State employee unions wasted little time in letting Gov. Ned Lamont know that his hopes of balancing the next budget by assuming flat pay for workers won’t happen without a fight.
The State Employees Bargaining Agent Coalition, which represents nearly all unions in state government, also renewed its call Thursday for Lamont to follow the recommendation of many of his fellow Democrats in the legislature to raise taxes on Connecticut’s richest households.
“We intend to bargain not just for fair wages, but for powerful and effective public services and for contracts that benefit all of Connecticut’s people,” SEBAC leaders wrote in a statement posted online at mid-day Thursday.
The $46 billion, two-year budget Lamont proposed Wednesday to the General Assembly relies on about $300 million in labor savings across the biennium.
The proposal saves $140 million by assuming no raises for all bargaining units with contracts currently in negotiations with the state.
“The governor’s budget assumes still more sacrifices from Connecticut’s public employees and working families, many of who have risked, and continue to risk, their lives every day to provide the much needed services that our most vulnerable populations have relied on,” SEBAC leaders wrote, calling the flat pay proposal just one of many “profoundly troubling” assumptions in Lamont’s plan.
If the governor and any of the affected unions don’t agree on compensation, the matter would be referred to arbitration. The General Assembly, unlike a municipal Town Council or Board of Finance, can reject an arbitration award if it doesn’t like the results and re-start the process — but historically it has rarely employed this option.
Lamont also wants to restructure contributions to the state employees retirement system for the second time since he took office in 2019. This would reduce contributions by $160 million over the next two fiscal years combined. But by not making the full pension payments now, the state would lose millions in potential investment earnings in future years.
The governor also cannot make that change unilaterally and would need the approval of state employee unions.
Lamont’s budget director, Melissa McCaw, said Wednesday when presenting the biennial plan that the administration had to close a major projected deficit and asked many groups to sacrifice.
Analysts say state finances, unless adjusted, would run more than $2.5 billion in deficit over the next two fiscal years combined.
The governor, whose budget includes no major tax increases, also said keeping spending in check is crucial right now if Connecticut’s economy is to recover from the pandemic.
“I’ve always said, we don’t need more taxes, we need more taxpayers, and they are already paying dividends as you can see by our balanced budget,” he said Wednesday in his budget address.
But unions counter they granted concessions in 2017, 2011 and 2009 — which included four wage freezes. And labor leaders insisted since the last deal that legislators and the governor need to reform the state and municipal tax systems to ease burdens on the middle class and seek more revenue from the wealthy.
The governor, a Greenwich businessman, consistently has opposed increasing state taxes on the wealthy, arguing it would prompt them to flee the state.
“We are proud to be part of the broad fight for a budget that will turn the economy around for all of Connecticut’s working families, not just the ultra-wealthy,” union leaders added. “We invite Connecticut’s multi-millionaires and billionaires who have profited so much during the pandemic to join us in that fight by finally paying their fair share.”