Sep 25
jonpeltoMalloy, Pension, SEBAC, State Employees, Unions Malloy, SEBAC, State Retirement, Unions
Yesterday, I posted this blog about rumors spreading that the Malloy Administration has lost a massive arbitration ruling concerning the retirement incentive that was offered to some but not all state employees. The details remain confusing. An arbitration award or awards have certainly been made that require the state and SEBAC to negotiate and action to be taken by the State Retirement Commission. I will update as details become available. What is clear is that according to State employees knowledgeable about the situation, there are employees who should have been given the opportunity to utilize retirement incentives, but were not given that opportunity and the problem must now be rectified.
*********************************************************************************************************************
Although it hasn’t been officially confirmed, word is spreading that the Malloy Administration has lost a massive arbitration ruling today.
Last summer, the Connecticut State Employees Bargaining Agent Coalition (SEBAC) filed a grievance against the Malloy Administration with the Connecticut Board of Labor Relations.
The complaint revolved around the Malloy Administration’s unilateral decision to
offer to certain employees the ability to retire with 25 years of service regardless of age.” According to labor unions, Malloy’s representatives made this offer without fulfilling their bargaining responsibility with SEBAC and without making it available to all state employees.
At the time, SEBAC challenged Malloy’s action because it was;
“(1) Unfair to employees who learned about them, because it forced those employees to make a critical life-changing decision without full information or the opportunity to change their minds; and
(2) Unfair to the vast majority of employees, who management never informed about the offer at all and thus were never given any opportunity to decide.”
Union leaders demanded that the offer be made available to all eligible state employees and that employees be given an adequate time frame to make a decision.
The Malloy Administration refused and filed a State Prohibitive Practice complaint.
Apparently, earlier today, an arbitrator ruled against the Malloy Administration.
If true, the state may now be forced to negotiate a process to give all employees the ability to retire, regardless of age, as long as they have at least 25 years of service.
There are also rumors that the Malloy Administration lost on a second major issue related to the fact that it gave managers longevity bonuses when unionized employees went without those payments.
Stay tuned – more to come.
Jan 18
jonpeltoBen Barnes (OPM Secretary), Malloy, State Budget, Taxes Ben Barnes, Income Tax, Malloy, SEBAC, State Budget
For months, Governor Malloy and his administration have been assuring the media and the public that this year’s budget was balanced and next year’s budget included a hefty surplus that could be used for – among other things – the education reforms that are being discussed and trumpeted in Hartford.
Last week, an independent report came out that revealed that while the State Employee Pension Fund was doing marginally better, the pension savings that the Malloy Administration had promised would come from changes negotiated in the Malloy/SEBAC agreement were not amounting to anything close to what they had promised.
In fact, it was fluctuations in the Stock Market and the state’s return on investments, and not the pension changes, that were providing the funds needed to balance that portion of the state budget.
As is their style, the Malloy Administration brushed away concerns and criticisms about their inaccurate estimates and stayed true to their rhetoric saying that everything was fine, all the Malloy/SEBAC savings would be achieved and the budget was balanced.
Yesterday we learned that the problems go much deeper than simply getting it wrong on the pension fund savings.
Early this month, the Governor’s Office of Policy and Management projected that the state was on track to have an$80 million dollar surplus. Yesterday, that same office, in a joint report with the General Assembly’s Office of Fiscal Analysis, revealed that tax revenue was down at least $95 million in this fiscal year (FY12) and would be down another $139 million next year.
Connecticut went from a surplus to a deficit in one day.
Of course, the problem has been known for a while, but the Administration chose to keep the information secret hoping that something would change.
OPM has claimed that they could not project income tax revenues until January 15, 2012, the date the last quarter income tax withholding reports were due.
Yet, as every accountant and business owner knows, a company and individual’s overall tax situation is almost always evident by the quarterly report that was due on September 15, 2011. That date was moved and as information came in OPM simply decided that they would not share their tax information with the rest of us.
The first victim of this budget collapse appears to be the Governor’s promised effort to shift the state toward GAAP (Generally Accepted Accounting Principles).
For More information about this development check out CTNewsjunkie: http://www.ctnewsjunkie.com/ctnj.php/archives/entry/balanced_budget_forecast_begins_to_unravel/ and CTMirror: http://ctmirror.org/story/15087/budget-hovers-brink-deficit-malloys-fiscal-cushion-erodes-quickly..
