labor lawAdivision of labor law center

In a surprise move on May 27, Governor Rell vetoed a bill that would have increased the Connecticut minimum wage beginning in January 2009.

 

The unexpected veto to House Bill 5105 by Governor M. Jodi Rell kills a plan to raise the state minimum wage from the current level of $7.65 per hour to $8.00 in 2009 and $8.25 in 2010. A related act, Senate Bill 55, that would have increased the tip credit, was also vetoed.

 

The Connecticut minimum wage bill passed both the House and Senate with large majorities. The vote was 106 to 45 for the bill in the House. The Senate passed the proposed increase by more than a 2-to-1 margin, with 25 for the measure and only 11 votes against it.

 

It’s entirely possible that the Governor’s veto will be overturned by the legislature. In order to overturn the Governor’s veto, proponents of the bill would require 101 votes in the House and 24 votes in the Senate. If the General Assembly considers this measure in a special session, and there are no defectors, they will overrule the veto.

 

Connecticut House Majority Leader Christopher G. Donovan, a democrat from Meriden, is organizing support, primarily among democrats, for an override. “We had good, strong votes in both chambers,” Donovan said. “I’m disappointed Gov. Rell would deny a modest increase to our lowest-paid workers in tough economic times,” he said. Donovan said he could not recall the last time a Connecticut governor vetoed a minimum-wage increase.

 

Governor Rell approved a minimum wage increase in Connecticut just 2 years ago, and most pundits expected her to approve this one. Instead, the Governor cited concerns that a minimum wage hike at this time would adversely affect Connecticut businesses and eventually reduce employment opportunities.

 

Saying that she does not want to take any action that will negatively affect businesses or jobs during a national economic downturn, Governor M. Jodi Rell today vetoed a bill that would have raised the state’s minimum wage from $7.65 to $8.00 beginning Jan. 1, 2009, and $8.25 beginning Jan. 1, 2010.

 

“We must not lose sight of the integral role that employers play in sustaining our economy, or the fact that, without employers, there are no jobs,” Governor Rell said. “It is not a minimum wage increase that will support our families – it is a thriving economy, accomplished through a business-friendly environment with successful employers and reasonably priced consumer goods and services.”

Governor Rell noted that the Connecticut minimum wage is already $1.80 higher than the federal minimum wage of $5.85 per hour. However, that gap will decrease to $1.10 on July 24, 2008 when the federal minimum wage is increased.  

“There is no doubt that families, particularly low income families, have been hurt by our strained economy,” Governor Rell said. “We all feel the pinch when buying groceries, filling up the gas tank and heating our homes. Yet we must also realize that Connecticut employers face these same financial pressures and are having an extremely difficult time making ends meet.

 

The Governor cited fears that businesses would increase prices to compensate for the raises, burdening consumers already strapped by high gas and food prices.  

“Business owners tell me it is not just the cost of raising the minimum wage, but also the associated costs, such as higher Social Security, unemployment tax and workers compensation payments,” Governor Rell said. “For businesses with thin profit margins that are struggling, this bill could have a negative impact of $700 or so per worker per year.”  

SB 55 would have offset the minimum wage increase in HB 5105 for hotel and restaurant employers by increasing the tip credit those employers could recognize for bartenders and servers effective January 1, 2009.

 

This veto comes as the Connecticut budget office is warning that the shortfall for the current fiscal year is growing while the projected deficit for Fiscal 2009 has increased to $150 million. Earlier this month, the Governor instructed commissioners and other agency chiefs to review their current expenditures and stop all non-essential spending. She also directed them to begin a ban on out-of-state travel by all personnel unless the trip is paid for by alternative, non-state funds.

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