Malloy’s proposed labor agreement unreasonable, outrageous and insufficient
I read with interest Gov. Dannel Malloy’s Op-Ed in the June 19 edition of the Hartford Courant, in which he offered a spirited defense of his proposed labor agreement. Unfortunately, he left out some key facts that Connecticut taxpayers and residents need to know.
First, Connecticut is ranked number 47 out of 50 states in relative financial position according to PricewaterhouseCoopers Public Sector’s latest State Financial Position Index (SFPI) Report. A detailed review of the state’s audited financial statements discloses that about 75 percent of the problem relates to unfunded pension and retiree health care obligations.
In reality, the problem is much bigger since the financial statement numbers are based on investment rate of return and other assumptions that are not reasonable. In addition, the fiscal imbalance associated with pension and retiree health care obligations grows dramatically in future years due to known demographic trends and rising health care costs.
Second, according to an independent study by the Dr. Andrew Biggs of the American Enterprise Institute (AEI), who is a member of the PROMESA Board for Puerto Rico, Connecticut state employees have the highest total compensation premium as compared to the private sector of any state in the union. This is directly attributable to unreasonable, unaffordable, unsustainable and unfunded pension and retiree health care obligations.
Third, the two year savings labor contract outlined by Gov. Malloy will not come close to addressing the structural financial challenges facing our state and its municipalities. Gov. Malloy quotes gross savings over two years which are significant but not worth the conditions.
Gov. Malloy is proposing to extend the anti-layoff provision for several years and the labor contract term beyond a two-term period for the next governor. This is outrageous. No governor should be able to enter into a labor agreement that extends beyond one year into the next governor’s first term.
The plain and simple truth is that the serious structural reforms that need to occur to put Connecticut’s finances in order and improve our state’s competitive will not occur during Gov. Malloy’s and the current state legislature’s tenure in office. Fortunately, the GOP Senate and House leadership recognize that tough choices are necessary to reduce spending and that taxes should not be increased further. They have proposed some meaningful reforms for which they should be commended. However, much tougher choices will be needed starting in 2019.
Gov. Malloy should not extend the anti-layoff provision or the term of the current labor contract. He should enter into a two year labor agreement focused on balancing the biennial budget. If labor rejects a two year concessions agreement then Gov. Malloy should cut state spending and impose layoffs and unpaid furlough days on state workers in order to achieve the needed savings.
The next governor will need to have the courage, commitment, communication skills and proven experience to tell the truth and make the tough choices needed to create a better future in Connecticut. This will require many changes to the size and scope of state government and its operational practices. It will also require dramatic tax, regulatory, welfare, transportation, state employee compensation/benefits, and other restructuring efforts.
Connecticut is sinking. I am committed to doing my part to help save our sinking ship of state. The hard truth is that people with choices will not stay on a sinking ship if they have options. Many businesses and individuals are already voting with their feet. The 2018 election may be our last chance to save the Constitution State from further decline. I’m up to the fight, and I hope that others are as well.
David M. Walker of Bridgeport is a former U.S. Comptroller General and is seeking nomination as a Connecticut gubernatorial candidate.
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