Healthcare, Malloy, State Employees Healthcare, Malloy, SEBAC, State Employees
(Cross-posted from Pelto’s Point at the New Haven Advocate)
Will Value Based Health Care save American health care and the Connecticut budget?
Is what is being proposed really Value Based Health Care?
Is it a bit ironic that Anthem Blue Cross, the state’s primary health plan carrier, happens to be rolling out what it claims to be a Value Based Health Care Plan in the Northeast at the very same time?
When the news about the Malloy/SEBAC agreement started to trickle out, many people saw the proposed new “Value Based Health Care” as little more than a form of managed care on “steroids.”
But advocates for the coming changes say that, in fact, this new system is really one based on paying for performance (where the medical community is paid for keeping people healthy rather than the present fee-for-service system that pays doctors and hospitals for simply providing services, regardless of the actual outcome).
The new system is projected to be so much better that the Malloy administration and the State Employee Unions believe that, over the next two years, the state will be able to reduce its state employee health care spending by a quarter of a billion dollars.
Considering that the state will save about $140 million a year from the across-the-board wage freeze, the shift to Value Based Health Care will be the 2nd biggest element in the Malloy/State Employee Concession Package.
The proposed SEBAC agreement describes “Value Based Health Care” as a new system, in which employees will sign “a commitment form each year promising to get scheduled yearly physicals, age-appropriate diagnostics (such as a colonoscopy), and two free dental cleanings per year. In addition, employees with one or more of the 5 listed diseases (Diabetes, COPD or ASTHMA, Hypertension, Hyperlipidemia (high cholesterol), and Heart Failure) which respond particularly well to disease management programs and which are a large part of total healthcare costs––must enroll and comply with the disease management programs.”
As a result of the free office visits and reduced pharmacy co-pays for any of the listed diseases, plus the other elements of the disease management program, healthcare costs for everyone will go down.
The stick to the carrot is that “Employees who after proper notice refuse to sign the commitment or fail to get their physicals (or if they have a listed
disease, refuse to participate in disease management), will have a premium increase of $100 per month, and a deductible of $350 per person per year.”
Finally, “current retirees will also have the option to participate in value based health care, while new retirees will continue to have a choice of free (the POE Plan) or nominally charged (the POS Plan) health care for life, but will be required to participate in value-based health care or pay the $100 per month extra premium.”
So, if the SEBAC Agreement is approved and adopted, state employees and anyone retiring after 9/1/2011 will be required to participate in the new “value based health care system” or pay an additional $1,200 a year and have an additional $350 deductible per person, per year, on top of their existing deductibles and co-pays.
Google “Pay for Performance” or “Value based health care” for some additional background on these issues, but apparently plans based on this type of reform were initially developed in California in early 2000s, and England adopted a more robust system using value based healthcare in 2004.
One of the questions that immediately surfaces is whether the Malloy/SEBAC agreement is a true change to a “value based health care system” or merely an expanded employee wellness program. Employee wellness programs can be important for employees but do not fundamentally change the way in which health care is funded. Reading through the available literature on this topic, it appears that a true, value based health care system
(one in which doctors are paid for outcomes rather than services) might save money in the long run; but, according to experts, the “return on investment doesn’t start to really pay off for “several years.”
Another issue is question whether the large health insurance companies are really ready to oversee such an approach. They are only now gearing up to handle these new approaches to health care.
According to a report in the Crain’s Detroit Business journal last year, Anthem is offering a Value Based Health product in Colorado that “that guarantees up to a 3% reduction in subsequent-year premiums if plan members participate in screenings and health promotion programs that
lead to improvements in their health status.”
Crain’s also reports that an Anthem official, Greg Hughes, the company’s commercial product development director, said that the company was awaiting approval for a new “VBID product” that it planned to introduce in the U.S. Northeast.
To back up their claim that savings will be forthcoming, the Anthem official said, “the findings in the [research and medical journal] literature are very compelling. We’ve also had some pilot groups with outstanding results from both a clinical and financial perspective, generally in the [administrative services-only] space,” Mr. Hughes said also, “but if it works in the ASO population, it’s a natural fit to start doing it in the fully insured market.”
