HARTFORD, CT — The $1.57 billion labor agreement passed the Senate Monday evening when Lt. Gov. Nancy Wyman broke a party line tie vote.
Debate on the labor agreement started around 2:25 p.m. after three Democratic Senators conveyed a list of a dozen “systemic” reforms for setting Connecticut on a better fiscal path to Senate President Martin Looney, D-New Haven.
Following the vote at 7:15 p.m., Looney said no promises were made to the three Senators for their votes.
“We promised our best efforts to negotiate them, but obviously we can’t speak for the governor or the House at this point,” Looney said.
Sens. Gayle Slossberg of Milford, Paul Doyle of Wethersfield, and Joan Hartley of Waterbury were undecided about how they would vote in the labor agreement until they were able to get a greater understanding of what it meant for the state’s fiscal future. During their research, which included the use of outside experts, the trio came up with a “list of reforms” for making budgets and labor contracts.
Budget negotiations stalled over the past week as lawmakers turned their attention to approving the labor agreement.
“There is no doubt that we have very big and serious problems,” Slossberg said. “Not only are we projecting a $5 billion deficit over the biennium, but we are projecting a $2 billion deficit every single year after this.”
She said the state has major financial challenges, but on Monday the vote was on a labor agreement. She said the labor agreement accounts for 30 percent of the current two-year deficit. She said it restructures the health plan to achieve long-term savings and the state is not “hamstrung” by the four years of layoff protection.
“We can restructure. We can reorganize. We can do those things,” Slossberg said, adding that “the problems we have are not about the agreement in front of us. The problems that we have are systemic.”
The five-year deal includes job protection for four years for bargaining groups that agreed to accept a three-year wage freeze, three furlough days, and a 3.5 percent pay increase in the final two years. In addition the deal increases employee contributions to their health and pension benefits and it extends that portion of the deal another five years until 2027.
Approval of the deal is also crucial to getting a two-year state budget agreement. Gov. Dannel P. Malloy has been operating the state by executive order since July 1.
Doyle said since the labor deal can’t be changed he was forced to decide whether to adopt the deal as it was negotiated by the governor and a coalition of labor unions, or reject it and send the state into “chaos.”
Doyle said he came in Monday uncertain about how he was going to vote.
“My main thought and concern, if I was going to vote ‘no’ today upon reflection, is the $1.5 billion paper savings of SEBAC,” Doyle said. “But the second, even more important component is if we were to reject SEBAC today, what do we do about chaos?”
Doyle added, “Will the unions come back to the table? Nobody knows. No one truly has the answer.”
Hartley, who ended up voting in favor of the deal after more than a week of hand wringing, said that in order to get the $1.57 billion in savings they needed to get this deal approved before September in order to transition state retirees to Medicare Advantage plans.
Sen. Cathy Osten, D-Sprague, said the savings turn a $20 billion underfunded pension liability into a $1.5 billion surplus over 30 years.
The wage changes will permanently reduce the state’s pension liability by 10 percent. The deal also increases employee pension contributions by 2 percent of pay and increases the employee share of health care premiums by 3 percent.
It also creates a new hybrid pension plan for new employees who don’t have the same kind of job security enjoyed by current employees. The proposed pension changes will save the state millions of dollars in fiscal year 2018 and 2019, according to Osten.
She said there will be 10,000 employees under the new hybrid pension system by 2022. This attrition will save the state nearly $77 million in the first two years and more than $90 million in the years following, Osten said.
Republicans were united in their opposition to the deal.
Senate Republican President Len Fasano, R-North Haven, urged his colleagues to reject the deal and make the changes legislatively. He said will the state save more money by making these changes.
He said approving the deal means three things:
“You have to raise the sales tax or the income tax,” Fasano said. Secondly, “you have to cut municipal aid,” and finally, social services will also need to be cut.
“Everything these contracts do, you could do in a budget,” Fasano said. “. . . but once you vote this deal out, you are trapped.”
He said voting for the deal cuts off “your options to deal with this budget.”
Connecticut, according to Pew Charitable Trusts, is one of only four states where collective bargaining plays a primary role in determining pension benefits.
Fasano said the list of reforms put forward by the trio of Democratic Senators was a “way to save face, vote for this deal and not look like they backed off of anything.”
He said if they wanted substantial portion of their reforms in the budget, then they should have voted for the Republican budget, which included at least seven of the 12 reforms.
Other Senators were less specific about their disapproval of the deal.
“This I believe is bad policy,” Sen. L. Scott Frantz, R-Greenwich, said. “Absolutely tying the hands of future governors and future legislatures.”
He said people are watching this issue closely because they know this resolution will change the direction of the state.
“Yes, there are some good things in this contract, but it does not go far enough,” Frantz said.
He said there’s an exodus of businesses and wealthy individuals.
“A vote for this is going to set us back years,” Frantz said.
Rep. Craig Miner, R-Litchfield, said lawmakers need the ability to completely reorganize the state of Connecticut.
“There are some things in here most of us would have a hard time explaining to our best friends,” Miner said, citing the $30,000 signing bonuses for doctors and free tuition for the children of certain state employees.
Sen. Heather Somers, R-Groton, said manufacturers in her district have told her they would leave if the labor agreement is approved.
Sen. Joe Markley, R-Southington, said he’s concerned about the state of Connecticut.
“We’re not here to be cheerleaders for the state,” Markley said. “. . . We cannot cure this state until we recognize we’re going in the wrong direction.”
He said the deal will guarantee the state is going in the wrong direction.
Sen. Gary Winfield, D-New Haven, said Connecticut is a state that people want to live in.
He said in order to get the concessions they needed, the Malloy administration needed to extend the pension and healthcare benefits to 2027.
“I don’t know how you get that $1.5 billion without it,” Winfield said.
Many objected to the extension of the contract, but Slossberg said the answer isn’t to impose the changes unilaterally. She said there’s a math problem because it exposes the state to significant liability.
“If you want to say we’re going to impose this unilaterally, then we’re going to get sued,” Slossberg said. “And the last time we got sued it cost us $100 million.”
Fasano said that two situations were not similar and it’s unfair to use the lawsuit that resulted from former Gov. John G. Rowland’s layoffs of state employees back in 2003 as an example of what would happen.