Tuesday, May 10, 2011

Plan B Lifts Off

Governor Dannel Malloy today announced “After more than two months of talks, I'm afraid that my administration and the state employee unions have not reached agreement. Our talks have been respectful and forthright so far, and I remain willing to continue the discussions if the unions are willing to do so. However, we must all be willing to work toward a settlement that Connecticut taxpayers can afford in the long run.”

Negotiations between the governor’s office and union leaders were not entirely leak proof. There were indications that the talks had been going no where, but no one was willing to speak on the record. The sticking point from the union side was that negotiators were unwilling to succumb to the size of the givebacks, said to be $20,000 per year per state worker.

In the absence of an agreement – really more a capitulation than an agreement – Mr. Malloy announced today that lay off notices would be sent out immediately:

“I have directed OPM to begin issuing layoff notices in an orderly fashion to the first 4,742 state employees. Those layoffs will result in savings of approximately $455 million. I've also directed OPM to begin the process necessary to cut an additional $545 million in spending; those cuts, many of them programmatic, will be spread across state government, and will, in all likelihood, result in additional layoffs.

"I want to be clear that this is not the road I wanted to go down. I didn't want to lay people off, and I didn't want to make additional spending cuts beyond the $780 million in spending we've already cut.

"But I have no choice. I promised the people of Connecticut that I would change the way we do business in Hartford. I promised to deliver a budget that is balanced with no gimmicks, and I will.”
In his press release, Mr. Malloy said that the savings he hoped to realize in his negotiations with union leaders were “predicated on two principles: we need to achieve the short-term savings necessary to balance this budget, and we need long-term, structural savings in order to make state government sustainable. To do so, I am attempting to bring the benefits enjoyed by state employees -- wages, healthcare, and pension benefits -- more in line with those enjoyed by their counterparts in the private sector and in the federal workforce."

The talks likely stalled on benefit package reforms as well.

In response to Mr. Malloy’s most recent announcement, the State Employees Bargaining Agent Coalition this morning posted the following statement on its website:

"The discussions have been extraordinarily complex and demand our continued efforts to find mutual resolution.

"SEBAC is disappointed the administration has decided to begin issuing layoff notices. We have said time and again that laying off workers, whether in the public or private sector, and slashing vital public services will prove disastrous to our shared goal of creating jobs and rebuilding the middle class - especially at a time when our 9.1% unemployment rate is already higher than the national average.”


  1. $20,000 per year per state worker is outrageous. To blame state workers, and force layoffs and cut backs of crucial state workers, instead of raising taxes on the rich, is unconscionable.

  2. Well, here we go -- Wisconsin, here we come! I predicted this day two + years ago -- the immovable object of the debt has bumped into the irresistible force of pension costs.

    This isn't blaming state workers -- it's like robbing banks -- that's where the money is. And Jonathan, my good amigo, we HAVE raised taxes on the rich (and everybody else) just last week.

  3. >>"..........crucial state workers..........."


    How can it be, considering we have twice the number of employees we had 20 years ago but the population has remained more static then not?

    However I do agree with you to a degree Jon as it's obvious we'll wind up laying off younger, newer and less paid workers instead of cutting where it might make more sense.

    Maybe we should simply cut the pay of all state employees with incomes in excess of 100K by 20%, those between 75-100K by 15% and so on down the line leaving those under 50K less or even totally unscathed.

  4. ACR - your approach, as usual, makes sense, but it can't be done unilaterally - the union has to agree to it.

    Vincent - only a token raise for the rich, the middle class much harder hit.

  5. Relax. Negotiations are still under weigh. Malloy just removed the mailed fist from the velvet glove. Donovan, Williams, and the Democratic majority in the General Assembly have not yet opened their beaks. And after Malloy’s shut out of Republicans in the General Assembly, help from that quarter will be sparing and grudging – good for unions on the whole. This is only round 3.

  6. >>"ACR - your approach, as usual, makes sense...."

    Well that's frightening - I've spent my life in sales.

