Cities and towns win, state employees lose in budget deal

The House Democratic majority and the administration of Gov. Dannel P. Malloy agreed Thursday to spare municipalities from proposed cuts in state aid, a change that will come at the expense of additional layoffs of state employees if a failed concession deal is not salvaged.

The Democratic majority in the House refused to grant Malloy’s request for authority to cut municipal aid by 2 percent, so Malloy instead says he will impose as many as 1,000 layoffs above the 5,500 previously announced.

But the legislators are gambling that SEBAC, the coalition of state employee unions, can deliver on its promise to salvage concessions voted down last week in voting by individual unions. SEBAC’s board has delayed indefinitely what was expected to be a pro forma acceptance of those votes.

“Our hope is that we don’t do any of these cuts, and that the state employees eventually ratify the agreement and avert all layoffs and avert all cuts. That’s our number one hope,” said House Speaker Christopher G. Donovan, D-Meriden.

Cutting municipal aid would have had an immediate impact, forcing cities and towns to cut positions or raise taxes. But the unions still have time before jobs are lost, since a layoff notice issued now could not take effect for weeks under existing contracts.

But Donovan, a former union organizer and a staunch backer of organized labor, pointedly noted after a closed-door caucus of House Democrats that legislators clearly had set their priorities: saving municipal aid was paramount.

Roy Occhiogrosso, the governor’s senior adviser, said Malloy understood the reluctance of legislators to make any cuts in state aid to cities and town since municipal budgets and tax rates already are set.

“It wasn’t something he wanted to do, either,” Occhiogrosso said.

Occhiogrosso said the administration made clear to legislative leaders that saving municipal aid would cost state jobs, and the leaders acknowledged that was the option being chosen.

“There will be other programmatic cuts that will be in the mix as well,” he said.

But Matt O’Connor, a spokesman for the state employees unions, said the prospect of additional layoffs are real only if the unions fail to revive the concession deal.

“We are confident we are going to come up with a resolution,” O’Connor said.

Fifty-seven percent of participating union members voted to ratify the tentative agreement, but SEBAC rules required affirmative votes from 14 of the 15 unions in the coalition and that AFSCME Council 4, the largest of the unions, be among the 14. Only 11 unions voted to ratify, and AFSCME was not among them.

Donovan said the tentative agreement struck by the Malloy Administration and SEBAC leadership preserves jobs and saves the state money now through a two-year wage freeze and for decades through health and pension changes.

“It’s a good, fair deal, and the majority of the SEBAC union voted for it. I just see that there’s a deal there,” Donovan said.

It became clear this week that even a modest cut in state aid was politically unacceptable.

“There was a strong backlash in both the House and the Senate,” said James Finley, the president of the Connecticut Conference of Municipalities. “Certainly the House led the charge, but I don’t think there was a state legislator who didn’t hear from at least one municipal official in their districts.”

The House tonight is set to grant Malloy’s request for additional budget-cutting authority in response to the rejection of the labor deal, but his proposal to curb some collective-bargaining rights will not be taken up in the House. It will pass the Senate tonight.

The budget cutting authority will come with strings: The legislature intends to retain the right to review Malloy’s additional budget cuts, which would take effect automatically after a review period if lawmakers do not return for a second vote.

Rep. Toni E. Walker, D-New Haven, the co-chair of the Appropriations Committee, said there is a strong consensus for the legislature to retain the ability to shape the budget revisions after a review by her committee.

In an outline given to House Democrats, Malloy’s rescission authority would increase from 5 percent to 10 percent of agency budgets. The Appropriations Committee would have from July 15 to Aug. 15 to hold hearings on any adjustments.

Republicans called the measure an abrogation of the General Assembly’s budget responsibilities.

“Never before in the history of the state of Connecticut have we given such power to the governor,” said Senate Minority Leader John P. McKinney, R-Fairfield. “My question to my colleagues is why did you run for office? If you’re unwilling to make decisions, even tough decisions, get out. Step out of the way.”

But House Majority Leader J. Brendan Sharkey, D-Hamden, said the governor already has the power to cut agency budgets by 5 percent without legislative oversight. Under the bill before the House, legislators will get to review every cut, giving lawmakers enhanced oversight.