State Comptroller Kevin Lembo wants questions answered before he can embrace Gov. Dannel P. Malloy’s budget plan as outlined before his cabinet. Chief among Lembo’s concerns are the governor’s pension plan adjustments.
The governor has proposed splitting the state employee retirement system into two funds, one a closed pay-as-you-go plan for Tier 1 retirees for whom most of the unfunded liability applies, and one open plan for Tiers 2 and 3. This fund will be 95 percent funded, and will be sustainable, Malloy said.
“First, in pulling a population of retirees (Tier 1) out of the State Employees Retirement System, liabilities are not eliminated – but shifted elsewhere. How does this liability shift affect the General Fund and state spending cap? How does it compromise federal revenue that the State Employees Retirement System receives related to fringe benefit recovery? These are only preliminary questions that we must fully explore,” said Lembo.
The comptroller has his own budget stabilization plan that he thinks should be implemented sooner rather than later. “I would ask that the Governor consider working to move up implementation of my plan, approved by the legislature this year after broad bipartisan consensus, to stabilize Connecticut’s revenue and budgets through the Budget Reserve Fund. Initially proposed to become effective this biennium, the implementation of my proposal was delayed until 2020. The sooner we adopt my Budget Stabilization Plan, the sooner policymakers, municipal leaders, nonprofits and businesses can all benefit from budget stability,” he said in a statement.
Lembo added, “Under the right conditions, I would like to support these solutions – but they require greater detail, deeper analysis, and raise several questions that we must consider.”
