Controlling State’s OT Spending Still a Work-in-Progress

Making state government more efficient and affordable includes keeping a tight rein on agencies’ overtime spending.
Three years ago, Governor Malloy charged state agencies with cutting their overtime costs and implemented several ways to hold them accountable.
Overall, the goal set in 2011 was to reduce overtime spending in state government by 10%–or better, said the governor’s budget director Ben Barnes at the time.
Since then, results have been mixed, says a study by the Republican American: Smaller increases in OT spending over the past three years, but increases nonetheless.
And this year alone, says the paper, the Department of Corrections is on pace for a $10 million jump in overtime pay, and the Department of Emergency Services and Public Protection is approaching an $8 million OT spike.  
Controls
In 2011, all state agencies were told to submit a plan for reducing OT. In addition, the Office of Policy and Management was to inform any agency if an employee’s OT pay was more than 50% of his or her base pay, or when an agency’s OT spending was coming in at more than 5% of payroll. If those triggers were hit, then the agency would have to justify the extra spending.
“I’m not trying to discourage overtime where it is appropriate,” Gov. Malloy said at the time. “I am trying to discourage overtime when it is inappropriate.”
Reducing OT spending is also key to avoiding the potential for some state employees on the verge of retirement to pad their pay in order to increase their pensions.
“I have never hidden that I was concerned about overtime expenses, particularly in a system where overtime counts for pension credit,” said the Governor.
Balance
Ensuring the delivery of quality public services and responsibly managing a budget is often a difficult balance.
Witness that among the biggest users of overtime are, not surprisingly, the Department of Corrections, Department of Mental Health and Addiction Services, and Department of Emergency Services and Public Protection–departments that operate in highly sensitive areas on a 24/7 basis.
And ironically, back in the latter part of 2011 when the governor began his OT initiative, the state was reeling from huge, disruptive storms—stretching personnel hours in several state agencies.
Slowdown
So overall, how has the state done on OT spending? Since the OT crackdown in 2011, the rise in OT in state government has slowed.
According to the Republican American, overall state OT spending in 2011 was $263.4 million; $264.7 million in 2012; and $266.6 million in 2013.
Corrections’ OT spending had decreased by $4.5 million in the last three years of Gov. Rell’s tenure, but rocketed by $11 million from 2010 to 2011. After that, its overtime spending moderated with growth of $2 million over two years.
Rocket again
Yet Corrections is on track to rocket from $73.3 million last year to $83.6 million this year alone. The Republican American says the increase is due to “an unexpected jump in retirements.”
According to the paper, OPM’s Barnes said those retirements are by Corrections staffers who were brought on during a prison expansion in the 1990s. Presumably, the overtime is from filling the gap of the retirees, not from efforts to pad pensions.
Another department with OT increasing significantly—an estimated jump of nearly $8 million this year–is the Department of Emergency Services and Public Protection.
With the state still going through choppy economic and fiscal waters, policymakers should continue their vigilance on controlling OT spending.
And, they should press on with efforts to streamline agencies—such as by using lean techniques—that will increase the efficiency and effectiveness in state government and help root out unnecessary overtime.