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Malloy Talks Of Layoffs; Is It Splitsville For Him And Unions?

Jon Lender

February 16, 2011

If it wasn't an out-and-out ultimatum, it sounded like one.

Democratic Gov. Dannel P. Malloy said in his budget speech Wednesday that leaders of state employee unions haven't offered "nearly enough" money-saving ideas — and if they don't come across with savings and concessions adding up to $2 billion for the next two years, the alternative is "to completely shred the safety net and lay off thousands of state workers."

Malloy enjoyed a close relationship with the traditionally Democrat-backing unions in last year's campaign and probably couldn't have won his narrow victory without their support. But there are moments when any relationship needs to change, and this is one of them: Malloy has to close an estimated $3.7 billion gap in next year's state budget and, if he's doing his job, he needs to consider taxpayers' needs as well as the unions'.

So now we'll see if the blissful allies of 2010 can carry their relationship to its next stage in the deficit politics of 2011 without the unpleasantness that sometimes accompanies growth in relationships.

The new administration and the unions will relate differently when they sit at the negotiating table in coming weeks and discuss ideas Malloy mentioned Wednesday for employee concessions from a 20-year benefit contract that extends to 2017. His ideas include a wage freeze, changes in health benefits, additional furlough days and raising the retirement age.

Sure, the unions have a binding agreement, but Malloy has a hammer that he hefted Wednesday: the prospect of layoffs.

Whether it all ends up being pleasant or unpleasant, it will be interesting, a top legislative Republican said.

"That is probably the hardest push I've ever heard from any governor at any time" about state employee unions during his budget message, said state House Minority Leader Lawrence Cafero, R-Norwalk.

"Based on the fact that he's a Democrat … it takes a lot of guts" to talk so bluntly about layoffs, Cafero added. "And I think he means what he says. He did not have to say that. There's a million things he could have said differently; he could have soft-soaped it."

Cafero said he expects a different political dynamic this year than in the past as the Malloy administration negotiates with its campaign allies from last year and tries to win legislative approval for a $40 billion, two-year budget proposal that includes cuts to traditional Democratic constituencies. That's because for the first time in 20 years, there's a governor in the same political party as the majorities controlling both the state House of Representatives and Senate.

'It's a unique circumstance, having this governor as a Democrat," Cafero said. "It's like Nixon going to China. If that were Tom Foley giving that speech" — a reference to Malloy's Republican opponent in last year's election — "his chances of getting it through would be a lot less."

Larry Dorman, the spokesman for a coalition of unions that represent about 43,000 state employees, made sure he didn't sever ties or have a public scene with Malloy Wednesday. But he and another union official said the budget woes aren't state employees' fault, and they suggested that Malloy's proposed income-tax increase of two-tenths of a percentage point on Connecticut's "ultra-wealthy" should be higher.

"Look, we've been as constructively engaged with the administration as we can, and our vow is to continue to do that," Dorman said. "Obviously, he laid down a very big challenge. It's difficult for me to assess how that challenge would be met, other than to say we do need to have a more global revenue solution. … State employees did not create this economic crisis. … This has to be truly a time of shared sacrifice, where everyone is at the table" — including "business and the ultra-wealthy people who have benefited over the last few years."

A hint of how heated the discussion could become was provided by the fiery John Olsen, president of the state AFL-CIO. "Let's just talk about the top 5 percent [of] wage earners in this state. They had an extension of the Bush tax cuts that were never paid for, and that they weren't really entitled to, but were extended anyway. … That's $3.1 billion."

Olsen said that to penalize the "shrinking middle class" for economic problems it didn't create is like "saying to me that 'somehow or other I lost my legs, so therefore my answer to my problems is to go and cut your legs off.' … They're trying to pit worker against worker."