State employee unions insist they can make government more efficient without cutting vital services, but they are fumbling their chance to prove it. The labor-management panels that were to identify $130 million in efficiencies as part of last summer’s concession deal haven’t met yet.
And with the fiscal year already 3-½ months along, Gov. Dannel P. Malloy’s administration seems to have moved on, drawing its own blueprint to determine which state agencies will be cut to cover nearly all of the concession savings target.
Robert Rinker, the executive director of Local 2001 of the CSEA/SEIU, formerly the Connecticut State Employees Association, conceded in a telephone interview that labor has gotten off to a slow start in advancing these efficiency panels’ efforts.
“Transformation takes place over the long-term,” said Rinker, a veteran state union leader who serves on the State Employees Bargaining Agent Coalition’s steering committee. “We’re trying to change the culture of state government to find the most efficient and effective way of delivering services.”
Rinker said he believes the three labor-management panels, one of which has not been organized yet, still deiver on the promise the unions’ made during the gubernatorial campaign: labor can make government more cost-efficient, if management will only listen.
“I’m still optimistic on this stuff. I think there is some significant money you can get to quickly,” he said.
Whether that happens or not, there are significant fiscal stakes involved.
The administration reported that the deal ratified by unions on Aug. 18 would save $700 million this year and $900 million in 2012-13 through a wage freeze, a new employee wellness program, retirements, pension and other benefit restrictions, and three labor-management efficiency panels.
One of the groups identified in that deal was an existing panel, the health cost containment committee, which was tasked with finding $40 million in annual savings.
But the deal also created two more groups.
One was assigned to find $40 million in annual savings in technology spending.
The second and more controversial committee is supposed to save $90 million per year anywhere in state government by following four principles, according to information prepared by union leaders and the administration for rank-and-file union members:
- “Harness the creativity and experience of front-line bargaining and non-bargaining unit state employees to improve the efficiency and effectiveness of state government.
- Streamline and flatten organizational structures to concentrate on service delivery.
- Examine and redress barriers to the most efficient use of in-house resources to address agency and cross-agency needs.
- Discourage the use of outside contractors and consultants when internal capacity exists or can reasonably be developed.”
This general efficiency panel and the savings projection attached to it quickly drew criticism from the Republican minority in the legislature. House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, dubbed it an “employee suggestion box” and predicted that $90 million in cost-efficiencies, following the guidelines described above, would not be found in the first year of the deal.
The agreement between the administration and the unions called for this panel to begin meeting no later than Sept. 1, while the technology panel would start “as soon as possible.”
According to a newsletter posted on state union websites this week, the technology group will hold its first meeting on Oct. 24. Regarding the general efficiency board, union leaders wrote, “We are in the process of setting up the structure for that committee.”
Rinker said that unions hope this general efficiency panel will be ready to begin meeting in the near future.
But Malloy’s budget agency didn’t wait. The Office of Policy and Management already has crafted a schedule showing how much money will be held back from each state agency budget to account for nearly all — $654 million out of $700 million — of the savings due from the full concession package.
“This is the big hoax of this concession deal,” Cafero said.
OPM officials can calculate now how much each agency can save because of the wage freeze, retirements and certain other components of the concession package. Further complicating matters, state agencies and departments already have been allotted funds for the first two quarters of the 2011-12 fiscal year.
But what rationale was used to assign agency-by-agency responsibility for savings from the efficiency panels that haven’t met yet?
OPM Secretary Benjamin Barnes said the administration “had to take the necessary steps” to hold back funds to ensure that all savings built into the budget are achieved.
Barnes said the administration is relying in part on what has come to be known as “Plan B” — a package of programmatic cuts prepared by OPM and state agencies over the summer to cut spending. Ironically, it was designed to occur only if the concession package, which was still pending when Plan B was developed, was rejected.
But Barnes also said he also remains optimistic that management and unions can identify some key cost-saving efficiencies in the near future. And as those efficiencies are found and confirmed, OPM would be willing to revise its agency budget-cutting plan to reflect those new ideas.
“We’ll do everything we can to be flexible,” he added. “I’m happy the process is still moving forward.”
But Cafero noted that union leaders frequently argued both during last fall’s state elections and during much of this year that they had developed a “win-win” agenda — a package of ideas designed to make state government more cost-efficient without cutting vital programs.
Back on July 26, with the concession deal still not ratified by rank-and-file union members, Rinker had touted the tentative deal by noting it “would implement over 300 rank-and-file member proposals we gathered over a period of more than a year.
“We got the administration to agree to recommendations for increasing efficiency that would save nearly $300 million over the next 2 years,” he said. “And it would finally begin the process of transforming state government and reduce hierarchy and break down barriers to promotion and job growth for rank and file workers.”
If these panels aren’t meeting, and if OPM already has told agencies how much of a budget cut to expect, then agencies are scrambling now to find savings however best it can, whether it is efficient or not, Cafero said, adding this is hardly an orderly downsizing of state government.
“What this really means is that employees are giving less in concessions than some people believe, and the public is being asked to make up the difference in terms of cuts to programs and services,” he said.
Republican legislators scoffed at calling these efficiency panels a “concession” by state workers from the first time a tentative deal was announced in May, arguing it was a gimmick to give the appearance that workers had sacrificed more directly from their own wages or benefits.
Unions noted they aren’t required to help state government find cost-savings, so their participation on these efficiency panels is a concession on their part — albeit not one that takes dollars out of workers’ pockets.
“I still hope the employees are successful and come up with savings, but whether it will be successful (in this fiscal year) is another story,” said Sen. Robert Kane of Watertown, ranking GOP senator on the Appropriations Committee. “At this point it looks like a big part of our budget is based on a lot of speculation.”