During a Wednesday morning interview on CNBC’s Squawk Box with Forbes magazine editor Steve Forbes and the staff of CNBC, Gov. Dannel Malloy offered a clearer picture of how labor unions might adopt a concession agreement and avoid mass layoffs.
“Round one they decided not to accept it. I wouldn’t be surprised to see another round, quite frankly, in which people kinda figure this whole thing out and understand that it would be better to put the state on firm financial footing and to rearrange our relationship with our fellow state employees so it’s sustainable. Right now it’s not,” he said.
Malloy said he believed the unions were currently looking at what he called arcane ratification bylaws which allowed the concession package to be defeated despite a majority of union members supporting it.
“They have to decide whether they want to be responsible for 6,500 state employees losing their jobs. I believe that they’ll rethink this one,” he said.
The eight minute interview covered a wide range of topics and found Malloy at odds with the conservative-leaning Forbes.
Malloy touted his First Five initiative and yesterday’s deal with CIGNA Corp., moving the company’s corporate headquarters to Bloomfield. That agreement is expected to create 200 to 800 jobs in the state.
“We’ve had parts of CIGNA here for a long time but we didn’t have the headquarters, now we do. That’s a great piece of news for us,” he said.
Malloy acknowledged the gains were offset by looming government layoffs but said Connecticut is starting to see job growth in the private sector.
“We’re a small compact state with about 3.5 million people and yet we have 12 fortune five hundred headquarters. You’re going to see more of that,” he said.
Forbes appeared to be enjoying himself when he told Malloy he was moving in the wrong direction.
“Your budget includes numerous new tax increases as well as spending cuts. How does that create an environment for luring new businesses? You talk about bringing in five companies with 200 jobs but as we know it’s the small businesses doing ten, 15, 30, 50 jobs are the ones that create the jobs and Connecticut’s becoming more and more of a hostile environment,” he said.
Malloy countered that Connecticut has substantially lower taxes than New York and New Jersey. Forbes pressed on, saying that those two states were in the process of lowering their taxes while Connecticut was moving in the other direction. The governor said that is because his budget was straight.
“With all due respect I know what your background is. How do you feel about a state that doesn’t fund its pension obligations? And in fact in the case of one of those states didn’t fund $2 billion of those pension obligations in the last two years? That’s going to come home to roost,” Malloy said.
He said he had to raise taxes and cut spending to undo the damage done by previous governors, who he noted where from a different party. He maintained that Connecticut has a lower maximum tax rate than its neighboring states, something that will help it attract jobs.
“We know we have the state moving in the right direction, what we have to start doing is telling that story. So if you want to pay higher taxes, stay in the state you’re in. If you want to pay lower taxes come to Connecticut,” he said.