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State Employee Unions Will Be Asked To Sacrifice $2B, Over 2 Years

by Christine Stuart | Feb 15, 2011 8:53am
(14) Comments | Commenting has expired
Posted to: Labor, State Budget

(Updated 11:29 a.m.) They helped elect him by one of the smallest margins in recent history, but Gov. Dannel P. Malloy will ask the state employee unions for close to $2 billion in concessions and cost-savings over the next two years when he gives his budget address Wednesday.

It’s still unclear how much of those concessions and cost-savings will come in the form of wages, pension, or health benefits, but it’s likely Malloy will ask for $1 billion in each year of the two year budget. That leaves him with about $800 million in additional spending cuts in the first year of the budget to find.

What is clear is that the labor unions, who were careful not to talk about opening up the collective bargaining agreement which doesn’t end for another six years, will be crying foul.

“SEBAC [State Employees Bargaining Agent Coalition] has previously stressed that discussions so far have not included collective bargaining issues,” Larry Dorman, a spokesman for the labor unions, said Tuesday. 

“We have vowed to continue to work with the Malloy administration both in the short term and the long term to make the ideas of front-line public service workers part of the permanent process of transforming state government to better serve the families of this state.” Dorman added. “Whether the proposed budget had $1 of assumed savings in it, or $10 billion dollars, we will work hard to protect and enhance the public structures Connecticut needs for a better future.”

At a press conference Tuesday morning Malloy didn’t necessarily disagree with the unions statement on collective bargaining.

“When their statement says we’re not in collective bargaining it’s absolutely correct,” Malloy said.

He said collective bargaining carries with it a legal definition and neither side had been willing to go there just yet. The unions are protected by a no lay-off provision until June 30 of this year under the agreement inked by former Gov. M. Jodi Rell.

“It’s a significant ask, but there are things we will reference in tomorrow’s speech that are specific to that point,” Malloy said.

CTNJ file photo

  In 2009 the State Employees Bargaining Agent Coalition was able to negotiate with Rell a package of wage and benefit concessions that amounted to about $750 million over two years. The wage concessions negotiated will expire on June 30 of this year.

It’s also unclear if Malloy will ask for lay-offs in order to achieve the close to $2 billion in concessions and cost-savings, but he has already said he won’t be offering an early retirement package and will fully fund the unfunded pension liability.

Earlier this month Malloy himself had hinted that he will be asking the labor unions for help balancing what he’s now estimating as a $3.2 billion budget deficit.

“For Connecticut to move beyond its current economic crisis, its budgetary crisis, we’re going to need to make headway with our employees on returning to a sustainable system of compensation and benefit allocation,” Malloy said on Feb. 2.

Malloy, who has been critical of the deal labor unions made with Rell, said on the campaign trail that he wants to hear the union’s cost-saving proposals before he even thinks about opening negotiations and formally asking for concessions.

In a “Face the State” interview which aired Sunday, Lt. Gov. Nancy Wyman, signaled that the administration will be asking employees to open up the collective bargaining agreement.

“We’re going to have to negotiate after this with the unions,” Wyman said.

In preliminary discussions the unions have presented the administration with cost-saving proposals, which are currently being calculated by the Office of Policy and Management.

It’s clear now that those cost-savings won’t be enough to avoid concessions.

Malloy refused to talk about the $800 million in spending cuts. “We’ll give you 15-minutes to go through it,” Malloy joked. He did hint that Medicaid, which accounts for about $4 billion of a $19 billion budget was a big driver in the budget.

Asked if he was worried about hurting the middle-class with his budget proposal, Malloy replied, “I worry about everything.”

“Nobody wants more taxes. I don’t want more taxes, but do you think that people of Connecticut believe we should borrow today to cover operating expenses and hand that over to somebody else. I don’t believe they believe that either. There is no easy decision in this.”

He said the heart of the matter is that “we’ve been on an unsustainable track for a very long period of time.”

“It’s not a question of how did we get there, but what’s the alternative?” Malloy said.

“Do we shred the safety net? Do we empty our nursing homes? Do we balance the budget as other administrations have sought to do on local communities—by jacking up property taxes which are more regressive than any other tax?”

He said after his full budget proposal is released tomorrow morning “everyone’s going to be upset. That is a certain reality.”

What he hopes they take away from the document is that “we are serious about solving our problems that put this state on a sustainable course.”

Late Monday afternoon Malloy officials unveiled a $1.5 billion tax package, which includes increases on everything from income to gasoline. Last week he said he will eliminate 30 percent of state agencies shrinking them down from 81 to 57, but that move will only save about $10 million, not counting the Higher Education consolidations.

