OFA Finds Malloy’s Union Deal Will Save $700 Million; Is It Worth 5 More Years?July 24, 2017
An new analysis finds the Malloy deal with state unions will save $700 million over two fiscal years, but does that justify five more years of benefits?
The deal Gov. Dan Malloy (D-Conn.) and state employee unions agreed to earlier this year will save the state $700 million over the next two fiscal years, according to a nonpartisan analysis released on Monday.
The savings are roughly consistent with what Malloy and Democratic leaders have touted for months, but Republicans still insist it’s a bad deal because it extends generous benefits to state employees for five years, through 2027.
- Two-year savings from the deal amount to $700.4 million – $371.8 million in fiscal year (FY) 2018 and $328.6 million in FY 2019
- Four-year savings from the deal are $1.182 billion
- State employees will see a wage freeze in FY 2018, a one-time payment costing the state $104.9 million in FY 2019, and general wage increases worth $156.2 million and $351.8 million, respective in FYs 2020 and 2021
- The largest savings in the deal come from converting some retirees to Medicare Advantage and making changes to the state employees’ retirement system – $470.6 million and $983.6 million in four-year savings, respectively
Speaker Joe Aresimowicz (D-Berlin) and Majority Leader Matt Ritter (D-Hartford) introduced a resolution for the legislature to approve of the deal on Monday.
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