As state employee unions reconsider the failed concession package, the stakes are much higher this time around for nearly 40 percent of the state’s unionized workers who belong to bargaining units that voted against the wage freeze sought by Gov. Dannel P. Malloy.
Malloy hasn’t said what he’d do if the new concession deal passes with some bargaining units still refusing to participate in a wage freeze.
But with new rules making it easier to ratify contract changes even with a sizeable minority opposed — and thereby forfeiting protection against layoffs — Malloy could be in a position to win major givebacks and still order significant job cuts.
And the governor made it clear Monday that the administration has more work to do to make government more efficient and less costly, regardless of the concession vote.
“We’re still going to have to do our jobs, one way or the other,” the governor told reporters following a meeting with commissioners and other department heads. “I’ve also made it very clear we’re still going to have to find more savings… I’ve always said that state government needs to be more efficient.”
Malloy’s biggest plan to cut government spending involves winning concessions worth $700 million this fiscal year and $900 million in 2012-13. Besides a two-year wage freeze, the governor also wants a new employee wellness plan, new restrictions on pension and other retirement benefits, and other efficiency initiatives.
The agreement also calls for annual raises of 3 percent in each of the three years following 2012-13, while the state’s health care and retirement benefit system–which expires in 2017–would be extended through 2022.
But the wage freeze is the key when it comes to layoffs.
The agreement states that each of the 34 bargaining units that comprise 15 parent unions would receive a four-year guarantee against layoffs provided they accept two years without a pay hike.
In the first concession vote, held in June, eight bargaining units representing 17,300 workers rejected the pay freeze. But they weren’t the only ones exposed to the risk of layoffs: Their “no” votes were enough to scuttle the entire concession package, leaving all 45,000 workers were left unprotected.
But the State Employee Bargaining Agent Coalition recently changed rules governing concession ratification.
Unlike wage issues, changes involving health care, retirement benefits and various labor-management initiatives to save money are voted upon by each union, rather than by their component bargaining units.
The non-wage concessions, which represent nearly three-quarters of the $1.6 billion in projected concession savings across two years — would be imposed on all workers as long as eight of SEBAC’s 15 parent unions vote for them, and provided those unions represent a bare majority of SEBAC’s roughly 45,000 members. The threshold for passage was much higher before the rules were changed, requiring 14 out of 15 unions and 80 percent of the rank-and-file membership to support ratification.
It was possible under the old rules for a few bargaining units to reject wage concessions and still have the broader-reaching and more valuable benefit givebacks ratified. This happened in 2009 when all unions voted for a deal with then-Gov. M. Jodi Rell, even though two bargaining units representing about 5,200 prison guards and other correction staff and about 600 of their immediate supervisors both rejected wage givebacks.
But the odds of several bargaining units opposing concessions and the overall package still being ratified were slim under the old rules.
If bargaining units and unions vote again under the old rules as they did under the previous system last month, Malloy would lack a wage freeze from 17,300 workers — but they would have no job security.
After the first concession deal failed, Malloy released a plan in July that involved laying off more than 3,600 employees — most of whom came from the 45,000-member unionized workforce.
If denied wage freezes by 17,300 unionized workers, how many layoffs, if any, would Malloy need to order?
The governor didn’t address that scenario Tuesday, saying only that if the deal is ratified, he expects most layoff notices issued earlier this month would be rescinded.
But Malloy also said whether it’s through concessions, massive layoffs, or some blended combination, he is committed to cutting overall labor costs in the state budget. “There’s no way we can afford our current relationship,” he said.
The administration last reported 1,851 layoff notices issued as of July 20.
“Right now, the coalition and all of its constituent unions are focused on getting accurate and relevant information about the revised tentative agreement out to their members,” SEBAC spokesman Matt O’Connor said. “So much is at stake right now, we can’t afford to lose sight of what really matters. Thousands of state workers have already received layoff notices and thousands more will be unemployed without an agreement. The legislature has already taken steps to restrict workers’ rights to negotiate their health and pension benefits. Then there are the devastating cuts in the governor’s proposed budget which will permanently take away public services that residents rely on every day.”
Even if wage and benefit concessions are endorsed by all bargaining units, the administration still has other cost-cutting goals it must achieve to keep this year’s $20.14 billion budget in balance. These include $170 million in cost-saving ideas involving health care, technology and other programs to be found by labor-management partnerships and another $130 million in savings targets built into the regular budget.
The legislature expanded Malloy’s emergency budget-cutting authority. Though the governor already had authority to reduce many budgeted line items by up to 3 percent, lawmakers expanded that limit to 10 percent to help Malloy balance the budget in case concessions fail. But that expanded authority expires on Sept. 30.
“We still have the normal rescission authority,” Malloy’s budget director, Office of Policy and Management Secretary Benjamin Barnes, said. “We’ll work with the cards we’re dealt.
Barnes added that the administration anticipates 800 to 1,000 retirements this fiscal year and expects to be very conservative about filling posts as they open.