Interestingly, the description of the new Anthem plan is very similar to the language being used in the Malloy/SEBAC Agreement. The Business Journal, quoting Anthem, said, “the product will attempt to remove the cost barrier to medication compliance by reducing copayments for high-value drugs and medical services while encouraging plan members to participate in the insurer’s condition management education programs…Initially, it will target five conditions: asthma, diabetes, coronary artery disease, chronic obstructive pulmonary disease and congestive heart failure.”
But unlike the win/win situation being projected in Connecticut (no increase in premiums and savings of a quarter of a billion dollars in two years” the report goes on to say that, “because of the additional cost of lowering or waiving copayments for prescription drugs and some services, the Anthem official explained, “The pricing is still being worked out…The promise of a value-based insurance design is to make an investment in your employees. When you do that, you are really looking at increasing the plan’s cost.”
In true health care industry fashion, another Anthem official said that it wasn’t so much about reducing premiums as about increasing employee
productivity. “One thing fully insured clients will benefit from is the effect on overall productivity…when their employees are compliant and educated, they’ll see decreased absenteeism, disability costs and increased productivity.”
Good news about the increased productivity, since the Malloy/SEBAC plan also relies on more than 1,000 employees leaving state service and not being replaced next year.
Here is the link to the Crain’s story for those interested in reading more: http://www.crainsdetroit.com/article/20100315/HEALTH/100319908/fully-insured-market-has-yet-to-embrace-value-based-design#
Malloy, Pension, State Employees Malloy, SEBAC, State Employees
(Cross-posted from Pelto’s Point at the New Haven Advocate) [apologies for the formatting issues]
Connecticut’s state employees were always going to be part of solving Connecticut’s budget crisis. A wage freeze and concessions were never not going to be part of some final fiscal package.
What was in question and remains in question is whether rhetoric and political pandering were going to get in the way of common sense solutions.
And now, after months of negotiations and unnecessary bullying on the part of the Governor, rank and file state employees are angry, hurt and upset. Meanwhile, the union leadership and the Malloy Administration has produced this incredible, some would say, unbelievable package.
Instead of a win/win situation where state government could move forward with a spirit “all for one and one for all”, Connecticut’s state employees have been put in a lose/lose situation.
I would never suggest how an individual state employee should vote…. But I know this, this debacle never had to happen…
So how did we get here?
On that day in February when Governor Malloy first proposed his budget, it was clear that the $2 billion dollar “state employee concession package” a gimmick and a fraud. However, the governor and his administration said over and over again that they could and would achieve $1 billion in savings for next year and an additional $1 billion in the following year.
Democratic legislators went along with this farce, even passing a budget that assumed the $2 billion would be achieved.
The Connecticut media, for the most part, took the rhetoric at face value and never dug deep to find what was on Malloy’s “secret plan” that added up to $2 billion.
Last Friday, when Malloy and SEBAC announced their concession agreement they said that they nearly reached the $2 billion goal with a plan that would save $700 million next year and $900 million the following year.
At last night’s JJB Democratic fundraiser, Governor Malloy went out of his way to taunt those who said the $2 billion dollars couldn’t be achieved.
Calling those who doubted his budget “naysayers”, the governor pointed to the concession package and said “Last Friday they proved themselves wrong again…The naysayers never go quietly into the night.”
Governor Malloy could not have been clearer and those of us who raised questions were left to wonder…while $700 million was not the promised $1 billion, how did they achieve $700 million in savings in next year’s budget and another $900 million in FY13.
Today the details of the agreement were released.
They speak for themselves;
On top of the $138 million true savings from a wage freeze there are millions, maybe even tens of millions, maybe even $100 or so million in true savings.
There is $110 million in savings from using more technology and finding other “efficiencies”.
There is $183 million in proposed healthcare changes. Changes that are, quite frankly stunning in their reach.
Among other things, our state employees will enter a new era of “managed care” in which if employees just do what their doctors and the plans require them to do, the state will miraculously save over $100 million dollars… thanks to healthier patients starting on July 1.
And for those who don’t follow the rules, they will have to pay an additional $1,200 plus a year for insurance.
