Republican ‘Common Sense’ Proposal Rolls Back Spending, Freezes State Workers’ Pay, Shrinks Government

January 25, 2011

Billions in Cost Cutting Proposals Offered to Address Fiscal Crisis

Read the Proposal

HARTFORD – Republican state legislators today outlined a plan to reform and right-size government while growing jobs in the economy.

The plan includes massive state government reorganization and downsizing, freezing state employee salaries, and other spending cuts to save Connecticut taxpayers billions over the next two years.

Republicans also offered other suggestions on how to deal with the state’s fiscal crisis: rolling back spending to previous levels; a 5 percent reduction in the state’s workforce; and cuts to the size and the scope of state government.  Republicans said their proposal is a true “hold harmless” for municipalities. It will preserve municipal aid over the next two years while saving the state approximately $1 billion.

No significant spending cuts have been made over the last two budget cycles, despite the massive drop off in revenue, which has led to the projected $3.5 billion deficit.

“Our legislative proposals will fundamentally transform the way government functions, making it smaller and more efficient through agency consolidations and employee benefit givebacks, from payroll to pensions,’’ House Republican Leader Lawrence F. Cafero Jr., of Norwalk said. “We also offer our other ‘Common Sense’ ideas of re-ordered priorities to deal with the state’s fiscal crisis that for too long has been ignored at the taxpayers’ expense.’’

Senate Republican Leader John McKinney of Fairfield said, “We are making a Common Sense Commitment to Connecticut taxpayers.  Excessive government spending and inefficiency has exacerbated our budget problems.  We need to reduce the size and scope of state government and we will work with Governor Malloy on these reforms.  Make no mistake:  These reforms and spending cuts are necessary.  Democratic governors in neighboring New York and Massachusetts are making them, and Connecticut needs to follow suit.”

Short and Long-Term Savings

The comprehensive set of proposals includes immediate savings for taxpayers, such as the 10 percent pay and perk cuts for lawmakers and elimination of longevity bonuses for state employees.  The two-year pay freeze for state workers would save $502 million, according to the non-partisan Office of Fiscal Analysis. 

Republicans said the long-term restructuring of pension benefits for state employees would require them to contribute more to their retirement packages and would raise the age of when workers could retire.

“We can no longer afford the size of government we have, and our pension and health care benefits are crushing Connecticut’s ability to provide all the services it does. We have to re-order state government now,’’ Cafero said.

Senator McKinney pointed out that, in 2012 alone, approximately $485 of every Connecticut resident’s income tax payment will fund future state employee retirements and that the state employee retirement system’s $11.7 billion unfunded liability represents approximately $3,325 per man, woman and child in the state.  Moreover, Connecticut employees contribute between 0 percent and 2 percent to their retirement plans, whereas other New England states have contribution rates between 5.1 percent and 8.75 percent.
“An important step toward putting the state’s fiscal house in order is bringing state employee pensions and benefits more in line with those offered in the private sector,” McKinney said.

Other features of the Republican plan:

  • Merging 43 agencies into 11, including combining all Legislative Management agencies into one entity;
  • Reducing the number of managers using private industry standards to determine the proper ratio to rank and file workers;
  • Limiting bonding to no more than 10 percent of the state budget. Connecticut borrowed $1.6 billion to pay for operating expenses in the last two years.
  • Eliminating the 10 percent corporate surcharge and the business entity tax; and
  • Providing tax credits to companies that hire off unemployment rolls.