Meanwhile, let’s return for a moment to the news about the State Employee Pension Fund because it is such a perfect example of this Administration’s approach to state budgeting.
As I wrote in yesterday’s blog, in February 2011, Governor Malloy announced that in addition to tax increases and budget cuts he would balance the state’s upcoming bi-annual budget with $2 billion in savings from state employees.
As one of the loudest critics of the governor’s approach, I’ve been writing about this topic on a regular basis, going so far as to state that there was no way those savings could be achieved.
When the Malloy/SEBAC agreement was reached, the parties announced that it would save the state $1.6 billion over the next two years rather than the promised $2 billion. [The difference was made up by sliding a larger than expected surplus in FY11 to FY12].
The Malloy/SEBAC savings were scheduled to come from a variety of different areas including the freeze in state employee wages, the elimination of longevity payments, changes to the state employee healthcare and pension system and a number of targeted budget reductions. The non-partisan Office of Fiscal Analysis could only confirm the value of about one-third of the savings.
But the Malloy Administration remained adamant that it would get all the savings it projected.
The changes to the state employee pension system were calculated to save the state $237 million this year.
Late last week, Keith Phaneuf of the CTMirror, explained the latest development with the pension fund in his “must read” article – see: http://ctmirror.org/story/15039/pension-report .
In order to balance the state budget in 2009-2010, Governor Rell negotiated an agreement with the state employee unions that allowed the state to reduce its payments to the Connecticut State Employee Pension Fund.
Rell and the Democratic Legislature decided to forgo about $314 million in pension fund contributions.
The impact from the reduced payments and drop in the stock market left the State Employee Pension fund with assets of about $9 billion and long-term obligations of $21 billion (or a funded ratio of 44.4 percent – one of the lowest ratios in the country – the appropriate funding ratio is in the range of 80 percent).
Last week, a new actuarial report on the Connecticut’s State Employee Pension Fund has determined that the fund now has assets of $10 billion dollars with long-term obligations of $21 billion (or a funded ratio of 47.9 percent).
The immediate effect of this development is that this year Connecticut will have to make a pension contribution of $926 million instead of the $939 million that was part of this year’s approved budget. (A savings of $13 million)
Thanks primarily to the bizarre ups and downs of the US stock market, the State Employee Pension Fund got over 21 percent on its investment over the last year compared to the 8.25% that was expected.
Although the expected pension savings from the Malloy/SEBAC” agreement did not materialize, this piece of the budget balanced thanks to the incredible return the Fund received.
The new actuarial report is vague but it appears that about $67.5 million of the $237 million expected savings (about 28 percent) was the result of the pension agreement while well over 70 percent of the goal was achieved due to the return on investments.
In what has now become a classic response, Ben Barnes, the Secretary of the Office of Policy and Management, told the CTMirror “thank heaven it was with us [the stock market growth], but market timing wasn’t really a factor for us.”
Meaning what?
The state projected that it would save $237 million in pension costs as a result of the Malloy/SEBAC agreement.
It failed to do that, but thanks to the stock market and investments, the state got that money that it needed; which is good news.
Sticking to his political “talking points”, and despite the recent evidence, Secretary Barnes said that he remains confident that the Malloy/SEBAC agreement will, in fact, save the state $700 million this year and $900 million next year.
And for the record, I remain convinced that the Malloy/SEBAC agreement will not achieve the amount of savings that have been projected and along with the “new” news that revenues are down, Connecticut’s State Budget is far from balanced.
Jan 17
jonpeltoBen Barnes (OPM Secretary), Budget Cuts, Pension, SEBAC, State Employees Ben Barnes, Malloy, Pensions, SEBAC
Stock Market Provides Key to Meeting State’s Pension Goal
Background: In February 2011, Governor Malloy announced that in addition to tax increases and budget cuts he would balance the state’s upcoming bi-annual budget with $2 billion in savings from state employees.
As one of the loudest critics of the governor’s approach, I’ve been writing about this topic on a regular basis, going so far as to state that there was no way those savings could be achieved.
When the Malloy/SEBAC agreement was reached, the parties announced that it would save the state $1.6 billion over the next two years rather than the promised $2 billion. [The difference was made up by sliding a larger than expected surplus in FY11 to FY12].
The Malloy/SEBAC savings were scheduled to come from a variety of different areas including the freeze in state employee wages, the elimination of longevity payments, changes to the state employee healthcare and pension system and a number of targeted budget reductions. The non-partisan Office of Fiscal Analysis could only confirm the value of about one-third of the savings.