And there is the $65 million savings that will come from reducing the state work force by 1,000 employees (no reference to where and how that might be done but it is presumed there will be a mass exodus of early retirees). The state budget already increases significant attrition savings. It is called the “lapse figure” and assumes every agency “saves” money by not filling positions, at least for a part of the year.
And finally there are multiple changes to the state’s pension system going forward. Most of the changes take place in a few years to allow the most senior state employees to bail out before the changes take effect. Incredibly, the money “saved” is not being left to better fund Connecticut’s extraordinarily unfunded pension system (we are presently among the 5 worst funded states in the nation). Instead we are apparently saving the money by reducing the pension payments. The one moment we have to put the system on better footing and we are pulling out the funds to balance the FY13 budget.
Many of us couldn’t imagine how the two sides could reach a concession package that ‘saved” $300 million let alone $500 million or a $1 billion.
Now we know what they did…
One word… “unimaginable.”
Wage Freeze ($138,852,400)
Pension Savings due to 2 year wage freeze ($69,316,000)
Change the minimum COLA ($32,525,000)
For individuals who retire after 9/2/11 from 2.5% to 2.0%.
Change the Early retirement reduction factor from 3% to 6% ($35,000,000)
for each year before eligible to take Normal Retirement with
associated health care savings
Technology Initiatives: ($40,000,000)
Utilize new technologies and reduced licensing procurement and consulting costs
SEBAC Budget Savings Initiative ($70,000,000)
Implement savings ideas proposed by employees to reduce
costs in agencies through reduced procurement costs, more efficient agency operations and other
Longevity – No longevity payment October, 2011 ($7,000,000)
to those units with capped longevity and an equivalent savings
amount would be negotiated from those with uncapped longevity.
No one during the biennium will have those years count for that period.
Individuals first hired on or after 7/1/11 (military service counts) would never receive
a longevity payment.
Health Plan Change ($1,200,000)
$35 Emergency Room co-pay; Certain cost savings changes where individuals would have to get preauthorization before a second MRI etc.
Value based health and dental ($102,000,000)
Provide a Value based health and dental care plan under which individuals
and their families could chose to participate and agree to follow
a plan and physician recommended physicals, disease management protocols
and diagnostic testing. Failure to comply would result in the individual
and their families being placed in the Non value added plan with the
concomitant cost increase. The cost for this plan would be the same as the
current plan plus any scheduled experience determined increases.
Value Added for Retirees–voluntary for current Retirees; Mandatory
for individuals who retire on and after 9/2/11. If new retirees elect non value added, cost is $100 per month.
Non value based health and dental ($18,000,000)
If the employee chose not to participate their cost for healthcare would be
the same as calculated in the first year for Value based, plus $100.00
per month additional. Institute a $350 Medical Deductible per year per individual.
Reduce Costs with Generics ($1,500,000)
Drugs coming off patent
Tobacco and Obesity ($1,000,000)
Reduce costs through voluntary referral program
Other Health Cost Containment Initiatives ($40,000,000)
The Healthcare Cost Containment Committee will identify additional
cost savings through renegotiation of contracts and improved service delivery
Pharmacy Co-pays/Mandatory Mail Order ($19,876,000)
Increase to $5, $20 and $35 for non maintenance drugs.
Additional drugs coming off patent which will now be available as generics. Mandatory Mail Order- maintenance drugs for active employees, future
retirees and current retirees under 65 must be ordered through the mail.
Voluntary for current retirees over 65 (mandatory once enrolled).
Minimum Service for Retiree Medical ($3,822,000)
Increase to 15 years of actual state service for Normal, early retirement and HD retirement
with continuation of Rule of 75 for Deferred Vested.
Cap salary that can be considered ($2,400,000)
As part of an individual’s pension benefit as provided under the Internal Revenue Code
Increase number of retirees due to absence of ERIP; ($65,0000,000)
Reducing the number of state employees by 1,000 plus due to attrition – read retirement incentive – (Worse, in
many ways this is a double count since the “lapse” figure already assumes natural attrition)
New Retirement Program (Applies to people in Higher Education) ($10,750,000)
Provide the availability of individuals in the Alternate Retirement Plan to switch
to a Hybrid-Defined benefit/Defined contribution type plan.
