- Associated Press - Sunday, March 27, 2016

HARTFORD, Conn. (AP) - Laying off state employees may not initially produce as much budget savings as Gov. Dannel P. Malloy and legislative leaders would like as they attempt to balance Connecticut’s budget.

When those workers are separated from state service, they’ll be entitled to reimbursement for their unused vacation time.

Currently, there’s a balance of that unused time across state government totaling more than 6 million hours, according to data provided by the Department of Administrative Services at the request of The Associated Press. That’s an average of 177 hours per state employee.

With the average state worker earning roughly about $1,300 a week, that 177 hours could potentially cost the state nearly $6,000 per employee laid off, depending on the individual employee.

“It’s clearly an offset,” said Ben Barnes, Malloy’s budget director, who hopes the final figure will be less than the average of 177 hours. Considering those losing their jobs will likely have less seniority and therefore less accrued vacation time, he said, “people are likely to be well below the average.” DAS also stressed how the average number of accrued vacation time might overstate the impact and not accurately predict what will happen.

John DiSette, president of the Administrative & Residual Employees Union, AFT Local 4200, said the lost savings goes beyond accrued vacation pay. He said there are other “hidden costs” of layoffs, including unemployment compensation, state-subsidized health care for workers’ children, food stamps and possible retraining if the workers are called back for another position.

“They may account for that vacation time. They may have adjusted for that. But you know they haven’t adjusted for unemployment. You know they haven’t adjusted for state medical costs,” he said. “They’re clearly adding expenses they’re not accounting for. There are better choices. There are better ways to do this. I don’t think they’ve given it enough thought.”

Barnes acknowledged the anticipated state employee layoffs could cost the state money in the current fiscal year because of the accrued vacation payouts. But he contends the job cuts will eventually save money in the budget. He and Jeffrey Beckham, the spokesman for DAS, both noted how the state won’t have to pay that employee’s salary in the new fiscal year or in future fiscal years. The current fiscal year ends June 30.

“While the impact of an accrued time payout might lessen any savings in the first year, certainly the longer term budget picture … would be helped by any reduction in force,” said Beckham.

Malloy said last week his administration is moving ahead with plans to impose a “substantial” number of job cuts, with an eye toward completing layoffs by June 9th in order to provide the maximum amount of savings for the new fiscal year. Because Connecticut pays its workers three weeks in arrears, someone working on June 9 would be paid in July, the start of the new fiscal year.

It remains unclear exactly how many state employees will receive pink slips. Barnes said the final figure depends on several factors, including the amount of open positions that will remain unfilled and the number of workers who retire. It’s been estimated that approximately 1,900 state jobs in total will eventually be eliminated over this fiscal year and next to help address Connecticut’s financial problems, but that figure could change.

The current fiscal year is at least $220 million in deficit while the new fiscal year is projected to be $900 million in the red. Each year’s budget is roughly $20 billion.

If a large number of people decide to retire, those savings could also be reduced by the cost of another accrued benefit - sick leave. Unlike laid-off workers, those who leave state service voluntarily are eligible to receive accrued sick time. According to DAS, there is currently a statewide balance of accrued sick leave totaling 16,634,895 hours, or an average of 391 hours per worker.

When an employee retires from the state, they receive payment for their vacation leave balance as well as one-quarter of their sick leave balance, up to a maximum of 60 days in most cases, Beckham said.

To address the issue of accrued vacation and sick time in the past, when Connecticut offered retirement incentives in 2009 and 2003, the back compensation was parceled out over several payments. Malloy, however, has stressed repeatedly that he does not support a retirement incentive to help reduce the workforce.

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