Connecticut GOP offers up retirement incentive to fix budget
HARTFORD, Conn. (AP) — Certain state employees would be offered a financial incentive to retire in order to help rebalance Connecticut’s budget under a plan proposed by the General Assembly’s Republicans.
House and Senate GOP members on Friday publicly unveiled their list of ideas for closing a projected shortfall in the current $20 billion budget, estimated by lawmakers to be $350 million to $370 million.
The suggested retirement incentive program for employees would affect only those currently eligible to retire. They’d receive three years of additional credit toward their total years of service. Republicans estimate the proposal would save about $80 million this fiscal year and $95.6 million during the next fiscal year.
“Maybe if somebody is not ready to retire in January but we add three years, that may incent them to do so if they so choose,” said House Minority Leader Themis Klarides, R-Derby.
Democratic leaders, however, were skeptical of the plan, likening it to past retirement incentives that had dubious benefits for the state budget.
Republicans contend their idea is different from past incentive programs, which allowed people to retire early. This week, consultants from Boston College blamed part of the state’s unfunded pension liability problem on early retirement initiatives. Nearly $11 billion of the state employee pension system’s $15 billion unfunded liability stems from retirees receiving Tier 1 benefits, for people hired before 1984.
There are about 30,000 Tier 1 retirees, including 2,000 still working in state government. Senate Minority Leader Len Fasano, R-North Haven, said the GOP’s program might encourage those workers to retire.
But the majority Democratic leaders said they’re cautious about the idea and unclear about whether it would exacerbate the state’s unfunded pension liability problem and whether it would provide much savings for the current fiscal year. House Speaker Brendan Sharkey, D-Hamden, said Democrats need to further evaluate offering an incentive just to eligible retirees rather than early retirees, like past programs.
“I’m not sure that that really makes a big difference,” he said.
Meanwhile, Sharkey said the majority Democrats plan to publicly release their deficit-reduction ideas on Monday. Legislative leaders and Democratic Gov. Dannel P. Malloy will likely meet next week to review their respective proposals. They are aiming to hold a special legislative session next month to vote on a bipartisan plan to cover the deficit.
Republicans on Friday also offered possible long-term changes to state employee contracts, which would have to be negotiated with the unions. The list includes higher pension contributions, caps on cost of living adjustments, higher health insurance premiums and copayments, and the suspension of payments made to certain workers based on their longevity in state service.