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Malloy Preparing Plan B If No Union Givebacks

By Chistopher Keating

March 25, 2011

HARTFORD, Conn.— Connecticut Gov. Dannel P. Malloy said Friday he is working on an alternative budget in case state employees do not agree to $1 billion in givebacks and other savings next year, calling his options "nasty and ugly."

Malloy's negotiators and the State Employees Bargaining Agent Coalition, which began closed-door discussions about three weeks ago, have weeks, not months, to come up with the savings, the Democratic governor said. In the meantime, Malloy said he's obligated to come up with new ideas for closing the state's approximate $3.4 billion budget deficit for the fiscal year beginning July 1.

"I hope we don't have to go there," Malloy said. "It would be nasty and ugly."

Malloy has said thousands of layoffs would be necessary if an agreement on labor savings can't be reached. His two-year, $40 billion budget calls for $1 billion in labor savings in each of the next two fiscal years. Malloy has also proposed raising taxes by a total of $1.5 billion in the first year and reiterated Friday he does not want to raise any more taxes if labor discussions fall apart.

Closed-door talks began about three weeks ago between Malloy's negotiators and the union officials. They've been careful to call the talks "discussions about collective bargaining" and not negotiations, which involve re-opening labor contracts. Mark Ojakian, the governor's lead negotiator, said there have been regular meetings and phone calls between both sides. In the past 10 days, he has met with various state bargaining units to discuss their ideas for saving money. The Office of Policy and Management is reviewing those proposals.

Ojakian said the discussions have not been adversarial. He would not comment on minutes from a March 16 Connecticut State Prison Employees Union executive board meeting that reported rank-and-file members were unified in saying "NO, NO, NO!" to any SEBAC concessions.

"The conversations that I'm having with the union leaders and with some of their locals have been very respectful, very honest, very frank, very candid and I'm hopeful that all of us continuing down that road will be able to get to where we need to get," Ojakian said.

Larry Dorman, a SEBAC spokesman, said coalition leaders understand the urgency surrounding the talks.

"We are in good faith discussions with the administration and we hope that those discussions will to something fruitful and constructive and lasting in terms of solutions that will rebuild Connecticut's economy, create jobs and strengthen the middle class," he said.

A deadline for the talks has not been set, but Malloy said there is not an unlimited amount of time considering the General Assembly's Appropriations Committee has to vote by April 27 on its revisions to the governor's spending plan.

"The governor has given me a huge responsibility here and one that I've taken willingly. I feel a tremendous sense of responsibility to reach an agreement and to work with these folks to get there. The other option is not one that I would prefer to see happen," Ojakian said. "I approach it like I approach everything else, I want to get the job done."

SEBAC represents 13 state employee unions on pension and health benefit issues. They negotiated a 20-year-agreement with former Gov. John G. Rowland that expires in 2017, making it challenging for Malloy to demand any concessions.

The Hartford Courant obtained a questionnaire, distributed to members of the Administrative and Residual Employees Union, that highlights the types of issues being discussed by the unions. For example, it asks if employees would make concessions to avoid layoffs, oppose a one-year or two-year wage freeze, oppose allowing the state to switch to a 401-K plan instead of a defined pension plan for new hires, or oppose requiring all state employees to pay 3 percent of their salary to cover retiree health care coverage, among other issues.