With Connecticut facing potential budget deficits, state employees must choose between layoffs or fewer benefits.
Gov. Dannel Malloy’s budget for fiscal year 2018 has a $700 million labor lapse, meaning that the state must cut spending on labor by that amount. These cuts can come either in the form of concessions in benefits from state employee labor unions or from layoffs. If in the form of layoffs, 10 percent of the state’s employees will be out of work, said Chris McClure, secretary of the Office of Policy and Management.
The Governor’s Office is currently in conversation with the State Employee Bargaining Agent Coalition, an umbrella bargaining unit for the state’s unions regarding health and pension benefits, to determine whether or not labor unions will agree to the concessions.
“The outcome is incredibly unpredictable,” said McClure.
McClure declined to say what the concessions could potentially be.
Connecticut faces a projected deficit of $1.3 billion to $1.5 billion in the coming fiscal year. Due to a clause in the state constitution that requires the state balance its annual budget, Hartford is under pressure to make up the entire projected deficit. Malloy’s budget proposal, presented to the joint session of the Connecticut General Assembly on Feb. 8, suggests cuts to the Teacher Retirement System, government agencies and the labor union concessions.
But labor negotiation is a complicated process with many variables, McClure said. Each union is its own bargaining unit, and there are over 20 total unions for state employees. In order for SEBAC to enter into labor term discussions, two-thirds of its membership must vote in favor of doing so.
Asking labor unions for concessions is not a new budget-balancing strategy for state governors, said state Rep. Michael Winkler, R-Vernon, who was previously a union officer.
Malloy asked unions for concessions in his 2011 budget proposal, and governors before him did so as well, Winkler said. Governors can use layoffs as leverage for getting unions to agree to concessions because the governor’s power to lay off state workers is unchecked. There is no need for approval from the legislator, Winkler said.
“Demanding $700 million in concessions or threatening to lay off seems unnecessarily confrontational,” he said.
In 2011, Malloy obtained $1.6 billion in concessions for the fiscal years 2012 and 2013 budgets after 12 weeks of negotiations and threats to lay off 10 percent of state employees. In 2016, union members decided not to make concessions for fiscal year 2017 and faced layoffs as a result, Winkler said.
According to Winkler, asking 40,000 state employees to sacrifice $700 million is an unfair request. Additionally, Winkler does not see layoffs as a viable option, citing the fact that highway toilets are overflowing and that state parks are being shut down due to employee shortages.
“[The] government is as lean as it can get,” he said.
Labor unions are not in favor of Malloy’s proposal, either. In a press release Feb. 8, Lori Pelletier, president of the Connecticut AFL-CIO said she is “extremely disappointed” with Malloy’s proposed budget.
“[The budget proposal] heavily relies on cutting vital public services and limiting workers’ voices, yet asks nothing of the state’s corporations and extremely wealthy,” she wrote.
State Rep. Dave Yaccarino, R-North Haven, agreed that labor concessions are not the solution to the state’s budget crisis. Yaccarino said he is only in favor of increasing workers’ contributions to pension funds and health care insurance. Those measures would only amount to $120 million, not the $700 million that the governor aims to cut in his budget.
Yaccarino added that the main root cause of the budget crisis is that Connecticut’s population is decreasing, leading to low tax revenues.
“If we just make cuts, we’ll be in the same situation in one year,” he said.
Malloy first assumed office in 2011.