New Concessions Proposals Deserve Consideration

Republican lawmakers released new budget proposals this week that outline over $2 billion in state employee wage and benefit savings.
Senate Republicans shared those proposals in response to the $1.5 billion concessions agreement Governor Malloy’s administration reached with union leaders the previous week.
The first option, which GOP lawmakers said saves $2.5 billion over two years, calls for revising that agreement by negotiating an additional $657 million in concessions with unions and making statutory changes.
That plan would also extend the current State Employee Bargaining Agent Coalition contract five years to 2027, as the union agreement with the Malloy administration does.
Republicans said a second option, a contingency plan should unions not agree to reopen negotiations, would save $2.1 billion over two years through legislative action.
Senate Republican Leader Len Fasano said only $186 million of the $1.5 billion in concessions negotiated by the administration requires union consent, while the balance could be achieved through legislative action.
“State employees are hardworking individuals who provide core services to people across our state every day,” Fasano said. “However, all parties recognize that current state employee benefits are not sustainable.
“These benefits far exceed what is received by union employees outside of state government, state employees outside of Connecticut, and employees in the private sector.”

Additional Concessions

The Republicans’ first option calls for negotiating additional concessions, including:

• Increase state employee pension contributions by 4% and 6%, beginning in fiscal year 2018
• Raise contributions to retiree healthcare plans to 5% in FY 2018
• Implement a sliding scale by salary band for state employee healthcare
• Replace overtime payments with comp time
• Eliminating longevity payments
• Eliminating two state holidays

The second option expands on the Malloy-SEBAC savings, including additional wage concessions, pension modifications, adding three furlough days, and further changes to employee and retiree healthcare plans.
That option also calls for additional legislative action to address reforms outlined in the first proposal, while eliminating mandatory contractual provisions like staffing levels and meal and clothing allowances.
House Republican Leader Themis Klarides said the significance of the statutory option is that it shows the SEBAC concession agreement is not the only choice available to lawmakers.

‘Explore All Avenues’

CBIA president and CEO Joe Brennan said given the state’s fiscal crisis—lawmakers are wrestling with a $5.1 billion, two-year deficit—the new proposals deserve consideration during budget negotiations.
“Extraordinary times demand different ideas and a different way of looking at things,” Brennan said.
“Policymakers should be exploring all avenues and approaches as they negotiate a budget solution.
“If we’ve learned anything from recent history, it’s that business-as-usual doesn’t solve the problem—it just makes it worse.”

The state House narrowly approved a plan May 31 to close the $317 million deficit for the current fiscal year.
House lawmakers passed the measure 75-74, with two Democrats joining all Republicans in opposing the bill. Two Democrats were absent.
The Senate earlier approved the bill unanimously.
The deficit plan uses most of the state's rainy day fund, withholds $19.4 million in casino proceeds from cities and towns, and uses a series of one-time revenue sweeps from other funds.

Special Budget Session Likely

Legislative leaders also acknowledged this week they will not adopt a new two-year budget before the General Assembly session ends on June 7.
A special session will then be needed to pass a budget.
Failing to act by the end of the fiscal year on June 30 will create widespread uncertainty among cities, towns, and businesses—all looking for the state to restore stability.
With no budget in place by July 1, the governor would administer state spending, something Connecticut experienced twice over the last two decades, in 2003 and 2011.
"I think that they [legislators] might consider it a worst-case scenario," Governor Malloy told reporters. "I consider it a worst-case scenario.
"I’m not inviting that to happen. What I'm inviting is for people to do the job and get a budget."

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For more information, contact CBIA’s Louise DiCocco (203.589.6515) | @LouiseDiCocco