Let me start with a couple statements that set the tone of this commentary. First, I am not anti-union. I was a union member twice in my career, once with the City of Waterbury and once with the federal government. Unions have their rightful place. Second, having a business career thereafter I have had to negotiate, re-negotiate and modify many a union contract in failing businesses, many with municipal, state or federal employee unions, both in and out of bankruptcy proceedings. I have never found union leadership and more importantly union members to be unreasonable.
Finally, we, as in everyone that lives and works in our state, have a problem. We will never, ever, be able to generate enough revenue to cover the cash demanded by our unfunded union liabilities. It doesn’t make a difference how we got here. Pointing fingers and demonizing each other does nothing. It’s our fault; we are here and it is up to us to fix it.
One of the most important factors when discussing a financial restructuring is this principle: the good of the many should always outweigh the good of the few. We can all agree without question that the current SEBAC situation clearly illustrates the good of the few outweighing the good of the many. The current SEBAC agreement outweighs all other revenue streams and there are no other revenue streams to tap.
We need to put the situation back in balance on a stable self-sustaining path and foundation. Most importantly, the way we do the restructure and the methods employed must be a model for all municipal union contracts as well. The local level is just as imbalanced as the state level. Worse, all 169 towns and cities in Connecticut are woefully dependent and live or die by one plan and strategy; begging for state grants and more state cost-sharing funding.
As SEBAC goes so does our cities and towns, and in our cities and towns is where SEBAC members live, work and raise families. SEBAC members are our friends and neighbors. They are us; so they see what we see, towns being crushed under the weight of unfunded liabilities locally manifested in reduced state funding for schools, charities and social services, roads, under-manned police and fire departments, dilapidated parks as well as countless other items. Add on pointless legislative unfunded mandates and the future not only looks bleak but is bleak.
I do not believe the SEBAC Union leaders truly believe their bluster that more taxes on millionaires, dog grooming, automatic car washes and haircuts for my balding head will save us. I know for a fact that the SEBAC union members I know do not want their town to take on further cuts, thus completely placing on the back of their union municipal brothers and sisters, non-union friends and neighbors, the SEBAC extraordinary guaranteed job security, extremely lucrative medical benefits and monetary gain until 2027.
The open talks must center on actual cash on cash savings and we must employ the changes by 2019. “Suggested cost savings” is silly, we all know that, so we must leave that off the table. So is any adjustment to retiree health benefits and pension benefits as, actuarially, our state will gain cash savings much faster and without any harmful costs to retiree lives.
That leaves existing and future employee compensation packages as the only remaining avenue to adjust; and adjust we must.
We can agree to recognize two facts 1) we cannot solve everything all at once, nor should we and 2) we can solve most of it over the next 10 years before the SEBAC agreement expires. Clearly, the most valuable items in terms of cash savings, speed to implement, harmlessness to SEBAC members, ease to approach — and one that will show the most goodwill by SEBAC — are health and pension adjustments.
Let’s face it head on, when every SEBAC member walks out their door to go to work in the morning, every neighbor, friend, municipal employee or federal employee as far as their eye can see is on a market rate healthcare plan. We all converted over to market rate healthcare plans, we all had a little bit of pain and we all lived to adjust financially and survive it. I am sure SEBAC members will convert easily like we did and it helps all of us.
Pensions are a good retirement program. Everyone likes them, I like them, but nearly all of your neighbors, friends, municipal employees and federal employees do not have them anymore. We all have 401K type plans. Pensions are too expensive and difficult to fund. Again, we all converted over to 401K type plans, we all had a little bit of pain, and we all lived to adjust financially and survive it. I am sure SEBAC members will adjust well like we did and it helps all of us.
Over the next seven years or so we can adjust the remaining multi-faceted specifics of the SEBAC contracts that are without merit in today’s and tomorrow’s financial and employment environment. Some specifics may never change either by agreement or market forces. As savings accumulate, trade-offs may work by elimination of terms in exchange for higher cash compensation. Over time, we put a balanced and a level playing field back in play for all of us.
If we don’t change now, I predict what I would call a “Trump event.” State grant and cost sharing will decline precipitously, punishing all 169 towns and cities — many into insolvency. As libraries close, schools fail and fall apart, public services, protective services and social services are eliminated, roads and infrastructure crumble, population declines accelerate, local and state tax burdens balloon plus there is nothing left to tax, we all will become extremely resentful, angry and feel isolated by the public policies of SEBAC and the Malloy era.
Trump won on a wave of anger, resentfulness and a large swath of America feeling isolated by the public policies of the Obama era. A “SEBAC event” will happen here and it will happen long before the 10-year deal expires forcing SEBAC and everything SEBAC worked for into extinction and none of SEBACs’ friend and neighbors will care.
Christopher M. Ursini Sr. is a local banker and a former Waterbury Alderman.