The partisan battle over the new state budget heated up Thursday.
Minority Republicans continued to argue the $43.4 billion, two-year budget is unbalanced and unconstitutional, relying on nearly $460 million in labor savings that unions still haven’t endorsed. The budget also makes no alternative provision to balance the books if a saving deal isn’t reached.
But Democratic Gov. Ned Lamont said he’s prepared to sign the budget into law and charged GOP leaders with political grandstanding. And Lamont’s budget director, Office of Policy and Management Secretary Melissa McCaw, said Republicans overstated the amount of savings that needs union approval, adding she nonetheless expects a deal to be finalized in the next 30 to 45 days.
“The budget is out of balance and unconstitutional, period,” Senate Minority Leader Len Fasano, R-North Haven, said during a late morning press conference in the Legislative Office Building. The governor “should veto it and have us back and have a legitimate conversation on how we’re going to balance the budget.”
At issue are two major savings targets built into the new, two-year budget.
One involves restructuring Connecticut’s contributions to the state employees’ pension fund. Contributions would rise — but not as quickly as originally planned, through 2032. Taxpayers between 2033 and 2047 would pick up those burdens, plus an effective interest charge.
The second change involves reducing employee health care costs without reducing benefits. This involves creating incentives for workers to select less costly providers. It also could mean negotiating discounts when purchasing health care services and pharmaceuticals.
The budget assumes $181.5 million in savings from these two labor areas in the fiscal year that begins July 1. It also assumes $276 million in savings for 2020-21.
Building savings targets into the state budget is nothing new, including savings that rely on labor negotiations.
But Fasano noted that past legislatures and governors built alternatives into their budgets.
For example, when Gov. Dannel P. Malloy had reached a tentative concessions deal with unions in 2011, that package still hadn’t been ratified when lawmakers adopted the budget in May of that year.
But while they used the savings from the tentative deal to balance the plan, they also instructed Malloy to hold back spending in other areas and to develop further cost-cutting measures in the event unions voted the agreement down.
Why did the 2011 legislature have a back-up plan?
Article 28 in the Connecticut Constitution, an amendment adopted by voters in 1992 following institution of the state income tax, requires the legislature to approve a balanced budget each year.
So while it’s acceptable for the state to borrow money to close an unexpected deficit at the end of a fiscal year, it’s an entirely different thing to concede before the year even begins that the budget is unbalanced — and that funds must be borrowed.
And Fasano argued that, effectively, is what the latest state budget does. The Democrat-controlled legislature adopted that plan in the final days before the regular legislative session ended on June 5.
“Show us the money, Governor Lamont,” Fasano said. “We have repeatedly asked for details on exactly how this nearly half a billion dollars is saved. We have heard crickets in response.”
The governor does have limited authority to rescind spending and otherwise compel departments to save money.
Lamont is particularly limited, given that a 2017 union concessions deal negotiated by Malloy restricts the governor’s ability to lay off workers through June 30, 2021.
But Fasano said he believes there is no way, mathematically, for the Lamont administration to rack up almost $460 million in savings with the tools at its disposal — should unions not go along with the changes he’s seeking now.
But Lamont countered there is no problem — legal or fiscal.
“I would think they would be saying congratulations for getting significant labor savings through a constructive collaboration with our state employees,” he said. “Usually Republicans are saying ‘Why aren’t you getting more savings?’”
The governor said the State Employees Bargaining Agent Coalition has shown nothing but a willingness to cooperate with his administration.
‘Reforms, not concessions’
“These are not concessions,” he said. “These are reforms.”
Hartford attorney Daniel Livingston, chief negotiator for SEBAC, has not commented on talks with the administration.
But he wrote in a June 4 statement, as the new budget was receiving final approval in the Senate, that the unions remain willing “to consider ‘win-win’ changes, including the pension funding proposal included in the budget. We don’t consider it unreasonable for the budget to assume the parties will agree to this change.”
It also might not take long to secure labor ratification once an understanding is reached with the Lamont administration.
