Carter contends state workers 'missed an opportunity'

By Scott Benjamin

The godfather of the New Deal had reservations about public sector collective bargaining.

Franklin Roosevelt - who ranks third overall in the 2017 C-SPAN poll of journalists, scholars and college professors on the 44 former presidents - once said that "collective bargaining agreements were incompatible with public sector work," according to the Show-me Institute.org.

The Show-me institute.org reported that his "issue with government collective bargaining is that in our system of government, 'we the people' set public policy through the democratic process. Binding the people to a collective bargaining agreement takes authority away from the people."

Recently, the Connecticut State Employees Bargaining Agent Coalition (SEBAC) announced that it would accept a 3.5 percent salary hike starting July 1 even though Gov. Ned Lamont (D-Greenwich) had asked that the employees postpone it following the economic impact from the pandemic.

CT Mirror reported that Lamont, who was endorsed in his 2018 campaign by organized labor, said, “I would have put it off, and I think we should put it off. I think we’re in an economy where you’ve got close to 20% unemployment. I think you’re in an economy where you see a lot of people on furlough.”

Larry Dorman - the public affairs coordinator for the American Federation of State and Municipal Employees Council 4, which represents about 15,000 state workers - told Patch.com in 2018 that state employees had accepted "six hard-wage freezes" over the recent years.

Lamont said that a Connecticut governor doesn't have emergency power to postpone the salary increases.

"The state employees missed an opportunity to stand by the people of Connecticut," said Republican Dan Carter of Bethel, who represented the state House in the Second District from 2011 to 2017, was the GOP nominee for the U.S. Senate in 2016 against Richard Blumenthal (D-Greenwich) and is now running again for his former state House seat.

"The Democratic legislators and the Democratic governor who was in office until two years ago [Dannel Malloy (D-Essex)] haven't shown any backbone," added Carter. "The state employees represent a large bloc of voters and they give them what they want."

Carter's campaign did an unscientific survey of the pay increase and as of June 15 had 388 responses with nearly 82 percent stating that the state employees should have postponed the increases.

"It's about what I had expected," he said in a phone interview.

The state employees have a no-layoff clause in their contacts through June of 2021.

"They have some protections that other employees don't enjoy," Carter said, making reference to the more than 288,400 workers that lost their jobs in Connecticut during March and April combined.

Carter, who served in the Air Force during Operation Desert Storm in 1991,faces first-term state Rep. Raghib Allie-Brennan (D-2) of Bethel in the November 3 election. Allie-Brennan, who has worked for members of Congress, lost in his first bid for the seat in 2016. The district includes parts of Danbury, Bethel, Newtown and Redding.

Under its current configuration, it has had five state representatives since 2002 - three Republicans and two Democrats - and is considered to be a swing district.

Allie-Brennan, a member of the Progressive Caucus, was unavailable for comment.

The leaders of the State Employee Bargaining Agent Coalition met with Lamont on May 5 about possibly postponing the salary hikes and then posted a statement on May 9. Daniel Livingston, the attorney for SEBAC, wrote, “Of course, state employees are already sharing the state’s fiscal pain. Those raises are due in accordance with the 2017 SEBAC agreement, where state employees to date have received one general wage increase in the last four fiscal years. Meanwhile large corporations and multi-millionaires and billionaires have done little to help address state fiscal issues. Their state and local tax rate remains below that of working families.”

Over the last three years union leaders have pointed to a report done for the state Office of Policy & Management, the governor's budget arm, by Segal Consulting that indicates that the collective bargaining units agreement with the state in 2017 would save taxpayers $24 billion over the next 20 years. They have indicated that no insurance executive or hedge fund trader has made those kind of sacrifices.

CT Hearst Political Columnist Ken Dixon has stated that the hybrid system for pensions included for new hires by Malloy in the 2017 agreement will save the taxpayers considerable money.

Could the wealthy easily pay more taxes to help make Connecticut more financially stable?

Patch.com has reported that state Rep. Bob Godfrey (D-110) of Danbury said in 2019 that in Connecticut the wealthy pay about four percent of their income for state and municipal taxes while the average for the middle class is about 8.5 percent of their income.

Patch.com has reported that economist Donald Klepper-Smith of DataCore Partners has said that on average a net of 428 people are leaving Connecticut each week. However, Godfrey insisted that the wealthy aren't the ones leaving the Nutmeg State. He told Patch.com in 2019 that Connecticut has 20 percent more millionaires now than it did in 2011 and the number of billionaires has increased from 11 to 17.

Kiplinger reported in June that Connecticut has the third highest concentration of millionaires in the United States

In his 2019 book, "People, Power And Profits" (371 pages, 2019, W.W. Norton & Company), Nobel Prize-winning Columbia University Economics Professor Joseph Siglitz wrote that the three richest persons in America - Jeff Bezos, Bill Gates and Warren Buffett - "are worth more than the bottom half of the U.S. population combined."

However, Carter said taxing the wealthy won't boost the economy in a state that has fewer jobs than it did in 1989.

"It is time to prepare Connecticut for a surge in economic growth and take advantage of the opportunity to attract businesses to Connecticut," he said. "Some studies suggest cuts in spending have no effect on economic growth, but an increase in tax reduces productivity. After the last economic crisis, tax increases and increased spending led to a lost decade where Connecticut's economic recovery lagged. Before we look at raising taxes, we must address state spending."

CT Mirror has reported that the Pew Charitable Trusts that Connecticut is one of only four states had addressed public-sector retirement benefits through collective bargaining. The state Commission on Fiscal Stability and Economic Competitiveness reported in 2018 that the pensions for the Connecticut state employees were only 29 percent funded.

"I do," said Carter when asked if the Legislature should have more input in determining the contracts for the state employees.

CT Mirror Budget Reporter Keith Phaneuf told a League of Women Voters forum in Wilton in 2019 that part of the reason was due to the state structurally under-funding the pensions each year from 1939 through 2010.

CT Hearst Business Columnist Dan Haar has reported that Malloy achieved savings by trimming the full-time state work force by 13.1 percent while in office from 2011 to 2019, largely through attrition.

Remarked Carter, "It's not just about reducing the number of workers, it is about having workers who will perform tasks more economically. For example, you could have non-profit organizations perform some of the work."

On a related topic, Nobel Prize-winning Yale University Economics Professor Robert Shiller has stated that public employee pensions should be indexed to the taxpayers' ability to pay. In his 2012 book, "Finance and the Good Society" (Princeton University Press, 304 pages), he wrote that gross domestic product would be an obvious metric.

In 2017 the current benefits contract with SEBAC was extended from 2022 to 2027.

Would Carter support eventually indexing the pensions to taxpayers ability to pay?

"Shiller's approach to linking pension funds to GDP is very intriguing," said Carter. "He has been critical of ending pension funds and moving to defined contribution plans due to a negative effect on the economy. This seems to be his compromise. I understand his concern about what happens to seniors who have mismanaged their investments in a 401 and how we might be on the hook later. I would have a similar concern about what happens when the economy retracts and we have an uproar about our poor seniors not making enough money."

Carter continued, "Politicians may not have the guts to let the system work and keep their hands out of it. After all, that is what makes defined contribution plans attractive in the first place. We have too many politicians who are giving away our financial future for their short term gains."