City’s budget at stake in state labor talks

As Gov. Dannel Malloy negotiates concessions with state employee unions, the jobs of some city employees may hang in the balance.

In order to slash a projected $3.67 billion shortfall, Malloy is demanding $2 billion in concessions over the next two years from the state’s 45,000 employees, a goal Mayor John DeStefano Jr. has called “ambitious” and union officials have called unfair. Malloy’s budgetary options are grim if he fails to meet that target, and the jobs of New Haven’s public employees — many of them represented by the same union in negotiations with Malloy — may be on the line.

In the budget proposals he is now touring the state to defend, Malloy calls for the state’s $2.8 billion in aid to municipalities to remain steady next year. But a condition on those dollars, a large portion of New Haven’s budget, is the success of Malloy’s concession talks with the state employee unions, which is far from guaranteed.

Cuts in municipal aid pose a threat to city employees, said Larry Dorman, spokesman for Council 4 of the American Federation of State, County and Municipal Employees (AFSCME), which represents both state and New Haven employees.

“Everything is interconnected,” Dorman said. “We do recognize that the outcome of our discussions at the state level could have an impact on municipal aid, but all we can do is push the governor for fair solutions for everyone.”

To avoid the painful impact of municipal aid cuts and further service cuts, Malloy should look to more tax increases, Dorman said. The governor’s budget asks too little of very wealthy individuals and corporations, he said.

But Malloy has strongly signaled that he is not willing to raise income taxes on the wealthy anymore than he has — a 0.2 percent hike on those making over $1 million a year.

Because Malloy’s budget already contains $750 million in service cuts and a record $1.5 billion in tax increases, state aid to cash-strapped cities like New Haven may be next on the chopping board, said Kevin Maloney, spokesman for the Connecticut Conference of Municipalities.

“The last thing Malloy wants to do is pass down the problems of the state budget to municipalities and local taxpayers,” Maloney said, but he added that Malloy has little choice if concession talks fail.

Maloney disagreed with Dorman’s charge that the wealthy do not sacrifice enough in the governor’s budget. Citing the addition of five new income tax brackets, Maloney said the governor’s tax proposals are “progressive,” and that the state must make cuts to the benefits and pensions of its employees.

The Connecticut Conference of Municipalities, which represents local governments across the state, has been a vocal proponent of Malloy’s budget proposals, in large part because they preserve municipal aid.

“Keeping [municipal aid] at current levels will go a long way toward insuring that there are as many teachers and other municipal employees retained as possible,” Maloney said.

DeStefano will join the group in Hartford for a lobbying effort Wednesday, the next day the state legislature is in session.

Malloy has already begun drafting a “Plan B” budget in case the ongoing labor talks fail to produce $1 billion in concessions this year. That budget not only includes “nasty and ugly” layoffs, but is also likely to cut state aid to cities like New Haven. But the impact on municipal aid is not yet certain, city spokesman Adam Joseph said. Regardless of the budget eventually passed in Hartford, he added, New Haven must address its own structural budget challenges.

“We’re taking a long view of all of this,” Joseph said.

While DeStefano is keeping an eye on the state budget, he is engaged in concession talks of his own with the city’s 11 unions. City employee health benefits and pension plans are becoming too expensive to maintain without drastic layoffs, DeStefano has said over past months.

In addition to 82 employees laid off in February, 60 to 70 further layoffs in the city’s school system are expected to come over the summer. The city’s fiscal situation will only get worse if Malloy comes up short in his concession talks, DeStefano told East Shore residents at a public hearing at St. Bernadette’s Church.

Malloy, who was elected in 2010 with significant support from labor unions, has had to walk a delicate line in negotiations.

Last weekend, Malloy attended an AFSCME convention in Groton, Conn. unannounced. In late February, he was the first speaker at a union rally outside the State Capitol in Hartford. At the rally, Malloy reiterated to hundreds of union workers his support for organized labor and the rights of unions to collectively bargain.

“There is no reason for a full assault on right to organize and the right to negotiate,” Malloy said. “We may not always agree, you and I, but we can sit down around a table, we can negotiate agreements, we can ask for compromises, we can work together, and we can build up our middle class.”

Dorman credited Malloy with “not demonizing public service workers,” but said it was still necessary to pressure “Gov. Malloy to act like candidate Malloy.”

Still, Dorman said, state employee unions would be in a very different situation had Republican Tom Foley eked out a victory over Malloy in the closest Connecticut gubernatorial election in 56 years. While union officials will not always agree with Malloy, “the relationship remains respectful,” he said.

“With Malloy, at least we have a seat at the table,” Dorman said. “If Foley were governor, we’d be on the table getting ready to be eaten.”

A final concession offer from union officials is expected within the next several weeks.

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