Changes to the pension contribution schedule could be approved by SEBAC’s governing board, and would not require a referendum of all rank-and-file unionized employees.
And McCaw said existing contract language already empowers negotiators for the administration and the union to regularly review and modify health care programs to achieve many of the efficiencies already under discussion.
Fasano also questioned whether having a budget adopted with labor savings still pending would leave the state over a barrel and at the mercy of union leaders demands.
“As a business guy I can’t believe the gov would have boxed himself in,” Fasano said. “The leverage clearly is in the union’s corner.”
But the governor said he would not grant any extension of the existing restrictions on layoffs. Nor would he agree to extend the current benefits contract that guarantees unionized workers pensions and retirement health benefits. That deal runs through June 30, 2027.
“Nobody has asked for that and that’s not what we’re going to do,” he said.
Extending necessary payments to the pension fund doesn’t seem much of a problem. Especially after Mr. Livingston’s assurances.
But the second category of savings is more vague: “The second change involves reducing employee health care costs without reducing benefits. This involves creating incentives for workers to select less costly providers. It also could mean negotiating discounts when purchasing health care services and pharmaceuticals.”
Incentives are a cost. The savings seem to rely on workers deciding to change their doctors or other providers. And on negotiating better prices from providers through talks not involving the workers. Why should those providers be more … lenient now?
Still, the state budget has always included estimates of savings (and revenues). If those prove optimistic, that’s what deficit sessions are for.
Senator Fasano has a legitimate point…
Len, you and the rest of the CT Republicans have ZERO credibility.
All of you either actively support or follow along in silent conformity, compliance and complicity while DJT/DC intentionally and actively decimate our democracy, the US Constitution and the rule of law. Republicans in elected office directly and willfully violate your Oath of Office to support the US Constitution in service to loyalty to GOP label. You supposedly committed to support BOTH the US and the CT Constitutions. Instead you say that DJT/DC is not your concern and doesn’t matter here.
When you demonstrate integrity in the face of blatant, flaunted criminal corruption in DC, then we might pay attention to what you have to say.
A completely absurd and off topic comment. What does Trump have to do with 30 years of democratic control of CTs finances that has now driven CT DEEP into the fiscal ditch.
The answer: NOTHING!!
Yes… Republicans have been acutely inept in checking the lefts 30yr spending spree.
Yes… Republicans can’t seem to mount a serious challenge electorally to a failed democrat government.
Even taking that all into account it is the Democrats that now fully and completely own this mess. Even now tbey keep digging the hole deeper and deeper.
Forget Trump lady… He’s not the problem here in Connecticut!
What??? Your comments have nothing to do with either the Connecticut budget crisis or the stranglehold public employee unions have over the Connecticut legislature. Stay focused, please.
Lady I think you should take you screed to the WP and not the CTM. This space is about CT not DC
Indicting nearly half of the population and dismissing out of hand an entire Connecticut point of view because of political affiliation is absurd. Do you similarly call out entire religions if you don’t agree with their faith? This doesn’t sound like a voice from the party of tolerance and understanding to me.
There’s a long history of “claimed Union concessions” that never quite seem the light of day. So its a bit unclear what the actual history was during former Gov. Malloy’s tenure.
Curious the CT GOP so far hasn’t advocated something similar to an across the board reduction in the CT Budget rather than new taxes to fund the CT State Budget Deficit. That’s puzzling because that’s the standard business proposal when facing repeated large deficits – cut outlays.
Maybe CT Republicans are just content to criticize the CT Budget without going through the hard work of preparing an alternative one for public review by those with some experience managing large organizations and “know a thing or two” about budgets and finance. There was a time earlier in CT’s not too recent past when both Parties put forth detailed alternative CT budgets.
Criticizing how the CT Democrats do State budgets while not offering detailed alternatives isn’t likely to attract attention.
Is not having a budget is unconstitutional? So the excuse that we will have an agreement is like saying we are relying on the democrats and the unions to look out for what is best for CT. There is a long history that the unions are more for their own benefits rather than what is good for CT. Paying the piper is coming due, sooner and sooner.
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