AG opinion strikes middle ground on cutting wages, benefits

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Attorney General George Jepsen

A formal opinion released Thursday by Attorney General George Jepsen warns of legal peril in rewriting state-employee contracts through legislation, but notes the free hand legislators have after contracts expire and the flexibility the courts have granted in some cases in the event of extreme fiscal emergencies.

The opinion was sought by Democratic leaders in the House of Representatives, which voted along party lines Monday to ratify a deal projected to save the state more than $700 million in the current fiscal year and $800 million in the next. The evenly divided Senate is expected to take up the issue Monday.

All sides claimed support in Jepsen’s opinion.

Senate Republican leader Len Fasano of North Haven said the opinion does nothing to undercut his argument against ratification since labor savings in a Senate Republican budget do not infringe on existing contracts.

They assume the same pay freezes negotiated by the administration of Gov. Dannel P. Malloy, plus legislation dictating higher employee contributions for health and pension benefits after the expiration of an existing contract in 2022. Fasano said the legislature could impose the pay freezes without the concession deal, because wages are set by individual contracts not yet finalized.

“We have clear sailing through judicial review,” Fasano said.

House Majority Leader Matt Ritter, D-Hartford, said he and House Speaker Joe Aresimowicz, D-Berlin, sought the opinion when some lawmakers seemed uncertain as to whether the General Assembly could immediately change health and pension benefits without state employees consenting in a concession deal prior to 2022.

Ritter, who does not disagree that changes can be imposed by the legislature in the absence of a valid contract, said Jepsen clearly was raising a red flag about a legislature unilaterally taking back benefits under the guise of an emergency.

On that point, Jepsen concluded, “It is difficult to predict with any certainty how a court would likely rule if presented with a constitutional challenge, given the need for a careful and detailed factual analysis of any specific proposal and the circumstances of its enactment.”

Deputy Attorney General Perry Zinn-Rowthorn issued a statement stressing that the formal opinion was not a comment on any particular legislative proposal.

“Given the importance of the debate currently before the legislature, we feel it important to take the unusual step of further clarifying the formal opinion issued by the Attorney General today,” Zinn-Rowthorn said. We did not evaluate any particular legislative proposal in conducting this legal analysis, and it should not be construed to endorse or oppose any particular proposal or potential proposal.

“Analysis of any particular proposal would present difficult and highly fact-dependent questions. Rather, our opinion reiterates the general principles articulated in a 1989 Attorney General opinion. In particular, there are substantial constitutional limitations, uncertainties and risks in attempting to unilaterally alter by legislation – as opposed to agreement – matters covered by existing collective bargaining agreements.”

The 1989 opinion from Acting Attorney General Clarine Nardi Riddle, who   succeeded Joe Lieberman after his election to the U.S. Senate, was sought by Democratic legislative leaders caught in a fiscal crisis: House Speaker Richard J. Balducci, now retired from elective office, and Senate President Pro Tem John B. Larson, now a congressman.

They asked whether any state or federal law barred the legislature from enacting a law to reduce or delay cost of living increases for state employees.

“We conclude that no state or federal statute prohibits such an enactment. However, the federal constitution, especially Article I, Section 10,2 imposes severe restrictions on such a law. For this reason, we advise you to approach the abrogation of provisions of collective bargaining agreements with extreme caution,” Nardi Riddle wrote.

Malloy said the concessions, which have been overwhelmingly ratified by rank-and-file union members, are the only sure thing for immediate and long-term savings. Under the deal, existing employees would increase their pension and health contributions and new employees would see pensions limited. Over 20 years, he said, the concessions are worth $24 billion.

The governor said Thursday that Jepsen’s opinion should not be taken as a rationale to reject the concessions negotiated with the State Employee Bargaining Agents Coalition.

“Despite the political rhetoric from those wishing to defeat the SEBAC agreement and undermine collective bargaining, the facts are the facts,” Malloy said. “And the fact is, the legal opinion offered by Attorney General Jepsen stresses that substantial constitutional questions remain with respect to certain Republican proposals to alter portions of state employee collective bargaining agreements.”

Senate President Pro Tem Martin M. Looney, D-New Haven, who is struggling to convince three moderate Democrats — Joan Hartley of Waterbury, Paul Doyle of Wethersfield and Gayle Slossberg — to vote for ratification, said Jepsen’s opinion underscores the risks of rejecting the concessions

“The attorney general’s opinion clearly highlights the constitutional dangers in the proposals put forth by the Senate and House Republicans,” Looney said. “To represent the Republican plans as anything other than an extremely risky proposition is disingenuous.”

Fasano said he will press his case that Connecticut could achieve greater savings — not only in the coming decades but also across this fiscal year and next — through legislative action alone.

The Senate GOP’s alternative hinges on suspending the salary arbitration process, imposing greater restrictions on overtime, allowing the existing benefits contract to expire in 2022, and curtailing benefit programs after that.

The Senate Republican leader says his plan saves $837 million this fiscal year and $1.08 billion in 2018-19. The governor’s concessions deal is estimated to save $701 million and $869 million, respectively.

Other Democrats challenge Fasano’s statement that his savings would not require changing the current wage-and-benefit contracts.

“The Republican Senate proposal makes unilateral changes that impair that contract and exposes the state to significant legal liability under the Contract Clause,” said Rep. Mike D’Agostino, D-Hamden, who led the House debate in favor of ratification. “By contrast, the collectively bargained for agreement leads to $1.5 billion in savings over the next biennium, $24 billion in savings over the next 20 years and avoids any legal risk.”

Fasano said that is not supported by his budget or Jepsen’s opinion: “Anyone who suggests there could be a challenge is misinformed, or purposefully misleading.”

Keith M. Phaneuf contributed to this story.

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