Boucher Contends State Needs Rhode Island-style Pension Solution

By Scott Benjamin

Republican gubernatorial contender Toni Boucher says Connecticut doesn’t need to look any farther than neighboring Rhode Island to find a solution to its state employee pension fund crisis.

Rhode Island Gov. Gina Raimondo, a Democrat who was elected in 2014, began revamping her state’s pension system, which was only 48 percent funded when she was elected as state treasurer four years earlier.

The New York Times has reported that even after court challenges, public retirees annual increases have been suspended and public workers have had part of their defined benefit pension plan put into a 401k-style benefit.

Raimondo has said the reform retained some of the traditional pension structure while lowering the costs.

But Boucher, a resident of Wilton who was initially elected to the state Senate in 2008 after serving for 12 years in the House, says Connecticut Gov. Dannel Malloy (D-Stamford) has not been able to make similar revisions in a state pension plan that is only 35.5 percent funded and isn’t sustainable over the long term.

However, the 2017 agreement negotiated by Malloy’s staff and narrowly ratified by both chambers of the General Assembly has been hailed by the governor and the leaders of the state employee collective bargaining units.

The union leaders contend it saves the state $1.57 billion over the current two-year budget cycle and $24 billion over the next 20 years through a three-year wage freeze, higher employee contributions to their pensions and a less-expensive hybrid plan for the new hires.

The governor has called it the largest public employee concession package in Connecticut’s history.

Boucher paints a different picture.

“We have some of the most generous state employee benefits in the country at a time when our budget continues to be in deficit,” she said in a phone interview.

Red Jahncke, the president of the Greenwich-based Townsend Group, wrote recently in CT Hearst that the American Enterprise Institute that Connecticut is the "only state where public sector employees have higher wages than private sector employees."

Boucher pointed to a Pew Charitable Trusts study that Connecticut is one of only four states where collective bargaining plays a primary role in determining state employee pension benefits.

Boucher, who has an exploratory committee as she did four years ago when she considered a run for governor, said, if elected, she believes that Connecticut should follow Rhode Island’s example. In fact, she believes that step could be taken by having a discussion with the rank and file state employees if they were told, among other things, that there wouldn’t be sufficient money in their pension years from now under the current system.

Out of a roster of gubernatorial candidates that is large enough to fill the XL Center, Boucher is by far the one with the most experience in the General Assembly, and the only one other than state Rep. Prasad Srinivasan, a Republican state representative from Glastonbury, who currently serves in the General Assembly. She also has served on the Wilton Board of Education, including a stint as its chairman, and on the town’s Board of Selectmen.

Malloy, who served as mayor of Stamford from 1995 to 2009, announced last April that he would not seek a third term as governor.

Boucher said that instead of providing financial incentives as Malloy has through his First Five/Next Five program for larger employers – such as NBC Sports Channel in Stamford and the Bridgewater Associates hedge fund in Westport – the state could increase its job market by lowering taxes and electricity costs.

“I think the state regulators have been too lenient on the rate increases,” she said of the utility costs.

Boucher said that the potential areas for larger job growth are engineering, artificial intelligence, high technology and defense.

She also says the state’s higher education system should “better align instruction with the job market.” She indicated that some community colleges aren’t fully aware of where there are potential jobs for their graduates.

For years, state elected officials have said that there are major companies in Connecticut to find trained workers in some sections of their operation.

Boucher, the ranking senator on the General Assembly’s Transportation Committee, said a high-speed rail train route from the Rhode Island border to Greenwich could transform Connecticut’s economy.

However, she doesn’t want to embark on the $100 billion, 30-year comprehensive transportation package that was proposed by an ad-hoc study committee three years ago by installing tolls, increasing gasoline taxes or enacting fees on tires at least until it is determined why the Connecticut state Department of Transportation had considerably higher administrative costs than similar operations in other states.

Boucher said she has garnered 1,500 contributions and is about two-thirds of the way to reaching the $250,000 threshold to qualify for the state Citizen Election Program grants.

However, she did not meet the criteria to participate in the most recent Republican gubernatorial debate held in West Haven, which is in the Third Congressional District. She did participate in two of the earlier forums – one in the First Congressional District and one in the Second Congressional District – that have been sanctioned by the Republican State Central Committee.

Boucher said she plans to make a decision in April as to whether she will continue her campaign to at least the GOP state convention, which is scheduled for May.

The raft of Republican hopefuls includes former Secretary of the State candidate Peter Lumaj of Fairfield, Shelton Mayor Mark Lauretti, former Trumbull First Selectman Tim Herbst, former U.S. Comptroller General David Walker, former hedge fund manager David Stemerman of Greenwich, Srinivasan, former West Hartford Town Council member and gubernatorial contender Joe Visconti of West Hartford. Danbury Mayor Mark Boughton, former UBS executive Bob Stefanowski of Madison, Stamford Chief Financial Officer Mike Handler, New Britain Mayor Erin Stewart and former congressional candidate Steve Obsitnik of Westport.

Boucher said, “I don’t think there is any strong front-runner at this time.”