State legislature narrowly approves labor concession deal
Lieutenant Governor Nancy Wyman cast the tiebreaking vote in the state senate to approved a union concessions package that will add up to just over $1.5 billion in savings for the state over the next two years. The deal passed in the house last week by a 78-72 margin, with the vote being entirely on party lines with the exception of a single Democrat, Rep. John Hampton of Simsbury, who voted against the package. After three Democratic senators spent a great deal of time on the fence about the deal, they too voted with their party, leaving Wyman to break the tie and accept the deal. The unions accepted the package by a very large margin, with 83% voting for approval.
State workers will now have a three year wage freeze and three additional furlough days. After the three year freeze, workers will get annual pay raises of 3.5% beginning in 2021. Most workers will see an increase in their pension contribution, and increase in health care premiums and copayments, and started a new defined contribution and pension hybrid plan for future employees. The state will extend current deal with union workers, scheduled to end in 2022, until 2027 instead.
When the deal was approved, the union representatives present broke into a loud applause, and Wyman had to quiet them.
That extension is the major point of argument between the two parties over the deal. Most GOP officials preferred allowing the current deal to expire. That would allow future deals to be done by statute as opposed to collectively bargain. Connecticut is one of just four states in the nation that still bargains state employee packages. The extending for five years is also thought of by many GOP officials as simply kicking this problem further down the road for another administration to deal with, pointing to the concessions deal made by Governor Dan Malloy in 2011. That deal extended contracts from 2017 to 2022, and the state is still in dire financial condition.
State Senator Bob Duff, who represents Darien and Norwalk, was happy to see the approval go through.
“This agreement is the latest step toward making government more affordable and more efficient for taxpayers,” said Duff through a press release.
“Outside independent analysts confirm that the new SEBAC agreement makes important long-term changes to our state employee pension and benefit programs resulting in significant savings for taxpayers—roughly $24 billion over the next 20 years. These savings are another important step toward reaching a final balanced budget that protects taxpayers, vital services and the important economic gains made here in Connecticut,” Duff added.
State Senator Carlo Leone, who represents Darien and Stamford, was also happy to see the deal approved, but acknowledged the contentious nature of the process.
“The SEBAC negotiation was between the executive branch and the unions. As a negotiation, both sides give to get something. Anyone can argue the deal as good or bad but you must be in the room to make changes and chances to renegotiate does not mean the deal is going to get better (or worse),” said Leone, adding, “As of June 7 there was gridlock, now with July 31 behind us and we are only a third of the way there and given the divide, we must chart a path forward with or without total consensus. Given it is $1.5 billion in concessions, with no other 1.5 billion alternative, I supported the deal in order to continue (hopefully bipartisan) discussions to balance the remainder of our fiscal responsibility.”
Turning locally, Leone said it is hard to anticipate an impact on Darien, or any other town.
“All towns are experiencing concern, as well as Darien. We all are working to mitigate harm to the municipalities as best we can. There have been many proposals with varying degrees of impact, but until we can get enough of a passage it still remains open for discussion, and for any alternative ideas to be vetted before a final proposal is ready for the next vote. At the at end of the day total agreement is what we strive for, but as of last night it is an obvious non-agreeable issue to date,” said Leone.
Leone also recognized the challenges and the differences between the two parties when it came to this issue. “I respect anyone who disagrees, and hopefully the reverse is true. I have received many messages both for and against the SEBAC issue so pleasing everyone has been most difficult, but as elected officials we must act and that is what I chose to do,” said Leone.
State Representative Terrie Wood lauded the agreement between Malloy and the union workers, but ultimately, said it is a good start, but not enough. “The agreement is a very good start, no question. There is also great respect for state employees and the valuable work they do. However, in the end, this agreement falls short of addressing our state's deep fiscal distress with bringing benefits and compensation of state union employees closer in line with the private sector and other states,” said Wood.
“It is very clear, with this vote, that the Democrats currently serving in the legislature are beholden to the state union leaders over their constituents and common sense. Multiple editorial boards in our state articulated their grave concerns with this agreement. In addition a majority of citizens believed there should have been a better agreement,” Wood continued.
The feeling that many elected democrats are beholden to union leadership is a common sentiment among many GOP officials.
“This agreement ties our hands for 10 years with benefits/contracts, allows no layoffs for four years and does not substantially increase contributions to pensions or healthcare. We need to be sending a message to our citizens and businesses that we understand the seriousness of our state's fiscal situation and are willing to make the changes needed to return our state to fiscal prosperity. Simply, common sense and courage need to prevail,” Wood closed.
