SEBAC turns 40 this month.
For most Connecticut residents, that acronym means little. For taxpayers, it represents four decades of consequences.
The State Employees Bargaining Agent Coalition (SEBAC) is not merely another union agreement. It is one of the most powerful governing structures in Connecticut government, shaping pensions, retiree healthcare, health benefits and job protections for the state’s unionized workforce. At 40 years old, it deserves a serious public accounting.
How It Got Here
SEBAC was created in 1986 to negotiate health and retirement benefits for state employees. Five years later, Connecticut adopted a state income tax amid a fiscal crisis. SEBAC did not create that crisis, but it became embedded in the system of pension and benefit promises taxpayers would be asked to finance for decades.
The arrangement grew more entrenched from there. In 1997, state officials and union leaders negotiated a SEBAC benefits agreement with an unheard-of 20-year term, running through 2017. Rather than let it expire, Connecticut extended it to 2022 in 2011, then to 2027 in 2017. Future governors, legislatures and taxpayers were bound by decisions made years earlier. That is the architecture of SEBAC: long-term commitments that move well beyond the reach of democratic accountability.
The Supersedence Problem
Perhaps the least-discussed chapter in SEBAC’s history is also among the most consequential. Connecticut is unusual in allowing collective bargaining agreements to override conflicting state law — a power known as supersedence. Critics have long argued it transformed Connecticut’s pension problem into a pension crisis.
According to Yankee Institute research, Connecticut law required the state to fully fund its pension obligations. Subsequent SEBAC agreements reduced pension contributions, extended payoff schedules and changed funding methods in ways that pushed costs into the future. The state had a law requiring responsible pension funding. Then it bargained around it.
The results are visible in Connecticut’s State Employee Retirement System (SERS), which now carries tens of billions in unfunded liabilities. Taxpayers spend billions annually paying for promises that should have been funded years ago.
The 2017 Deal and the Savings That Weren’t
By 2017, Connecticut was facing one of the worst fiscal crises in its modern history. Gov. Dannel Malloy and legislative leaders promoted SEBAC 2017 as a breakthrough.
In a CT Mirror op-ed defending the deal, Senate Majority Leader Bob Duff (D-Norwalk) wrote that the agreement included “significant concessions and structural changes” and would “make government more affordable and more efficient for our taxpayers.”
He called the labor concessions “the most critical piece” in crafting the next biennial state budget and cited an outside analysis projecting “about $24 billion over the next 20 years” in savings for taxpayers.
There was a significant problem with that figure. A substantial portion of the projected savings relied on raises that were merely “potential,” “proposed” or “recommended” in budget documents — not raises employees were contractually guaranteed to receive. In other words, the state was claiming credit for not spending money it had never legally committed to spend.
By that logic, state government could invent raises tomorrow, cancel them the same day and announce billions in savings before dinner.
Meanwhile, the deal’s actual guarantees were quite real. AFSCME described the agreement as a direct tradeoff: employees accepted wage freezes and higher pension and healthcare contributions in exchange for layoff protections, outsourcing restrictions, 3.5 percent raises in the final two years and an extension of pension and healthcare benefits through 2027.
What Taxpayers Are Actually Subsidizing
Healthcare illustrates the gap between what state employees receive and what the taxpayers funding those benefits can afford for themselves.
According to a Georgetown University Center for Health Insurance Reform study, Connecticut state employees pay only about 2 percent of their medical bills through the State Employee Health Plan. The national average for state employees is 14 percent. The plan is effectively equivalent to a Platinum-level health plan — coverage so generous that only a small fraction of Connecticut residents purchase anything comparable on the exchange.
Many private-sector taxpayers are struggling to afford their own coverage while subsidizing a benefit richer than what they can buy for themselves.
Already Eyeing the Next Deal
Even before the current agreement expires in 2027, SEBAC is positioning for what comes next. In late 2024, the coalition argued Connecticut must “protect and enhance” pension and healthcare benefits, address “inadequacies” in benefits offered to newer employees and maintain robust offerings to support recruitment and retention.
Apparently, SEBAC’s preferred 40th birthday gift is a head start on the next benefits deal.
What Reform Actually Looks Like
Connecticut taxpayers should want something different from the next four decades.
No labor agreement governing billions in pension and healthcare commitments should lock future taxpayers into arrangements spanning a decade or more.
Supersedence should be ended — wages are a legitimate subject for collective bargaining, but pension policy, retiree healthcare and the laws governing how state government operates should not be decided in contracts negotiated outside public view.
Savings claims should be measured against reality: before approving the next deal, lawmakers should require verification that promised savings from the last one actually materialized.
And governors should stop trading basic management reforms and things that could be addressed through legislation, for union concessions that come bundled with new long-term commitments.
SEBAC turns 40 this month. After four decades, taxpayers should stop asking what SEBAC wants next and start asking why one labor coalition has been allowed to shape so much of Connecticut’s fiscal future for so long.
