A deal has been struck between Governor Dan Malloy and union leadership that would amount to a $1.6 billion concession over the next two years, according to Keith Phaneuf of the Connecticut Mirror. The deal reportedly saves over $700 million in the next fiscal year, and nearly $850 million the following year. This savings is what Malloy sought with his original budget proposals back in February.
According to the Mirror, one of the primary aspects of the deal is a three-year wage freeze that would provide almost half of the total savings. Other features include, “doubling pension contributions for most workers, the creation of a pension/defined contribution plan for future workers, increase health care copayments and premiums, require active workers to contribute more toward their retirement health care benefit, and curtail health care benefits for existing retirees,” according to the Mirror.
The trade off to these concessions is the extending of the benefits contract to 2027. Currently the contract expires in 2022. The Mirror is also reporting that all unions that grant wage concessions would be safe from layoffs through 2021-22.
The extending of the contract is where state Democrats and Republicans split.
State Sen. Carlo Leone called the deal a “good first step” to resolving the budget issues.
“As with any negotiation, both parties must be willing to open up a dialogue and work towards an agreement. The $1.6 billion is a large and real figure in concessions, and in order to obtain the agreement the deal is to extend the contract as mentioned. There may be those who want to drive a tougher bargain or dictate more concessions but then that would not get us towards an agreement, and that alone would bar us from working the other aspects of the budget resolution,” Leone said, before adding that it is now in the hands of the union members to ratify the agreement. The vote to accept the deal may not come until July.
State Representative William Tong also applauded the deal as, “a strong move in the right direction.”
“Requiring state employees to contribute more to pensions and healthcare, creating a hybrid 401k/defined benefit retirement plan, and wage freezes are all critical steps I have advocated for some time,” Tony said. “I know people are concerned that certain benefits may be extended under this deal. We all need to keep in mind that a deal on employee concessions is just that – a deal. A deal is a bargained for exchange. Which means, to get concessions, the state needs to offer something in return to get the deal done,” added Tong.
State Senator Bob Duff released a statement as well, saying “On its face, the proposed agreement appears to make important structural changes to our state employee pension and benefit programs resulting in significant savings for taxpayers. Initial projections indicate that, if approved, the agreement would save taxpayers $20 billion over 20 years.”
First Selectman Jayme Stevenson also called the deal a step in the right direction. “It’s an acknowledgement that state employees need to be part of the solution to the fiscal crisis,” Stevenson said. Stevenson said she was also concerned that the agreement “didn’t go far enough.”
“Extending contracts and guaranteeing employee is part of the reason why we’re in the position we’re in. I’m not sure that’s a wise policy,” Stevenson added. Moreover, Stevenson said the agreement seemed light on details at the moment, specifically as it pertains to the hybrid plan that was agreed to. Stevenson also said that, as she understands the agreement, “It only extends to state employees, and does not address teacher pension crisis.” Still, Stevenson reiterated the positive step that has been taken in the legislature by working toward the agreement.
State Representative Terrie Wood applauded Malloy for the efforts to come to an agreement and recognizing the need for change.
“There are parts of this tentative agreement that are a step in the right direction such as increases in co-pays, healthcare premiums and pension contributions along with wage freezes in 2017 and 2018,” Wood said. However, parts of the deal did not sit well with Wood, specifically as it pertains to wages and contract extension.
“The 2019 wage freeze paired with a one-time payment in lieu of doesn’t make sense nor does 3.5% wage increases in 2020 and 2021. That is assuming a more robust economy in those years,” Wood said, adding, “I do not support extending the contract to 2027.” Many of Wood’s fellow Republicans have been in favor of letting the contract expire in 2022, and then negotiating a new deal.