This one hit the web after I was off the air, so I’ve had plenty of time to think about it. Connecticut Governor Dan Malloy (D) is demanding concessions from state labor, $1 billion in concessions, to help close a $3.5 billion budget gap. Unless he can tackle pensions and healthcare I’m not sure how he’ll get $1 billion in savings he needs. So when he promises that Plan B will be ugly, is this already etched in stone? Or is this nothing more than tweaking the unions? H/T ctcapitolreport.com
Here’s the skinny from CT mirror.org:
Gov. Dannel P. Malloy said Friday he has begun work on an “ugly” alternative budget in case talks with state employees do no not yield significant savings in the next month.
“I am preparing recommendations with respect to what that would look like,” Malloy said. “I hope we don’t have to go there. It would be nasty and ugly.”
Speaking to reporters at a press conference, Malloy declined to assess the state of talks with unionized state employees, from whom he is seeking $1 billion in concessions and savings in the fiscal year beginning July 1.
“They are not over,” he said of the talks. “So I am happy.”
Malloy conceded for the first time that his goal of obtaining legislative approval on a budget in May relies on the labor talks, and that he does not yet have $1 billion in alternative cuts.
After reading the entire story, I just don’t get the feeling that there is any conflict between labor and the governor’s office. It sounds more like a governor is just tweaking the process open to get it moving a little faster. And I don’t think it’s unusual for me to wonder if a Democrat governor is really serious about laying off public employees.
My biggest concerns are two: that either the governor will announce concessions by labor call them dramatic but still not be able to close the budget gap resulting in additional taxes on top of the $2.8 billion in new taxes he’s already proposed, or, get the concessions he needs, balances the budget this year but does little to change the clunky system that will drive us right back into deficit again in a few years.
Initial reports seem to indicate that the governor is at least trying to establish a new tier of benefits for new employees. The Courant reported on this just a couple days ago.
The one-page memo, obtained by Capitol Watch, also asks if the employees would vote against a one-year wage freeze or a two-year wage freeze. They are also asked if they would oppose allowing the state to switch to a 401k retirement program for all new employees who are hired after July 1 – instead of the lucrative pension system that the current employees receive.
Other issues include:
*”Raising the retirement age to 65 for employees hired after June 30.”
*Creating a new, Tier III pension plan for new employees with a defined benefit, such as the current system.
*Charging an additional $60 per month – or $720 per year – for health insurance. An alternative would be an increase of $30 per month.
Everything mentioned here is a step in the right direction except a couple points. I am stunned that the state is even considering extending a defined benefit plan to new hires. it needs to be made clear those days are long gone. As for “raising the retirement age to 65”, welcome to the private sector.
By the way, the employees who were asked to fill out the survey are all professionals. Lawyers now belong to a union?
A & R represents 3,300 state employees, including accountants, planners, and attorneys in various state agencies, as well as about 500 tax collectors, auditors and other employees in the state Department of Revenue Services.