Some public sector union abuses are usually not solely alive and properly, however extra egregious than ever.
In Connecticut, state staff are retiring with pension advantages greater than their final wage. How? It is a basic scheme often called “spiking.”
Tens of hundreds of Connecticut state staff benefit from the limitless proper to spike time beyond regulation — that’s, to work monumental hours of time beyond regulation simply earlier than retirement for the only objective of boosting the pensions calculation, which incorporates time beyond regulation pay in instant pre-retirement years.
And that’s not all. Beneath Connecticut Gov. Ned Lamont (D), unionized state staff have loved six consecutive annual pay raises, compounding to a whopping 33 p.c. It’s no coincidence that state worker wages have climbed the rankings to second place among the states. Nationally, personal sector pay has elevated solely 23 p.c over this span. Lately, Lamont promised his union allies “every year I’m here, you’re going to get a raise.”
Maybe we shouldn’t be stunned, since Connecticut’s public sector is the second-most-heavily unionized of the states.
Normally, states have been eliminating or progressively phasing out overtime-spiking. In essentially the most unionized public sector state, neighboring New York, former governors David Patterson (D) and Andrew Cuomo (D) instituted moderate limits on the inclusion of time beyond regulation in pension calculations starting in 2010. Former Governor Jerry Brown (D) eliminated pension-spiking in California in 2012.
In Connecticut, Lamont’s predecessor, Gov. Dannel Malloy (D), ended spiking for employees employed after 2017. But there are 28,000 pre-2017 hires nonetheless on the payroll.
My group carried out a study of of overtime spiking in Connecticut’s Division of Correction for the Nutmeg Research Initiative and the Yankee Institute. In every of the final 5 fiscal years, we recognized the ten employees with the best time beyond regulation pay. Eleven have retired. Their pensions averaged a shocking 138 p.c of their final wage.
These employees retired virtually instantly upon reaching retirement eligibility at 20 years of service. And why wouldn’t they, if retirement brings a right away 38 p.c increase? Why work six extra years to build up “solely” 33 p.c?
The beginning pension of 1 employee was $153,000. For comparability, the utmost Social Safety profit for these retiring at age 67 is $48,000. However this employee is probably going forty-something and can spend a long time making a living at different jobs alongside her sturdy month-to-month pension. In her final full yr on the job, this employee earned 80 p.c extra time beyond regulation pay than she earned in straight-time wages.
Beneath what sort of administration — or mismanagement — may this happen?
In 2020, Lamont employed Boston Consulting Group to check state company staffing and administration. The group reported that rampant absenteeism was resulting in widespread time beyond regulation and that the absenteeism was not simply incidental or unintended. Their report not solely implied strongly that staff have been gaming the system, but additionally laid out varied methods they may recreation it.
There’s a easy resolution: Allocate time beyond regulation evenly amongst youthful and older employees.
With statewide time beyond regulation up from $312 million 4 years in the past to $378 million final yr, clearly, the Lamont administration has not improved its workforce administration nor achieved reforms within the final contract negotiations in 2022. But, negotiations are underway once more, as a result of the present wage contract expires on the month’s finish.
State Sen. Rob Sampson (R) launched legislation to eliminate overtime from pension calculations. It died with out a vote. He plans to reintroduce it subsequent session, however its prospects are slim and none with Lamont in workplace and union-friendly Democrats holding supermajorities in each homes of the legislature.
Republicans have additionally proposed one other repair — particularly a two-year wage freeze. This could reasonable the fast-paced development of wage will increase, whereas additionally controlling quickly rising pension prices, since pensions are primarily based on wages. Not directly, this is able to considerably reasonable time beyond regulation spiking.
A wage freeze shouldn’t be unthinkable. Lamont’s predecessor, Democrat Malloy, imposed three annual wage freezes.
Current circumstances would advocate a freeze. Lamont and Democrat legislators cut raises out of the just-adopted budget for fiscal 2026, as a result of spending is barely inside constitutional price range limits. Two months in the past, Lamont himself imposed a hiring freeze for the rest of this fiscal yr, to maintain this yr’s price range in steadiness by way of June 30. However a number of weeks in the past, he threw within the towel on this yr’s fiscal problem and declared a fiscal emergency in order that he can legally spend above the cap.
The elemental drawback is that the state is paying unionized state staff prime greenback regardless of being in the worst financial condition of all 50 states. That is unsustainable. This primary drawback afflicts different blue states; unaffordable pay for public sector union employees is unsustainable.
In the present day, Connecticut Democrats are on the again foot. Republicans within the state ought to press the case for a freeze. Malloy confronted down the unions, why can’t Lamont? Why can’t he lastly take Boston Consulting Group’s steering and truly handle the workforce and clamp down on time beyond regulation spiking?
Pink Jahncke is president of the Townsend Group.