Malloy thanks labor, zings critics

By turns conciliatory and defiant, Gov. Dannel P. Malloy framed today's overwhelming ratification of a labor concession deal as a victory of sweeping scope and a vindication of what he calls his tough, but respectful approach to state employees.

"Ladies and gentlemen, this is a historic agreement," Malloy said, standing with Lt. Gov. Nancy S. Wyman in the Old Judiciary Room of the state Capitol.  "It represents the most fundamental restructuring of the relationship between state government and state workers that has ever occurred in the state of Connecticut."

Malloy looked beyond the two-year biennial budget, which was unbalanced without a mix of concessions and labor savings his administration values at $1.6 billion, a number that non-partisan budget analysts have yet to confirm. Instead, he focused on pension and health changes projected to save $21.5 billion over 20 years.

Malloy Wyman

Malloy, Wyman framing the concession deal.

"The real significance of this agreement lies in the long-term savings it produces for taxpayers and the state of Connecticut," Malloy said.

Malloy, 56, this blue state's first Democratic governor in 20 years, had made national news by vigorously defending collective bargaining rights even as he demanded up to $1 billion a year in concessions from the unions that played crucial roles in the state's tightest gubernatorial contest in a half-century.

The governor contrasted his approach with confrontational Republican governors such as Scott Walker of Wisconsin and Chris Christie of New Jersey. But when the unions failed in June to ratify an initial tentative agreement, Christie crowed on MSNBC's "Morning Joe"  that Malloy had been played. The clip was shown again days later when Malloy appeared on the show.

Today, it was Malloy's turn to push back after the State Employees Bargaining Agency Coalition, representing 45,000 unionized state employees, voted by more than a 2-1 margin in favor of concessions that Malloy was willing to clarify, without changing the basic terms of the original agreement.

And push back he did, working off a prepared text that mentioned none of his doubters by name, but listed their insults.

"There were many people who said we could not reach an agreement that we achieved here this day," Malloy said. After a long pause, he added, "They were wrong."

Slipping into the cadence of a formal speech, Malloy went on to say exactly how wrong his critics were, weaving in shots he had taken from Christie, newspaper editors and House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, whom his administration is now cultivating for bipartisan support of a special legislative session on jobs.

"There were many people who said when the first agreement was rejected that I should renegotiate the terms of the deal, or it would fail a second time," Malloy said. "They were wrong.

"And when the first agreement failed, there were many people who said I should just go onto Plan B. They said I'd been taken for a ride, and I'd gotten what I deserved negotiating respectfully with my fellow employees. Some people even suggested that the rejection of the agreement proved that Hartford was too difficult for me to navigate and that I was naïve to think we could implement real change. Obviously, they were wrong.

"On that point, they were very, very wrong."

The deal imposes a two-year wage freeze, penalizes employees who opt out of a new wellness program, and imposes structural changes to the retirement system, some taking effect this fall, while the others will not apply to anyone who retires before 2022.

Early retirements will become less attractive on Oct. 1, as the present three-percent benefit reduction will double to six percent, and contributions for health coverage will increase. In 2022, the normal retirement age will increase by three years, to age 63 or 65, depending on years of service.

To labor and Democratic legislative leaders, Malloy was grateful.

House and Senate leaders, despite long ties to state employee unions, backed the governor as he insisted the only alternative to the concession was layoffs and deep budget cuts.

And he acknowledged that the leaders of the SEBAC coalition shared his desire to stabilize the costs of employee benefits, recognizing that without savings now, pressure would grow for more givebacks when the unions' basic health-and-retirement deal expired in 2017.

"But for this agreement, come 2017, there would have been hell to pay," Malloy said.

But Malloy said he was most grateful to state employees, who reconsidered the earlier rejection and approved a deal that will save jobs and preserve vital state services. Left unsaid, the ratification also saved Malloy from budget cuts that touched nearly every part of the Democratic base.

"They have stepped up to the plate," Malloy said. "They have made real sacrifice. And when, not if, but when we turn this economy around they can rightfully say that with this agreement they became part of the solution. We would not be at this place without them."

Malloy said he saw no reason for the House of Representatives to act on a bill approved by the Senate at his instigation after the first deal was rejected. It would have changed the way state employee pensions are calculated, reducing their sick days and freezing longevity payments.

The governor left for another day a question that will grow more important as he nears re-election in 2014: How badly has he damaged his relationship with organized labor?

"I don't know whether it's suffered. I think that would be a question for those folks," Malloy said.

Then he reminded listeners that he never sought to undercut collective bargaining or labor arbitration laws, even as he tried to push the workforce toward accepting concessions.

"So, I'm feeling pretty good about the relationship," Malloy said. "That's not to say that, you know, feathers haven't been ruffled. I'm sure they have. But we needed to get to this point."