Monday, July 31, 2017
After Day of Drama, Senate Democrats Unite to Back Concessions
By Mark Pazniokas and Keith M. Phaneuf
On a tie-breaking vote by Lt. Gov. Nancy Wyman, the Senate gave final approval today to a state-employee concessions deal after Democratic leaders mollified three dissenting colleagues with a promise to make a good-faith effort for fiscal reforms.
Uniting all 18 members of the caucus hinged on the willingness by Senate Democratic leaders to at least endorse in concept a dozen fiscal and collective-bargaining reforms sought by three wary Democratic colleagues, any one of whom held the power to kill the deal by voting with Republicans in the evenly divided Senate.
”I’m very pleased that we achieved Democratic unity on this proposal today, and it now helps set us up for the remainder of what will be very difficult budget negotiations,” said Senate President Pro Tem Martin M. Looney, D-New Haven.
The show of unity did not go beyond the vote. The three holdouts — Sens. Paul Doyle of Wethersfield, Joan Hartley of Waterbury and Gayle Slossberg of Milford — skipped a post-session news conference with Looney and other Democrats, a sign of remaining difficulties in resolving an impasse that has left Connecticut without a budget for 31 days.
Aside from the promise of support for fiscal reform, the trio conceded they saw no clear path to an alternative that could produce the $1.57 billion the concessions are projected to yield over for the overdue two-year budget. Doyle said he saw “potential chaos” in rejecting the concessions.
Republicans said accepting concessions now would do little to stabilize the state’s long-term finances, articulating what is likely to be a wedge issue in the 2018 campaign for control of the closely divided General Assembly.
“Once you vote for this deal you are trapped,” said Senate Republican Leader Len Fasano of North Haven. He warned that labor costs under this deal largely will be fixed for the next decade, and that Democrats who ratified it will be responsible for what he says are certain tax hikes and program cuts.
Democrats and Republicans are sharply divided over whether Connecticut needs to end decades of setting pension and health benefits by collective bargaining and instead dictate them by legislation. The GOP, whose candidates for governor declined to campaign on weakening collective bargaining in 2014, is getting more aggressive on the issue.
“People look to us for leadership,” Fasano said, dismissing Democrats’ arguments that the GOP approach would lead to a court fight with unions. “People look to us for strength. And we’re afraid to take an issue up and lead with it?”
The intra-party turmoil in the Democratic caucus largely overshadowed the partisan differences. The day’s source of drama was the question of whether Doyle, Hartley and Slossberg would give the Democrats 18 votes for passage.
Doyle told his colleagues on the floor he was placing faith that the Senate leadership would deliver on its promises to him, Hartley and Slossberg.
“They assured me they would do their best to advocate for systemic reforms,” Doyle said. “I have to take a leap of faith with all of you in this chamber.”
All Looney could promise was his best efforts. Gov. Dannel P. Malloy, House Speaker Joe Aresimowicz, D-Berlin, and rank and file Democrats in both chambers will dictate what, if anything, is accepted.
Doyle, Hartley and Slossberg retain significant leverage — their support for a budget, when one is finished — to ensure that some of their demanded reforms end up in policy language implementing the budget. Hartley hinted her vote would depend on seeing support for the systemic reforms.
“I do believe that the SEBAC [concessions] with systematic changes will help to make a path forward and bring equilibrium,” she said, “and will be — for me personally — pivotal in adopting a budget.”
Until a speech on the floor at 6 p.m., Hartley declined to say how she intended to vote. But the Senate opened debate at 2:20 p.m., an indication that the Senate leadership believed all 18 Democrats were on board, setting up the tie-breaking vote by Wyman.
With the holdouts missing from the chamber, Sen. Cathy Osten, D-Sprague, began outlining the case for concessions by SEBAC, the State Employees Bargaining Agent Coalition.
“SEBAC’s position is it will always be willing to sit down and help the state,” said Osten, who was leader of the correction guard supervisors’ union before her retirement from the Department of Correction.
Slossberg eventually arrived in the chamber and chatted amiably with Looney before explaining her support for the agreement to the chamber.
“I believe in collective bargaining,” Slossberg said.
Doyle followed and briefly engaged Looney in a one-sided conversation in which neither man smiled. Doyle spoke, and Looney listened.
The resolution accepting the terms of a concession deal negotiated by the Malloy administration could be voted up or down, but not amended. The holdouts’ demands would have to be addressed in a side deal inserted in the budget or a new piece of legislation at a later date.
