Lawmakers see savings opportunity upcoming

Union contracts set to expire in June; state on track for $2.2B shortfall

Hartford — With labor contracts for 12 of 13 Connecticut state employee unions set to expire at the end of June, some elected officials see opportunity for budget savings as they grapple with projected deficits this year and in the future.

Democratic Gov. Dannel P. Malloy has already warned these will be “very tough negotiations” with the unions, stressing how the state “must live within our means.”

A laundry list of ideas, including higher health premiums, a retirement incentive program and higher pension contributions have been floated in recent weeks by Democrats and Republicans as possible short- and long-term ways to tackle the state’s budget problems. But such proposals face some hurdles, making it unclear how much savings can be expected.

First, the unions have a deal with the state until 2022 regarding pension and health benefits. They would have to decide to reopen that agreement before any changes could be made. Second, a pattern for possible pay raises for unionized workers might already have been set for the upcoming negotiations because of the ratification of a new three-year contract with state police troopers, whose pay will increase by 9 percent over three years.

“A lot of what they’re going to be looking at monetarily has almost been established,” said House Majority Leader Joe Aresimowicz, D-Berlin, referring to the “pattern” of collective bargaining agreements set with the state trooper contract. He acknowledged Malloy’s administration will have “a little play with that” as it negotiates salaries and working conditions, but it’s uncertain how much.

Despite such limitations, House Speaker Brendan Sharkey, D-Hamden, said he expects the administration will make it clear “this is serious” and “there are going to have to be some structural changes to our budget and the way we budget.”

Lawmakers estimate the current fiscal year’s $20 billion budget is about $350 million to $370 million in deficit. Malloy and the legislative leaders have been working on a bipartisan plan to close the gap and hope to hold a special legislative session in early December. Meanwhile, the General Assembly’s nonpartisan Office of Fiscal Analysis projects deficits well into the future, ranging from $552 million in fiscal year 2017 up to $2.2 billion in fiscal year 2020.

Sharkey said he would like Malloy to ask the unions to reopen the pension and health agreement reached with the State Employees Bargaining Agent Coalition in 2011, especially given the state’s unfunded pension liability problems.

“We want to maintain the pension fund and current benefits as best we can, but the long-term viability of the pension fund is at risk right now,” Sharkey said. “I would hope the governor would at least ask for their sake, as well as for ours.”

Sal Luciano, executive director of AFSCME Council 4, a union that represents a range of state employees, including prison and clerical employees, said he’s not surprised politicians are eying state workers for possible budget savings.

“Every time there seems to be a problem, there seems like there needs to be a special tax on state employees,” he said. The 2011 SEBAC agreement included an estimated $1.6 billion in labor concessions, including a two-year wage freeze, higher insurance copays and other changes.

“While I clearly expect the Republicans to kind of do this, I’m quite frankly a little bit alarmed the Democrats are talking this stuff,” he said.

Luciano contends the 45,000 or so state employee shouldn’t always be the ones to bear the brunt of the state’s fiscal burdens.

“I know there are people who say there’s a spending problem. But the fact is, it’s not true,” he said.

Luciano said the state’s deficits stem from insufficient tax revenues, adding how “the top one percent continue to do extremely well.”