But the Malloy Administration remained adamant that it would get all the savings it projected.
The changes to the state employee pension system were calculated to save the state $237 million this year.
Late last week, Keith Phaneuf of the CTMirror, explained the latest development with the pension fund in his “must read” article – see: http://ctmirror.org/story/15039/pension-report .
In order to balance the state budget in 2009-2010, Governor Rell negotiated an agreement with the state employee unions that allowed the state to reduce its payments to the Connecticut State Employee Pension Fund.
Rell and the Democratic Legislature decided to forgo about $314 million in pension fund contributions.
The impact from the reduced payments and drop in the stock market left the State Employee Pension fund with assets of about $9 billion and long-term obligations of $21 billion (or a funded ratio of 44.4 percent – one of the lowest ratios in the country – the appropriate funding ratio is in the range of 80 percent).
Last week, a new actuarial report on the Connecticut’s State Employee Pension Fund has determined that the fund now has assets of $10 billion dollars with long-term obligations of $21 billion (or a funded ratio of 47.9 percent).
The immediate effect of this development is that this year Connecticut will have to make a pension contribution of $926 million instead of the $939 million that was part of this year’s approved budget. (A savings of $13 million)
Thanks primarily to the bizarre ups and downs of the US stock market, the State Employee Pension Fund got over 21 percent on its investment over the last year compared to the 8.25% that was expected.
Although the expected pension savings from the Malloy/SEBAC” agreement did not materialize, this piece of the budget balanced thanks to the incredible return the Fund received.
The new actuarial report is vague but it appears that about $67.5 million of the $237 million expected savings (about 28 percent) was the result of the pension agreement while well over 70 percent of the goal was achieved due to the return on investments.
In what has now become a classic response, Ben Barnes, the Secretary of the Office of Policy and Management, told the CTMirror “thank heaven it was with us [the stock market growth], but market timing wasn’t really a factor for us.”
Meaning what?
The state projected that it would save $237 million in pension costs as a result of the Malloy/SEBAC agreement.
It failed to do that, but thanks to the stock market and investments, the state got that money that it needed; which is good news.
Sticking to his political “talking points”, and despite the recent evidence, Secretary Barnes said that he remains confident that the Malloy/SEBAC agreement will, in fact, save the state $700 million this year and $900 million next year.
And for the record, I remain convinced that it will not.
Aug 21
jonpeltoMalloy, SEBAC, State Budget Malloy, SEBAC, State Budget
(cross-posted from CTNewsjunkie)
That summarizes the dispute over the “value” of the $1.6 billion dollar concession agreement.
A little secret about how to determine who is telling the truth.
Reading the back and forth between Office of Policy and Management Secretary Ben Barnes and House Minority Leader Larry Cafero you’d think you were listening to an argument between two 10-year-olds on a playground.
OPM Secretary Barnes recently told reporters that he is “100 percent confident that the deal will yield $1.6 billion: $700 million in savings in the fiscal year that began July 1 and $900 million the following year.”
Cafero, using data provided by the non-partisan Office of Fiscal Analysis, says Barnes has inflated the number and there is no way that state is going to achieve that level of savings.
After that it quickly deteriorates into name calling.
Meanwhile, Gov. Dannel P. Malloy has risen above that fray to repeatedly point out that this labor agreement is the structural change Connecticut has needed to get back on track.
As is so often the case in American politics, the two sides of trying so hard to argue their respective positions that they have – at least to some degree – bypassed the truth.
The fact is the Malloy/SEBAC agreement will NOT lead to $1.6 billion in savings over the next 22 months but that doesn’t mean that the Malloy administration can’t provide a balanced state budget for this year and next.
First off the governor and legislature have built a significant surplus into this year’s budget to help balance things out should additional dollars be needed to cover expenses next year, which is an election year. While it is hard to tell exactly how much extra has been built in, between excess revenue and funds hidden in various accounts such as the post-employment healthcare line there could be a quarter of a billion or more that can be used to cover up any shortfall that may occur from the $1.6 billion concession package.
Second, while Governor Malloy has repeatedly said (even this week) that he will not allow any additional taxes to be raised, Barnes, his budget director, is very open about the need and likelihood of raising additional fees to access certain services.
