Updated at 3:55 p.m. with comments from the governor and legislators
Calling $1.5 billion in proposed union concessions insufficient given Connecticut’s $5 billion budget crisis, Senate Republicans called Wednesday for legislators and Gov. Dannel P. Malloy to dramatically reshape labor laws to force larger savings in wages and benefits.
Senate Republican leader Len Fasano unveiled a plan to achieve nearly $2.2 billion in savings — with or without union consent.
But it would require officials to:
- Suspend or eliminate arbitration for unionized employees’ wages;
- Replace all overtime with compensatory time;
- Increase worker contributions toward retirement health care and require more service before guaranteeing this benefit;
- And triple all workers’ pension contributions in future years.
“We have the power within the legislature to change statutes, prospectively and currently, to achieve savings,” Fasano said. “ … This is the power we have. We don’t have to sit back and wait.”
The caucus proposal drew strong criticism from labor leaders, Malloy and the top Democrat in the Senate.
But the Senate GOP also argued their plan would avert layoffs, preserve a very valuable benefits system at a much more affordable level, and make some benefits fairer, asking higher-paid employees to contribute more.
And while Fasano acknowledged the plan would spark plenty of criticism, he also asserted it might draw more support from Democrats than some would believe.
“I think there are other people who recognize we are in deep, deep trouble,” Fasano said. “I don’t think they are harsh by any means; I think they are getting closer to the reality of the private sector.”
Concessions not enough given deficits, debt?
State finances, unless adjusted, are projected to run $2.3 billion in deficit next fiscal year, and $2.8 billion in the red in 2018-19.
The governor estimates the concessions deal would save $708 million in the first year and $845 million in the second.
Fasano argued that only one-eighth of the concessions savings union leaders and Malloy recommended several weeks ago — less than $190 million — actually require unionized employees’ cooperation to achieve. Most of these involve pension and health care changes that would take effect immediately.
But the bulk of the savings are tied to wages. And most union wage contracts expired in July 2016, though employees continue to work under the outgoing deal until a new contract is resolved.
Because of that, though, the Senate GOP says state government has the legal flexibility now to dramatically alter rules unilaterally regarding wages and overtime.
“State employees are hard-working individuals who provide core services to people across our state every day,” Fasano said. “However all parties recognize that current state employee benefits are not sustainable.”
Pelletier: GOP is ‘attacking’ the middle class
The plan quickly drew sharp criticism from labor leaders.
“This is about attacking workers, the middle class, people who drive Connecticut’s economic engine,” said Lori J. Pelletier, president of the state AFL-CIO.
“These aren’t solutions, said Salvatore Luciano, executive director of Council 4 of the American Federation of State, County and Municipal Employees. “They are the same failed austerity policies that have damaged the economies of states like Wisconsin and Kansas.”
“Whatever public reason the Senate Republicans gave to justify their proposal, it is a lie,” CSEA-SEIU Local 2001 wrote in a statement. “Removing collective bargaining will only benefit the wealthy and lower standards for everyone else across our state.”
“Middle class workers could potentially save the state over $1.5 billion dollars through the SEBAC framework, and Republicans have yet to ask one penny from billion dollar corporations or our state’s most wealthy,” added SEIU 1199 spokeswoman Jennifer Schneider.
Malloy: GOP plan ‘is not thought-out’
Both Malloy and Senate President Pro Tem Martin M. Looney, D-New Haven, predicted the Senate Republican proposal doesn’t have much of a future.
The governor challenged the proposal both on ethical and fiscal and grounds.
After spending close to six months bargaining with labor representatives on ways to save a projected $20 billion over the next two to three decades, Malloy said Connecticut should not, on principle, enforce an alternative plan legislatively.
“I have engaged in good-faith negotiations,” he said. “I believe in negotiations.”
The governor and union leaders last week announced a tentative concessions framework that would:
- Freeze wages for three fiscal years;
- Impose three furlough days on all workers;
- Double pension contributions for most workers;
- Create a hybrid pension/defined-contribution plan for future workers;
- Increase health care co-payments and premiums;
- Require active workers to contribute more toward their retirement health care benefits;
- And curtail health care benefits for existing retirees.
In return for these concessions, the state would extend its worker benefits contract — which otherwise would expire in 2022 — until 2027. Unions that grant wage concessions also would be largely exempt from layoffs through the 2021-22 fiscal year.
“I stand by that agreement,” the governor said. “We engaged in that process honestly and forthrightly.”
The governor also argued the Senate GOP plan — and particularly the replacement of overtime with compensatory time — would not work logistically.
For example, the governor said, allowing state police to take compensatory time would leave too few troopers on the job far too often. Similar problems would crop up in many other jobs across state government.
Connecticut would have to hire “tens of thousands of additional employees,” the governor said. “This is not thought-out folks.”
Meanwhile, Looney predicted the Republican plan would never win legislative approval and charged Fasano’s caucus with offering an untenable proposal so it could leave the task of solving the budget deficit to Democrats.
“This just confirms my fear that Republicans all of the while were looking for an excuse to bail” on budget talks.
Looney called the GOP plan “completely unrealistic” and little more than an attack on labor. “They want Connecticut to become Wisconsin. They want to destroy collective bargaining.”
House Speaker Joe Aresimowicz, D-Berlin, predicted the his chamber also would not adopt the Senate GOP plan.
“I think the governor and the labor unions came to an agreement in good faith,” he said, adding that the concessions savings from that tentative framework “is a huge part of the budget (proposals) from all caucuses. To now try to poison that well with additional requests puts that deal at risk.”
Klarides: All Republicans want real structural change
But Senate Republicans did receive the backing Wednesday of the top Republican in the House.
Minority Leader Themis Klarides of Derby, the first legislator to argue the concessions didn’t provide enough savings to warrant adding five years to a benefits program that already shifts huge costs onto future generations.
Even with the concessions proposed by Malloy, the state still would not set aside enough funds annually to cover the retirement health care benefit promised to present-day workers. That means a significant share of those costs must be covered by future taxpayers.
“I think the Senate and House Republicans are on the same page; we have the same goal,” Klarides said. “We need significant structural change, now and tomorrow, because that’s the only thing that’s going to put the state on strong footing.”