EAST WINDSOR, CT — Gov. Ned Lamont inched away Tuesday from a fight with state employees over cost of living adjustments for future retirees, but he’s not backing down from a fight with municipalities over picking up part of the teacher pension costs.
Following an unrelated press conference Tuesday, Lamont said he thinks cities and towns should help fund some of the teacher pension costs.
The legislature’s Education Committee stripped language from a bill that would require “non-distressed municipalities” to pay 25 percent of teacher pension costs and “distressed municipalities” to pay five percent of teacher pension costs.
“Look it’s the right thing to do,” Lamont said. “We’re picking up all the legacy costs.”
He said the state didn’t put money into the system for years, but “going forward I believe it’s important the towns have a little bit of a contribution there. The wealthier communities will pay a little bit more.”
As far as negotiations with the state employees union, Lamont said if he had to be frank about it, he thinks he can “take the cliffs out of our pension obligations” and “get some real savings on healthcare.”
But as far as the cost of living adjustment he wanted to make for future state retirees, “I think that will take a little longer,” Lamont said.
A spokesman for the governor later tried to clarify his remarks.
“The governor has not abandoned COLA restrictions completely but will work with the legislature to ensure the final product reflects a balanced budget,” the governor’s office said in a statement late Tuesday evening.
The cost of living adjustment was expected to save the state about $20 million and would require a vote of the State Employees Bargaining Agent Coalition—a group of labor unions which helped elect Lamont.
Labor was publicly convinced that Lamont, who they supported, would not ask them to re-open the 2017 contract even though Lamont never explicitly said that on the campaign trail.
“We are disappointed that Gov. Lamont has broken his campaign promise to not seek further givebacks from state workers after they made concessions three times over the last decade,” AFL-CIO President Sal Luciano, said following Lamont’s budget speech. “Our teachers, firefighters, nurses, corrections officers, and other state workers have already made concessions worth tens of billions of dollars, and to continue to go after these public service workers is patently unfair.”
Luciano added that the budget proposal doesn’t ask the wealthy to help solve the deficit.
Meanwhile, if the legislature doesn’t adopt Lamont’s proposal to shift some teacher pension costs to cities and towns, then it will need to figure out where to find about $73 million.
Connecticut Conference of Municipalities said in written testimony that the teacher pension shift to cities and towns “represents one of the largest property tax increases in modern history.”
The shift would impact some towns more than others at a time when the state is also looking to accelerate the reduction in Education Cost Sharing funding to wealthier communities under a new formula adopted last year.
“Towns have had no say in managing the teachers’ pension fund or in negotiating benefits or contribution levels,” Betsy Gara, executive director of the Council of Small Towns, said during the public hearing. “In addition, binding arbitration laws limit the ability of towns to negotiate teachers’ salaries, which contribute to benefit costs.”
She said the state was simply “offloading this cost from their balance sheet onto the towns, imposing an untenable burden on local property taxpayers.”
The Connecticut School Finance Project has mapped out the impact of the shift in some of the teacher pension costs to the towns.
The bulk of what happens next will likely happen behind closed doors.
Lamont and legislative leaders will need to negotiate a budget in the near future, but first the legislature’s two budget-writing committees will need to present their budget.
That won’t happen until the first week of May, after the revenue from the April 15 tax filing deadline is calculated.
All of these issues will likely be negotiated as part of a final budget package.
It’s unclear how the legislature will handle Lamont’s labor proposals since they are not part of the collective bargaining process.