(This is a big “positive” for faculty in higher education, stay tuned)
Increase Age of Retirement: ($22,000,000)
For current employees who retire after 7/1/2022, Normal Retirement eligibility
increase from Age 60 and 25 YOS or Age 62 and 10 YOS to age 63 and 25 YOS or
Age 65 and10 YOS. By 7/1/13, present employees may elect to pay the actuarial
pension costs of maintaining the normal retirement eligibility that exists in
the present plan which is scheduled to change effective July 1, 2022.
New Tier III
For individuals hired after 7/1/11, Normal Retirement eligibility Age 63 and 25 YOS
or Age 65 and 10 YOS and salary based on Final five year average; HD 20 Years
of HD service and age 50 or 25 Years of HD Service regardless of age and salary
based on final five year average pay; Early Retirement Age 60 and 15 YOS; Ten
year cliff vesting.
Increase the Employee Contribution to 3% for Retiree health care trust fund
for all employees, (not just new employees) phased in beginning 7/1/13. This is a 3% cut in pay starting in FY14. (It is the 7 furlough days for life, but you have to show up to work in order not to get paid).
So , as my introduction observed, after months of negotiations and unnecessary bullying on the part of the Governor, rank and file state employees
are angry, hurt and upset. Meanwhile, the union leadership and the Malloy Administration has produced this incredible, some would say, unbelievable package.
Instead of a win/win situation where state government could move forward with a spirit of all for one and one for all, Connecticut’s state employees have been put in a lose/lose situation.
As I said earlier, I would never suggest how an individual state employee should vote….
But I know this….this debacle never had to happen.
Malloy, Pension, State Employees Malloy, State Employees
Taking the Governor and state unions at their word, Connecticut’s media outlets reported Friday that the new state employee concession package will save Connecticut $1.6 billion over the next two years.
Although Governor Malloy repeatedly said that nothing less than $2 billion would do, the $1.6 figure was touted as a major victory by all involved.
Actually, it turns out that the Malloy Administration projects savings of only $700 million in the first year and $900 million in the second year leaving the existing approved budget about $300 million dollars in deficit for the fiscal year beginning July 1, 2011.
To address this new deficit the Governor said he would make up the gap with additional budget cuts and by using some of the unanticipated revenue that has been coming in recently. (Thank you Connecticut gas tax #2).
Both sides agreed to keep the details of the deal secret in order to provide the SEBAC union coalition time to educate their members about the agreement.
Without knowing the details it is impossible to determine the accuracy of the projected $700 million figure. The few details about the package that are public include:
(1) A wage freeze for two years for all unionized employees
(2) After the two year wage freeze, unionized state employees would receive 3 percent pay increases 2013, 2014 and 2015
(3) Newly hired state employees would no longer be eligible for longevity pay (but of course new employees would not have qualified for longevity payments for 10 years anyway but it sounds good)
(4) The age of retirement would be increased from 60 to 63 for Tier II employees and 62 to 65 for Tier IIA employees but apparently that change would not take place until 2017
(5) Although the 4 year no-layoff clause would cover all unionized employees, it would not protect non-union managers who could be laid off the next two years
(6) Finally, by all accounts the agreement includes “big changes to the health insurance plan.”
In addition, among the rumored changes will be a new requirement that all employees will have to contribute 3% of their salary to help fund the cost of state retiree health benefits. Connecticut has huge unfunded liabilities for future state employee pensions and retiree health benefits and this change would begin the process of addressing the retiree health fund crisis.
One side note, the Governor was especially keen on pointing out that there were no furlough days in the agreement. At his Friday press conference announcing the agreement he said “One more point: there are no furlough days in this agreement, nor is there a reduction in the 40-hour work week. This means we’ve achieved these savings without reducing government’s ability to serve its constituents, and without reducing employees’ productivity.”
It is an impressive agreement by any standards, but the real question is: If it actually saves $700 million next year, then what has not been revealed and why?
A real wage freeze saves about $160 million and having employees pay 3% of their salary to fund retiree health benefits “saves” about $100 million.
Together these two items save about $260 million, so if they are being truthful about the $700 million, there is only $440 million to go.