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(14) Comments

posted by: jonpelto | February 15, 2011  9:48am

Talk of shared sacrifice evaporates as Governor panders to the political talk show hosts

Yesterday it was a new tax plan that comes close to coddling the rich at the expense of the middle class.

Today is it he the announcement that he Malloy will seek $2 billion in employee concessions. 

Putting aside the “lets beat the shit out of state employees” - this isn’t shared sacrifice – it is scapegoating of the worst kind. 

It is a number designed to fail so that state employees end up paying their “fair share”, then pay more than their “fair share” and then still lose in the public opinion game.

There is no question that concessions are needed - major concessions at that - but anyone in the know - including the Governor know that $2 billion is a number designed to fail.

posted by: Disgruntled | February 15, 2011  10:18am

Ask the Stamford Schools custodians how Dan deals with labor.
Ask residents,who are over taxed in Stamford and have pretty poor services to show for it how they feel about the MillRiver project that was jammed down their throats by Dan before he left office. Nice plan on paper but the execution is a bit problematic.
Finally,while I have no sympathy for the SPD,ask them how they liked Dan while in office.

posted by: THREEFIFTHS | February 15, 2011  10:43am

I don’t feel sorry for none of you.keep on voting for the crooked two party system and this is waht you will get.Get ready because this will be all of you very soon.


http://www.youtube.com/watch?v=KbVHbEGerRA&feature=related

posted by: GoatBoyPHD | February 15, 2011  12:22pm

GoatBoyPHD

If you were to take Rowland’s budget from 2002-03 at the low of the last recession and adjust it for inflation it would be for $15.8 Billion which is the state’s current revenue base before tax increases.

Anything less than $3.7 billion in cuts is a win for the Democrats and State workers.

If SustiNet was a true single payer/single policy model of egalitarian health care coverage billed as a right for all CT residents from birth then I’d be in favor of higher tax rates.

VT’s Shumlin impressed me by advertisng univeral care as a business comptitive advantage for VT—health care funded entirely out of progressive taxes.

When done VT will ahv elower taxes than CT and have a true universal care proram.

CT citizens will have SEBAC and the CT Democratic Party and their mess.

You can’t believe just how far down on my list of priorities protecting SEBAC jobs and benefits is.

To qutoe Shumlin:

“I believe that the states that we currently lose jobs to — frankly, like New Hampshire to our east, who has no income tax — those small businesses will say, ‘Hey, wait a minute. If I can get rid of my biggest rising cost, which is health insurance to my employees, by moving to Vermont, that looks attractive.’ So, I think it’s a jobs creator. We have to do it.”

posted by: Matt W. | February 15, 2011  3:02pm

Matt W.

Very smart the way they handled these releases. Drop the tax increases on everyone, knowing that it will cause an uproar. Then, just when everyone’s all fired up, release the news about hitting up the unions to make it look as though the goal of shared sacrifice is real.

posted by: myrlin | February 15, 2011  4:54pm

And where does he want those savings to come from.  Most of the line workers make a living wage.  You want to save a ton of money, eliminate 50% of the middle management, or offer them a demotion to those jobs that are necessary, like corrections and public safety where they will make substantially less doing a lot more work.  I can’t afford to take a pay cut, any more furlough days or the raising of my health insurance any more.  I don’t make $80K a year, and I can’t afford to take any more cuts, including Malloy’s proposed cut of the property tax credit.  The only solution for me is to sell my house and move to a state that isn’t going to force me out.  All you end up with are fewer people living in the state but with the same old bills, forcing them to raise taxes and cut benefits even more.  Goodbye CT, hello anywhere in the south where they are happy to have me and let me keep more of my money.

posted by: B. Hebee | February 15, 2011  7:08pm

Private sector unemployment is at 10%. The State Employee work force unemployment is at 0%. I can’t believe anyone can even defend that statistic with a straight face. By protecting the excessively large number of Employees in the State work force we are continuing the downward fiscal death spiral. We are all tired of hearing the same old replies from the Legislature, State workers and the unions’. This is not picking on the front line State worker. This is the reality that our cowardly Legislature has created for us. They have spent the last several years with their heads where the sun doesn’t shine and this is their legacy. The most shameful fact of all is that we voters continue to put them all back into office. The State work force needs to be reduced by 10- 15% as has been done in the private sector. People of Connecticut, Welcome to EARTH!

posted by: hawkeye | February 15, 2011  9:29pm

Unlike New York Gov. Mario Matthew Cuomo, who is forcing his state lawmakers, to make the necessary tax cuts, to eliminate, any increase in taxes, our Gov. Dannel P. Malloy, is giving us the largest tax hike in our history, instead of forcing his Democratic General Assembly, to make the necessary budget cuts, to eliminate his projected, massive increase in our state taxes, instead.