State Representative William Tong was also candid on the agreement. Tong pointed out that the deal contains a number of things the legislature was asking for, but truly, no one is happy with the deal.
“This was a necessary deal that saves $1.5 billion in the next two years, $24 billion in the years after. These are real hard dollars. We all demanded that state employees move to a less expensive health care plan. Done. We wanted a salary freeze, 0% increases. Done. We wanted new employees to move to defined contribution 401k plan. Done. We wanted state employees to pay more for their pensions. Done. Critics say that this deal does save money, but not enough. I seriously doubt they could have done better at the negotiating table,” said Tong. Tong also pointed to former Governor John Rowland and the deal signed two decades ago as a reason the state is in the current financial situation.
“Governor Rowland signed the current 20 year contract, and for decades our predecessors on both sides of the aisle kicked the can down the road. Now it’s on us to pay the bill,” said Tong, adding some clarification about the extension itself, saying, “It’s important to note – some complain about the extension of healthcare and pensions by 5 more years. This is NOT an extension of the current deal – this is a five-year “extension” of a dramatically different package of healthcare and pension benefits that includes significant changes and reductions from the current arrangement.”
Tong said that ultimately, the union workers do not have to come to the table and open negotiations, but they did, and “you have to give something to get something.” Still, Tong had no illusions about the fact that the process was contentious and the deal might be the most popular, but it emphasized that this is the reality in Connecticut.
“No one is happy with this deal — we all wish we could eliminate our fiscal challenges in a single vote. But that is not reality,” said Tong, “this deal reckons with reality by making hard choices and real reductions to state spending and our long term liabilities.”
First Selectman Jayme Stevenson sent a letter to Leone and Duff prior to the vote, urging them to think of the consequences for Darien before choosing to support the package. Stevenson responded to the news of the vote on Monday with disappointment.
“It was a very contentious and partisan day in Hartford yesterday but certainly no surprise that it continues to be business as usual for state Democrats. Locking in expensive benefits for 10 more years and promising no layoffs for four years is simply bad policy. It remains to be seen if Connecticut taxpayers were well served by the Senate Democrats’ ratification of the SEBAC deal negotiated by Governor Malloy,” said Stevenson.
“I do, however, greatly appreciate the ideas and effort put forth by Senators Slossberg, Hartley and Doyle to press for much needed structural reforms as they closely align with the ready-for-a vote Republican budget plan. Ideally, these reforms should have been considered much earlier in the process but do show a clear path to political common ground if incorporated in the biennium budget,” Stevenson added. The senators mentioned were the three who held out most of the day before ultimately voting with their party.
The savings from the deal will now be the basis of the discussion as work towards a budget continues. Even with the savings, an over $3 billion shortfall still needs to be closed. Stevenson mentioned this as well, saying, “This leaves an enormous $3.53 billion dollar deficit gap yet to be filled and does not even begin to address future year pension and OPEB crises or the fiscal crisis in several of our major cities.”
In the wake of the deal, a number of ideas have been put forth, with many of them being tax increases. Stevenson expressed frustration that this will be the tactic taken, and urged Darien community members to be vocal about their feelings on the budget, saying “Ideas being discussed include revising education funding policy, raising the sales tax, taxing the “wealthy” more and requiring towns and cities to reimburse the state for the cost of teachers’ pensions.”
“All of these “solutions” may have a significant impact on Darien taxpayers. Darien taxpayers should reach out to the Darien Delegation to express your concerns over state budget matters and potential impacts to local taxes. Your voice is more important than ever,” she said.
Democratic candidate for First Selectman Rob Richards weighed in on the agreement as well. "The complexity of Connecticut’s budget issues goes far beyond any concessions deal that could have been achieved. The truth is the SEBAC agreement is only one piece of the pie. Of course I would have preferred the agreement to account for three fifths of the problem instead of one fifth. And the argument to fight for more should be respected. But since I was not at the negotiating table I will withhold criticism and instead focus on what was achieved and where we need to go," said Richards. Richards also was disappointed in the partisanship on display in the course of the deal's approval. "With the future in mind, I think a party line vote on any issue is an embarrassment to our governance. We need to stop drawing lines in the sand and instead respect different points of view. We all want what’s best for our state and community," said Richards.
On Tuesday, Malloy outlined a plan to dramatically cut education aid in favor of sending funding to the lowest performing districts in the state. The executive order would reduce education spending by over $500 million, and would go into effect when the first Education Cost Sharing grant money is sent out in October if the state is still without a budget. This order would cut the ECS money to Darien from just over $400,000 to nothing. Virtually every district in the state would stand to lose funding should the order come to pass.