Boughton Says State Will Need Help From Unions To Mitigate Pension Crisis

By Scott Benjamin

Danbury Mayor Mark Boughton says Connecticut’s pension funding crisis can be partly resolved by having future employees assigned to the less-expensive “401-style” plan and using “buy-out” provisions and an extended payment period on the defined benefits plans for the current employees and retirees.

The state is facing $32 billion in unfunded obligations through 2030.

Benjamin Barnes, the secretary of the Office of Policy & Management, has said the state’s pensions were only 42 percent funded when Gov. Dannel Malloy (D-Stamford) began providing additional annual funding in 2012.

“The crisis didn’t materialize overnight,” Boughton said in an interview.

CT Mirror has reported that retirement benefits, bonded debt and Medicaid costs will represent about half of Connecticut’s $18 billion General Fund during the fiscal year that will start in July. State Rep. Toni Walker (D-New Haven), a co-chairman of the Appropriations Committee, has said that could lead to drastic cuts in existing programs under a package that already faces a projected $1.3 billion deficit.

Boughton calls it “the worst fiscal mess” in Connecticut’s history and believes the projected deficit for the two-year fiscal cycle starting next July could climb to a record $4.5 billion. Malloy entered office in 2011 with a projected $3.5 million shortfall.

The mayor, who announced an exploratory committee in November for a third run for the Republican gubernatorial nomination, said the magnitude of the crisis should force the leaders of the state public employee collective bargaining units to negotiate a less expensive program for new workers. CT Mirror has reported that those union leaders have rebuffed efforts by Malloy to take that step.

“The state should get its actuaries, the unions get their actuaries and then meet with the state Comptroller and come up with an agreement,” said Boughton, who is the mayor of Connecticut’s seventh largest city.

“You can’t solve this by raising revenue or by taxing the wealthy,” the mayor said. “Pretty soon that’s not going to work, and that’s what’s [already] put us in a downward spiral.”

“[The state unions] are going to have to come to the table,” Boughton said. “It’s simply what we have to do.”

Boughton, 52, said he is not sure if the need for increased pension funding should be exempt from the revised state Constitutional spending cap, which is currently being developed by a committee,

“I think a lot of that will depend on the negotiations with the unions,” the mayor said.

“It is absolutely critical that it’s a hard cap, and it is crafted in such a way that some smart lawyer can’t figure a way out of it,” said Boughton, who has served as mayor since 2001, the longest tenure in Danbury’s history.

He said all current municipal employees in Danbury have a 401-style plan, except the fire and police personnel who, as is the case with the current state employees, have a defined benefit package. The mayor said since the firemen and police officers sometimes “risk their life,” they deserve a more comprehensive package.

However, Boughton said, in large part, the state will not be able to alter the defined benefits payments for its retirees and current workers.

“If the state of Connecticut made a bad deal, then it made a bad deal,” he said of the agreements that were signed by former Gov. John Rowland (R-Middlebury).

Honeywell Vice President Kevin Covert is quoted in “The Selfie Vote,” Republican pollster Kristen Soltis Anderson’s 2015 book, as saying that today no “major corporation” would today start a defined benefits plan, because of its costs.

Boughton said if he is elected governor, he would try to defer some of the payments over a longer period of time and offer “buy-out” provisions in which retirees and current employees could invest their pension funds into a private program.

Regarding government operations, Boughton said the state “can function with fewer employees.”

He said that a reduction of the work force could largely be accomplished through attrition, although he indicated it would be “premature to come up with a solid number” on how small the work force could be.

“My intention is to work cooperatively with the unions and hope they see the catastrophic position that the state is in,” he said, noting that as a former Danbury High School Social Studies teacher he is still a member of the Connecticut Education Association. “Absent that, I have to represent the taxpayers without prejudice.”

Boughton acknowledged that there would be a cost to the layoffs through unemployment compensation payments.

He said that state government also could lower its costs through privatization.

Boughton said Danbury has privatized its emergency dispatchers and information technology staff. Additionally some social services functions are now funded for less cost through grants to non-profit providers.

The state’s hospitals have been critical of Malloy, who sought to suspend $140 million in payments to them earlier this year in an effort to help balance the state budget. Some administration officials have, among other things, said the hospital executives could receive lower salaries.

“I would honor our commitment to reimburse them for the dollars that they’ve been promised,” Boughton said. “Those people are hemorrhaging jobs, they’re hemorrhaging dollars.”

“They’re always interested in efficiencies,” he explained. “I don’t think that they’re this behemoth that doesn’t care about costs.”

They also are large employers.

Danbury Hospital has been the largest in the Hat City since 1990.

On federal fiscal policy, Boughton said it would be difficult for President-elect Donald Trump to reach his goal of four percent annual economic growth since consumers have become more savings conscious since the Great Recession of 2009.

However, he said “there is some benefit to” Trump’s proposal to lower business taxes from the current 35 percent to 15 percent.

Economics commentator Larry Kudlow of Redding, who was an informal advisor to Trump, has said there would be a payback within five years from the loss of revenue through productivity and investments. He has said it would make the United States more competitive with Canada, which has a 15 percent rate, and Great Britain, which has a rate of 17 percent.

Regarding his gubernatorial campaign, Boughton ran for the Republican nomination in 2010 and withdrew from the race shortly before the state convention to seek the nomination for lieutenant governor on a ticket headed by then-Lt. Gov. Michael Fedele (R-Stamford). He captured the nomination for lieutenant governor in a primary that August and ran on a ticket with gubernatorial candidate Tom Foley of Greenwich. They captured 128 of the 169 municipalities in November but lost by a scant 6,400 votes to Malloy and his running mate, Nancy Wyman of Tolland, who is now in her second term as lieutenant governor.

In 2014, the mayor placed second in the state convention, behind Foley, but then suspended his campaign before the primary when it became apparent that he wouldn’t have enough funding to qualify for the grants from the state Citizens Elections program.

Political pundits have mentioned at least 10 prospects for the 2018 GOP run, including former state Senate GOP Leader John McKinney of Fairfield, who placed second in the 2014 primary to Foley.

Many political observers believe Malloy, who had a 24 percent approval rating in a Quinnipiac University poll earlier this year, will not seek a third term in 2018.

Boughton - who has billed himself as a blue-collar Republican with degrees from Central Connecticut State University in New Britain and Western Connecticut State University in Danbury - has been hindered by a lack of fund-raising in both bids. He launched his exploratory committee last month – nine months earlier than in the last cycle. He is raising contributions of up to $100, hoping to reach the $250,000 threshold needed for the Citizens Elections Program.

The last sitting mayor to be elected governor was Morgan Bulkeley of Hartford in 1888. However four of the last eight governors – Democrat John Dempsey, Republican Tom Meskill, A Connecticut Party’s Lowell Weicker and Malloy – served as a mayor or first selectman before ascending to the state’s top office.

Boughton said although digital media advertising is growing, candidates for statewide office “will still have to be up on television for name recognition.”

He said his Political Action Committee ran a digital ad for GOP candidates during the recent election, which cost just $5,000 but generated 150,000 views and considerable activity on Facebook.

“There’s a strong argument to be made that more money can be put into digital,” Boughton said.

He has been popular in the social media for years, which apparently has helped him, in particular, with voters 25 and under. His Twitter list has grown from 10,500 to 28,000 people over the last four years.