Senate Minority Leader Len Fasano, R-North Haven, challenged Gov. Ned Lamont and unionized state employees Thursday to delay raises due this summer and re-channel $130 million in savings to cash-strapped, nonprofit social service agencies.
The lead negotiator for union bargaining agents accused the Republican leader of a cynical political ploy to divide state and private-sector workers at a time when they are risking their health providing services during a pandemic.
Gov. Ned Lamont, whose administration is facing a $500 million shortfall due to COVID-19 economic impact, responded cautiously to the prospect of stripping raises from “amazing front-line state workers who are putting it out every day.”
“First of all, that’s where my heart goes out to,” Lamont said at his daily briefing. “I also understand the fact that I look around the state of Connecticut, I see people who are losing their jobs, taking pay cuts and this hits a note with people. So it’s something I’ve got to think about seriously in terms of trying to get that right balance there, and I am going to think about that.”
Fasano is trying to force an issue that the Lamont administration already was weighing. Governors in other states, including some Democrats, have announced pay freezes and other cuts to offset the added expenses of COVID-19 and the bigger problem of lost revenue due to the instant recession sparked by the pandemic.
Many unionized employees are scheduled by contract to receive a 3.5% general wage increase when the fiscal year begins July 1. And all except the most senior also are owed a 2% step increase.
Forfeiting those wages would generate an estimated $132 million in savings. That’s nearly 30% of the $460 million gap nonprofits say exists between their annual state funding and the costs they face to treat millions of Connecticut’s most vulnerable residents.
The GOP leader added his own twist by not only asking Lamont to take away state employee raises, which were universally opposed by Republican lawmakers, but casting the act as one of generosity to non-profits that serve the disabled, persons with mental illness and substance abuse issues, and abused children.
“At a time when everyone is sacrificing so much, when jobs are disappearing around us, a small sacrifice of temporarily pausing a pay increase can go a long way,” Fasano wrote. “Delaying these raises for state employees can mean someone else who works at a nonprofit can go back to work and provide needed care for someone who is physically, mentally, or emotionally struggling.”
Nonprofits have pressed Lamont since he took office nearly 16 months ago to address two decades of underfunding. Instead the Democratic governor focused on closing a big budget deficit and freezing income tax rates — which he did while sparing state employees from concessions and layoffs.
In addition, nonprofit social workers and their public-sector counterparts traditionally have been allies in lobbying for more state funding, despite being competitors for limited resources.
Gian Carl Casa, the leader of the CT Community Nonprofit Alliance, thanked Fasano for his support, but tried to keep his distance from the senator’s jab at Lamont and the unions.
“We have asked the state for both financial and logistical support and have yet to receive any assurance community nonprofits will be kept financially whole through this crisis,” he said. “But our job is to say what is needed during this crisis by people with behavioral health needs, intellectual and developmental disabilities, people in need of shelter or returning to their communities. Elected officials have to choose between competing concerns.”
Daniel E. Livingston, the chief negotiator for the coalition of unions, was blistering in his response to Fasano.
“We are disappointed to see that even in the midst of a historic national crisis instead of coming together in support of all working families – and especially the frontline workers public and private, profit and non-profit who are keeping us all safe — your caucus resorts to the cynical, manipulative and divisive behavior for which it has become famous,” Livingston wrote. “Unlike the tiny comfortable minority of millionaires and billionaires your caucus truly represents, state workers together with the non-profits actually help provide the critical safety net upon which the most vulnerable in our state depend.”.
State agencies collectively spend roughly $1.4 billion per year hiring hundreds of community-based nonprofits to deliver state-sponsored social services. This represents more than 7% of the budget’s General Fund. In terms of dollars, that’s more than is spent on the departments of Transportation, Correction and Motor Vehicles combined.
Nonprofits note this funding has grown roughly 10% since 2002, and after adjusting for inflation, means most have lost money.
The CT Community Nonprofit Alliance warned Wednesday at a press conference that surging protective equipment and technology costs, coupled with declining revenues from certain programs closed during the pandemic, have pushed many nonprofits to furlough staff while others are on the brink of insolvency.
Lamont has sweeping powers to set aside state regulations and laws under the emergency declared a month ago, but declined to offer an opinion Thursday about whether he could unilaterally suspend raises set by contracts and approved by lawmakers.
Union leaders have said repeatedly that public-sector workers have sacrificed too often to close budget shortfalls in recent years.
Unions agreed to concessions packages that included one year or more of wage freezes and increased benefit costs or cutbacks in 2009, 2011 and 2017. Bargaining units also granted the state permission to refinance — and effectively to defer — contributions into the workers’ pension fund in 2017 and 2019.
Labor leaders consistently have argued governors and legislatures instead should focus on raising tax rates on Connecticut’s wealthiest households and largest corporations. Livingston revisited that issue Thursday.
He said Fasano’s letter was an effort to make a headline.
“But if you want to make real news, and make a real difference for non-profit workers, for the people they and state workers serve and for all working families in our state, try retracting your letter,” Livingston wrote. “Instead, try thanking all the front-line workers, state and private, who are risking their lives for all of us, and asking your millionaire and billionaire friends to pay their fair share of taxes.”
Livingston said that would be “a headline worth reading.”