While the bipartisan Commission on Fiscal Stability and Economic Growth will not address any Connecticut state budgetary or pension-related matters until March 1, two coalitions called for changes to the troubled pension system during a Wednesday meeting.
According to The Hartford Courant, the Yankee Institute for Public Policy and the Connecticut Business and Industry Association (CBIA) suggested the state pension system shore up its funds by increasing state employee contributions to 6%, eliminating overtime from their benefits calculations (leaving a maximum $100,000 salary calculation), and capping annual cost-of-living increases at 2%.
While the savings estimate from overtime cuts could not be provided, Yankee said the contribution hike would save Connecticut $4.3 billion over a 30-year period.
One of the main reasons for the Constitution State’s financial issues has been attributed to pensions. Earlier in the day, the state comptroller’s office indicated that roughly 1,400 state employees receive six-figure pensions, with more than 15,000 receiving more than $50,000 annually, The Courant reported.
Although the Commission has yet to take a stance on pensions, it is currently conducting public hearings to help determine which structural reforms the state should eventually take.
In response to Yankee and the CBIA’s suggested changes, the state’s Union group American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) President Lori Pelletier deemed them ludicrous, citing other things that the state can do, such as a detailed overview of the state budget and possibly rolling back certain tax cuts.
“If workers earn over $100,000, then why should they be punished for working?’’ Pelletier told The Courant. “A pension is part of your salary that you work your whole life for…how is that fair to the worker?’’
The Commission’s Co-chairman Robert Patricelli somewhat agreed with this sentiment, stating that there are more contributing factors to the state’s pension predicament than just the pensions themselves.
“Frankly, I think we’re more focused on the fundamental issues of pension and health care contributions,’’ Patricelli told The Courant. “The gut issues on pensions are things like the treatment of overtime, COLAs, the time to retirement, and all of those are pretty well locked in.”
For the current fiscal year, Connecticut’s pension funding is projected at $2.5 billion. Over the next two years, the Commission projects funding to be $2.6 billion each. In addition, it has projected retiree health care at $1 billion for the current fiscal year and $1.1 billion for each of the two following fiscal years.