Foley reopens old question of forcing union givebacks

Republican gubernatorial candidate Tom Foley hopes a 21-year-old legal opinion charts a path for Connecticut’s next governor to reduce unionized state employees’ salaries and benefits, regardless of whether workers voluntarily offer givebacks.

But the memo, drafted by former state Attorney General Clarine Nardi Riddle, strongly cautions against such a move, warning that unless an array of very difficult standards are met, any abrogation of contract obligations likely would prove unconstitutional.

And both the campaign for Foley’s Democratic rival and a state union spokesman said the Greenwich businessman’s statements were more likely to antagonize unions and undermine confidence in state government rather than to produce any tangible budget savings.

Foley’s position, first outlined in an article this week in the New Haven Register, stems from a memo prepared for the General Assembly in early May 1989, just before it would adopt nearly $700 million in tax-and-fee hikes, according to budget records. Those increases were designed to eliminate a budget deficit, and stave off the need for a state income tax – the latter arriving nonetheless in 1991.

When asked by legislative leaders whether government could decrease or delay contractually required “cost-of-living” raises, Riddle wrote that while the federal prohibition against states’ “impairing the obligation of contracts” is not absolute, the U.S. Constitution imposes “severe restrictions.”

“For this reason,” she added, “we advise you to approach the abrogation of provisions of collective bargaining agreements with extreme caution.”

Foley said Tuesday that he’s not certain Connecticut’s fiscal crisis – and its $3.26 billion deficit forecast for 2011-12 — would meet the standards Riddle outlined, “but it certainly creates some uncertainty for the unions” and underscores the value of making concessions that could avert layoffs or a court battle over raises.

“I hope I get the cooperation of union leaders so we can do the right thing,” said Foley, who already has indicated that public-sector wage and benefit concessions would play a key role in his plan to close the deficit without tax hikes – a move that Democratic nominee Dan Malloy and others charged is unrealistic.

And based on what Riddle wrote 21 years ago, the odds of backing state government’s more than 40,000 unionized employees into a legal corner seems like a long shot as well.

Based on a review of federal and state case law, the former attorney general wrote that several key factors should exist for any legislation stripping contractually promised benefits to have a chance of passing constitutional muster.

There must be a “severe financial emergency,” she wrote, adding that courts apply greater scrutiny when legislation targets benefits that workers “reasonably relied” on, such as cost-of-living raises.

The projected deficit for 2011-12 equals about 17 percent of current spending, and about one-half of all revenue expected to be generated this year by the state income tax.

And Riddle wrote that any effort to abrogate guaranteed benefits “must be based on an important and legitimate public purpose,” such as eliminating a budget deficit. But she quickly added that the courts have applied greater scrutiny, not less, when states interfere with contracts tied to their own employees – rather than to those involving the private sector – and the desire to avoid tax hikes isn’t a sufficient reason.

“A government entity can always find a use for extra money, especially when taxes do not have to be raised,” she wrote. “If a state could reduce its financial obligations whenever it wanted to spend money for what it regarded as an important public purpose, the Contract Clause (in the U.S. Constitution) would provide no protection at all.”

Former Speaker Richard Balducci, a Democrat who represented Newington when he led the House of Representatives from 1989 through 1992, said lawmakers decided against trying to abrogate any contracted raises or benefits. “I think people felt it was just bad policy,” he said. “And what happens if you do that, and then the employees decide not to show up for work?”

Roy Occhiogrosso, senior campaign adviser to Malloy, said Foley doesn’t have any new legal leverage to entice union concessions, but only continues to push labor away from the bargaining table.

“In the last debate, he (Foley) said that he could reduce the state workforce through attrition with no layoffs, and that state employees had nothing to fear from him,” Occhiogrosso said. “I think that, at times, he demonstrates a dangerous ignorance about the job that ought to make people pause.”

Foley, who has charged that Malloy is “in the pockets of the unions” and will not press public-sector workers for big concessions to help close the deficit, said those who question whether a Republican governor could effectively negotiate with labor “are just trying to help the Democratic candidate. That idea is ridiculous.”

State Employees Bargaining Agent Coalition spokesman Matt O’Connor said Foley’s comments don’t reflect “the type of tone you would want to take with anyone you hope to forge a collaborative partnership with.”

“My hope is that Tom Foley would have learned that is not the right type of approach when it comes to leadership,” O’Connor added. “He’s still operating from a very adversarial position.”