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Appropriations Vote

JPE Union Board


Bothers and Sisters,

Despite concerns about the state's huge pension liabilities, a key committee approved a deal Tuesday that restructures pension payments by spreading them out over an additional 15 years.

Before passage, some Republicans said the state needs to make further improvements to rein in costs and control the billions of dollars that are poured into the fund through the years.


The legislature's appropriations committee approved the agreement 30 to 10 among House members and 10 to 2 among senators. The deal could be approved as early as Feb. 1 in both the full House and Senate.

The deal between Gov. Dannel P. Malloy and state employees restructures future payments into the pension fund, but does not change the benefits or contributions of any retirees or current employees.

Malloy's budget team said approval was needed because it helps the state avoid pension payments as high as $6 billion annually in the future, which officials said is unaffordable because it would likely represent about 25 percent of the entire state budget at the time.

Attorney Dan Livingston, the chief negotiator for state employees, said the deal should be viewed independently of any other fiscal problems that the state is facing.

"If you turn down this agreement, all you're doing is creating a new problem," Livingston told legislators on the budget-writing appropriations committee.

But Rep. Melissa Ziobron, the ranking House Republican on the budget committee, said the state needs to make further reforms, including removing overtime from pension calculations. In a long-standing practice, some hourly employees, including state troopers, work large amounts of overtime in their final three years in order to receive increased pension payments for the rest of their lives.

"I feel there's nobody watching the back of the taxpayer," Ziobron said.

When Livingston said that state employee pensions are moderate in size, Ziobron countered that they would be moderate if overtime calculations were not included.

If overtime is removed from pension calculations, then "you are discriminating against blue-collar workers and in favor of salaried workers," Livingston said.

Overtime, however, is not part of the agreement and will be debated again, lawmakers said. The deal affects about 80,000 people, including 43,000 unionized state employees, 7,000 nonunion workers, and about 30,000 retirees.

Both Republicans and Democrats said a positive move was to reduce the annual assumed rate of return from 8 percent to 6.9 percent. They said that assuming the fund could grow by 8 percent every year, in up and down markets, is not realistic.

Suzanne Bates, the policy director of the conservative Yankee Institute for Public Policy, said the state needs pension reform in order to save money.

"We're in a house that's too expensive for us," Bates told lawmakers. "We believe our pension benefits are too expensive at this point. My hope is that this is not the end point, but the beginning point."

But Sen. Cathy Osten, the committee's new co-chairwoman, said the agreement focused only on the funding mechanism of paying the pensions.

"This resolution is not about pension reform," Osten told Bates. "We are here talking about the resolution at hand. .... The only person today who has characterized this as pension reform is the Yankee Institute. ... The only person who brought up the statement was you."

After lawmakers repeatedly talked about the broader issues that are beyond the scope of the pension agreement, Rep. Toni Walker of New Haven asked her colleagues to stay focused on the issue and avoid heated exchanges.

"Everybody have a cup of tea," Walker urged before the lawmakers adjourned the hearing for one hour and headed into caucuses to discuss how they would vote.

"This is a good step toward increasing stability and managing the long-term obligations of the state, and shows the willingness by all parties to come together for the benefit of Connecticut taxpayers and the health of our future economy," House Speaker Joe Aresimowicz said. "In a perfect world, we wouldn't have to consider this, but when Governor Rowland started us down the path in the early 1990s of deferring future obligations, this is where we ended up."   Besides bipartisan support in the legislature, the deal was favored by the 10,000-member Connecticut Business & Industry Association, along with Wall Street bond rating agencies.


Carmen A. Roda


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