Third, thanks to Connecticut’s second gas tax (the wholesale tax on gasoline); the high gas prices continue to produce a windfall of revenue for the state. Rather than use those extra funds to pay for transportation expenses the dollars are going into the General Fund where they can be used to help balance the budget.
Fourth, while Wall Street has taken a real hit the past couple of weeks; any recovery there will help push up state revenues since Wall Street bonuses and pay increase income tax receipts.
And finally, while the governor’s super authority to cut the budget evaporates on Sept. 1, he will continue to have his traditional statutory authority to cut up to 5 percent of any given line item in the budget (except municipal aid). He can and will use this power to cut programs and services to make sure the budget is balanced.
So while the state may not get $1.6 billion in savings from the concession package it certainly helps the Malloy administration balance the state budget.
But the bigger issue is that Malloy has been clear from the start. This concession package was not about simply balancing the budget. Malloy has consistently said it was about forcing structural change.
The term “unsustainable” has been Malloy’s second most used phrase behind “shared sacrifice.”
At Thursday’s press conference, Malloy said, yet again, that “The real significance of this agreement lies in the long-term savings it produces for taxpayers and the state of Connecticut,” and that what he negotiated with the unions will create the “systemic change” that will create a sustainable relationship with Connecticut’s state employees.
So what are the elements of that long-term relationship?
(1) Unfunded Pension Liabilities:
As of June 30 Connecticut’s state employee pension fund needed an additional $12 billion dollars in order to fully fund its obligations. Reduce the total liabilities of the State Employees Retirement Fund by the total assets and you have the figure that is called the unfunded liability. Most states maintain a funding ratio for their employee pension funds of between 75 percent and 125 percent. Connecticut had a funding ratio of about 52 percent before the economic downturn and before former Gov. M. Jodi Rell, SEBAC and the legislature agreed to defer a couple hundred million in pension payments in order to balance the budget over the last few years. The latest estimate is that Connecticut funding ratio has dropped us to the absolute bottom of the list with a pension fund ratio of only 46 percent.
If Malloy is correct and the labor agreement provides for significant structural change then the state’s pension fund liability should drop dramatically and the state’s funding ratio should go up dramatically.
The next regularly schedule actuarial report isn’t due until June 30, 2012 but the Malloy administration could strengthen its credibility on this issue by having an actuarial assessment done now to see if the changes are really as significant as he says they are.
[By the way, the underlying problem is that about 75 percent of the state’s liabilities are due to Tier I retirees and employees (or other existing retirees). Over 88 percent of all Tier I employees have already retired. Furthermore, since the labor agreement did not impact Tier 1 employees and only penalized the far less generous Tier II and Tier IIA retirement employees, contrary to what the Governor and Secretary Barnes have said, it is unlikely that this agreement has dramatically reduced Connecticut’s long-term pension obligation).
(2) Unfunded Retirees Health Benefits:
The other major long term state employee related state obligation is the retiree health benefits.
The state of Connecticut has not put ANY funds aside to pay for these required future expenses and instead has opted for a “pay-as-you-go” system in which the state only allocates enough money each year to pay for that year’s out of pocket expenses for retiree health insurance.
As of last June the unfunded liability for retiree health benefits was projected to about $27 billion dollars.
The labor agreement does include a provision requiring all state employees to pay 3 percent of their salary for a period of 10 years into a new retiree healthcare fund that would then be used to over-set the existing $27 billion state liability.
The 3 percent payment – a year for 10 years – was implemented for younger state employees as part of the previous Rell/SEBAC agreement. The Malloy/SEBAC agreement would expand that program for all state employees starting with 1/2 of 1 percent in FY ’13, 2 percent in FY ’15 and 3% in FY 15.
The 3 percent a year would equate to about $224 million a year. Over 10 years this would provide $2.24 billion or (if I have done my math correctly) about 8 percent of the funds needed to cover the existing liability. The Malloy/SEBAC agreement does require that the state deposit an equal amount into the new fund. Not counting for the benefit of compounding, the new play means that employees and the state would be putting in about 16 percent of what is needed over a 10 year period. While that is a critical step forward it doesn’t provide the funds necessary to cover the costs that they state is obligated to pay.
In any case, as with the state’s long-term pension obligation, instead of bickering about who is right and who is wrong, the Malloy administration could put an end to this whole debate by ordering an actuarial assessment on both the state’s pension obligation and the state’s healthcare obligation.