Malloy’s projected tax burden on our families and business, will be devastating, and an absolute hardship may people.

posted by: newview | February 15, 2011  9:37pm

What a typical scenario this is.  I believe in the other article regarding Mr. Cafero’s questions to the administration…how many state jobs will be lost with this proposal…answer 150!  150???  That’s not reducing the size of the workforce…that’s less than natural attrition!

Once again, what happened to this bloated management everyone was ballyhooing about just a month ago??  Someone’s feet need to be held to the fire here and have this administration follow through with the top heavy managerial reductions before they take one dime from union employees!  The problem with that notion is that a lot of political cronies get singled out because they have nowhere to hide.  These are the people who need to be released.  These are the people who need to identified by this administration.  This is where the greater waste of public monies are spent.  Services will not be compromised in any manner if these people are released.  Mandated reductions of 25% Agency managerial employees get shifted to the private sector before one single union concession is implemented!  Then… let’s talk! 

Let’s get one thing straight right now,  Gov. Malloy has done nothing but talk about this bloated management, and be very clear about this, he has no intention, as of this point, to do anything about it. 

Union employees should be a part of the solution, there should be concessions.  They should willingly come to the table to offer their assistance in this regard.  It is disgraceful that the lowliest of the low State working dogs will bear the burden of these unreasonable numbers when the organized protection of the politically connected cronies will remain unscathed by the conditions. 

In case you folks in Hartford haven’t heard…  This is not what your constituents expect from their representation.

posted by: AntonK | February 15, 2011  9:59pm

@myrlin: Exactly myrlin, you hit the nail on the head. One of the major problems, if not the most critical problem with the state workforce, is the enormous layer of middle-manager/supervisor do-nothings who earn in the area of 100K + their paid-to-stay bonuses. Demote them or retire them and you’d have a more productive, vibrant, proactive, meaner-and-leaner state workforce. Period.

posted by: THREEFIFTHS | February 15, 2011  10:09pm

posted by: B. Hebee |

February 15, 2011 6:08pmPrivate sector unemployment is at 10%. The State Employee work force unemployment is at 0%

Those who work in the Private sector should have form unions and maybe they could have keep there jobs.Also blame wallstreet which is the private sector that put us in this mess.

posted by: JoinaUnion | February 15, 2011  10:13pm

“Malloy to seek $2 Bil from State Employees” Typical political types, stupid general public, and big business in control of our government. Banks, Wall Street lenders and the rich put our country into economic free-fall, taxpayers bail them out, business and rich get continued tax breaks and a windfall profits year last year(!), middle class still pays for it. Now politicos, the media, big business and banks convince the sheep-like general public that the state employees have to pay for all their bad judgment. And the stupid general public buy it! Today the general public find out that they get to pay higher taxes, and still want someone to blame, so aim at state employees, who the media would have you believe all make $150G, pay no taxes, get all their wages in retirement and contribute a $1 to their medical expenses. Americans need to wake up and revolt. It’s not the state employees. YOU should earn livable wages with some health care and a retirement in dignity too. It’s big business, the rich, and politics that have brought us here, not Unions, not state employees. Get an education! Start to think critically! (Oh wait, you just cut state spending for that.)

posted by: ... | February 15, 2011  11:02pm

...

B Hebee: Agree with you. Trying to put an unemployment statistic on the State Workforce doesn’t work because isn’t a statistic. Its a cynical joke argument made by those wholly against state workers, which is why people laugh if you ask them to defend it. Its not a fact. But the 8.6% rate of unemployment in CT as of Dec 2010, provided by the BLS to Google, is.

posted by: What what what? | February 16, 2011  11:39am

Holy cow!

Four years ago I took a $20K paycut to take a job in the public sector. What attracted me was the relative security and benefits offered by the state.

What a mistake!

In the four short years I’ve worked for the state, raises were skipped TWICE, a 3% pay-cut was foisted upon me (under Rell’s deal with the unions), and I was forced to take furlough days.

The real kick in the teeth is that I’M NOT PART OF THE UNIONIZED WORKFORCE. I work for a quasi-state agency that MAKES ITS OWN MONEY. Yet somehow (through a mechanism I don’t understand) any concessions the unions make apply to me, as well.

Now here we are, on the verge of Malloy’s budget speech, and the general public is rabidly screaming “You’re a lazy union bum that is causing CT’s taxes to go through the roof! It’s time to give back or else!”

As you can see, I already “gave back” and then some. Maybe its time to look for someone else to string up.