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Malloy Continues To Doubt Unions’ Ability To Get Package Approved

by Christine Stuart | Jul 6, 2011 1:29pm
(22) Comments | Commenting has expired
Posted to: Labor, State Budget

Christine Stuart photo

Gov. Dannel P. Malloy and Ed Reilly, president of the Ironworkers Local 15

(Updated 3:12 p.m.) NEW BRITAIN—Gov. Dannel P. Malloy reiterated his feelings Wednesday that it’s still up to the unions to prove they would be able to pass a clarified concession agreement if talks are expected to continue.

The deal officially defeated by union leadership Tuesday provided four years of job security and made changes to pension and health care benefits, but “I think folks didn’t do a good job explaining that to their members,” Malloy said.

“They also have a set of rules that make it very difficult to amend these agreements and unless there’s a clear road to resolve that issue it’s difficult to move forward,” Malloy said. “Having said that you never close the door.”

Malloy said he’d be happy to have discussions about clarifying the SustiNet issues, but is uncertain if that will be enough to pass the agreement.

“The agreement was always very clear that the benefits, the medical benefits, were guarantees that were being extended not shortened,” Malloy said.

The other hurdle he faces is the approximately 2.5 percent salary increases being given to more than 40,000 state employees later this month. The failed agreement would have postponed those raises another two years in exchange for three percent wage increases in the last three years of the five year extension of the agreement.

“I’m not sure there’s a clear road to ratifying any agreement,” Malloy said. “So until we get to a point where there’s a clear road it’s hard to seriously consider that.”

He said he has to understand what the level of commitment is from the unions for resolving this issue before sending someone from his administration back to the table for discussions.

In the meantime, Malloy said he’s pressing forward with preparing a budget that will layoff more than 6,500 state employees. He said it’s not a road he wanted to take but the defeat of the agreement left him no choice.

“This is not a time to be laying off 6,500 people,” Malloy said. “It wouldn’t be good for the economy, but if there’s not a choice then we move forward.”

“It’s not as if I’m not desirous of finding a solution. Again we’ve got to understand what a road to an approval process is because clearly it hasn‘t worked,” Malloy added.

And the clock is ticking, Malloy said a vast majority of the 6,500 state employees will have already lost their jobs by Aug. 31. Malloy is expected to present his budget cuts to legislative leaders on July 15

Union spokesman were unable to specify any bylaw changes being discussed by their leaders Tuesday and were unable to say specifically how they planned to move forward— aside for asking the Malloy administration to reconvene discussions.

“We understand the governor’s interest in the approval process—and his recognition that any change to the process is an internal SEBAC matter,” Matt O’Connor, SEBAC spokesman, said.

Last week the union leaders adopted a resolution to consider changes to the SEBAC bylaws that would govern future agreements. In the statement on their website they noted: “changes that must reflect both the democratic values of the unions that make up our coalition and the lessons learned from experience.”

In the meantime, the unions said they want to start meeting with the administration to work on a solution, “Given how much is at stake for the economy, for the critical public structures upon which the economy depends, and for our members and the services they provide, we think time is working against all of us.”

Union sources say they may look to change the rule of accepting a new, clarified package by a simple majority of the members.

The current 1996 bylaws were so stringent that even though 57 percent of the voting members endorsed the agreement, it still failed. Four of the 15 unions were able to defeat the agreement by opposing it. In order to pass 14 of the 15 unions would have needed to ratify it, in addition to 80 percent of the voting members.

The State Employees Bargaining Agent Coalition requires two-thirds of the 15 union leaders to vote in favor of any change to the bylaws. Union spokesmen were not ready to talk about the bylaw discussions amongst their leaders Tuesday and were not immediately available for response today.

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(22) Comments

posted by: DrHunterSThompson | July 6, 2011  2:17pm

DrHunterSThompson

The 1996 bylaws were agreed to for exactly this purpose. We need an overwhelming majority to change the Heath and pension provisions that thousands of people have relied upon in planning their future. It’s a contract that both sides need to honor until it’s expiration.

