Explaining the SEBAC Deal

 

Our friends and neighbors across Connecticut are working really hard for their families and businesses.  It’s not easy – and we know that Connecticut needs to make tough choices so we can speed up the growth in our economy, create jobs, and make ourselves much more competitive.

We were not elected to do the easy stuff.  We need to confront the fact that our state has accumulated high amounts of debt and billions in pension payments and other retirement and healthcare benefits that are now coming due.  Decades ago, the state promised substantial pension and healthcare benefits to state employees.  But for generations, our predecessors from both sides of the aisle borrowed without putting money aside to pay those commitments down the line.  And then, when the bill really began to come due in the 1990s, Governor Rowland signed a 20 year contract with state employees that guaranteed those pension and healthcare benefits.

We cannot unilaterally cancel or change these contracts.  Doing so would expose the state to legal liability under the Contracts Clause of the US Constitution. In short -- we have a Constitutional obligation to honor our contracts and commitments to state workers.  That means we have to negotiate changes with them -- and in any negotiation, you need to give something to get concessions in return.

This is the time for serious, far-reaching change.  That’s why we called on the state employee unions to open their existing contract and to agree to concessions that dramatically reduce the cost of their salary, pension, and healthcare benefits.  Understanding the situation the state is in, they agreed.  Together, we have put together a package of concessions and give-backs that total $1.5 billion over the next two years and that will save $24 billion in the long run.

We asked hard-working state employees to come to the table and give back billions in wages, health care benefits, and pensions.  They did that.

Now it’s up to us to take the next step.  Connecticut is still one of the most prosperous and productive economies in the world.  But we need to build a budget designed to make Connecticut even more competitive, to accelerate job creation, and that makes hard choices and reforms that make sure that state government is affordable for all of us in the years to come.

Let’s get back to work.