Connecticut’s new pension panel is seeking to draw from state government coffers to keep rising pension costs at bay.
The Pension Sustainability Commission, which is exploring how to shore up Connecticut’s sagging public employee retirement system, ruled out using the sale or lease of state parks or other publicly used amenities. Instead, earnings from the Connecticut lottery, or unused state land and properties, could help shore up dwindling pension funds.
At its Tuesday meeting, the 13-member group’s chairman, state Rep. Jonathan Steinberg, a Democrat from Westport, said the state could slow growing pension liabilities by leasing, transferring, or borrowing against its assets. Except for raising taxes and using public properties, Steinberg said that “everything is on the table.”
“The single largest factor in this budget crisis has been the growing pension liabilities, both with the state workers and also with teachers,” Steinberg said, as reported by the Yankee Institute. “The burgeoning liabilities are quickly crowding out spending for all other aspects of government.”
Steinberg said state lottery revenue, which also helps fund Medicaid, debt service, and the Department of Education’s libraries and services, would be considered for use in the teachers’ pension fund as well. This is similar to New Jersey, which began using state lottery income to fund its struggling teachers’ pension system last year.
Connecticut’s pension plan is 41% funded, and pension costs are expected to increase significantly over the next 15 years. Annual contributions for state employees and teachers currently sit at $2.9 billion, and are expected to grow to $5 billion by 2026.
The state’s pension expenses currently eat about 15% of the general fund, which is valued at more than $19.43 billion.
The group, created in February, must report its suggestions to the state legislature, which next meets on January 9.