Malloy announcing deal with Conn. union leaders

  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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CT Gov. Malloy issues layoff notices amid labor talks

  By SUSAN HAIGHHARTFORD -- Connecticut's Democratic governor increased the pressure Tuesday on state employee unions to agree to $2 billion in concessions and other savings over two years and began issuing the first of more than 4,700 layoff notices to workers.

A full accounting of how many people received notices, effective July 1, was not expected from Gov. Dannel P. Malloy's office until Thursday. Roy Occhiogrosso, the governor's senior adviser, said the process would continue throughout the coming weeks as various bargaining units have different notification requirements.

"The governor is very sensitive to the fact that there are people who are being impacted by these decisions. He understands the angst they feel, that some people are angry, some people are nervous. (He) didn't want it to come to this. (He) still hopes there can be a deal that will make all of this go away, but has to do certain things to prepare for a scenario in which there is no deal," Occhiogrosso said.

One state technical school employee told The Associated Press that she was informed by a supervisor Tuesday that she's among 1,350 technical school workers who will lose their jobs as of July 1. The employee would not give her name because of the sensitivity of the discussions Leo Canty, second vice president of the American Federation of Teachers, said Malloy's so-called "Plan B," an alternative budget being considered in case there is no deal before the fiscal year ends on June 30, basically shuts down the vocational technical high school system.

Malloy had delayed issuing the notices Friday to give both sides more time to talk. But Occhiogrosso said the new governor, who received strong support from union members in last year's campaign, decided to begin issuing layoffs on Tuesday because not enough progress had been made to warrant further delay.

In the meantime, talks were expected to continue, but on a "day-by-day basis," according to Matt O'Connor, spokesman for the State Employees Bargaining Agent Coalition, the group that represents 15 state employee unions in the closed-door talks.

"They will be talking today and hopefully tomorrow and hopefully reaching a deal," Occhiogrosso said. "Today's action in no way, shape or form should be seen as an indication that there will not be a deal. The governor still hopes very much to reach a deal, but this process, this parallel process has to continue."

Union leaders had met with Malloy's staff over the weekend and until early Tuesday morning in hopes of reaching a deal. Both sides have been tight-lipped about any specifics from the talks, but Malloy referred to trying to bring state workers' benefits - wages, healthcare and pension benefits - "more in line with those enjoyed by their counterparts in the private sector and in the federal workforce."

He said the union leaders have not offered enough so far.

"I simply refuse to dig us into a deeper hole," said Malloy, referring to Connecticut's various fiscal problems, including large, unfunded pension liabilities for state employees.

Despite the impending, steady stream of layoff notices, news that raised tensions among many state workers on Tuesday, O'Connor said union leaders still wanted to continue the talks and try to avoid job cuts. O'Connor said the unions strongly believe that layoffs will further harm Connecticut's economy, which already boasts a 9.1 percent unemployment rate.

"We're still involved in this process of working hard," he said. "Our leaders remain committed. They are very dedicated to reaching a mutual agreement. As long as we're still talking, nothing is holding that process up."

The layoffs are expected to save $455 million in the first year of the two-year, $40.1 billion budget, according to the governor's budget director. To make up the $545 million difference, Malloy has also ordered the state budget office to begin the process of making additional spending cuts. Malloy's budget chief last week provided the Democratic governor with the "Plan B" budget that included $1.2 billion in additional possible cuts that affected all aspects of state government and included large reductions in state aid to cities and towns - something Malloy has tried to avoid because property taxes would increase.

Many of those possible budget cuts would involve closing or scaling back various state programs. Occhiogrosso said those reductions could boost the projected 4,742 job cut figure over 5,000 positions. The reductions affect both union and non-union workers.

If that happens, it would be the largest state layoff in recent memory for Connecticut state government. According to union officials, there were 2,800 job cuts in 2003 under then-Republican Gov. John G. Rowland and 3,600 in 1992 under then-Independent Gov.

Lowell P. Weicker Jr. The state is still dealing with lawsuits involving the 2003 layoffs.

For Malloy, that would be unwelcome notation in the state's history books.

"I want to be clear that this is not the road I wanted to go down," Malloy said in a written statement. "I didn't want to lay people off, and I didn't want to make additional spending cuts beyond the $780 million in spending we've already cut. But I have no choice."

The budget signed into law raises taxes by about $1.4 billion in the first year. Malloy has said he's unwilling to raise taxes any higher.

There are approximately 45,000 unionized state employees in Connecticut and an estimated 50,000 overall.

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