Having said that, I have talked to many folks that might change their vote to yes if the pension changes are taken out of the package and the health provisions are explained fully and it turns out there really is no degradation of coverage.

posted by: Jim in Mfg | July 6, 2011  4:57pm

If the pension changes are taken out of the package, then that is a reduction in the concessions.  If Gov Malloy allows that, he will need a firm concession such as a wage reduction to offset it. 

In my opinion, we already have too much smoke and mirrors in the 1.6b “savings” and concession.

posted by: le2011 | July 6, 2011  6:54pm

Proceed with the layoffs.  The union members do not want to give concessions.  The pension and the health care are the cause of the problem.  Without changes to them talks are pointless

posted by: Chuck | July 6, 2011  7:20pm

State employees for the most part are selfish and feel a strong sense of entitlement. Those that have retired or who are high on the seniority list minds will never change. I myself am high on the seniority list but voted yes because in solidarity with my union brothers and sisters thought it would be appropriate to give back not only to avoid my friends being laid off but to sacrifice due to the current economic times. My main concern with the state workforce is the allocation of multiple high paid managers to supervise a disproportionate number of line staff. I truly believe the commissioners need to reorganize the state management and eliminate those that still have jobs up in the office that have little or no job function. I as a union member applaud Governor Malloy’s handling of the situation and I hope the union majority gets the package that we voted on.  A good move on the Commisioners part to show good faith would be to layoff some layers of management which cost the state millions of wasteful tax payer dollars. Keep the managers that work hard and actually have a specific job function.

posted by: Wakewhenover | July 6, 2011  7:27pm

Well…you can bet that ‘Sustinet Sal’ is gonna cave, against the wishes of his AFSCME constituents.  Doc Hunter is spot-on, wage freezes and increased co-pays yes, butchering early retirement for current employees and socialized health care?  No.

posted by: perturbed | July 6, 2011  7:53pm

perturbed

“The current 1996 bylaws were so stringent that even though 57 percent of the voting members endorsed the agreement, it still failed. Four of the 15 unions were able to defeat the agreement by opposing it. In order to pass 14 of the 15 unions would have needed to ratify it, in addition to 80 percent of the voting members. “

Thank you for your accuracy!

On the agreement failing, you all are looking in the wrong place. The problem won’t be found in SEBAC’s bylaws. It’s doubtful the solution will be found there either.

Has anyone ever wondered if there are other reasons why all the other concessions votes passed, but this one failed?

Do you think “air-tight” negotiations work now? (Hopefully, SEBAC is wise enough to include their mis-guided and arrogant exclusion of the individual bargaining unit heads among the “lessons learned from experience.” Somehow, they don’t show it if they have learned this lesson.)

Do you think the conflict of interests had anything to do with the agreement failing? It must be difficult to wear two hats at the negotiating table: state employee advocate and health care reform advocate.

Do you think the cumulative total of all the concessions —which hit too many employees especially hard in one way or another —didn’t really add up to a “cream-puff” of a deal after all?

Do you think there was a problem conflating the purported 2-year budget solution with major long-term structural pension concessions? If there was ever a communications problem with SEBAC 2011 agreement, the lack of any credible justification for why it takes significant long-term pension concessions to close a 2-year budget shortfall was the mother-lode of all communications failures. What, did anyone honestly think we just wouldn’t notice the bait-and-switch?

Maybe there’s just no real justification, and they just should have told the truth instead?

“Sorry, people. We know this agreement really, really sucks for everyone except Tier I and hazardous duty employees. It’s tough to take. But you have to realize what we were up against this time. Our health care reform bill was in tatters, and the only way we could even get Malloy to support a “pooling” bill was to give up some of your long-term pension benefits. On the bright side, it worked! We passed the pooling bill right after the agreement was signed. Malloy held up his part of the bargain. Now it’s time for YOU to hold up OUR part of the bargain. It’s in SEBAC’s interest for you to ratify this deal.”

Nah, guess not. That probably wouldn’t have worked either.

OK, how about now we try sending in a new SEBAC team with fresh ideas who aren’t focused primarily on health care reform, focus on the 2-year budget shortfall, and have an open and transparent negotiating process. The path this gang of bandits is heading down now will only lead to more failure.