    Not R&D, Engineering, Accounting, etc. and have done so mostly because I have no other talent.
    I'm not so good with tools (usually either hurt myself or create a disaster that requires professional help to fix) can't sing or dance or even draw a straight line.
    (I can however deliver an occasional straight line.)

    Thus if I'm making sense it's surely a sign of the end of time; or our state government has been totally taken over by loons.

    BTW - How many union state employees earn in excess of 100K?
    Why aren't we at least cutting those non-union employees that earn 6 digits?

  7. To expect $20,000 from each state employee is no more outragous as pretending the small percentage of our residents who are truly rich and not just "middle class rich" rich can continue to support a system that must be changed to go on.

    Unless real, not just the typical smoke and mirror changes are made to significantly reduce the size, cost, and efficency of the state government, the day can never come when those who resist that change will feel the rich pay their fair share. Al

  8. If Malloy, a democrat, is not able to get an agreement with the unions, then voters outside the union confines may say that the republicans are correct to try to disenfranchise unions so that state government is able to make the necessary adjustments to make government sustainable and viable. That is not in the unions self interest or that of the individual worker. An agreement is what is needed to keep the safety net, the towns and cities funded and the government working.

  9. Sorry, I don't agree - why should 45,000 workers take a huge hit rather than hundreds of thousands of taxpayers taking a much, much smaller one?

  10. Jon - Because those non public sector workers have already taken the hit from frozen pay to reduced pay to less benefits to loss of job so that corporations may remain profitable and stay in business. Very few companies have the retirement benefits, including health care, or the current health care benefits of state employees. Even some municipal workers have seen changes in their retirement plans, health care benefits, and wages. The Rell Administration's $700 million was insufficient last year and, unfortunately, more needs to be asked from the state employees. Do I think that some of the millionaires in Fairfield County should pay higher taxes - Yes. But I don't see that happening in the current political climate. It is unfortunate that since the eighties, taxes and government services have a bad name. It might change if Malloy at the state level and Obama at the Federal Level are able to change the vocabulary in the next two to four years. Until then....

  11. Both our state workers, as well as the taxpayers of this state have been the benefactors for far too long of the complete irresponsibility of the Democratically controlled General Assembly and the lack of Republican leadership from the last "governor" Rell , and governor Rowland. In addition most if not all of those then in the constitutional offices at the time.

    This combined recklessly disregard for fiscal sanity of any kind has led us to hugely under funded pension and retiree healthcare benefit liabilities well beyond tens of billions of dollars. We bonded everything including even bonding of day to day operating expenses, as well as bonding of a portion of the teachers pensions a few years ago. We have even emptied our rainy day fund. All this was done over many years rather than call attention to the unaffordable benefits, pensions, wages, and oversized work force and it's true cost from the typical head in the sand taxpayer/voters in this state.

    Those responsible people like Chris Donovan have tried to call this a revenue problem caused by a poor economy. The truth is it's an unaffordable spending problem cause by irresponsible legislators, that a poor economy finally clearly exposed.

    Malloy has correctly recognized that the solution to any hope of future fiscal sanity is to fix what got us here in the first place. Yes, we all are going to have to pay more in taxes to cover the taxes we were spared as we happily looked the other way while the unaffordable and unsustainable cost of CT government was disguised with all sorts of irresponsible gimmicks. But now the time has come for the state of CT to get it's house in order just like any business and most of us private citizens with limited means have had to do for years now.

    We hear the number $20,000 per state worker, but it seems more likely in the end some will pay far more than that than others. The 5000 or so state workers who may be laid off will pay with their jobs, so 40,000 or so of their union brothers and sisters will go unscathed. Followed by those laid off in the cities and towns affected when aid there needs to be cut to make up the difference. The taxpayers including the rich who already pay for the out of control cost of CT government will pay far more as well.

    The biggest problem still is if only 5000 or so state workers and those laid off in cities and towns as well as the taxpayers are involved in closing a budget gap while 40,000 state workers are still left largely whole with unaffordable pensions and benefits etc, the basic problem still has not been addressed. Al