Members of Gov. Dannel P. Malloy’s administration met Wednesday evening for the first time with representatives of the State Employees Bargaining Agent Coalition, which represents the 45,000 unionized state workers.
Malloy has asked the unions for $2 billion in concessions and savings over the next two years in order to help balance the two-year $40 billion state budget. Both Malloy and union leadership have agreed not to negotiate their differences in the media, but Deputy Budget Director Mark Ojakian and Dan Livingston, chief SEBAC negotiator, put out a joint statement following the meeting.
“We engaged in a respectful and frank discussion,” the unions said. “We agreed to continue meeting and that the substance of our meetings would not be discussed in the press. We hope these discussions will be productive and yield positive results.”
Earlier in the day Wednesday Malloy, who did not attend the meeting with union officials, said he’s been very frank about the state’s fiscal situation.
“I made it clear that we couldn’t cut our way out of it, nor can we tax our way out of it,” Malloy said. “I presented a budget which I think is an appropriate compromise.”
He speculated the conversations will start with a set of ground rules on how the meetings will be conducted and what level of secrecy is expected by both sides. Then there’s the question of the timeline and how quickly negotiations will be concluded.
“I have not hidden the fact that in the absence of success we’ll have to go down a different road,” Malloy said. “We’ll be prepared to go down that road in a few months.”
Malloy has said he’s prepared to offer more spending cuts, not tax increases, if negotiations with the unions are not fruitful.
Malloy admitted Wednesday that while he’s at the table when these negotiations conclude, he’s never been there at the beginning and thus can’t comment on what happens at these initial meetings.
The unions negotiated a 20 year contract back in 1997 with then-Gov. John G. Rowland. Their contract including health benefits and pensions doesn’t expire until 2017, but Malloy has called their wage and benefit package unsustainable. He has also criticized Rowland for agreeing to such a long term labor contract.
Asked why the unions with six years left on their contract would want to even open negotiations with the administration, Malloy said “ because they want to see these issues resolved, as much as I want to see them resolved.”
Union leaders like AFL-CIO President John Olsen, who is not involved in the negotiations, insisted Malloy’s approach to solving the first year of the budget by raising taxes $1.5 billion and cutting spending $1.76 billion, isn’t a balanced approach. Olsen has argued Malloy should be taxing the wealthier far more than he has proposed.
But during his first Town Hall meeting in Bridgeport, Malloy defended his 0.2 percent income tax increase on the state’s wealthiest citizens by explaining that they saw a full one percent increase in their rates just 18 months ago.
In 2009 the unions with former Gov. M. Jodi Rell negotiated about $750 million in concessions, including a wage freeze in the first year, seven furlough days over two years, and increases in health benefits and pension contributions. But Malloy has said not all of that $750 million counts as a concession since at least $300 million was a deferred payment by the state to the pension fund.
Malloy was in New London Wednesday evening at his third Town Hall meeting both defending and selling his budget to the people.
“More people are saluting than not,” Malloy said of his budget proposal.
“I think most people have come to understand that we can’t tax our way out of it, nor can we cut our way out of it. That it involves a compromise of both of those steps,” Malloy said.
The legislature’s Appropriations Committee has been holding nightly meetings on Malloy’s budget proposal. The conversations at those meetings vary depending on which agencies are up for discussion, but most oppose the consolidations and some of the spending cuts. Most admit the cuts are painful, but not as painful as they could have been. The Appropriations Committee will issue its budget proposal in April, which will be followed by the Finance, Revenue, and Bonding Committee’s tax package.