Those must be pretty damn impressive changes to healthcare and benefits.
In addition to the changes in retirement age (which would save some money down the road), certainly look for reductions in the annual Cost of Living Adjustments for retirees, and perhaps a change in how a retiree’s pension is calculated. (Maybe using their average salary over a five-year period rather than the present three-year system).
However, that still doesn’t come close to explaining where an additional half a billion in concessions is coming from.
Last, but not least, back to the interesting point that the Governor felt he need to highlight the fact that no furlough days are part of this agreement.
Many states and even some private employers have been using furlough days. Employees are told to stay home a certain number of days and that way the employer doesn’t have to pay them for that day of work. It serves as a temporary (one year) reduction in pay without actually cutting the
employees pay over the long-term. In Connecticut, each furlough day saves about $14 million dollars.
By requiring state employees to pay a new 3% of their wages to retiree health benefits, the employee is getting a true 3% reduction in salary. This is equivalent to instituting 7 days furlough a year for the duration of a state employees’ career. The only difference is employees will actually have to go to work in order not to be paid.
It will be interesting to see what happens next.
And don’t forget that 14 out of the 15 SEBAC unions must vote yes to implement the pension and health care changes.
Individual unions could still accept the wage freeze but without the pension and health care changes the total amount saved won’t even be 20% of the amount that has been publicized.
Malloy, State Employees Democrats, Malloy, State Employees
The date was March 2, 2011: Day 1 of the Malloy/State Employee negotiations.
“But before we think that Connecticut and Wisconsin have nothing in common when it comes to the rights of workers, let us remember that efforts to undercut unions and the rights of employees to join together for their common good come in a variety of forms.
Like bullying, anti-union efforts can be overt, covert or both.
Bullying occurs when a “person intentionally inflicts injury or discomfort upon another person, through physical contact, through words or in other ways”. It is behavior that seeks to intimidate, offend, denigrate or humiliate a person or group of persons.
As we know, now more than ever, bullying is a form of abuse that is often perpetrated on another as a way to intimidate someone to take some particular action.
Governor Malloy’s entire budget is based on state employees agreeing to make $2 billion dollars in wage and benefit concessions.
Anyone familiar with Connecticut’s state budget knows it is a number that literally cannot be achieved and the Governor purposely put out a number that is designed to fail.
Disguised as shared sacrifice, the Governor’s proposal is scapegoating of the worst kind since he has repeatedly connected his demands to the state employees with the warning that if the state employees fail to provide $1 billion in annual savings, he will be forced to shred the safety net and lay-off thousands of employees at a time the unemployment rate makes it clear that many of those laid off will not be able to find jobs.
Malloy has been very clear. If state employees don’t come up with a billion dollars in concessions – this year – the most vulnerable and needy people among us will be hurt and the fault will lie squarely with the state employees and no one else.
Even today, as the Malloy Administration and the state employee unions prepare to officially sit down for the first time, Malloy’s chief political advisor said that the “governor hopes and expects the talks to be productive and will produce the money that’s necessary to help balance the budget,”
The facts could not be clearer.
Saying that his budget is balanced when he knows it is not and then setting up Connecticut’s state employees to take the fall is more than a gimmick, it is nothing short of a mean-spirited form of bullying.
The definition of bullying is clear. A person or group is being bullied when “exposed, repeatedly and over time, to actions that seek to intimidate, offend, denigrate or humiliate.
Let’s face it, today the Connecticut’s Public Employee Unions will be sitting down with representatives of an Administration that would be expelled from school or fired from the workplace for the intentional bullying that they have perpetrated.
Flash Forward: May 10, 2011…. Now let’s ask the question again, is Connecticut really that different from Wisconsin?
Malloy, State Employees Malloy, State Employees
Ironic – to say the least – as 4,700 state employees get layoff notices.
It is quite a story. A Democratic Governor, a Democratic legislature and now 4,700 Connecticut state employees and their families await news that they will be joining the ranks of the unemployed.
It could safely be called the greatest anti-public employee initiative since Connecticut adopted collective bargaining in 1974.
