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Union Deal Shot Down; Malloy Pledges To Cut Close To 7,500 State Workers

Coalition Leaders To Meet Monday On Possible Next Steps

CHRISTOPHER KEATING

June 24, 2011

HARTFORD — Gov. Dannel P. Malloy said Friday that he was moving "full steam ahead'' with plans to lay off 7,500 state employees, as leaders of the AFSCME union announced that their members had officially rejected a savings and concession deal that would have given them layoff protection for four years.

The administration has ruled out a renegotiation with the unions because the multi-faceted agreement took months of intense negotiations and compromises to complete. Malloy said he and his budget team intend to release layoff notices "as soon as possible'' to balance the budget.

I have a big job to do, and we're going to do it,'' Malloy told reporters Friday. "Listen, I don't want to be laying off 7,500 people or more. I think it's bad for the economy. I think it's bad public policy.''

It would have been unnecessary had the rank-and-file state employees ratified the estimated $1.6 billion savings agreement. The deal's failure became official Friday when the state government's largest union, the American Federation of State, County, and Municipal Employees, rejected the deal with about 55 percent of the members voting against it.

Besides AFSCME, the 4,500-member Connecticut Employees Union Independent, which represents custodians, cooks, maintenance workers and others, also rejected the deal.

The agreement would have provided layoff protection for four years in exchange for a two-year wage freeze and changes to health care and pension benefits. It was designed to save the state $1.6 billion over two years.

Malloy's latest plan includes calling state legislators back to Hartford next Thursday for a special session. The will be asked to close a projected budget hole for fiscal 2012 of about $700 million — a hole that would have been closed by the savings from the concession agreement. He called for the legislature to act quickly so that budget cuts would have the full impact of all 12 months of the fiscal year, which begins next Friday.

If a person is laid off halfway through the year, the state would receive the savings of only half of that person's annual salary.

"Every day that we delay will increase the number of layoffs that will have to take place. That is a mathematical equation,'' Malloy said. "The later we start to terminate employees, the more employees will have to be terminated.''

Malloy rejected the notion that members of AFSCME and other bargaining units that turned down the deal would be subject to a higher proportion of layoffs than the unions that approved the tentative agreement.

The union leaders, however, said that layoffs would be devastating at a time when the state's economy is still sluggish and the state's unemployment rate is already at 9.1 percent.

"It's important not to go nuclear,'' said Larry Dorman, a union spokesman. "We want them to understand how devastating layoffs will be.''

Besides blaming the conservative Yankee Institute think tank for pushing against the deal, the unions charged that even managers at the state Department of Transportation were advocating against ratification.

"We heard reports that managers were telling employees: 'Don't vote to ratify this. You're safe. You're fine. Don't worry about it,' '' Dorman said. "And that had an effect, too. Not just in DOT but in other agencies, too.'' A department spokesman could not be reached for comment.

There were widespread reports that many of the "no'' voters were older state employees who wanted to preserve their lucrative benefits and knew they would not be laid off because they have seniority. Malloy conceded that some state workers clearly believed that they would not lose their jobs because of "bumping rights'' that protects the older workers with seniority.

"If you have more than 10 years in seniority, they might be pretty safe,'' Malloy said Friday.

Some private sector workers were stunned that the unions rejected the agreement, calling it a sweetheart deal that would have been approved almost immediately by non-union workers who have been battling against layoffs, pay cuts, wage freezes, and benefit reductions since the huge downturn on Wall Street that started with the collapse of the Lehman Brothers investment bank in mid-September 2008. The nation was plunged into a deep recession, and many workers saw their jobs cut and pensions frozen.

Message To Mayors

Malloy met Friday morning with the mayors of the state's five biggest cities, including Hartford, Bridgeport, New Haven, Stamford, and Waterbury, regarding the budget crisis. He told them that he would do everything possible to avoid deep cuts in state aid to municipalities, particularly in the first year of the two-year budget.

But Malloy would not say that there would be no cuts at all for the cities.

"It does not mean zero [cuts],'' Malloy said.

Reporters asked union leaders whether the unions could call for a re-vote and whether the SEBAC bylaws would even allow it. Union officials said there had been no decisions on possible re-voting or whether all 34 bargaining units statewide would need to vote again. SEBAC leaders will meet Monday to plot their next moves.

Under the complicated and weighted voting system of the unions, a rejection by AFSCME — the state government's largest union, with more than 15,000 of the state's 45,000 union employees — sank the entire deal for all 15 unions in the SEBAC coalition. The fourth largest union, CEUI/SEIU, Local 511, also turned down the deal.

Overall, about 60 percent of the members of all the unions had voted in favor of the agreement, but voting was still continuing Friday and the final counts were not available.

The complicated SEBAC voting system is similar to other systems where a simple majority does not guarantee victory. In the U.S. Senate, 60 percent of the vote is needed to stop a filibuster; high majorities are also needed to change the state and national constitutions. In 2000, Democrat Al Gore won the popular vote but and Republican George W. Bush won the presidency because of the electoral college tally.

Union officials will discuss whether all 15 SEBAC unions and 34 bargaining units would need to re-vote — as opposed to only those unions that turned down the agreement.

"This is a coalition, and we intend to remain a coalition,'' said Dorman.

The rejection was a huge and stunning blow to union leaders and the Malloy administration. Senate Republican leader John McKinney of Fairfield said that the union leaders who negotiated the deal are clearly out of touch with their rank-and-file members who shot it down.

Insiders said the unions clearly got outmaneuvered in the fast-moving world of e-mails, blogs and web sites that generated a huge amount of information about the deal. The union spokesmen said the disinformation was particularly targeted to the prison guards and did not reach the university professors in great numbers.

One of the biggest issues that was spread through e-mails was that the state employees' healthcare benefits would be merged into the state's SustiNet health care plan. Even though Malloy had rejected that theory long ago, he said Friday that some state employees clearly did not listen to his statements.

"I made it clear ... that there was no way in Hades that I was going to put state employees' insurance into SustiNet,'' Malloy said. "So I've always been clear. I do wish that some folks had understood my position earlier rather than later. That issue may have been chosen by folks who wanted to oppose the deal as a scare tactic, but let me assure you it was a scare tactic that was artificial in nature.''

Special Session Looms

Senate President Pro Tem Donald E. Williams, a Brooklyn Democrat, said his caucus is ready to respond to Malloy's call for a special session next Thursday.

"Given the rejection of the labor agreement, it's critical that we act decisively before the beginning of the new fiscal year,'' Williams said in a statement. "We support the governor's call to action and will work with him to ensure that Connecticut has a balanced budget."

One of the biggest issues in that session will be whether the legislature grants Malloy increased budget-cutting authority that he could use without legislative approval. Malloy had sought the so-called "rescission authority'' earlier this year, but the Democrat-controlled legislature rejected the idea because they did not want Malloy to have increased powers over cutting items such as state aid to cities and towns.

The Hartford-based Yankee Institute on Friday again responded to allegations that it has been running a massive disinformation campaign to shoot down the agreement. The unions are charging that the Yankee Institute is an anti-union, anti-worker "corporate front group'' that is seeking to kill the deal and has been opposing union issues for years.

But Fergus Cullen, the executive director of the institute, says the charges are baseless and preposterous. He wrote to the state auditors to seek an expedited investigation into the charges that the small institute had hacked into the state employees' e-mail system to spread the disinformation about the SustiNet health care plan.

"SEBAC has made the preposterous and paranoid allegation that we hacked the state computer email system to spread misinformation about the deal, used false identities, and covered up our electronic tracks. The government unions have produced not a shred of evidence to support their assertion.''