In that way, the public could have the information necessary to look past the Barnes vs. Cafero argument and judge whether the Malloy administration is or is not accurate when it says this agreement deals with what the governor has called the unsustainable relationship with its employees.
Aug 19
jonpeltoUncategorized layoffs, Malloy, SEBAC
With passage of the Malloy/SEBAC agreement the unnecessarily long and unnecessarily difficult process comes to an end.
Governor Malloy said this agreement was needed or he’d layoff thousands and shred the safety net. He said there was no other option.
Meanwhile there was never a doubt that Connecticut’s state employees were ready to make major concessions in order to save programs, services and jobs.
But power politics, political pandering and just plain meanness got in the way … and so here we are.
Now the Governor can rescind the layoffs and the extra cuts including the especially deep and offensive cuts to the good government agencies (Freedom of Information, Ethics and Elections Enforcement).
Meanwhile, there are so many issues and questions that remain unanswered — but most of those can wait for another day.
Just two quick questions;
(1). Will the Governor rescind the layoffs for the state employees who staffed the state’s consumer utility hot line? Remember Commissioner Esty eliminated the program even though it is paid for by the utility companies and even though every other state has a hot line for consumers who have problems with their utility companies.
(2). Now that Section 8 of the emergency budget is no longer needed -
The Governor no longer has the power to cut more than 10% of any given line it. But we still don’t know how this “secret” section made it through the Legislature. Its time for the Malloy Administration and the Democratic Legislative leaders to come clean and tell the public what happened.
Jul 29
jonpeltoLayoffs, Malloy, SEBAC, State Employees layoffs, Malloy, SEBAC, State Employees
(Cross-posted from Pelto’s Point at the New Haven Advocate)
Not, I will beat you up until you bring in your lunch money.
I’ve read some crazy stuff over the past six months as Connecticut meanders towards a budget resolution but the Hartford Courant takes the cake with their recent editorial entitled “State Employee Pink Slips Can’t Stop” and applauds the Governor’s decision to “continue with layoffs till unions vote.”
I actually had to read the commentary piece a few times before I could bring myself to believe what they were saying.
According to the Courant’s editorial,” If Mr. Malloy rescinded the layoffs now, the unions would have little incentive to vote on the agreement with dispatch” adding “ Mr. Malloy has to keep the pressure on by continuing apace with the layoffs plan.”
Wait, let me get this right.
If the Governor puts the layoffs on hold union members would be more likely to vote against the agreement?
The Courant’s editorial writers have no concept of how the collective bargaining process works and worse, are either ignorant or uncaring about the impact layoffs have on the families receiving those notices.
As a result of the Governor’s approach, another 600 Connecticut families (and maybe far more) will face the daunting challenge of becoming unemployed.
Gone will be their bi-weekly check that many use to pay their mortgage or day to day expenses.
Instead these families will have to turn to an overburdened Connecticut unemployment system.
Also gone is their health care insurance.
Beyond the incredible amount of wasted time and lowered productivity as both the state and the laid off employee spend their time filling out paperwork, these families – like thousands of other laid off Connecticut workers – will now be preparing for the school year by reducing their purchasing which in turn hurts Connecticut’s already weak economy.
But even putting all of that aside, the Courant editorial is disgustingly insulting.
We aren’t talking about telling a child that they must get their grades up before they can use their Xbox.
We are talking about hard working adults, who are trying to put food on the table, pay their bills, raise their families and remain productive citizens.
I’m not sure if Governor Malloy is writing editorials for the Hartford Courant or the Hartford Courant is writing speeches for Governor Malloy but their approach is cruel, mean-spirited and unnecessary.
Yes, everyone, including Connecticut’s state employees understands that if the Malloy/SEBAC deal fails – thousands of state employees will lose their jobs. In fact, 57 percent of those who cast their votes in round #1 voted yes and there is no reason to believe that the state employees won’t vote in favor again, now that some issues have been “clarified”.
There is simply no excuse for hurting hundreds, perhaps thousands of Connecticut residents.
Let’s face it. If the population being impacted was deemed a “valued” one, worthy of being treated with humanity, neither the Governor nor the Courant would be say “whatever you do, don’t stop punching them until they hand over their money.”
Jul 23
jonpeltoLayoffs, Malloy, State Employees layoffs, Mallloy, SEBAC, State Employees
(Cross-posted from Pelto’s Point at the New Haven Advocate)
Once again Dan Malloy’s rhetoric seeks to scapegoat Connecticut’s public employees and trivialize the fact that they have already voted in favor (and are working to fully adopt) the largest concession package in state history.