Over the past 37 years Connecticut’s public employees have faced their ups and downs. We’ve even seen layoffs before. John Rowland, for example more or less laid off 3,000 state employees for a bit..
But in all these years we haven’t seen a time like this where 10% of Connecticut’s state work force awaits the news that they are the victims of an ugly game of chess in which the real goal is force the public employee unions and state employees to take on an unfairly large share of the burden of balancing the budget.
All this while the Democratic Party holds control of the Governor’s Office and maintains strong majorities in the State Senate and State House of Representatives.
So what is the problem?
Overarching everything seems to be the sense that the public demands blood and state employees must be sacrificed to prove that our elected officials truly recognize that politics as usual cannot continue.
It is not as if Connecticut’s state employees failed to recognized the notion that these are difficult economic times and they must share in the sacrifice.
On top of paying the higher taxes that all middle income families will be paying, state employees and the unions that represent them have known all along that a significant concessions package would be needed to balance the state budget. Wages freezes, furlough days, higher co-pays and deductibles, increased pension payments were all going to be part of the “solution” that ensured that state employees were going to pay more than their fair share.
The problem was – and is – that when Governor Malloy selected the figure of $2 billion in required concessions, he chose a number that was simply not achievable.
And so now the process has played out to its predicted end.
There is no question in my mind that the goal was and has always been to ensure that if additional cuts were needed to balance the budget, the public blame for that catastrophe was blamed solely on state employees and not elected officials.
Governor Malloy deserves credit for sticking to the script. If the $2 billion in concessions was not achieved thousands would lose their jobs and then he would have no choice but to make deep cuts to Connecticut’s safety net which would regrettably hurt Connecticut’s must vulnerable citizens.
And through all of this, as noted previously in this blog, there is nothing but silence and complicity from Connecticut’s other Democratic leaders.
Sadly this charade has also been perpetuated by much of Connecticut’s news media which has praised the Governor for his “political courage” and failed to point out the obvious that under no circumstances was $2 billion in labor concessions ever achievable.
Now,there are another 4,700 Connecticut families who have joined the ranks of people who fear that they may lose everything;
Tens of thousands will be impacted by the Plan “B” budget cuts.
And this debacle has played itself out without any effort to find a truly fair and workable solution to Connecticut’s budget crisis.
What a mess…
Malloy, State Employees Malloy, State Employees
Apologies for the typos in this blog post….tried posting from a blackberry…. will never try that again!
Since there are comments attached, I’ll fix a couple of problems but won’t take it down.
That’s about how I’d explain my feelings as I watch the train wreck that is taking place in Hartford.
The Governor, elected as a Democrat, seems increasingly comfortable with his role as Lead Bully in the ongoing effort to scapegoat Connecticut’s
public employees. As if reading from the script of an old western that they jacked Malloy looks into the camera, narrows his eyes and proclaims, as
recorded in the CT Mirror, “They know the deadline. I know the deadline…There’s not a lot of time before we have to start to do things.”
Meanwhile, Malloy and his political spinners talk, as if they deserve praise, that he has decided to delay sending out 4,700 layoff notices for an additional day and remain “hopeful” that state employees will capitulate and produce $2 billion dollars in concessions that are needed…
Or the Governor will be forced take it out on Connecticut’s most vulnerable citizens by implementing devastating cuts to the state’s safety
net and other vital programs.
And through all this, as noted previously, there is nothing but silence and complicity from Connecticut’s other Democratic leaders.
For more on the latest check out http://ctmirror.org/story/12520/layoff-notices-hold-again-talks-continue and http://www.ctnewsjunkie.com/ctnj.php/archives/entry/malloy_remains_hopeful_but_time_is_running_short/
Or perhaps skip straight to Colin McEnroe commentary piece in yesterday’s Hartford Courant entitled “A Budget In Wonderland” where he writes “I was trying to remember whether I had ever seen this done before. I have covered many state budgets but have then usually engaged in trepanation — the primitive process of punching a hole in the skull to treat intracranial diseases such as seizures, migraines or remembering speeches by former Sen. Richard Bozzutto. I don’t think I remember the state passing a budget $1 billion of which will be arrived at a later date by some combination of threats and finagling. I think it’s even in the constitution that the budget has to balance…But then I think: “Hold on, Mr. Gloomy! Turn that frown upside down! When did you start insisting that the Connecticut legislature and governor make sense? That’s like demanding that Lewis Carroll be bound by the laws of physics.”
