While most details of Gov. Dannel P. Malloy’s budget proposal have been dissected repeatedly since he unveiled it five weeks ago, one still-looming question could have a huge impact on state finances for many years.
Why does that two-year budget include $800 million for state employee raises — an amount that far exceeds anything Malloy set aside before and doubles the funding his staff estimated was necessary just five months earlier?
The answer to that question is crucial given that:
Malloy is seeking $1.6 billion in union concessions to close major deficits in the next two-year state budget.
Connecticut may have to extend a controversial benefits contract — guaranteeing pensions and retirement health care to workers — to get those concessions.
And the value of raises workers might surrender is vitally important to those who instead want to end pensions and other retirement benefits by allowing that contract to expire in 2022 — the last year of the next gubernatorial term.
Proposed funding for raises doubles earlier estimate
Most funding for raises in the new budget is included in the Reserve for Salary Adjustments (RSA) — a line item commonly used to cover raises that might be awarded after the budget is adopted.
Malloy recommended $317.1 million in the RSA for 2017-18, and $484.5 million for 2018-19, a total of $801.6 million for the biennium.
That total does include some back pay owed to workers.
Most unions agreed in the summer of 2011 to a concessions plan that froze wages in 2012 and 2013, and then fixed raises at 3 percent in 2014, 2015, and 2016.
Most unionized employees have been working in the 2017 fiscal year under that expired deal. The next state budget has to include pay hikes for the 2017 fiscal year as well as for 2018 and 2019.
“The RSA increase in FY 2018 vs. FY 2017 reflects a budgeting assumption that any future wage increases would be roughly consistent with average increases in prior contracts and would be retroactive to FY 2017,” said Chris McClure, spokesperson for the governor’s budget office.
In fact, the first three biennial budgets of Malloy’s administration don’t recommend RSA funding close to the levels in his latest plan, even considering the back pay that is owed.
Malloy recommended a total of: .. FOR REAR MORE CLICK HERE.