Senators Frantz, Boucher Question Administration’s Commitment to Creating Stable, Sustainable Budgets

February 15, 2017

State Senator Toni Boucher (R-26) and Senator L. Scott Frantz (R-36) today said they were extremely disappointed to hear an administration official’s continued support of expensive state employee defined benefit plans that have created significant budget deficits and instability. The administration has rejected suggestions from lawmakers and public sector leaders to switch new employees to a more affordable defined contribution plan.

On Tuesday, February 14, Office of Policy and Management Secretary Ben Barnes presented Governor Malloy’s proposed budget to the legislature’s Finance, Revenue, & Bonding Committee. When asked if the administration would consider revising the state employee pension plan to place new hires on a defined contribution plan, Barnes said no.

“To hear Secretary Barnes say he doesn’t believe ‘defined contribution plans are in the best interest of the employer,’ makes me question the administration’s commitment to economic stability and the taxpayers of this state,” Sen. Boucher said. “How can we be expected to create balanced, sustainable budgets if we don’t address one of its most problematic expenditures?”

The existing state employee defined benefit plan is presently underfunded, Sen. Boucher said, and has failed to perform anywhere near the rate of return agreed to by the State Employee Bargaining Agent Coalition.

Sen. Frantz said continuing to put new employees on the defined benefit plan is also problematic because the costs for those employees have increased significantly.

“Municipalities have recognized the unaffordability of defined benefit plans and, like the private sector, have adopted defined contribution plans,” Sen. Frantz said. “It’s baffling that the state would continue on a path that is certain to destabilize future budgets. It begs the question: How serious is the administration’s desire to create sustainable budgets that will allow our state to finally recover from the recession? Recent budgets have created an environment of economic uncertainty that put Connecticut’s recession recovery far behind other states in the region.”

The senators also said they are concerned with the budget’s proposal to shift state expenses onto local communities while eliminating the property tax credit residents receive on their state income tax returns.

“Requiring municipalities to pay a third of the cost of the State Teachers’ Retirement Fund and cutting funding to our communities virtually guarantees property tax increases,” Sen. Boucher said. “Towns have already cut costs to maintain balanced budgets while the state ran into the red. Now the administration proposes to punish those municipalities for their fiscal responsibility.”

“Secretary Barnes’s assertion that the budget should not lead to property tax increases contradicts the deep funding cuts many of these communities are facing,” Sen. Frantz said. “Considering how badly the administration has mismanaged recent state budgets, it’s in no position to tell municipalities how they should spend their money.”

As members of the Finance, Revenue, & Bonding Committee, Sen. Boucher and Sen. Frantz pledged to advance proposals to address the state’s pension problems, Reduces the tax burdens on local communities, and negate future budget deficits. Budgets must become more responsive to the needs of state taxpayers, they said.