—perturbed

posted by: Frankly | July 6, 2011  8:19pm

Bylaws can be changed.  These bylaws clearly should be changed; they’re making us a laughingstock. 
I’m a union member, and I understand that we state employees are no longer going to get the gold-plated package that people got in the past. It’s over.  Things change. 
Now let’s make sure the hefty longevity payments for state management are dropped, and the excessive pay and pensions for non-union management are cut.  Let’s keep our eye on the bloat at the top that Gov. Malloy and the unions and the CT tax payers know is draining the public purse.

posted by: Wakewhenover | July 6, 2011  8:24pm

No, Chuck, No voters are not selfish.  Those that blindly vote yes just to save jobs are not heroes.  Yes, you may save a 1 yr employee but throw 20+ yr employees under the bus as they see pensions reduced.  These jobs ain’t made for people to work until 63-65.

posted by: Michael | July 6, 2011  9:05pm

Frankly: As we keep hearing, there are 2x state managers, as compared to the private sector. During the campaign, Malloy was scaring then managers by mentioning ‘dupliucation of work’ and ‘extra layers’. Now it seems that the layoffs involved only union employees and the management is safe? If Malloy wants quicker savings, why not terminate management with their 6-figure pay, receives more vacation time, gets to bank more vacation time, 4x the longivity and with the regressive Tier II pension plan, receiving a higher pension multiplier. I guess that the 6-figure bloat are Malloy’s type of people. This is one of the reasons I voted ‘no’.

posted by: Todd Peterson | July 6, 2011  9:51pm

perturbed, you had your A-game going this time! 

There were too many things going against this deal.  Now Sal says that he should have sold the deal more like a campaign. Really?  He and his crew figured that when they said, “Jump” the rank-and-file would say, “How high, Sal?” and comply. Call it the Audacity of Nope.

There needs to be a real examination of how the ranks of management have grown in state govt.  When people earning $40 K annually are being implored to forego pay raises when they know that the ranks of management have grown in Hartford it won’t be swallowed easily even in a crummy economy.

posted by: Truth, Justice and Karma | July 6, 2011  11:03pm

What happens next will be a big test for union members in CT.  What happens will determine whether having a union contract, like the SEBAC Agreement, has any value at all.  Here are some facts.  1. The current SEBAC deal is valid until 2017; 2. This concession deal was made in secret between a few SEBAC leaders and the Governor with no input from rank and file; 3. the deal does more things than are needed to achieve savings to help with the next two fiscal years; 4. borrowing and spending on programs and projects that do not produce revenues or savings to recover or pay back the costs are the primary root causes of the budget deficit; 5. the concession deal was not supported by a majority of SEBAC members -  less than half, 21,000 out of 45,000, members voted for the deal; 6. the concession deal was rejected under the voting rules by a SEBAC member vote; 7. SEBAC, and some union, leaders are not trusted due to the secret deal making, lack of details, questionable motives and big concessions for veteran employees whose jobs are not at risk; 8. a large amount of members who voted for the deal did so only out of fear produced by SEBAC reps; 9. SEBAC leaders continue to operate in secrecy without consulting members for input; 10. SEBAC leaders are working in concert with the Guv and legislature to scare workers that they will be laid off, collective baragining will be abolished, sick days will be limited, the sky will fall on you when you are naked and slowly suffocate you while others watch and laugh, etc; and 11.  SEBAC is trying to do whatever it can change the voting rules, tweak the original deal but not change its substance, and get members to pass a deal that has support of less than 50% of SEBAC members and that was rejected through the lawful contractual voting process.
Whether you voted YES or NO on the deal in the first vote, SEBAC’s reps’ current behavior is a serious problem that members need to address.  They apparently are not familiar with the concepts of representation, fiduciary duty, tortuous interference with contracts, breach of contract, reliance, estoppel, unfair trade practices, principal-agent relationship, etc.  The union leaders have clearly forgotten who is the employer and the employee.  They work for us, not the other way around.  We pay dues that pay their salaries.  These leaders have lost all perspective on have a proper relationship with members and properly representing our interests by educating the public and politicians about the actual work we do at our various jobs and agencies.  Before I was in SEBAC, I never had an experience where someone representing me only communicated with me by presenting me “an offer I cannot refuse” with an explanation that I or others I care about will suffer harm (lose job) if I don’t take the deal.  My paid representatives always presented the issues to me, my options, advice including pros and cons, and the the rep did what I, or, if it was a group, the majority instructed the rep to do on my or our behalf.  The SEBAC reps never truly represented its members.  They just went off and did what they chose to do taking into account some of their various interest in health care reform.  It has now been rejected by SEBAC members, but leaders refuse to accept that basic truth and continue to sneakily, creepily, and sleazily scheme to ram their plan through despite the outcome of the vote.
Time for members to say, “NO.  This is not they way we are going to do business!” and reject any attempt by a handful of SEBAC leaders to rule by fiat.  When this is over, we need to clean house and get real representatives who monitor, report, advise and carry out directions not would-be dictatorial rulers like the ones we have now who want to run the entire show and tell us when to go to bed.  I haven’t paid these dopes tens of thousands of dollars in dues over the years to be left in the dark and spoken down to like I am incapable of grasping the special truths the leaders hold a monopoly on but must grudging share tiny pieces of so my puny brain can understand enough to know I better do what they tell me or bad stuff will happen!

