Most state employees will see a 2.5% wage increase annually for the next two years as representatives from the State Employees Bargaining Agent Coalition (SEBAC), which oversees 15 unions for state employees, and Gov. Ned Lamont reached a contract agreement on Friday, April 10. That agreement will need to go before Connecticut’s General Assembly.
The agreement, which has since been ratified by SEBAC union members, includes an annual 2.5% general wage increase for three years. This increase will be retroactively applied to the fiscal year beginning on July 1, 2025, and will be added to on July 1, 2026, and July 1, 2027. There will be another round of negotiations after the 2027 pay increase.
“I do think that both sides made strides. I think it was dragged out longer than it needed to be, but at the same time, there was a very respectful negotiation, and I do thank the Governor for what he did here,” said John DiSette, president of the Administrative and Residual Employees Union (A&R), which is a part of SEBAC. “I am very satisfied with the fact that we did end up with wage increases, which are sorely needed right now. Although obviously, we wish the wage increases were a little bit higher, but we are thankful that we got something that is respectable.”
In 2024, SEBAC also negotiated a 2.5% general wage increase, with a 2% step increase for certain employees. Back then, Office of Fiscal Analysis (OFA) officials determined that it would cost taxpayers an additional $154 million in 2025 and $183 million in 2026 to cover these wages. In his proposed biennial budget this year, Lamont set aside $186 million for “salary adjustments” in the 2027 fiscal year.
“State residents and businesses depend on our state employees, who keep us safe, maintain our roads, educate students, protect our environment, and deliver assistance to our most vulnerable residents,” Lamont said in a press release on Monday, April 13. “This agreement recognizes their dedication, supports retention and recruitment, and delivers a fair deal for taxpayers.”
Before the contract can be implemented, it needs to be approved by the Connecticut General Assembly.
State law requires all employees, including those who are not in the union, to have the same salary adjustments. Once the union wage increases are approved by the General Assembly, the Office of Policy and Management (OPM) will need to adjust wage increases for non-represented staff.
“I urge the General Assembly to act quickly to approve this agreement and deliver these reasonable wage increases to our state employees,” Lamont said in the release.
Next year, SEBAC will renegotiate healthcare and pension plans.
The recent agreement mentions goals for the Healthcare Cost Containment Committee. It mentions that the committee should come up with policies to lower the overall cost of health care for state employees. These include creating incentives for employees to waive coverage to lower the overall cost of insurance, changing the default Medicare plan that retirees are enrolled in, and improving coverage for fertility services, among other initiatives.
For more than 20 years, the cost of health care premiums has not only increased but also outpaced median household income growth in Connecticut. The cost of health care is projected to increase even further following the expiration of the Affordable Care Act’s enhanced premium tax credits at the beginning of 2026.
There is also a section in the contract dedicated to “Pension Administrative Fixes” that, among other things, addresses discrepancies between the professional state employment and the Teachers’ Retirement System, which was created in 2024 when the state redefined what a “teacher” was.
As of 2022, Connecticut had over $40 billion in unfunded pension liabilities, according to the think tank Pew, which is affiliated with Pew Research Center. That same study found that the state has made significant progress in decreasing its existing pension debt.
“It’s too early [to talk about specifics],” DiSette said. “I do think that there are some things that need to be adjusted… and obviously, the cost of healthcare, we need to address it somehow.”
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