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The Harmful Effects of Collective Bargaining in Connecticut

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It’s with great dismay that I inform you of the legislature’s recent activity. On July 24, a new state employee union concessions deal was passed by the Democrat-controlled majority in the State House of Representatives. On July 31, Lt. Governor Nancy Wyman cast the tie-breaking vote in the State Senate to cement the agreement’s passage.  Despite passage of this agreement, Connecticut still does not have a budget.  It seems the Democrat majority is attempting to incrementally pass a budget with this latest vote, and this strategy is undoubtedly leading to tax increases and municipal aid cuts.  They will claim these decisions are inevitable, but I disagree.  They are causing a greater fiscal crisis.

This recently approved ten-year union agreement will undoubtedly have harmful effects on Connecticut’s economy for decades. Despite the efforts of Republicans in both the House and Senate, the legislature approved this new union contract. After its implementation we can surely expect the following: an increase in taxes, cuts to important social services and reduced funding for municipalities. All of this is done to account for obligated wage increases, benefits, and guaranteed employment for unionized state employees.

While the agreement does increase the amount that state employees pay toward their pensions and health care, it caps those increases leaving the state to fund any health care cost overruns over the next decade.  The agreement includes several changes to existing individual union contracts that actually increases costs for the state. I’d like to point out an important discrepancy within this contract – the benefits of unionized state employees continue to dramatically exceed the benefits that municipal union employees and private sector employees in Connecticut receive.  All of these benefits ultimately are driving tax rates up and leading to the out migration of our residents, including our retired state employees, over a third of which have left Connecticut.

On top of that, this agreement limits the state’s ability to privatize or find ways to make government more efficient by consolidating services or departments through a no layoff provision.  So while our non-profits who perform the same services at a lower cost than the state are forced to operate with less funding, our state agencies have guaranteed funding.

At face value, this new contract and the state’s budget appears to be balanced for the first fiscal year (FY ‘17-FY ‘18), but the reality is that it will ultimately have harmful effects on the state’s ability to attract new business and grow jobs. What’s even more damaging to Connecticut is that it will surely lead to massive deficits in the future and further perpetuate the tax-and-spend mentality that has drained the state’s taxpayers and businesses for so many years already.  For ten years, I have fought these type of bad fiscal decisions, and I am amazed that Governor Malloy and the Democrats in the legislature continue down this path expecting a different outcome.  I’m becoming more convinced that the only way this state will change is with a change in the political makeup of the legislature.