Reaction to state budget deal mixed
State budget: Reactions mixed to union concession agreement
HARTFORD -- As a private sector union president, state Rep. Zeke Zalaski, D-Southington, knows a well-bargained concessions package when he sees one. And after reviewing details of the labor deal negotiators for the state's nearly 45,000 public employees struck Friday with Democratic Gov. Dannel P. Malloy, Zalaski suggested they ratify it quickly.
"My members would jump through hoops to get that agreement," said Zalaski, referring to United Auto Workers Local 712, which represents his fellow employees at Bristol-based Associated Spring manufacturing.
Zalaski was among the dozens of legislators at the Capitol Tuesday trying to digest summaries of the deal in between committee meetings and votes in the House of Representatives. Malloy and the State Employees Bargaining Agent Coalition announced a successful conclusion to months of closed-door negotiations Friday, but waited until Tuesday to release and discuss the terms. A union summary intended for online morning release was leaked to the media Monday.
"It's a good resolution," said Senate Majority Leader Martin Looney, D-New Haven. "Without it, we would have an implosion of our budget process."
The two-year budget legislative Democrats passed and Malloy signed earlier this month counted on, following assurances from the governor, $2 billion worth of union givebacks. The administration bargained concessions it claims are worth $1.6 billion spread over the 2012 and 2013 fiscal years, and $21.5 billion in savings over 20 years.
Union negotiator Dan Livingston, during an afternoon news conference, said the toughest concession, in terms of money coming directly out of workers' pockets, is a two-year wage freeze worth $138.8 million in 2012 and $309.5 million in 2013. In return, Malloy agreed to 3 percent raises in each of the following three years and a four-year, no-layoff guarantee for current SEBAC employees.
In the final weeks of labor talks, the governor had said he was prepared to lay off as many as 4,742 employees without a deal.
More InformationThe plan Highlights of some of the two-year savings in the plan: Imposes two-year wage freeze, $448 million Increases the number of retirees and leaves many jobs unfilled, $130 million Changes the early retirement reduction factor from 3 percent to 6 percent for each year before retiree eligible to take normal retirement, with associated health care savings, $67.4 million Increases normal retirement age for current employees who retire after July 1, 2022. Accordingly, retirement age increases from age 60 with 24 years of service or 62 with 10 years tp age 63 with 25 years of service or 65 with 10 years, $44 million Boosts pharmacy co-pays and require mail prescriptions for maintenance drugs, $43 million Shifts employees to so-called value-based health and dental care plan under which individuals and their families agree to follow all plan and physician recommended physicals, disease management protocols and diagnostic testing, $205 million Achieves savings through as-yet-unspecified ideas proposed by employees to lower procurement costs and make agency operations more efficient, $180 million
Asked how the SEBAC concessions compared to the private sector, Livingston said workers "who weren't fortunate enough to have someone speak for them" have likely given up more.
But Zalaski said even as a member of a union, he has not received a raise for five years.
"Nine percent in five years is pretty good," Zalaski said.
Senate Minority Leader John McKinney, R-Fairfield, and House Minority Leader Lawrence Cafero, R-Norwalk, could not understand how Malloy will keep promises to downsize government if workers cannot be laid off for four years.
"Who gets that?" Cafero said.
But the administration Monday anticipated an additional 1,000 employees will retire due to changes in health care and pensions included in the concessions that take effect in September. They've assumed $130 million in related savings.
"That seems like a pretty good clip," said Rep. William Tong, D-Stamford. "But we have to be careful we don't lose the most productive people in state government who know what they're doing."
Livingston was unsure of the basis for the 1,000 retirements, adding the deal was not structured to scare away workers. "We don't think our people are going to be frightened out by this package," he said.
The deal will also provide more flexibility in transferring workers. According to union negotiators, the current requirement that a comparable position be offered within a 20-mile radius has been expanded to a 30-mile radius.
"I want to see him have flexibility to really restructure government," said Rep. Kim Fawcett, D-Fairfield, who voted against the Democrats' budget. "I hope this deal allows him to do that."
Rep. Bob Godfrey, D-Danbury, praised what he considered a true commitment to streamlining government through a combination of attrition and the anticipated $270 million in savings assumed from future changes in how government operates. Under the arrangement, joint information technology and labor management committees will identify efficiencies and reduce what unions have long complained is the state's overreliance on consultants and contractors.
By avoiding layoffs, Godfrey said, "We maintain our respect for the people who work for the state and, in return, a respect for the people in my district who use their services."
But Rep. Tony Hwang, R-Fairfield, said the administration is relying on a union "suggestion box." Livingston countered SEBAC put about 370 real cost-cutting ideas on the table that over time could save even more.
Hwang was also concerned the agreement calculates $205 million in savings over two years by shifting employees to so-called value-based health care initiatives intended to promote wellness and cut medical costs.
"How real is that going to be?" Hwang said.
David Walker, the former U.S. comptroller general under Presidents Bill Clinton and George W. Bush, said the agreement between Malloy and the unions has its pluses and minuses. Walker is also a columnist for Hearst newspapers.
"On the positive side, they reached a timely agreement in a nonconfrontational manner," Walker said. He gave high marks to structural changes in the pension plan and in employees' health insurance plans that he said would pave the way for a more stable financial future.
Walker was critical of Malloy's decision to extend the agreement with the unions until 2022, saying it might lock the state into a deal that would look worse if the economy sours again. He also said the Malloy administration made only tepid changes to an "incredibly generous" retiree health plan, noting that the state has a $29 billion unfunded liability.
"It clearly exceeds what major employers provide to retirees," Walker said.
Finally, Walker said, the agreement to allow overtime pay to be used in calculating workers' pensions ensures the continuation of "extremely abusive" cases of employees earning pensions close to or above their actual salaries.