posted by: DrHunterSThompson | July 7, 2011  12:53am

DrHunterSThompson

i’m not sure that the managements ranks are as bloated as many think.  the numbers include all nonunion workers and they are not all managers, not even close.  this fact has been lost on the media, but the Governor does understand.  for example, an executive assistant is an appointed position, but it can range from a secretary for a commissioner or a right-hand man. neither management nor union.

posted by: Michael | July 7, 2011  1:21am

Just like the sales tax, property tax and gas tax, concessions are flat rate, meaning, regressive in nature. The $45,000 maintainer takes the same hits as the $125,000 manager, but it puts the maintainer closer to the edge, while the manager has a much thicker layer of discretionary income to bouy him. I predict by the time state employees reach the other side of this decade, we will have lost 20% of our living standards.

posted by: Hugh TalkingToMe | July 7, 2011  7:26am

The early retirement benefit actuarially costs the plan 7.5%. A penalty is used to recoup early retirement costs on the system. The proposed agreement would increase the the early retirement penalty from 3% to 6%. That would leave everybody else subsidizing them by 1.5%. Guess paying their fair share is too much to ask.

posted by: What what what? | July 7, 2011  9:09am

Perturbed—You’re absolutely 100% right on the money! Well said!

posted by: Chuck | July 7, 2011  9:13am

I applaud all of you. This discussion is nearly identical in scope to the conversations taking place among the rank and file prior to voting. We need to be heard no matter how you voted and we need to stick together. Why have some bargaining union presidents written letters to the governor to negotiate their own contract? I thought this type of action is what destroys the solidarity of the union.

posted by: Tren | July 7, 2011  1:22pm

OK, please explain to me what I am missing from this SUSTINET REPORT, Executive Summary:
The SustiNet law embodied a distinctive vision.
Uninsured, low-income residents will get the help
they need to afford coverage, and insurers will
no longer be permitted to discriminate against
consumers with preexisting conditions. At the
same time, a new, publicly-administered health
plan—dubbed “SustiNet,” from the state motto—
will implement the country’s best thinking about
reforming health care delivery to slow cost growth
while improving quality. SustiNet will begin
with existing state-sponsored populations, state
employees and retirees as well as Medicaid and
HUSKY beneficiaries. SustiNet will then become
a new health coverage option for municipalities,
private employers, and families.

posted by: Wakewhenover | July 7, 2011  4:46pm

Hugh:  We have a contract through 2017.  I’ll take my chances then, when this governor is gone and the GOP takes the White House for term 2 and the economy is soaring.  you won’t get back what you give up.  Ignore the extortionist threats of bully-boy Dannel and again, keep a look out for ‘Sustinet Sal’ and his ilk.  He has his own agenda, not ours.

posted by: sickofit | July 7, 2011  8:49pm

Tren: The point is it is socialized medicine. State run, subsidizing small business and low income families. Sounds nice doesn’t it? Well, if the State is broke, who do you think will end up subsidizing it? You got it, State Employees will. They’re contributions will increase to pay for those who can’t pay their share. That’s the main reason State Workers don’t want it.