From his budget announcement last February to his press statement last night Dan Malloy has consistently said the wrong thing at the wrong time.
At 10pm last night Governor Malloy released a statement that an agreement has been reached between his administration and SEBAC and that another vote would be taken on a concession package.
According to Malloy, “This agreement saves the same amount of money as the last agreement– $1.6 billion over 2 years, $21.5 billion over 20 years – and it contains all of the same cost-saving provisions as the last agreement.”
With that, the Governor then concludes;
“I hope state employees ratify this agreement, but I am assuming nothing. If they ratify it, the vast majority of layoffs and painful spending cuts can be undone. If this agreement fails, then we’ll unfortunately have to continue to lay people off and implement the spending cuts.”
And with that the Governor renews his familiar role of making this process as difficult as possible.
With the SEBAC by-law changes, 50% of state employees must now adopt this plan to fully authorize it. Originally 57% voted yes (when 80% was needed). The language related to the health care change that worried many state employees as been removed to ensure that no one thinks this agreement is part of SustiNet – the State’s comprehensive health care reform law.
Governor, continuing to lay people off pending the vote is mean-spirited, bad for the employees and the families of those being laid off, bad for the people who rely on the essential services these employees provide and bad for the state’s economy during the greatest recession of our lives.
Malloy could and should have suspended the layoffs pending the vote.
And yet again we see the double standard.
If a Republican governor was doing what this Governor is doing and if a Republican governor put out a press release like the one Malloy put out last night, Democratic elected officials would be condemning the action.
But regardless of whether Democratic legislators are silent, Malloy’s actions deserve to be criticized.
Thankfully, Connecticut’s state employees care more than this Governor when it comes to preserving vital
services and doing the right thing.
Jul 20
jonpeltoMalloy, SEBAC, State Employees Malloy, SEBAC, State Employees
(Cross-posted from Pelto’s Point at the New Haven Advocate)
Dear Courant Editorial Writers;
In your editorial today you lectured state employees saying “Repeat after the governor: ‘clarifying’ doesn’t mean ‘better’ and then you go on to say that state employees should expect “no more sugar.”
At no time during the last few weeks did I hear any state employees demanding “more sugar.”
There were significant concerns raised about some of the health care language (as you note).
And I’m sure you too heard a lot of disgust with the way Governor Malloy (and SEBAC for that matter) handled the entire process.
Personally, I’m convinced that had the Governor returned to the table to “clarify” the issues the day they went down and then did a bit better in retraining his anti-state employee rhetoric, a clarified agreement would have already been adopted – by a super majority no less – and the July 1st raises would not now be an issue.
Now that SEBAC has changed its process the concerns can be quickly addressed and with a majority vote and the state government will get the largest concession package in state history.
Quite frankly, the assumption that states employees are trying to “get” a little more is not only absurd but insulting.
As you, yourselves, point out in your editorial, not only will this agreement balance the FY12-FY14 state budget but it will begin the process of putting “the cost of Connecticut’s state government on a sustainable footing for the long haul — by reining in health and pension costs”. Reading the courant editorials of late make me think you are actually writing them based on the rhetoric that is floating around rather than on the facts.
I understand politicians engaging in policy by rhetoric but it is certainly disappointing when it comes from the State’s “newspaper of record.”
Jul 20
jonpeltoMalloy, SEBAC, State Budget Malloy, SEBAC, State Budget
Yesterday, Governor Malloy was up in Litchfield Country touting tourism (something his revised budget cut deeply).
His message, for all to hear, was that he wanted an agreement with state employees finalized in the next 24 or 48 hours but he also made it clear that his plans for massive layoffs would continue (pending such an agreement).
Malloy said, “”We don’t have an approved agreement. We’ve been down this road. We will continue the process of notifications and laying people off, of moving forward as if there is no agreement in place.”
Yeah, Governor, we get it…you “mean business.”
You recognize that fear is a greater motivator and you certainly know how to give a good gratuitous kick to those that fear losing their jobs
But since you are the State’s chief operating officer and you say you really want to get this package done, how about taking a day off the PR trail, sitting down with the state employee unions, talking through the issues and actually help charter a new course for the state.
You talk about the structural changes that are needed and you certainly recognize that the $1.6 billion to balance the budget pales to the $20 billion you say an agreement will save the state over the next 20 years.
