Connecticut government’s overtime costs continued to tick upward to open the new fiscal year, according to a new report from nonpartisan analysts.
But the same development that helped spark the latest increase — a surge in veteran worker retirements between January and June — also has left overall payroll costs well below those of one decade ago.
State agencies, excluding the University of Connecticut, spent $77.9 million on overtime between July 1 and Sept. 30, the first quarter of the 2022-23 fiscal year, according to a new report from the legislature’s nonpartisan Office of Fiscal Analysis.
That’s $7.9 million or 11.3% higher than agencies spent during the same three-month period during the prior fiscal year.
OFA totals include all three branches of government and most higher education units but exclude the University of Connecticut’s main campus in Storrs and most of its satellite campuses, which use a different human resource/payroll system from the rest of state government.
The latest report from nonpartisan analysts comes just a few months after Connecticut closed the books on the 2021-22 budget that saw General Fund overtime spending rise by $26.1 million or 11.1% for the fiscal year, reaching $266 million.
But the increase in overtime costs hasn’t translated into higher overall compensation expenses for the state.
The Office of Policy and Management estimates overall compensation in all areas covered in the OFA report — including salaries, overtime bonuses and paid leave — will stand at roughly $2.5 billion this fiscal year.
That’s well below the $3.4 billion annual payroll from one decade ago, once the $2.7 billion price tag from 2012 is adjusted for inflation using the U.S. Bureau of Labor Statistics inflation calculator.
The State Employees Bargaining Agent Coalition, which includes most worker unions excluding state police troopers, has argued for much of the past two years that public-sector staffing has reached a crisis point.
“State workers are exhausted, working triple and even quadruple shifts just to keep the doors open,” said Drew Stoner, spokeswoman for the labor coalition.
Though short staffing is a concern across all state government, Stoner said, the problem has reached a critical stage in several departments, including Mental Health & Addiction Services, Correction, Developmental Services and Children & Families.
The latest report and others from nonpartisan analysts shows some of the highest overtime growth has occurred in these agencies.
The four departments Stoner cited, along with the Department of Emergency Services and Public Protection — which includes the state police force — account for 92% of overtime spending in first quarter of this fiscal year and throughout each of the prior two fiscal years.
SEBAC has pushed Gov. Ned Lamont and the General Assembly to adopt a policy of aggressively refilling positions — across all agencies — after more than 4,400 senior workers retired between Jan. 1 and June 30. In a typical year, the state sees 2,000 to 2,500 retirements.
Many workers stepped down then to avoid retiring under new pension rules that took effect July 1.
A new system for making cost-of-living adjustments to pension payments is tied to the Consumer Price Index and features a series of caps that could produce adjustments smaller than the CPI.
The first COLA payment for workers who retired after July 1 won’t come until 30 months after retirement. Under the former system, that payment came within the first nine to 15 months.
Despite this surge in retirements, most of the erosion in the state’s workforce occurred during the decade of the 2010s.
Gov. Dannel P. Malloy, who served from 2011 through 2018, worked in conjunction with the legislature to reduce staffing to help mitigate frequent budget deficits.
The Executive Branch workforce, excluding all higher education units, shrank by 10% during his tenure, falling to around 26,500, according to the Office of Policy and Management, the Executive Branch’s chief budget and labor relations agency.
“A dedicated and fully staffed state workforce is what Connecticut needs in order to properly offer the crucial public services our state’s residents rely on without accruing increased overtime expenses,” Stoner added.
The Department of Administrative Services works with other agencies to develop job descriptions and post openings and otherwise oversee the hiring process.
And both DAS Commissioner Michelle Gilman and Lamont said in late June that the so-called “silver tsunami” of retirements was milder than feared, but the Executive Branch was responding and agencies are well positioned to preserve services.
Competitive salaries and bonuses, more strategic recruiting efforts and an increased reliance on digital platforms and hybrid working conditions helped the state hire more than 6,000 people last fiscal year, about 1,000 more than normal.
This past spring, the governor negotiated, and the legislature ratified, new four-year wage contracts with bargaining units representing the bulk of the state’s workforce.
The contracts include 2.5% annual cost-of-living hikes, step increases — adding another 2 or 2.5 percentage points to the pay of all but the most senior workers — and $3,500 in bonuses spread across this spring and summer.
“DAS is proud of the work we have achieved with our agency partners in turning over every stone to recruit talent, in particular, positions in the fields of healthcare, public safety, and other fields serving Connecticut’s most vulnerable residents,” Gilman said last week.