Last month Gov. Dannel P. Malloy was able to reach an agreement with the state employee unions to make changes to the pension fund without changing the benefits state employees receive.
However, in his speech Wednesday he indicated that he would like to continue to work with labor leaders “to find solutions for bringing employee costs in line with our economic reality. These talks have been frank and direct so far, and I’m appreciative that state workers are taking part in them.”
Labor officials said they are still talking with the Malloy administration, but being at the table doesn’t mean they plan on opening the 2011 contract to renegotiate their health and pension benefits.
“It’s very hard, but we must reach an agreement on how to make our pensions and benefits more affordable, as we face these fiscal challenges together,” Malloy said. “We must recognize that a responsible and balanced solution to our budget problem is one that includes state employee concessions.”
Lori Pelletier, president of the Connecticut AFL-CIO, said Malloy talked about having workers give back and taxpayers giving back, but she said he never spoke about tax fairness.
“How can we continue as a state to have this incredible wealth 30 miles down the road from Bridgeport or from what you see in Hartford?” Pelletier said.
The unions, including AFSCME Council 4, which represents the largest number of state employees, said that Malloy’s reference to “state employee concessions” may give some the impression the governor “expects a small minority of the population to resolve Connecticut’s fiscal challenges. The reality is that the scope of the problems facing us all requires a broader, far more comprehensive approach.”
The unions said they are more than willing to help the state by fully implementing the 2011 agreement — meaning that more savings can be realized if the state delves into everything that was agreed upon in 2011.
“But we are not willing to be scapegoats or political cover for legislators unwilling to make better choices,” says a statement on their website.
The statement continues: “Members of the unions in the State Employees Bargaining Agent Coalition (SEBAC) are already providing over $1 billion dollars annually in ongoing budget savings. Over the past eight years they have ratified two separate agreements to sacrifice wages and benefits in exchange for protecting the vital services they provide for residents.”
But even Democratic legislative leaders are calling on the unions to help resolve the state’s budget deficit.
House Speaker Joe Aresimowicz, D-Berlin, who is an education coordinator with AFSCME, said he thinks the governor’s office has done a great job in negotiating with the state employee unions and their collective bargaining agents.
“I wish them the best of luck,” Aresimowicz said, but he added that he doesn’t believe the legislature needs to put any more pressure on the unions to continue those discussions.
Senators in both parties have also encouraged the governor and the unions to continue their discussions.
House Majority Leader Matt Ritter, D-Hartford, pointed out that the governor has unilateral authority to continue those discussions.
However, under union rules the membership would have to vote to give their officials permission to open discussions on health and pension benefits.
In his speech Wednesday, Malloy said that in 2011 his administration and the unions worked to put Connecticut on a more sustainable fiscal path.
“Together we changed benefits, reduced longevity payouts, restructured state pensions, raised the retirement age, and required all employees to pay for a portion of their post-employment benefits,” Malloy said.
However, Malloy said that if they had not saved the state $1.6 billion on its unfunded pension liability in the two years following the 2011 agreement, then the deficit the state is facing today would be much worse than the $1.5 billion that’s been estimated for 2017.
“We will not saddle future generations with fiscal cliffs and unpayable fixed costs,” Malloy said. “Responsible changes must be made — and they must be made this year.”
Labor unions were disappointed last year when lawmakers refused to increase taxes and instead cut spending by more than $820 million in order to balance the budget. They dubbed it the “austerity budget” and said it will hurt the middle class.
The business community appreciated Malloy’s message Wednesday.
Joe Brennan, president and CEO of the Connecticut Business and Industry Association, said reducing budget deficits and making government more efficient is a good first step.
“Second, make state employee wages and benefits more affordable for taxpayers,” Brennan said. “We believe this, along with leaning government, are important steps in closing budget gaps while maintaining essential services and avoiding further harmful tax increases.”
Malloy will give his budget address in February, but if his speech Wednesday was a road map then it’s certain labor and progressive Democrats aren’t going to like it.
“What’s conspicuously absent were any clear plans to stimulate job creation, address the state’s income inequality (the second worst in the nation), and begin to diversify our economy — even when there are some obvious solutions right there under our noses,” Lindsay Farrell, executive director of the Connecticut Working Families Party, said.
Farrell said they need to reduce the number of corporate tax breaks, invest in the working class by implementing paid Family and Medical Leave, and take a serious look at legalizing marijuana.