The tense dance of Dan Malloy and organized labor

State employee unions spent hundreds of thousands of dollars last year to elect Gov. Dannel P. Malloy. Now, they must decide if it is worth $1 billion in concessions to make him a success.

Malloy’s political future is in their hands, just as it was in the frantic final days of the 2010 campaign when labor played a pivotal role in electing the first Democrat in a generation by the closest margin in 56 years.

Their friend is demanding $1 billion in labor savings. The number is unprecedented. But without it, or at least a good portion of it, Malloy’s budget falls apart, very likely a fatal blow to their ally on other issues.

It is labor’s dilemma.

“Our number one concern is always to our members,” said Sal Luciano, the executive director of AFSCME Council 4. “But yes, we’re also concerned about him politically, because we did put in an enormous amount of energy to help get him elected.”

Luciano said it is Malloy’s dilemma, too. When labor places its final concession offer on the table–something Malloy says must happen within weeks–the governor knows that a failure to amicably resolve the concession talks would be devastating to everyone.

In an interview, Malloy did not disagree with the notion that his re-election in 2014 could be decided by his first budget and his relationship with labor, but he said that is not part of his conversations with union leaders.

“I’m not arguing about four years from now,” Malloy said. “But the reason that it’s better for them that it’s me than somebody else is I like them. I support them. I believe in organized labor. But I also believe in a strong management team. Quite frankly, Connecticut hasn’t had a strong management team for a long, long time.”

Protracted budget fights wear on governors.

In October 2002, Gov. John G. Rowland had a 62-percent approval rating in the Quinnipiac University poll as he began a war with labor over concessions that ended with 3,000 lay offs.

By March 13, 2003, even before his corruption issues dominated the news, his approval rating had dropped to 33 percent, with voters blaming his handling of the budget.

“In the end, it benefits no one if this whole thing blows up,” acknowledged Roy Occhiogrosso, Malloy’s senior adviser.

The result is a remarkable public dance as Malloy and the unions warily circle each other.

“If Jodi Rell put forth a budget calling for $1 billion in concessions, they would be picketing the Capitol, the Executive Residence and maybe even her house in Brookfield,” said Senate Minority Leader John McKinney, R-Fairfield. “They haven’t offered one word.”

Instead of picket lines, Malloy was welcomed last weekend during an unpublicized appearance during the social hour of an AFSCME convention in Groton. The invitation had been extended before the demand for concessions, but the union reaffirmed that Malloy was welcome.

“It was cordial,” said Larry Dorman, an AFSCME spokesman. “The mood was positive.”

Malloy did not downplay their difficulties, Luciano said.

“Seven times, he said, ‘Times are tough.’ One time, but at least he said it, he thinks maybe we come out of this all right. Now, what exactly that means…” Luciano laughed. “…is subject to debate.”

It is not entirely true the unions have been silent. Union members have been a presence at each one of Malloy’s 16 town-hall meetings on the budget, pressing him for a more progressive tax structure. Occasionally, there are flashes of anger on the part of individual members.

In New Britain, the audience applauded when Marybeth Kaczynski, an AFSCME member employed at the Department of Children and Families, told Malloy she resented the make-or-break demand for givebacks.

“I’m tired of being a punching bag for the state of Connecticut,” Kaczynski said. “Shouldn’t your budget ask more of people who can afford it?”

Sitting six feet away was John McNamara, the Democratic town chairman, one of many New Britain politicians who endorsed Malloy early over his rival for the Democratic nomination, Ned Lamont.

“It’s asking for the impossible to ask for $1 billion a year in concessions,” McNamara said. “He has an impossible situation.”

McNamara is not a disinterested party, politically or personally. He wants to see a Democratic governor succeed, but he, too, has money on the line: He is a unionized employee of the state community college system.

“He has a lose-lose situation,” McNamara said. “The allies of 2010 are going to have a difficult few months.”

But, as McKinney noted, the restraint is remarkable.

Steve Curran, a correction officer at Garner, a high-security prison housing inmates with mental-health issues, is an active AFSCME member, but he has stayed away from the town-hall meetings for fear of letting his anger show.

“It’s tough,” Curran said. “I’m three months into a four-year marriage with the guy.”

There still is hope the marriage can be saved.

But Curran, who came to the Legislative Office Building this week to testify against bills hostile to labor–bills, incidentally, that Malloy opposes–offered another, less-flattering family analogy about labor’s ambivalent feelings toward Malloy.

“It’s like a step-dad we’re not sure if we like or not,” he said.

Even as he demanded a seemingly impossible $1 billion, Malloy has taken difficult, politically risky steps that labor appreciates, primarily his proposal to raise taxes by $1.5 billion, rather than gutting state aid to municipalities or making deeper cuts to the state budget.

“There are some things he is doing that other governors aren’t doing, and we recognize that. I mean, he actually is talking about raising taxes,” Luciano said. “We may not like where those taxes are right now.”

Malloy has signaled he is open to a more progressive income tax structure sought by labor, so long as Connecticut can remain competitive with surrounding states, but he will not go above $1.5 billion in taxes — and may even go lower, if he has blow up his budget.

“I’ve got to keep in balance the concept of shared sacrifice, so what I’m saying is we are not going to ask the taxpayers for any more money than that,” Malloy said. “In a reconfigured budget, I’m not guaranteeing you I’m going to ask for that.”

The governor expressed frustration that the concession talks have not moved faster, but he conceded that labor and the legislature have been taking his measure.

“I think that too few people knew me well enough up here to understand that what I said is what I mean. And perhaps, part of this has been the process to make sure that people understand, as opposed to some of the politicians they have dealt with in the past in this very seat, when I say something, I mean it. If I said it was $1.5 billion at the most, that’s all I’m ever going to sign off on. And if I said I needed a billion dollars, I need a billion dollars.”

Malloy is no stranger to bargaining with unions. As mayor of Stamford for 14 years, he frequently clashed with labor.

“Getting a negotiated settlement with the police was almost always impossible. Fire was always difficult, and everyone else, I think, we always settled. But if you remember five years ago when I was running for governor, I didn’t have much labor support, in part, because, I think, if you really scratch the surface, I held a management position, which required that I bargain on behalf of the people of Stamford, the taxpayers,” Malloy said.

In recent days, Malloy has increased the pressure on state employees. He has said failed concessions will lead to cuts in aid to municipalities, which would lead to lay offs of union members at the local level. And this week, his administration issued lay off instructions to his agency heads.

“I think I’ve done what I need to do to remind people there is a calendar, and there’s an option,” Malloy said. “That’s all we’re doing. I’m not trying to be provocative.”

Malloy also has continued to back other elements of labor’s agenda, a reminder to labor it might be nice to have a functioning Democratic governor for a while. That agenda includes an expansion of collective bargaining rights to managers and a bill requiring private employers to offer paid sick days. Malloy said those positions have helped to lower the rhetoric around the concession talks.

“I think it makes it hard for them to demonize me,” Malloy said.

There also is a simpler reason, a case for restraint that can be summarized in two words: “Governor Foley.”

If Malloy is fatally wounded in his first year, the unions know that the election of a Republican governor is likely in 2014, and Tom Foley, the 2010 GOP nominee, is planning a rematch. Foley had vowed to balance the budget with no new taxes, an even uglier prospect than an awkward dance with a friend who wants $1 billion in concessions.

“If Tom Foley was the governor, we’d be on the menu,” said Lori J. Pelletier, the secretary-treasurer of the Connecticut AFL-CIO. “With Dan Malloy elected governor, we’re at the table.”