Gov. Dannel P. Malloy’s administration notified state employee unions this week that nearly 1,100 workers could face layoffs in May — the first stage in an alternative cost-cutting plan if ongoing concessions talks aren’t successful.
This marks the second time in the past week that Malloy has hinted time is running out for unions to accept major concessions to help balance the next budget.
The governor, who expressed disappointment publicly last week that months of informal talks hadn’t produced a deal yet, this week took the first in a series of procedural steps to begin another round of state worker layoffs.
The administration specifically notified bargaining units that 11 departments and agencies had crafted plans that could affect close to 1,100 workers and also lead to elimination of about 120 unionized positions that currently are vacant.
But annual savings from the plan are estimated only at $80 million — far short of the value of concessions the governor is seeking.
While Malloy made clear Thursday that the threat of layoffs is real, these notices don’t mean negotiations are being abandoned.
“We’re having discussions,” the governor said. “They should go on for an additional period. Obviously they can’t go on forever.”
These notices do not mean workers immediately will be removed from the job. All unions have preliminary notification requirements in their contracts with the state.
And while the governor also insisted the notices were issued only to fulfill legal requirements — and not to spur reluctant unions to offer givebacks — such notices have preceded some concessions deals in the past.
“It is not being done for leverage, the governor said. “It just is a legal requirement. … This is not saber-rattling.”
Malloy is seeking concessions worth an unprecedented $1.57 billion in the next biennial budget, breaking down to $700 million in savings in the 2017-18 fiscal year and $869 million in 2018-19.
Malloy disclosed those targets in early February, and informal talks with the unions already had been underway for several months.
And while talking with Capitol reporters last Thursday, the governor acknowledged time was becoming a concern.
“I’m hopeful but, you know, we’ve been at it — unofficially — since November and we don’t have an agreement in place, and we’re asking a lot, he said last week.
And while he didn’t use the word “layoffs” last week, he implied he would impose them if no deal is struck. “I don’t even think I need to assure you I will act,” he added at that time.
Still, there have been several signs that unions, which granted concessions in 2009 and 2011, are not willing to provide givebacks this time around.
Union leaders have expressed disappointment that both Malloy and many of his fellow Democrats have not sought to raise tax rates on wealthy households or major corporations.
The legislature’s Finance, Revenue and Bonding Committee raised a bill Wednesday to raise the top marginal rate on the income tax from 6.99 to 7.49 percent. But while that bill will go to a public hearing on Tuesday, Democratic leaders on the panel already have said they are striving to avoid any income tax hike and Republican leaders have said they oppose any tax increases.
Council 4 of the American Federation of State, County and Municipal Employees, one of the largest state employee unions, posted a response to the Malloy administration’s notices Thursday on the union website.
“Layoffs and service cuts threaten public health and safety, our children’s education, and our state’s future,” the statement reads. “They will hurt our economy and lead to even more fiscal crises. Connecticut needs a balanced approach to resolve our budget deficit that isn’t entirely dependent on damaging state services to meet that goal.”
The union added that while the middle class here continues to struggle, “Connecticut remains the wealthiest state in the richest country on the planet. … We ask our elected leaders to stand up for working and middle-class families and for a budget that works for everyone.”
The Connecticut AFL-CIO released a study earlier this month that asserted Connecticut businesses can afford — and should pay — higher taxes to support investments in education, health care and other priorities to grow the economy and preserve quality of life here.