Stay tuned, more to come.
Malloy, State Employees Malloy, State Employees
Earlier today the Malloy Administration informed the State Employees Bargaining Agent Coalition (SEBAC) negotiators that they will NOT BE issuing layoff notices to unionized state employees before next week.
Whether the decision was based on politics or policy remains a mystery.
Perhaps the Governor’s people realized that bullying tactics would backfire.
More details as they become available.
Malloy, State Employees, State Legislature Democratic Legislature, Malloy, State Budget, State Employees
REVISED AND UPDATED (cross-posted from Pelto’s Point at the New Haven Advocate)
The ugly truth facing Connecticut became increasingly apparent Wednesday as Governor Malloy signed into law a new state budget that is $2 billion out of balance.
A budget that from the very beginning was designed to fail while making Connecticut’s public employees the scapegoats for the state’s fiscal problems.
Over the last 48 hours, relying on unachievable concessions from Connecticut’s state employees, Democratic Legislators approved Governor Malloy’s plan that will eventually lead to massive cuts to vital services.
Rather than confront that truth and raise sufficient revenue or identify and approve additional cuts the Democratic majority held fast to the lie that $2 billion in concessions could be achieved.
However, with only 45,000 active state employees, a legal impediment to reducing the benefits provided to retirees and a legacy of underfunding Connecticut’s state employee pension and health care costs it is literally impossible to achieve a $2 billion concessions package that would survive the negotiation and approval process.
Now, with the budget approved, this twisted approach to governing moves forward as the Governor announces that tomorrow he will issue 4,000 lay-off notices and that “everything is on the table” for additional cuts.
The magnitude of the budget lie is becoming apparent.
4,000 Connecticut state employees and their families now wait in fear for the news that their lives will be plunged into chaos as they are thrown into the world of unemployment during the greatest economic downturn of the past 50 years.
Adding insult to injury, laying off 4,000 employees will not only impact the quality and availability of important state services but it will only “save” the state about $300 million leaving a hole of at least $700 million in the coming year’s budget.
According to the Governor’s rhetoric, this “deficit” will only be eliminated through additional cuts rather than additional revenues – despite the fact that the new budget gave Connecticut’s super wealthy a pass on being required to pay their fair share in taxes.
Cutting $700 million more on top of the record cuts that have already been adopted will have a profound and devastating impact on Connecticut’s most essential services. The quality of life for tens of thousands, including some of Connecticut’s most vulnerable citizens is now at risk because legislators would not face the reality that they were voting on a fraudulent budget plan.
Meanwhile, like so many politicians around the country, Governor Malloy continues to blame this impending disaster on public employees as he ramps up a game of psychological warfare to force concessions and set the stage for cuts in services that can then be blamed on the state’s workers.
And as this horrible strategy plays out there is nothing but silence from Connecticut’s Democratic officeholders.
Imagine if Pratt & Whitney announced 4,000 layoffs.
No, better yet, think back to the times that Pratt has announced layoffs of far fewer employees. Rallies with Democratic politicians on the picket line calling for investigations, demanding meetings and charging that the company is engaged in union busting.
But now when the shoe is on the other foot and a Democratic CEO who is unfairly targeting employees….Silence.
Malloy, State Budget, State Employees Budget, Malloy, State Employees
Cross-posted from Pelto’s Point (New Haven Advocate)
Connecticut media are abuzz today with reports that Gov. Dannel Malloy’s “Plan B” to dealing with historic deficits ($1 billion in concessions from public-sector workers) may be cutting $1 billion in state aid to Connecticut’s cities and towns.
The question is whether this is another case of Malloy’s psychological warfare to demonize Connecticut’s state employees or a political gimmick gone bad.
For an administration that can’t get out of campaign mode, the evidence actually suggests the latter.
The Associated Press reports that, “Connecticut cities and towns would lose one-third of their state aid under a contingency plan Gov. Dannel P. Malloy has requested in case there is no agreement on $1 billion in union savings and concessions to help balance his budget.”
