CT unions and Republicans unite to block Gov Lamont's WNBA pension gamble

In an unexpected political alignment, CT Governor Ned Lamont's plan to use the state's massive public employee pension funds to secure the future of the WNBA's Connecticut Sun has hit a wall erected by a group of strange bedfellows.

According to Mike Cirulli's Capitol Report, the Governor now faces a rare two-front opposition. One from Republican state legislators and the other from CT's largest public employee union (Council 4 of the AFSCME). Both groups have launched broadsides against the administration's proposal to have the state pension fund acquire a minority stake in the team. As GreenwichWise noted here it's a high price to pay by CT taxpayers for politicians to boast that CT is the "Basketball Capital of the World."

Unions: an unacceptable gamble with workers' futures. The Union representing thousands of workers views the investment as an unacceptable risk, not a venture fund for sports. They say "members have put their hard-earned money into the pension fund, expecting a secure retirement, not for it to be used on a sports franchise that plays 18 games a year in Connecticut.”

Republicans: flawed governance invites foul play. Republicans are seizing on the proposal to attack the state’s centralized system of pension fund management. Unlike any other state, the CT Treasurer serves as the sole fiduciary. Without oversight, returns have been poor and the plan has been massively underfunded. The WNBA proposal underscores the need for governance reforms that would curb political meddling with retirement savings.

Governor Lamont: seeking fat returns and a ringside seat. Lamont said keeping the team in CT, could be a sound investment and generate "fat returns". He wants the state pension to take a minority stake in the team along with other private investors to coax the team into staying in Connecticut.

This high stakes maneuver has quickly drawn national interest. A Wall Street Journal editorial here notes the weakness of CT's pension plan. The state of CT contributes much more to the pension fund than do government workers, in part to make up for past years of paltry returns. Connecticut's pension last year was only 60% funded, the fifth lowest level of funding in the nation. If the defined benefit pension plan had been moved to a defined contribution 401K by now, politicians would not be able to meddle for political purposes.

Between the Lines: This unlikely coalition of Republicans and public-sector unions recognize the inherent risk when politicians treat retirement funds as a pool of capital for pet projects. Hopefully, this could be enough resistance to get the Governor to come to his senses on this vanity project.

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