posted by: Truth, Justice and Karma | July 8, 2011  12:30am

Hello SEBAC.  Is there anybody in there?  Just smile if you can hear me.  Why hasn’t SEBAC held some type of meeting that involves more than just the 15 tightrope walkers who are chained together at the ankle and are being watched by everyone as they very shakily try to keep balance a thousand feet in the air, without a net, above a morass of potential illegal conduct; ethical failures; breaches of fiduciary duties; conflicts of interest; lawsuits against SEBAC, some unions and possibly certain individual reps; declaratory rulings, injunctions and prejudgment remedies, etc.
Who do you think you are?  Why do we pay dues?  Who are you working for?  Do you really think for a minute that you are going to change voting rules, conduct a re-vote, and pass the same deal that already failed and have it go unchallenged in court? 
Why don’t you tell the 45,000 members who you work for what you plan to do and why you have not made a counter proposal to the Governor that has features you know members will support and that will help achieve savings so we can avoid most, if not all, of the layoffs?

posted by: Truth, Justice and Karma | July 8, 2011  12:59am

Check this article link out.  It explains the actual impact the deal would have on a worker, so that folks can understand the reasons some workers voted against the deal.

http://jonpelto.wordpress.com/2011/07/07/some-politicians-and-media-remain-committed-to-the-principle-of-“don’t-confuse-me-with-the-facts”/

posted by: perturbed | July 9, 2011  9:25am

perturbed

Hugh TalkingToMe,

How do you know how much early retirement costs the plan, compared to normal retirement? Have you seen the actuarial assumptions and calculations, and you concur with them?

Or are you taking SEBAC’s “agreement brochure”, that initial sales pitch (propaganda) that they released before the neutrally worded (real) agreement was made public, at face value?

If that propaganda is accurate, should an employee retiring after their normal retirement age receive a bonus pension payment, for saving the plan so much money?

So let’s see, it takes 10 years of 0.24% additional payments into the fund to “buy back” 1 year of your normal retirement age under SEBAC 2011—from 61 to 60, for example—but it takes 7.5% per year of retirement for the rest of your life if you want to leave 1 year before that? A total of 2.4% of your salary paid up-front over 10 years to get you from 61 to 60, but 7.5 % of your pension each and every year of retirement for the rest of your life to get you from 60 to 59? Does that seem right to you? Personally, I’d have to see the actuarial assumptions and calculations before I would ever take SEBAC’s word for anything at face value.

Besides that, your penalty assumption (and SEBAC’s) is simplistic and just plain wrong. In reality, the reduction in retirement benefits is far greater than SEBAC would have us believe. Here’s an example:

A 55 year old employee with 25 years of state service making $65,000/year is contemplating taking early retirement. Normal retirement for this person would be 60, with the minimum 25 years of service. Thus, this would be 5 years early. The Tier II Benefit Estimator comes up with an approximate pension of $19,100 annually. The benefit reduction in this example is about $3,371/year, or 15% of the $22,471 that would be possible without the reduction. That’s the 3% per year “reduction” the agreement talks about.

Now let’s compare that pension to the normal retirement version. At normal retirement, the employee would have 5 more years of credited service, adding 1.33% per year to the calculation. Additionally, some combination of increments and general wage increases could be expected to average ~ 2% per year. (The actual agreement is more generous, if you discount the new 3% retiree health care trust fund contribution that the media seems to ignore anyway.) So besides more credited time (30 years), in 5 additional years this employee’s 3-year average salary might grow to $70,500. Plug that into the estimator, and the estimated pension is $28,100.

The reduced early retirement pension is only 68% of the normal retirement pension. That seems more like a 6.4% per year total reduction. Under existing penalties.

Factor in the proposed doubling of the early retirement reduction under SEBAC 2011, and the early retirement pension drops to $15,700. That’s $15,700 vs. $28,100. At a little more than half the normal retirement pension 5 years later, that’s almost a 9% per year penalty. So even according to SEBAC’s own propaganda, an early retiree will be subsidizing the plan at a rate of almost 1.5% under the new agreement.

Please let me know where my analysis is wrong. I’d like to know if it is.

—perturbed