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April 15, 2024

Budget panel OKs 2.5% raise for most CT state workers

CLARICE SILBER / CTMIRROR.ORG Rep. Gregg Haddad, D-Mansfield, addressing the House in 2018.

Majority Democrats on the General Assembly’s Appropriations Committee approved a 2.5% general wage increase Friday for about 46,000 state employees, many of whom also would receive a step hike in the coming fiscal year.

The raises, which the full legislature is expected to vote upon before the regular session ends May 8, would cost more than $190 million, according to analysts for the legislature and for Gov. Ned Lamont.

The committee approved the increases after a hearing during which some Democratic members chastised the administration for not recommending sufficient funding to help public colleges and universities cover the full cost.

“If we have a weak educational system, we have a weak state,” said Rep. Toni E. Walker, D-New Haven, co-chairwoman of the Appropriations Committee.

Public colleges and universities are in a fiscal bind

The raises, negotiated earlier this spring by the administration and the State Employees Bargaining Agent Coalition (SEBAC), apply to nearly all state workers. But not all the increases would be paid for out of the state budget.

The legislature’s nonpartisan Office of Fiscal Analysis estimates it would cost the budget $121.2 million to give workers the 2.5% general raise on July 1 and the step increase on Jan. 1. A step hike, which recognizes experience, typically adds about 2 percentage points to a worker’s raise. The tentative deal also allows many seniors who are ineligible for that experience bump to get a lump sum payment or a secondary percentage increase.

But public colleges and universities, which receive operating block grants from the state budget, still employ many staff with funds from other sources, such as tuition, other student fees, and federal and philanthropic grants.

The Lamont administration says Connecticut has reserved enough funds to cover raises for all employees, paid for out of the state budget.

But the University of Connecticut, with about 10,000 total staff, covers about 70% of its payroll expenses through sources other than its block grants.

The CSCU system, which includes four regional state universities, 12 community college campuses and the online Charter Oak State College, pays for about 40% of community college operations, including staffing, with tuition, fees and other revenues that don’t include the state block grant. For the regional state universities, it’s about 60%. Collectively, the system employs more than 14,000 full- and part-time workers.

State analysts say higher education units will have to cover about $70 million of increased salary expenses not supported by their block grants. Higher ed units already were projecting deficits for the upcoming fiscal years as the federal pandemic relief grants that Lamont and legislators have used to bolster college finances in recent years have nearly been exhausted.

All units already have ordered tuition and fee increases for next fall and begun developing program cuts.

Democrats on the Appropriations Committee pressed Lamont’s deputy budget director, Paul Potamianos, to explain how these higher ed systems would handle the $70 million price tag.

“The college units have a variety of levers at their disposal,” Potamianos said. Besides seeking more from students and their families, other options he mentioned include redirecting grant money and tapping other resources. 

“I find that answer to be entirely unsatisfactory,” said Rep. Gregg Haddad, D-Mansfield, who co-chairs the legislature’s Higher Education Committee and whose districts includes UConn’s main campus in Storrs. Community colleges rely overwhelmingly on state aid and student fees, he said, adding that higher education units risk their academic accreditation if they don’t maintain sufficient budget reserves.

“That’s going to result in [another] increase in tuition,” said Sen. Mae Flexer, D-Windham, whose district not only includes UConn’s main campus but also Eastern Connecticut State University in Windham and Quinebaug Valley Community College in Killingly.

“It’s a shame that we can’t get some straight answers here this morning,” she added.

But Potamianos said the administration not only has been forthright, but that higher education officials long have known the $70 million challenge was coming.

Traditionally, the legislature and governor have provided colleges and universities with resources only to cover raises for positions funded through the state budget, he said.

Potamianos didn’t specifically suggest Friday that higher education units work harder to cut spending and find efficiencies, something that Republican lawmakers have argued repeatedly for more than a year.

But the budget deputy did note higher education officials had years to plan for this issue.

Lamont and unions struck a four-year deal in 2022 that granted a 2.5% general wage increase and step hikes for each the first three fiscal years — from 2021-22 through 2023-24 — and various changes to benefits. They agreed to reopen and resolve compensation this spring for the final fiscal year, 2024-25.

The latest proposed raises largely mirror those from the earlier years and were projected in 2022.

“If the higher education units did not plan for that [$70 million] impact but instead were hopeful that a state appropriation increase would cover that, I would say that was an opportunity that may have been missed,” Potamianos said.

Walker asked the deputy budget director when the state had last broken from tradition and funded all higher education raises out of the state budget. Potamianos noted that was just two years ago, in the spring of 2022.

At that time, the state was flush with cash, not only from federal pandemic relief, but also from a record-setting budget surplus that would total $4.3 billion — a staggering cushion equal to one-fifth of the entire General Fund. 

But it also happened while Lamont, a Democrat, was running what would prove to be a successful campaign for reelection. Republican legislators charged the governor was overly generous with raises — full-time workers across most of state government got $3,500 in bonuses — to ensure a key part of his labor base was happy.

GOP opposes raises, questions affordability

Republicans on the Appropriations Committee questioned whether the state could afford the latest proposed pay hikes.

GOP senators and representatives on the committee opposed the raises unanimously Friday and were out-voted by majority Democrats in two separate tallies that went largely along party lines. (Though all committees include senators and representatives, legislators must vote separately — by chamber — on contracts.)

And while legislators included funds to cover raises — excluding those for certain higher education employees — in the preliminary $26 billion budget adopted last spring for 2024-25, Sen. Eric Berthel of Watertown, ranking Republican senator on appropriations, noted that plan already has sprung several leaks.

  • Pension and other retirement programs need another $156 million to meet mandatory contribution levels.
  • State agencies have reported more than $310 million in gross over-spending this fiscal year, with much of that problem involving Medicaid-funded programs. Analysts typically project at least a portion of these cost overruns to continue for more than one year.
  • And sales tax receipts have fallen well below anticipated levels as inflation has dropped. This year’s collections already are $225 million below the level anticipated in the next state budget.

This proposed agreement only deals with raises for next fiscal year. Other working conditions won’t be addressed until a new contract is developed one year from now.

But Rep. Tammy Nuccio of Tolland, ranking House GOP member of the Appropriations Committee, said the state is overdue to address abuses of remote-work rules developed in the first few years immediately after the coronavirus struck Connecticut in 2020.

“I don’t know that I can support any SEBAC contract going forward that does not bring employees back into the office and that does not put workers back into the homes of needy people,” Nuccio said. “Virtual visits and people working from home and long queue lines and stuff is just not acceptable.”

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