Some of the reforms sought by the trio would restrict in statute benefits the state could offer in future contracts, when the latest concessions deal expires in mid-2027.
They would end automatic cost-of-living adjustments to pensions, remove overtime earnings from pensions calculations, and restrict future benefits contracts with state employee unions to no more than four years in duration.
Other reforms would peg arbitration awards to the state’s ability to pay increased wages and benefits and create a commission to develop a sustainability plan for the pension fund for municipal teachers. One study projects the state’s annual contribution will grow from $1 billion last fiscal year to more than $6.2 billion by 2032.
Malloy celebrated the passage tonight.
“Today the state legislature ratified the largest state employee concession package in our state’s history – a deal that will save state taxpayers $1.57 billion over the next two years and approximately $24 billion in long-term savings,” Malloy said.
“Make no mistake about it – these are significant savings, and I want to thank our state workers for stepping up to the table and negotiating in good faith to produce significant, structural changes that will be the foundation of a responsible, balanced budget.”
Most workers would accept a three-year wage freeze and three furlough days. About half the value of the deal is in wage concessions, the rest in pension and health changes.
The deal also would:
Double pension contributions for most workers, from 2 to 4 percent.
Create a hybrid pension/defined-contribution plan for future employees.
Increase health care co-payments and premiums, and require active workers to contribute more toward their retirement health care benefit.
And move retirees into a more cost-efficient Medicare Advantage program for health care.
In return for these concessions, the state offered protections against layoffs for four years and extended the basic agreement on pension and health benefits from 2022 to 2027.
After three years of wage freezes, the employees would get two annual wage increases of 3.5 percent, beginning July 1, 2021.
The extension is a major obstacle to a goal of conservatives: Removing retirement and health benefits from the purview of collective bargaining.
In a review of the concessions deal, the Pew Charitable Trust noted that Connecticut is one of only four states where those benefits are bargained. In most places, they are set by statute.
“This is bad economic policy. This vote will indeed determine which direction the state goes in,” Sen. Scott Frantz, R-Greenwich, said during the debate. “We’re already in a death spiral. This is going to exacerbate that situation.”
Sen. Tim Larson, D-East, urged his colleagues to consider the contributions of unionized state workers when deciding whether these concessions are sufficient to help balance the next state budget.
“I don’t strap on a gun before I come to work every day, and I don’t hold prisoners in a cell,” Larson said. “I wonder if there’s ever been a cost analysis of not plowing 84 and trying to get to work?”
Sen. Craig Miner, R-Litchfield, said “no one wants a wage freeze,” but he believes many private-sector workers would accept that and tougher benefit restrictions to preserve their jobs.
Miner pointed to declining state tax receipts, auto sales and other economic trends as signs Connecticut’s economy is slipping and that businesses are losing confidence in the state’s ability to control spending.
He said Connecticut should emulate dramatic reductions in labor costs achieved by Rhode Island state government in recent years. Miner said that businesses wanted this concessions deal to make similar groundbreaking changes when it comes to the benefits offered to the next generation of Connecticut state employees.
“The truth of the matter is, it may not be enough,” he said. “They’re waiting for us to make that Rhode Island statement.”
Sen. Beth Bye, D-West Hartford, said she has grown tired of the “state employee bogeyman” theory that public-sector worker benefits just get better and better.
Bye said that Republican Gov. John G. Rowland locked in much more generous health care and retirement benefits for state workers back in 1997 in a 20-year deal with unions. A concessions deal Malloy negotiated in 2011 extended the expiration from 2017 to 2022 in return for a concessions package in 2011.
“The truth is the private sector has significantly reduced their share of health care benefits, and that has really hurt middle-class workers,” she said.
But Sen. Toni Boucher, R-Wilton, said that while Connecticut did offer very generous benefits to workers for decades, “continuing that practice certainly doesn’t make any sense” in the context of a massive budget deficit.
Boucher noted that even with this deal, Connecticut employees would contribute far less toward their pensions than their counterparts in other states do. The maximum contribution here would rise from 2 to 4 percent of salary, while the national average for state employees is 6.7 percent.
Watching in the gallery were union representatives, including Salvatore Luciano, the executive director of Council 4 of the American Federation of State, County and Municipal Employees. He said state employees comprise 2 percent of the state’s population and their concessions package would solve one-third of the projected budget deficit.
“No one else is stepping up to provide any money to deal with this mountain of debt,” Luciano said.
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