By SUSAN HAIGHHARTFORD, Conn. -- Gov. Dannel P. Malloy and state employee union leaders announced a tentative deal Friday that covers $1.6 billion of the $2 billion in labor savings the governor was seeking over two years to balance Connecticut's deficit-plagued budget and protects unionized state employees' jobs for the next four years. The plan still needs to be ratified by the state's 45,000 unionized workers. They will be briefed on the details in the coming days and asked to vote on the proposed retirement and health benefit changes. They will also have to vote separately on any salary changes to the 34 bargaining unit contracts.
Malloy told newspaper executives in a conference call that the agreement includes a two-year wage freeze, followed by 3 percent pay increases and revised retirement and health benefits for new employees.
"While it didn't reach the billion-dollar mark in each year, it fell short only a little bit," said Mark Ojakian, the governor's lead negotiator in the discussions. "The future savings to the state from some of the structural changes are huge."Details of the plan were not released to the media, so it was unclear whether the proposed concessions and changes add up to $1.6 billion in savings over two years. Malloy said he wanted to honor an agreement with the unions and not release information about the agreement until the rank-and-file were notified.
The Democratic governor called the deal, reached after weeks of closed-door talks, "historic" and said it will save Connecticut taxpayers $21.5 billion over the next 20 years, mostly through changes to benefits packages. In the meantime, Malloy said the remaining $400 million gap needed to balance the two-year $40.1 billion budget will be covered with additional spending cuts and existing revenues. The budget includes a $369 million surplus in the first year and $635 million in the second year.
The budget also raises taxes by $1.4 billion in the first year and $1.2 billion in the second. Malloy said taxes will not be raised any higher to cover the remaining gap.
"Our agreement is historic in every way because of the way we achieved it," Malloy told reporters during an announcement at the state Capitol, surrounded by Democratic legislative leaders. "We respected the collective bargaining process and we respected each other, negotiating in good faith, without fireworks and without anger."
Malloy also agreed to rescind the first of nearly 5,000 threatened layoff notices issued this week to state workers.
Malloy's administration had prepared for the layoffs and hundreds of millions more in spending cuts, including large reductions in aid to cities and towns, just in case an agreement was not reached with the unions.
"I have said repeatedly that I had no desire to lay off people in the context of the difficulties that we're having," said Malloy, who received strong support from the state employee unions during last year's election. "No one should be surprised by the position that we took."
The tentative agreement contains no furlough days and no change in the 40-hour workweek.
Leaders of the State Employees Bargaining Agent Coalition, which represents 15 unions, voted unanimously Friday afternoon to present the proposed changes to the current health and retirement benefits contract, as well as a framework for changes in wages and working conditions, to their member unions.
"The agreement is intended to help reduce costs while protecting public services in the current and next fiscal years, and to help put Connecticut on a firmer footing for economic recovery," according to an internal SEBAC statement that was being distributed to rank-and-file members. The group said the $1.6 billion in savings will come from "labor cost reductions and service efficiencies." Union members have suggested cost-cutting ideas throughout the talks.
Fourteen of the 15 SEBAC unions must approve the proposed retirement and health benefits. They will also need to be ratified by 80 percent of the rank-and-file who turn out to vote. The approval margin needed to make changes to the individual bargaining unit contracts differs by each contract.
The two Republican legislative leaders questioned the administration's decision to promise no layoffs of unionized workers for the next four years. State employees have been protected from layoffs over the past two years because of a 2009 concession deal reached with former GOP Gov. M. Jodi Rell. They said Malloy's plan also extends the 20-year contract on health and benefits - something Malloy has strongly criticized former Gov.
John G. Rowland for signing - for five years, from 2017 to 2022.
"So if our economy gets significantly worse ... we can't right-size or downsize state government to deal with those economic conditions by even letting go of a single person," said Senate Minority Leader John McKinney, R-Fairfield.
State Republican Chairman Christopher Healy called the tentative deal a charade, saying there were no serious cuts made to the overall size of the state's workforce, which he estimates to be 78,000 people - a figure that includes part-time workers.
"This deal is insulting to anyone who can add two plus two and it will do nothing but certify the notion that 78,000 public sector employees own the heart and soul of the elected Democrats in (the) legislative and executive (branches)," he said.
Malloy's chief adviser, Roy Occhiogrosso, said the governor wants to shrink the size of state government and has begun the process of laying off about 100 non-union mangers. He said the no-layoff provision does not affect non-union workers and additional managers are expected to be cut as the governor attempts to reduce bureaucracy.
Senate President Donald Williams, D-Brooklyn, said he was pleased the agreement was reached because Malloy's alternative budget proposed drastic budget cuts.
"This was an extraordinarily difficult challenge," Williams said. "And the governor and state employees stepped up to meet that challenge."
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