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Do Malloy's Union Deal Numbers Add Up?

The Hartford Courant

May 22, 2011

Gov. Dannel P. Malloy has another sales job to do.

He has to convince Connecticut taxpayers that the tentative concessions agreement he struck this past week with state employees' unions will result in real savings and isn't, as skeptics fear, partly built of the kind of smoke-and-mirrors wishful thinking that he's decried in the past.

Mr. Malloy doesn't have to present the agreement to the public for a vote. Union leaders, however, must sell it to their members, obtaining favorable votes from 14 of the 15 bargaining units in the coalition for it to go into effect.

But the governor's credibility and his political future are at stake.

That's why Mr. Malloy scheduled press briefing sessions on the agreement with his top negotiator, Mark Ojakian, and his budget chief, Ben Barnes.

Maybe Mr. Malloy should take that show on the road to try to sell the deal to doubters as he did with his 17-town budget framework tour after being sworn in last January. A great many people think too little is being asked of state employees and that a good share of the projected savings to the state are illusory.

The critics' advice to state employees covered by the agreement? Sign it. You'll never get a better deal.

Taxpayer Sacrifices

Taxpayers can't be blamed for feeling rubbed raw by the agreement.

The governor and legislature recently passed a budget that raised taxes by a record $1.5 billion to help wipe out a $3.4 billion deficit. The budget also cut spending by almost $800 million, and the governor asked state employee unions for $1 billion in concessions in each of the budget's two years.

The taxpayers' heavy lifting is obvious. Homeowners know, for example, that the property tax credit on the income tax has been reduced by $200 as part of the budget. Taxpayers can figure how much the income-tax hike and the sales tax increase will cost them. They know that if they die, it will cost 50 percent more to be cremated because of this "shared sacrifice" budget, and so forth. Their sacrifice is considerable and easy to quantify.

The tentative labor agreement gets $1.6 billion in savings over the next two fiscal years — not the $2 billion asked for by Mr. Malloy. The remaining $400 million should come from additional spending cuts, though the governor will be tempted to tap surplus revenues coming in, spawned by a recovering economy.

A Few Questions

Some of what's demanded of state employees in the no-layoffs-for-four-years deal comes in hard numbers, too — such as from the wage freeze in the next two fiscal years, which nets $448 million.

But too much of the savings seems like gossamer.

Can the state really save $180 million over the next two fiscal years by implementing employee suggestions for savings, for example? (Where were those suggestions up to now?) Or save $205 million in the biennium through preventive medical and dental care programs? They're good ideas, but will they produce that much hard cash in savings? It's doubtful.

How about $75 million in savings to be identified in the future by a health care cost containment committee? Or $90 million in the next two years from the utilization of new technology? Again, this sounds like wishful thinking.

Will more employees opt for retirement to save $130 million in pension expenses? The Malloy administration estimates that about 1,000 additional workers will retire, on top of normal attrition. With jobs hard to find, is that a reasonable assumption?

There are more questionable assumptions that might leave taxpayers wondering if it's a fair agreement that gets a handle on unsustainable state spending.

Let's see some hard-fact explanations to justify these seemingly squishy numbers.