Gov. Ned Lamont defended raises and bonuses Tuesday that could boost state employees’ pay close to 7% this year, calling them vital to the state’s ability to recruit talent and preserve services amidst high inflation.
But the Democratic governor also confirmed that workers could accept $2,500 of the $3,500 in bonuses offered under a tentative contract deal — and still retire before more stringent pension benefits take effect on July 1.
“I want a salary structure that allows me to recruit … the best and brightest,” Lamont said during a late afternoon, online press conference. “That’s not always easy.”
Lamont inherited an Executive Branch workforce in 2019 that already was down 10% from 2010 levels. Couple that with two years of a coronavirus pandemic and inflation that topped 7% in 2021, and keeping state workers has become challenging, he said.
But Republicans said the governor’s tentative agreements with more than 30 state employee bargaining units are little more than an election-year stunt to buy votes.
“Governor Lamont justified these bonuses as a means to retain workers,” House Minority Leader Vincent J. Candelora, R-North Branford, said. “For us now to be told these workers can receive the bonuses even when they retire demonstrates that the governor either made a bad deal for the taxpayers or misled the public to avoid the critical fallout of this lucrative political deal.”
The CT Mirror first reported on March 8 that Lamont had negotiated new wage agreements with roughly 43,000 unionized state employees — covering the bulk of the state’s workforce.
Each bargaining unit received a three-year deal, retroactive to last July 1, that includes a 2.5% general wage increase, a step hike for all employees except the most experienced, and a two-stage bonus.
Workers get a $2,500 bonus in mid-May, and another $1,000 in mid-July.
The State Employees Bargaining Agent Coalition announced last Friday that all units had ratified the deal. The legislature still must consider the agreements, and is expected to act before the regular 2022 session closes on May 4.
Senate Minority Leader Kevin Kelly, R-Stratford, said he questions how the deal amounts to a staff retention plan if workers can accept 70% of the pledged bonuses and still retire a month later.
“I think the governor’s being somewhat less than candid and frank with the public,” Kelly said, adding that workers in the private sector aren’t enjoying compensation hikes close to those state employees would receive.
Lamont acknowledged that step increases would add roughly another 2 percentage points to workers’ pay, while the bonuses represent a one-time hike of about 3%. Coupled with the 2.5% general increase, the overall compensation bump for many workers this year is around 7%.
“Connecticut families aren’t getting anything out of this,” Kelly added. “The only thing the middle class is getting here is the bill.”
But Lamont says the public is getting to keep state services that are under extreme pressure.
The state had 2,056 workers retire two years ago and 2,656 in 2021.
But according to data released Friday from the comptroller’s office, 2,086 workers have retired so far this calendar year, and another 1,330 have filed written notices of their intentions to retire before July 1.
The 3,416 retirements and planned retirements combined is up 10% from just one month ago.
Lamont also made two other arguments to defend the raises and bonuses: state employees responded with dedication during the pandemic, and state government can afford to pay more right now.
“It’s a way of saying job well done,” he added.
But the tentative deals with bargaining units technically don’t address hazard pay or special compensation for the pandemic. That still is being negotiated by the unions and the administration.
Lamont is correct, though, that the state’s coffers are unusually flush.
Connecticut has a record-setting $3.1 billion in its rainy day fund and is on pace to wrap this fiscal year with an equally unprecedented $2.7 billion surplus.
Administration officials estimate the wage increases and bonuses would cost $287 million more this fiscal year, and $403 million above 2020-21 levels next fiscal year.
Union leaders also said their members granted concessions to help close major state budget deficits in 2009, 2011 and 2017.
Those packages, collectively, included six fiscal years in which workers forfeited general wage and step increases, though they did receive lump sum payments in two of those six years.
All three concession packages also increased health care costs for workers, while two of the three tightened pension and retirement health care benefits. The last one specifically reduced benefits for those who retire after July 1, 2022, which had sparked this year’s rush of senior workers leaving the state employment.
Madison Republican Bob Stefanowski, who lost the 2018 gubernatorial race to Lamont and is seeking a rematch this year, has called the agreements “politics, pure and simple,” when they were first reported last month. “Governor Lamont wants the union vote next November, and he will do everything in his power to get it — at the expense of everyone else in Connecticut.”