and the Department of Mental Health and Addiction Services ran up the most overtime across each of the past two fiscal years.
The DOC incurred $76.6 million in overtime expenses last fiscal year and $72 million in 2018.
DMHAS had $52.9 million in OT costs last fiscal year and $54 million in 2018.
I am curious, if offloading personal, responsibilities and expenses to any of the “13 Quasi-Public Agencies” created by Gov Malloy. Reduced or masked actually state employee salary costs. Giving the appearance of a reduction…that didn’t actually occur.
Of course, every dollar of overtime contributes to future pension obligations and it would be interesting to see data on what current state employees total cost is, including health benefits and pensions. I’d bet those are going up dramatically as overtime spiking grows.
Exactly!! There is a very good reason why TOTAL COMPENSATION is not included in this study so there can claim costs are declining when in fact they are not.
That’s a big increase since 2017. And since they pad the last three years for the pension calculations, that must mean there will be a wave of retirements in 2021. So predictable.
Pensions should be based on regular salary only. We really need legislators — and a Governor — with the backbone to take overtime pay out of the pension calculations. Will we ever get such elected officials with a spine? Wouldn’t bet money on it.
They could have negotiated that when they added 5 years to the SEBAC contract that goes until 2027 but they did not. I guess the state is not in that bad of shape if they could not get that concession. Even Massachusetts does not allow state workers to have OT in pension calculation. Just wait until all these 200K a year (with OT) state social workers and LPN’s retire.
I am curious, if offloading personal, responsibilities and expenses to any of the “13 Quasi-Public Agencies” created by Gov Malloy. Reduced or masked actually state employee salary costs. Giving the appearance of a reduction…that didn’t actually occur.
The workload of state employees is determined by the legislature. If the legislature doesn’t eliminate any programs, then the need for employees remains constant, and can increase if laws are modified to require further efforts.
So how was a workforce reduction achieved?
The obvious answer is moving state functions to other organizations, especially non-profits. That has happened, and more such moves are being contemplated. The same work is being done but by different people.
The state employees displaced could be moved to other state functions when they didn’t leave state service. That helped compensate for years of hiring freezes. But it produces an aging workforce.
With the (negative) incentives to retire soon, the state is going to be forced to a hiring surge even as the people who could train replacements are disappearing. Disruptions can be expected.
Staffing has declined to the point where in many areas there aren’t enough people to do the work. It’s increased because there are not adequate staffing levels.
Not everybody gets paid overtime. Quite a few get compensatory time. How, if at all, does that fact figure into this analysis?