A recent Yankee Institute
study – “Unequal Pay: Public Vs. Private Sector Compensation in Connecticut” –
provides a data foundation that supports what everyone writing about budgets in
the State of Connecticut has known for many years.
The study shows that
while the average non-tax supported worker in Connecticut earns a slightly
higher salary than his state employee counterpart, benefits received by state
employees far outpace those in the private sector by a ratio of about two to
one. According to the study, total compensation for state employees, which
includes salary and benefits, exceeds similar compensation for non-government
workers in the state by at least 25 percent.
President of the
Yankee Institute Carol Platt Liebau put the principal takeaway from the study
pithily when she said, “Connecticut needs a return to fairness. The same
workers who earn less than state employees are facing more than $1 billion in
new taxes this year, much of which goes to compensate state workers. Bringing
state compensation in line with non-government earnings would save the state
between $1.4 and $2.5 billion, depending on the assumptions used.”
Even including the
two major tax increases of the Malloy administration, the first and second
largest in state history, Connecticut’s
chronic out-of-balance budgets are frequently in arrears. Temporary patches
have not prevented recurring deficits, and a recent move to impose a furlough
on some state workers is at best a temporary expedient that will do nothing to
repair the hole in Connecticut’s revenue bucket. The projected savings
mentioned by Ms. Liebau would do much to staunch the red ink flow which, Mr.
Malloy’s budget chief Ben Barnes continues to remind us, may be a fixed feature
of Connecticut’s economic universe for some time to come. The state’s recurring
deficits are caused by excessive spending. In the absence of other major tax
increases, any solution that does not include long term spending cuts can only
be a temporary palliative.
Of course, any
attempt to level the compensation playing field between state employees and
private workers -- most sensibly by reducing state benefits for new employees,
thus rendering less likely additional future tax increases, which in
Connecticut have been accompanied by anemic job growth and business flight --
is bound to produce considerable push-back from state unions and their enablers
in Connecticut’s Democratic dominated General Assembly. Mr. Malloy has in the
past advertised his solidarity with problem-causing union demands by marching
in picket lines with unionized workers, and he has shouted down most attempts
at leveling the compensation playing field as a virulent form of creeping
Scott-Walkerism. Mr. Walker is the governor of Wisconsin, and a cloven-footed devil
among the leadership of state union workers.
Mr. Malloy on the
other hand has given indications he means to keep the promise he made to
hard-hit taxpayers during his first term, a pledge he renewed unambiguously during
his re-election campaign, that further tax increases would not be necessary to
balance his budgets. The state budget should be reduced by about $1.5 billion
or more; long-term spending cuts would seem to be Mr. Malloy’s only viable
option. You cannot continue to take
revenue from a diminished pot of resources, and the pot in Connecticut has been
depleted by revenue raids conducted by progressives. State revenue has been
shrinking because the state’s economy, “the rising tide that lifts all the
boats” to employ John Kennedy’s formulation, has for many years been eroding in
response to crippling regulations, high taxes and a punishing economic uncertainty
that can be traced to an unwillingness on the part of the ruling party to
implement long-term solutions to chronic dislocations, both social and
economic.
Temporary fixes are needlessly destructive. Policy Director of the
Yankee Institute for Public Policy Suzanne Bates notes in a column she wrote for CTNewsJunkie, “There are two choices — freeze or lower pay
increases until parity is achieved, or reopen the SEBAC agreement to address
pension and health benefits.”
In order to
discharge the most recent deficit, Mr. Malloy has reduced in one of his
frequent rescissions the amount of tax resources usually given to state
hospitals. Asked earlier why he was plundering hospitals to balance his budget,
Mr. Barnes replied in the accents of bank robber Willy Sutton, “because that’s
where the money is." The real money is locked in state union contracts.
Patterning himself
after “bread and circus” Roman emperors, Mr. Malloy has launched a 30 year $100
billion infrastructure and transportation improvement venture, promising to
secure such funds as are necessary over the years to pay for his legacy achievement
by imprisoning them in an unraidable lockbox. In the past, similar lockboxes
have been used by governors as slush funds to patch budget holes, and it is
simply imprudent to tie the hands of future governors thirty years down the
road, especially now that the state’s tax revenue well has run dry.
However, if Mr.
Malloy is truly interested in preserving his transportation slush fund against
General Assembly raiders, he might consider tucking the tax money into an
impregnable, unassailable union contract.
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