Gov.-elect Dan Malloy’s relationship with the labor unions who helped him win on Election Day is facing its first test this week as Connecticut’s largest health care workers union called on him to halt a controversial privatization policy.

New England Health Care Employees Union, District 1199, which has been battling  with Gov. M. Jodi Rell for several years over ongoing efforts to privatize group homes and other services for clients with developmental disabilities, rallied in Meriden on Thursday to oppose planned closures of four more homes.

The Department of Developmental Services, formerly known as the Department of Mental Retardation, converted 17 group homes to private control and closed another five over the past two years, according to union records. The majority of clients in state-run homes that are closed are transferred to private facilities.

But the latest closures planned by DDS, involving homes in Hamden, Meriden, Mansfield and Windsor would be phased in between December and March 1, giving Malloy – who takes office on Jan. 5 – an opportunity to block the process.

“It’s a bottom-line driven decision, and one that hurts the clients and the workers,” District 1199 spokeswoman Deborah Chernoff said Friday.

The closures of these state-run homes disrupt close relationships that developmentally disabled clients share, both with each and with the workers who care for them, Chernoff said. “Consistency of routine is extremely important to allow people to function at their best. … They are breaking up their relationships with their caregivers and with each other.”

Both Rell and her predecessor, John G. Rowland, relied increasingly on the private sector to deliver social services at a greatly reduced price. This fiscal year’s $19.01 billion budget includes about $1.3 billion to fund contracts with private, nonprofit agencies that not only provide support services for the developmentally disabled, but also counseling for abused children and the mentally ill, substance abuse treatment for drug addicts, and job training and other programs for prison inmates.

DDS released a written statement Friday that said “Throughout the planning process, careful and thoughtful consideration was given in an effort to maintain quality of services for our consumers and their families.  Consumers will have the opportunity to move to alternate residential programs that will meet their identified level of need.  Guardians will be involved in the selection of new residential services and all phases of transition.”

But for nearly a decade the private, nonprofit social service sector has complained that little or no growth in state funding has left hundreds of community-based agencies in tough financial straits. According to both the Connecticut Association of Nonprofits and the Connecticut Community Providers Association, the state’s two largest parent groups for nonprofits, average social worker pay in the private sector is roughly half that of comparable state employees, and many community-based agencies struggle with annual turnover rates of close to 25 percent.

More than 2,400 developmentally disabled residents are on a state waiting list for residential placement, including 863 on a “Priority 1” list. Most clients in that group are disabled adults living at home whose parents are getting to old to care for them.

Chernoff said District 1199, which represents 20,000 health care workers statewide – including 8,500 state employees – would reach out to Malloy’s transition team this month.

“We all know what it means when we have fewer state homes,” she said. “There are going to be more people who end up having to go to the private sector.

House Speaker Christopher G. Donovan, D-Meriden, who attended Thursday’s rally, said he also hopes to speak with Malloy in the next week or two to discuss ending the trend toward privatization.

The governor-elect, who had criticized some DDS privatization measures this past spring, said Friday that his transition staff would listen to concerns raised by unions or legislators, and that “I would not be doing this (latest closure plan) based on the information I currently have here.”

But Malloy was quick to add that the budget deficit he faces, which was daunting before the election, hasn’t gotten any better since then.

In fact, both the Rell administration and the legislature’s Office of Fiscal Analysis recently worsened their deficit forecasts for the fiscal year that begins July 1.

The administration estimated the deficit this week at $3.37 billion, with no shortfall in the current budget.

Legislative analysts see things slightly worse, projecting a $3.67 billion hole next fiscal year and an $83 million deficit for the current year.

Malloy added that his assessment of privatization proposals would look at much more than just the dollars involved, noting that many of the clients served in state-run facilities have the most severe medical challenges–in some cases, challenges that the private sector doesn’t want to tackle.

“Sometimes these aren’t apples-to-apples” comparisons, he said.

Malloy spent much of the final weeks of the campaign rebutting attacks from his Republican opponent, Tom Foley, that he had made a secret pact to accommodate labor from spending cuts in exchange for their support.

But Farmington lawyer John F. Droney, a former Democratic state chairman, said that while he wouldn’t predict how Malloy would resolve this particular privatization dispute, he was confident the governor-elect would call upon public-sector unions to make fiscal sacrifices to help close the deficit.

“I think Dan is a problem-solver,” Droney said. “I think he is going to be saying ‘no’–a lot.”

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Keith M. PhaneufState Budget Reporter

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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