(Updated 8:30 p.m.) The nonpartisan Office of Fiscal Analysis dropped a bomb on the legislature today as it debated a budget implementer, which in part addresses the $1.6 billion union concession package.
The fiscal note compiled by the Office of Fiscal Analysis says it can’t verify the savings and concessions estimated by Gov. Dannel P. Malloy’s administration because it doesn’t have enough information.
The fiscal note says it had a hard time verifying the numbers including the creation of a health care cost containment committee, employee suggestions, and even the Value Based Health Care plan, which the unions touted as one of its biggest accomplishments.
House Minority Leader Lawrence Cafero, R-Norwalk, wondered how the package could estimate $180 million in employee suggestion savings if they haven’t made them yet.
“That’s $180 million we’re going to save from a suggestion box?,” Cafero said during debate on the House floor. Most of those savings were expected to come from the implementation of technology, an area where the state is behind.
“If using technology more will generate savings, it’s going to generate savings whether you negotiate it or not,” Cafero added. “It’s sort of a nebulous number, isn’t it? I think we’ll save money from more technology and I think it will be $90 million.” The $90 million is the figure for the first year of the State Employees Bargaining Agent Coalition agreement, which has yet to be ratified.
“Achievability of savings cannot be determined; information as to how savings were estimated has not been provided,“ the OFA fiscal note says after those savings estimates.
Cafero said based on the OFA fiscal note there’s about $600 million in wishful thinking that’s part of the $1.6 billion package.
“If you’re going to measure the quid for the pro quo and the total amount was called $1.6 billion in savings we realize almost $600 million of it is wishful thinking or not a concession at all,” Cafero said.
If he’s right then the budget is already in deficit.
“You know what that means one of three things. Either we’ll increase taxes even more, we’ll cut spending, or we’ll borrow it,” Cafero said. “So it is vitally important for us to make sure, whether you like the deal or not, $1.6 is $1.6 and yet our own Office of Fiscal Analysis says they don’t have enough information to verify.”
Mark Ojakian, deputy secretary at the Office of Policy and Management, who negotiated the agreement on behalf of the administration said he made his staff available to OFA to respond to their questions.
“We’ve been very responsive to OFA so this kind of surprised me today,” Ojakian said. “We’re taking our charge very seriously to find the savings.”
Ojakian said they provided OFA everything they asked for including letters from consultants to back up the estimates.
In a cover letter accompanying the report, Alan Calandro, director of OFA wrote that in some cases “certain actuarial reports” were provided. “In other cases, and to a significant extent, further information is still needed.”
House Speaker Chris Donovan said it’s a little unusual to have an analysis done before a ratified agreement is finished. He said the adversarial relationship between the administration and the unions created contested numbers which were checked by both sides.
Matt O’Connor, SEBAC spokesman, said this type of analysis by OFA is not unusual after a ratified agreement is filed with the House and Senate clerk. He said he believes all the questions OFA was unable to answer will become clear later this month. He said the unions are in the beginning stages of ratification.
As far as Cafero’s wishful thinking, O’Connor said he wants to see the agreement fail, which is unfortunate because it has more to do with politics than good public policy. He said the agreement may not include the cost savings Republicans wanted, but the savings and concessions are very real.
The concession package has yet to be ratified by the 45,000 union members. Eighty percent of voting members and 14 of the 15 unions need to vote in favor of it in order for it to receive ratification.
Republicans have been critical of the plan since it was unveiled May 13.
Republican Party Chairman Chris Healy had harsh words for Malloy regarding the OFA analysis.
“Gov. Malloy grand plan to ring $1.6 billion in savings from state employee unions has been long on rhetoric and short on reality,” said Healy. “Now it has been revealed to be a outright fraud.”
The fiscal note was compiled in response to requests from Cafero.
Hugh McQuaid contributed to this report.