HARTFORD, CT —Just in case, Gov. Dannel P. Malloy’s warning that he would veto any budget that tries to change the labor agreement wasn’t clear, labor’s chief negotiator penned a letter to legislative leaders last week explaining why.
Daniel Livingston, the attorney for the State Employees Bargaining Agent Coalition, said if the Republican budget proposal to use savings from future changes to the recent SEBAC agreement were to pass, the unions will challenge it in court.
Malloy vetoed the Republican budget, which was passed with the help of eight Democratic lawmakers in mid-September.
Livingston said in the letter that the vetoed budget would reduce earned pension benefits that were earned before 2027, which is when the current contract expires.
“These contractually earned benefits are protected against these bait-and-switch tactics by the United States and Connecticut Constitutions,” Livingston wrote. “We would have no choice but to enforce those constitutional protections.”
The vetoed budget also sought to reduce the “contractually required state pension contributions immediately by ordering the independent Retirement Commission to redo the actuarially required pension contributions to reflect the illegal changes,” Livingston wrote.
“… To unilaterally alter those provisions by ordering the Retirement Commission to reflect the illegal changes to the plan even though they are certain to be legally challenged is a direct violation of our contract. Again, we would have no choice but to sue.”
House Minority Leader Themis Klarides, R-Derby, said Sunday in a radio interview with 94.9 FM that Connecticut state employees still have the best health care and pension benefits in the entire country, “and that’s not good enough for them.”
She said the unions just continue to push “to show they run the show in Hartford.”
Klarides that the Democrats effectively control both chambers and the governor’s office and the only thing they made sure they did this year was to approve a 10-year labor agreement — “that ties the hands of every citizen of this state.”
She said the labor deal passed unanimously on the Democratic side with the exception of Rep. John Hampton, D-Simsbury.
That deal, according to the actuaries, saves the state about $1.57 billion over two years and $24 billion over 20 years.
According to Livingston, the savings from state employee concessions in the first two years amounts to less than 1.5 percent of Connecticut’s population — the state employees
— solving over 33 percent of the budget deficit. He said that’s approximately $17,500 per year per state employee.
Livingston said what the Republicans want to do “would put the state hundreds of millions or even billions of dollars more in debt to the pension fund instead of reducing that liability. And that’s not even counting the millions of wasted dollars on legal fees that should instead to be used to provide vital services.”
He said ironically it’s that way of doing business that got the state into the current mess.
“From 1939 to 1971, the General Assembly didn’t even try to pre-fund the pension plan,” Livingston wrote. “In 1971, the General Assembly passed a law requiring it to pay the actuarially required contributions to the fund but ignored that law repeatedly simply by putting the words ‘notwithstanding’ into its budget bills and paying whatever it chose to pay. It was only collective bargaining that created the legal obligation on the General Assembly to actually fund its pension promises, and it is precisely that legal obligation that the Republican budget seeks to weaken or destroy.”
He argued that the Republican budget proposal “would recreate the bad old days when the General Assembly could simply decide how much money to put into the pension funds based upon what was politically expedient, not what was financially prudent.”
But others disagree.
“Government unions that represent 45,000 employees apparently want to dictate how a state of 3.6 million people governs itself,” Carol Platt Liebau, president of the Yankee Institute, a conservative policy think-tank based in Hartford, said. “The fact that this powerful special interest actually feels entitled to overrule the people’s elected representatives shows clearly why Connecticut now stands on the brink of fiscal catastrophe. SEBAC — an organization that claims its members serve our state’s residents — ought to be ashamed.”
Livingston said the state should be looking at increasing revenues to make the system more fair and “reviewing billions in corporate tax loopholes” as a way to solve its budget deficit.
“Billionaire-funded right-wing think tanks may urge the General Assembly to dismantle that system and replace it with a legislatively set retirement benefit,” Livingston wrote. “But in more than half of the states that legislate instead of bargaining their pensions, the ‘reforms’ supported by such extremist organizations would be illegal without a constitutional amendment — much harder to get than a collective bargaining agreement.”
Legislative leaders are expected to continue their negotiations over a bipartisan budget agreement this week. However, it’s still unclear how close they will be able to get.