Christine Stuart photo
Gov. Dannel P. Malloy delivers his state of the state address (Christine Stuart photo)

State workers will take it on the chin under a spending plan outlined Wednesday by Gov. Dannel P. Malloy.

His plan to save $570 million in the coming fiscal year depends in large part on a big reduction in the number of state employees, as well changes to their benefits.

“Connecticut state employees are not at fault for our current budget shortfall,” the governor said in his address to the General Assembly. “But it has fallen to all of us — collectively — to address the challenges before us.”

Malloy told legislators his budget “will require the reduction of the state workforce by more than a thousand employees through attrition and other means.”

Budget director Benjamin Barnes said there will be “many fewer state employees” if the budget revisions are adopted. He said “several thousand” of the state’s nearly 46,000 positions will vanish.

Lori Pelletier, president of the Connecticut AFL-CIO, said the plan offered by the governor “is potentially devastating to workers.”

“We cannot capitulate to those who would balance this budget on the backs of nurses, paraprofessionals, correctional officers, and teachers,” she said.

Pelletier said that axing workers affects not only the employees themselves, but also their neighbors and their communities. Everything from home values to small business sales will suffer if state workers lose their jobs, she said.

Christine Stuart photo
Lori Pelletier, president of the Connecticut AFL-CIO (Christine Stuart photo)

Pelletier said, however, that it’s premature to panic.

But the prospect of layoffs is clearly on the table.

To cope with the financial crunch caused in large part by slow growth in the state’s tax base, Barnes said, there has to be “reduced staffing and services.”

Barnes said each agency will have to figure out how to make the cuts necessary, whether through layoffs, changing assignments, or other means.

In an earlier draft of Malloy’s budget address included in his budget book, the governor’s speech mentioned that “hundreds, if not thousands” of employees could be lost. By the time he delivered it Wednesday, the tally had risen above 1,000.

Barnes said the state also has to restructure the pension plans for state employees and teachers to avoid future fiscal crises that threaten to hike costs for taxpayers sharply in about 15 years.

Malloy and legislative leaders, including House Speaker Brendan Sharkey, D-Hamden, and Senate President Martin Looney, D-New Haven, said they need to begin addressing the pension issue soon rather than waiting for current contracts to expire in 2022.

“Let’s acknowledge that we should not wait until 2022 to have necessary discussions between labor and management,” Malloy said Wednesday.

Malloy added: “The instability created by this cliff is shaking the confidence of the business community and looming over the next generation of Connecticut taxpayers.”

Democratic legislative leaders agreed.

“If we’re going to close the kind of deficit that we’re facing, our workforce has to be part of the equation to help realize those savings,” Sharkey said.

He said he wants the governor to have a conversation with “our friends in labor” to talk about what they’re currently negotiating, which is wages and working conditions, and add to that a discussion about health and pension benefits.

Looney said he thinks there’s broad-based support to end the practice of including overtime in pension calculations and a modest increase in medical co-pays.

“Those kinds of things, I think people see as generally reasonable,” Looney said.

Malloy said there’s a lot to talk about with labor leaders.

“Our expectations for these negotiations should be based on what we can afford, not what we previously spent,” he said.

Malloy said there is a need also “to align state employment benefits with our present economic reality.”

“Let me be clear — I strongly believe that working people who serve the public for decades deserve good benefits and a secure retirement that is offered by a defined benefit plan. But friends must be honest with each other,” he said.

“The obligation of maintaining this system cannot be solely supported by our taxpayers under our current budget practices. If we want to support our pension and benefits system, we have to make changes,” the governor said.

“We should be willing to have the tough but necessary conversations about what those changes might look like,” Malloy said.

Pelletier said union representatives will be sitting down with the governor and his staff to talk about alternatives in the weeks ahead.

She said they will suggest some “proposed adjustments for him” that might make a difference. It is not clear what union officials may have in mind.

Christine Stuart contributed to this report.