The state’s top labor leader says Connecticut has a revenue problem and the state budget shouldn’t be balanced on the backs of state workers.
In the budget Gov. Dannel P. Malloy released yesterday he asked the state employee unions to find $2 billion in savings and concessions over the next two years, or face massive layoffs.
But John Olsen, president of the AFL-CIO, said Thursday he doesn’t understand why state employees are being asked to solve 32 percent of the budget gap when they aren’t responsible for the state’s fiscal woes.
“What is ‘unsustainable’ is that we allow the wealthiest of our state to pay the smallest share of their income in state and local taxes,” Olsen said Thursday. “It is a staggering statistic that the top 5 percent of Connecticut’s taxpayers—those making $412,000 and above—got more than $3 billion in Bush tax cut extensions.”
Olsen says he’s for both public and private sector job growth and working with businesses to spur job growth.
“I’m not willing to stay in a state with 10 percent unemployment and I don’t want to see a budget that’s based on 10 percent unemployment going forward,” Olsen said. “That’s not what I’m about. I’m about growing jobs, growing the pie so we all can prosper.”
He said “there were 55,000 employees, now we’re down to 46,000 employees. They’ve already given in concessions….they keep giving, but there seems to be no recognition, so therefore you know we have to look at where that gap is.”
Malloy believes the state has both a revenue and spending problem, not all lawmakers agree with how Malloy has balanced the spending cuts and revenue increases. Republicans believe there aren’t enough spending cuts to merit a $1. 5 billion tax increase.
“We want to make sure the share is fair, so we’re going to be working on that,” House Speaker Chris Donovan said Thursday. He said he’s not part of labor discussions between the governor and the unions, but the legislature will work hard to find savings in the budget process.
Donovan, an optimist who rarely talks ill of anyone or anything, said there are lots of places to find savings. “Opening up the state health care plan to cities, small business, and nonprofits I believe we’ll save tens if not thousands of dollars. I mean tens of millions of dollars if not hundreds.”
Asked is he was upset Malloy didn‘t include the SustiNet health care proposal in his budget, which purports to bring in millions of federal health care dollars to create a statewide pool and public option, Donovan said, “If he overlooked that I’ll be sure to bring it up.”
While early projections pegged the implementation of SustiNet in the billions of dollars, passage of federal health care reform changed those expenditures into savings for the state.
“We’ve estimated that the combination of federal health care reform and SustiNet will save Connecticut taxpayers $226-$277 million per year, starting in 2014, by replacing current state spending on HUSKY and Medicaid with newly-available federal dollars,” state Comptroller Kevin Lembo said last year. “And if SustiNet slows health care cost growth by just one percentage point per year, state budget deficits will fall by $355 million in 2014, with reductions reaching more than $500 million a year, starting in 2019.”
Currently, Connecticut’s government spends about $8 billion annually on health care for state employees, retirees, Medicaid recipients and other populations, but proponents of the SustiNet concept say pooling these populations will save the state more than $226 million a year.
However, the Malloy administration was lukewarm to the idea earlier this week. During the public hearing on the bill Malloy’s Budget Director Ben Barnes outlined the administration’s concerns in testimony to the General Assembly’s public health, insurance and health services committees.
He emphasized that the administration “fully supports the goals of SustiNet,” but is wary of the bill’s design to set up the quasi-public agency. “Some of the bill’s provisions severely weaken the executive branch’s authority and ability to manage major components of the state budget in a time of historic budget challenge—when executive leadership is critical to achieving success in implementing health care,” Barnes wrote in his testimony.
But the administration’s current hesitation didn’t stop Malloy from appearing with religious leaders at a rally before the SustiNet Board’s vote on its recommendations to the legislature.