Government Sector Bleeding Jobs in Connecticut
Hartford Business Journal, April 7, 2017
By John Stearns
The government sector lost the most jobs in Connecticut last year and has been one of the hardest hit employment sectors since the Great Recession in 2008 — and the bleeding appears far from over.
The future for the sector — which includes federal, state, local and public higher education jobs, plus jobs in casinos run by tribal governments — looks bleak with budget challenges clouding state and local governments, in particular. The state has said 4,200 jobs could be lost if it can't win $700 million in labor concessions next fiscal year.
Job reductions at the state's two tribal casinos, Foxwoods and Mohegan Sun, have accounted for the lion's share of losses in local government, in which casino jobs are grouped. From 2008 through the first quarter of 2016, the state lost about 7,000 gambling jobs, according to the latest data available from the U.S. Census. Those declines accounted for about 60 percent of local government job losses in the state since 2008 and 38 percent of the 18,400 total government sector losses, including federal, state and public higher education.
The tribes say that without a third casino — proposed for East Windsor to counter the nearly $1-billion casino complex MGM plans to open by fall 2018 in Springfield — job losses will only continue, and casino and other revenues to the state will plunge. The tribes say 9,300 direct and indirect gaming jobs will be lost.
Andrew Doba, a spokesman for the MMCT Foxwoods-Mohegan joint venture planning the third casino, said he wasn't surprised by the government-sector job losses considering the casino competition that has sprung up around Connecticut.
"It shows what happens when we don't compete," Doba said. "When New York launched its gaming enterprise, we sat back and did nothing. When Rhode Island got in the game, we sat back and did nothing."
There's a clear record of what will happen if the state doesn't compete to keep the industry's good-paying jobs and benefits, he said. At their peak, the tribes employed about 23,000 people combined versus about 14,000 now by tribal estimates.
The General Assembly is considering a bill to grant a third casino to MMCT and another bill to open up casino bidding to others. Critics say a third casino, particularly one located just 13 miles from MGM's Springfield venue, will do little to curb job losses and only add to an oversaturated gaming market.
State budget constraints back to top
At the state level, if $700 million can't be saved through concessions, money will have to be found somewhere in major spending categories, said Chris McClure, spokesman at the Office of Policy and Management.
"I doubt there's an appetite that takes a $700 million lapse out of a major category like Medicaid or municipal aid, so it's likely going to come from personal services, staff salaries, staff benefits, which means layoffs," McClure said.
A concession package, though, may not necessitate any workforce reductions, he said, adding that it's possible the state could achieve $700 million in cuts without any appreciable changes to overall state staffing, with savings reached exclusively through a concession package.
While not speaking for unions, "it's possible that some of these concessions could force retirements because people would no longer want to work and contribute or take part in a system that they don't find as beneficial as they used to," McClure said.
The state reported 2,662 retirements last year, or about 550 more than in 2015, adding to cost savings from layoffs that also occurred last year.
"The layoff separations had an impact, most certainly, but the volume of retirements we saw was really high last year," McClure said.
Two unions with heavy representation among state workers, the Connecticut AFL-CIO and 1199 New England SEIU, which represents 7,000-plus healthcare workers in state agencies helping those that include the disabled, mentally ill, drug addicted and abused children, resent being the fallback position for budget cuts.
"State workers have proven time and time again that they are willing to come to the table and to help come to a resolution together," said Lori Pelletier, president of the state AFL-CIO. "They don't mind being partners, they just don't want to be prey."
Pelletier and Jennifer Schneider, spokeswoman for 1199, called for addressing issues like large corporations that pay their employees so little that their workers have to utilize state services, essentially subsidizing the businesses' low wages.
There has to be a discussion about revenue, including issues like raising the capital gains tax, Schneider said.
"There is a view that state workers are the only solution to a problem, which is just so myopic," she said.
State services and workers keep getting reduced, but the deficit keeps growing, Schneider said.
"The only real solution … is to really address the revenue side of it," she said.
Pete Gioia, an economist for the Connecticut Business and Industry Association, said government employment has probably peaked for at least the next five or six years.
Private-sector employment is nothing to brag about either, and overall, employment was flat last year, down 200 jobs, according to 2016 revisions from the state.
"The numbers were awful, I mean we had a net 200 job loss," Gioia said. "We should have added 12,000 to 15,000 jobs last year."
Contributors include a lack of skilled manufacturing workers in the state and proposed negative, anti-business legislation such as a $15 minimum wage and new paid family and medical leave program in Connecticut, Gioia said.
"All that has done is driven a lot of firms in the retail, construction, medical and particularly food-service businesses … screamingly into automation and robots," he said. "That, I think, has been going on with a vengeance for at least the last 10 months."
"I think we have the opportunity to add thousands and thousands of workers, but we've got to find a way to deal with the skills gap," Gioia said.
Connecticut also has to find a way to encourage more companies to expand here, he said.
"I think both of those are possible and doable, but it really needs to move up in the priority schedule of the policymakers," Gioia said.
Local government headaches back to top
With Gov. Dannel P. Malloy's proposed budget calling for municipalities to cover a third of teachers' state pension costs, about $400 million, and other education cost shifts, towns are facing the prospect of higher property taxes or more cuts to balance their budgets, neither popular. Almost everyone agrees, though, that Malloy's budget faces significant revisions.
"At the local government level, there's an overdependence on the property tax and residents don't want to pay anymore in property taxes than they already have been paying," said Kevin Maloney, spokesman for the Connecticut Conference of Municipalities (CCM).
Under pressure to restrain tax hikes, but with cuts to state aid and President Donald Trump's proposed federal budget portending possible federal aid cuts, "that puts towns between a rock and a hard place, and they have to make cuts because they don't have the revenues to pay for everything," Maloney said.
Maloney said he wasn't surprised by the jobs lost in the government sector last year, 4,400 from Jan. 2016 to Jan. 2017, according to the latest data from the state Department of Labor. That was the largest job loss in raw numbers, not percentage terms, for any sector.
CCM has tracked local government closely and there have been cutbacks and layoffs, and moves not to significantly replace people as they retire, Maloney said.
A court decision calling for a better way to fund local public education presents additional funding uncertainties for cites and towns, he said.
"That's also in the mix in terms of the pressures that are going to come to bear on the state budget and local budgets, so that's another sort of question mark that hasn't landed yet in terms of a defined answer," Maloney said.
East Hartford has felt the money pinch as far back as 1991, cutting 76 non-public safety jobs since then, said Mayor Marcia Leclerc.
"Providing a variety of valuable services like leaf collection, road plowing, senior transportation and emergency response with fewer employees has been a challenge and other communities will be impacted just as East Hartford was," Leclerc said.
East Hartford's total town employment stands at 1,712 full-time employees, including the board of education. The board is down 68 employees since 2014, a response to stagnant aid from the state, and it's trying to raise test scores with fewer teachers, tutors and student aides, Leclerc said.
"So you can see how we're impacted and state and federal aid in the future looks even more tenuous," she said.
Going forward, the town remains concerned about state aid cuts because expenses grow, even if only by inflation, the mayor said.
"We have made program restructurings and we understand the taxpayers have been saturated, so it's a difficult and never-ending job balancing the community's need for services and their ability to pay," Leclerc said.