When you think about it, it is really hard to imagine that anything – anything at all – could be more important to the future of this state than your actual participation in making this agreement happen.
Jul 19
jonpeltoDemocratic Legislators, Layoffs, Malloy, State Budget Democratic Legislature, Malloy, SEBAC, State Budget
(Cross-posted from Pelto’s Point at the New Haven Advocate)
It is morning in America – or at least in Connecticut – as a “solution” to Connecticut’s immediate budget crisis takes shape.
SEBAC, the State Employees Bargaining Agent Coalition, has voted to change its bylaws and allow for another vote on a clarified SEBAC/Malloy concession package.
The change means that going forward a state employee concession package will only need the support of a majority of state employees rather than the 80 percent super majority that was required under the old rules.
Governor Malloy proclaimed “It’s good news that the unions have changed their ratification process to one that respects the will of the majority,” and announced that he will be dispatching his lead negotiator, Mark Ojakian, to meet with SEBAC leaders to prepare “a clarified agreement that’s ready to be voted on by all state employees.”
Other Democratic elected officials, who had mysteriously disappeared from public view, scurried back into the lime-light with the news.
Democratic Speaker of the House Chris Donovan released a statement saying “This is the responsible course of action, as we look to avoid the terrible cuts and layoffs that would do so much harm to our state,”
Meanwhile, the top two Democrats in the State Senate, Don Williams and Martin Looney, issued their own statement calling the SEBAC action “the news Connecticut has been waiting on for weeks.”
Even Democratic State Senator Edith Prague, who had long been considered a strong labor supporter, piped in saying “I literally prayed for days for something like this to happen… Plan B, all of those layoffs, would have been a disaster for everyone,”
Earlier Prague had some of the harshest criticism for state employees following the failure of the initial agreement to get a sufficient number of votes to pass.
So, call it joy in Mudville as Connecticut’s politicians do high fives all the way around.
Governor Malloy succeeded, with the help of the Democratic Legislature and various media outlets such as the Hartford Courant, to vilify Connecticut’s state employees.
Even though the vast majority of state employees supported the biggest concession package in state history (a package that according to the Governor saved $1.6 billion over the next two years and more than $20 billion dollars over the next 20 years), Connecticut’s politicians were able to shift responsibility for their own failures onto the backs of Connecticut’s public employees.
Malloy explained the need for action on the unsustainable state employee pension and healthcare systems.
The truth is that those systems were the product of negotiated collective bargaining agreements between previous Democratic, Republican and Unaffiliated Governors and all were approved by Democratic or Republican dominated legislatures.
The $9 billion unfunded liability in the state’s pension fund and the $25 billion hole in the state employee post-retirement health care fund are exclusively the product of the state’s failure to set aside the money needed to fulfill those commitments.
That is not to say that changes weren’t necessary but imagine taking on a large mortgage, not making payments and then being angry when the bank showed up and said you are in deep trouble and at risk of losing the home. And we aren’t talking about a sub-prime mortgage sold to some illiterate applicant or not being able to make payments due to a job loss.
This was year after year of simply not making the necessary payments to fulfill the legal and moral obligation to do the right thing.
But all of that was lost in the noise when Governor Malloy framed the debate in February.
If the state employees did not come through with an unachievable concession package, he – the Governor – would be forced to shred the safety net and lay of thousands of state employees.
And let’s be honest. It was never a question of whether state employees were willing to make major concessions – both short-term and long-term.
From the beginning it was a political game to determine who would “take the fall” for the tax increases and budget cuts necessary to balance the budget.
That and, of course, a way to divert attention from the actions that were or were not being taken by the Governor and the Legislature.
For example, thanks to all of the excitement around the concession package few will remember that the underlying budget fails to require the rich to pay their fair share, makes the deepest cuts in history to our public colleges and universities, undermines our landmark campaign finance and ethics system and provides for an ill-conceived merger of our state university and community colleges systems that will lead to ending the state’s long-time policy that anyone can seek the knowledge and skills needed to succeed by attending one of Connecticut’s community colleges.
The majority of state employees will be relieved that a “solution” to the layoffs is at hand while a minority of state employees will be upset and feel they have been “had” by their union leadership and the system.
And meanwhile, the Governor and Legislature will claim victory.
True our elected officials had to mislead the public and bully the state employees, but as the saying goes – “Tis better to look good than be good”.
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