The Malloy administration has even created a list that reduces every local government’s state aid by 35.83 percent.
However, when the Connecticut Post asked Roy Occhiogrosso, Malloy’s chief advisor, about the $1 billion cut-list (which was leaked to the Post on Tuesday), he said it was developed in response to complaints about why Malloy hadn’t balanced Connecticut’s budget without raising taxes.
Occhiogrosso said cutting $1 billion in aid to cities and towns would be like New York Gov. Andrew Cuomo’s plan to cut $4.65 billion in aid to New York’s cities and towns. Occhiogrosso pointed out that the cut-list’s town-by-town breakdown indicates just how devastating a $1 billion cut would be.
Meanwhile, the Connecticut Conference of Municipalities, the state’s primary lobbying arm for local governments (and an organization that Malloy once chaired) called the plan a “doomsday budget.” It said: “A billion-dollar cut in municipal aid will result in massive municipal employee and teacher layoffs across the state.”
Yet later that same day (Tuesday), the governor’s office was handing out the $1 billion breakdown to reporters and Occhiogrosso was saying to the Associated Press and other media “There are only so many places where you can go to get large sums of money to get to $1 billion, if that number is not reached in discussions with labor … Municipal aid is certainly one of those places. It represents a large portion of the budget.”
Occhiogrosso added “There are different scenarios being looked at — municipal aid, reduction in state agencies’ (budgets), several different scenarios. The governor’s been pretty clear that one thing will not happen. Taxes will not rise beyond what he has already proposed … Everything else is on the table.”
So what exactly is this “doomsday budget”?
Is it a document designed to explain Malloy’s decision not to use Cuomo’s approach. Or is it a genuine plan to destroy every town’s local budget and local school system if state employees are unable to come up with the unachievable $1 billion in concessions.
Either way, it is a maneuver more in line with a political campaign than the thoughtful approach of a chief executive.
For me, the primary clue to what is going down is that Malloy’s town-by-town breakdown does not differentiate between towns that could survive a massive cut in aid and those that could not. Whomever authorized this list decided to simply cut 35.83 percent from every town. No reasonable policymaker, especially no Democrat, would ever propose cutting municipal aid by the same percent in every town.
The fact is a cut in municipal aid of more than a third to a town like Greenwich, with its extraordinary tax base and limited municipal demands, would create far less damage than a similar cut to a city like Hartford or Bridgeport.
It is more than far-fetched to think that this $1 billion cut-list could really be part of Malloy’s “Plan B”.
The Malloy people would do themselves and the state a big favor by developing a “real” Plan B if they can’t squeeze the billion from the state’s employees.
Malloy, State Employees Malloy, State Employees
Cross-posted from Pelto’s Point (New Haven Advocate)
A “shout out” and thanks to Keith Burris, the editor of the Journal Inquirer, for adding his voice to the call for Governor Malloy to reveal his “secret” plan to get $2 billion in concessions from Connecticut’s state employees.
The Middletown Press ran Burris’ piece here – Time for Malloy to come clean
On the issue of the Governor’s proposed solution to Connecticut’s fiscal crisis and his plan to balance the budget with $2 billion in employee concessions, Burris points out that “there is one massive gap in the governor’s mathematic and political reasoning…We still do not know where Malloy expects the state employees to make their sacrifices. Where, exactly, will the billion a year come from?”
Malloy has repeatedly talked about shared sacrifice and transparency in government and Burris successfully calls Malloy to task when he writes “The time has come for the governor to reveal to us what he has proposed to the unions. In fairness to state workers and in fairness to the taxpayers, tell us what the plan is.”
Governor Malloy’s budget does rely on $2 billion is employee savings.
Malloy’s advisor and spokesman has even gone so far as to say that they have a plan to achieve that number but they will not reveal it.
Burris’ response to Malloy’s secret plan is absolutely correct.
“Tell us what you are proposing to the unions, Governor. Put your cards on the table. The public has a right to know. It will only help your credibility and your bargaining position to reveal what is behind that curtain.”
Hopefully others will pick up the call as well. It’s time for Malloy to “come clean” on his secret plan.