Malloy Releases Analysis of Overtime Calculations, Says GOP Budget Overstates Savings

HARTFORD, CT — (Updated Wednesday 10:20 a.m.) Gov. Dannel P. Malloy isn’t in the room with legislative leaders negotiating a budget, but he’s trying to anticipate and steer some of that discussion from the outside.

One of the ideas he believes they’re debating behind closed-doors is removing overtime as part of the calculation for any new state employees who won’t be vested by 2027.

Malloy’s administration had the actuaries with Cavanaugh MacDonald Consulting LLC draw up two scenarios.

The first scenario, which Malloy said was legal, would remove overtime from pension calculations for newly hired employees who aren’t vested. Actuaries found it would only save about $5.32 million over two years, and the savings projected for fiscal year 2018 probably wouldn’t be realized until 2020.

The second, which he believes would be illegal and is part of the reason he vetoed the Republican budget, would eliminate overtime from pension calculations from vested state employees. He said the actuaries found it would save about $51 million over two years. He said that’s less than what Republicans included in the budget that passed with the help of eight Democratic legislators. However, Republicans said the higher number, which came from the same actuaries, included the elimination of cost-of-living increases and other pension changes.

Republicans said the number for the overtime calculation of $51 million over two years was exactly the same one they included in the budget Malloy vetoed.

“I hope this new information is useful to legislative leaders as they work to send a responsible and balanced budget to my desk,” Malloy said. “I’m hopeful they will not remake the very mistakes of our past the same mistakes that put Connecticut in its current financial predicament.”

House Minority Leader Themis Klarides, R-Derby, called it a “desperate attempt” to interfere with ongoing negotiations between GOP lawmakers and Democrats over the budget impasse.

“The governor is now calling into question the initial actuarial analysis that state actuaries undertook to assess the Republican budget proposal that was passed in a bipartisan manner,” Klarides said. “Now, in an attempt to inject himself into our negotiations he is trying to dispute the initial findings which show that hundreds of millions can be saved by making long-term structural changes in the state employee pension plan beginning in in 2027.”

Senate Republican Leader Len Fasano, R-North Haven, said since overtime is not a “right” anyone has or which can be protected, he doesn’t believe there’s anything wrong with eliminating it as part of the pension calculation for vested state employees.

“What the governor said today is the same thing he’s been saying for weeks. The only problem is he’s wrong,” Fasano said. “The governor continues to argue that pension reform 10 years from now cannot affect any state employee who is vested. But numerous courts have upheld the rights of the legislature to make such changes.”

Malloy said the numbers his office presented Tuesday prove there is no way to accomplish the savings that were outlined in the Republican budget.

“The whole thing is a castle built of sand. No cement,” Malloy said.

He also said he’s “hopeful they will reach an agreement I can sign. But I think it’s best to be transparent. This is the 12th day of those discussions.”

Legislative leaders have maintained their focus on negotiations without the governor’s interference. They expect to reach an agreement or not by 2:30 p.m. Wednesday.

They said that gives them enough time to present the proposal to their caucuses.