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After Union Concession Deal Nixed, Conn. Gov. Malloy Proposes 5,500 State Layoffs

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Gov. Dan Malloy is seen in Hartford, CT - Jun 25, 2011 (credit: Governor's Office)

Gov. Dan Malloy is seen in Hartford, CT – Jun 25, 2011 (credit: Governor’s Office)

HARTFORD, CT (AP / CBSNewYork) - Gov. Dannel P. Malloy on Tuesday proposed nearly 5,500 state employee layoffs to balance Connecticut’s two-year, $40.1 billion budget now that workers have defeated a labor-savings and concessions deal.

WCBS 880 Connecticut Bureau Chief Fran Schneidau: Malloy Says He Now Has To Do This To Balance The Budget

Malloy’s recommended budget fix, being presented to state legislators, also calls for cutting 1,000 additional positions that are vacant. That means a total of 6,466 job cuts – a reduction from the original 7,500 layoffs Malloy had first predicted.

The Democratic governor already has called members of the General Assembly back to Hartford for a special legislative session on Thursday, the final day of the current fiscal year, to address the two-year, $1.6 billion budget gap. He wants lawmakers to expand his budget-cutting authority to impose the reductions on his own and make the process more seamless, but it was unclear whether the Democratic-controlled legislature will agree. Republican lawmakers are raising concerns about granting Malloy the power to decide how to balance the budget.

“I think it’s vitally, vitally important to the state of Connecticut that we balance the budget prior to July 1. I think the legislature would make a tremendous mistake if it fails to do that and I don’t think it’s a legislature that intends to fail to balance the budget,” Malloy told reporters before releasing his proposed budget fix.

Release of the proposed fix comes as the State Employee Bargaining Agent Coalition attempts to come up with some kind of a solution to ultimately stop the layoffs from taking effect. Given the various notification requirements, many of the workers will not actually leave the state payroll until September, Malloy has said.

SEBAC officials are looking at everything from possible re-votes by individual unions to re-examining the SEBAC bylaws, which allowed the deal to fail even though a majority, 57 percent, of the 45,000 unionized workers who voted actually supported the deal.

Any changes to the existing retirement and health care agreement require the support of at least 14 of the 15 SEBAC unions. In this case, the vote was 11-4 – two more than needed to kill it.

Matt O’Connor, a SEBAC spokesman, said the unions want to help close the budget gap, but layoffs are not the answer.

“Cutting thousands of middle-class jobs will only add to our stagnant unemployment rate. Slashing services that every resident and business owner relies on will only degrade our quality of life,” he said. “The damage that these layoffs would cause makes clear how important it is we come up with a solution that works for everyone in Connecticut.”

Malloy appeared unwilling to wait right now for the unions to come up with a solution.

“Let them decide what rules apply because that’s not a decision that I get to make. And once they’ve sorted out what all their problems are and once we experience what we’re about to experience, maybe other things happen,” he said. “But I think what is necessary is that we move forward. We balance the budget. I have a plan to do that.”

Malloy has already signed into law the new, two-year budget, which addresses a projected $3.3 billion deficit, beginning July 1. Besides spending cuts and the labor savings – projected at $1.6 billion over two years – the plan relies on $1.4 billion in tax increases in the first year and $1.2 billion in the second year.

The recommendations Malloy is now making to the legislature outline savings goals for individual state agencies and a suggested number of layoffs needed to help commissioners reach those goals. Colleen Flanagan, Malloy’s spokeswoman, said it will be left to the individual commissioners to determine how to achieve those savings.

“Some might choose to lay off more people to get to that number, some might choose to lay off a lower number and find additional savings elsewhere,” she said in an email to reporters.

The Department of Correction has the largest number of suggested position reductions – 1,019 – a figure that includes jobs that are currently filled and vacant. Some other larger, proposed position reductions include 817 at the Department of Transportation, 540 at the Department of Developmental Services and 486 at the Department of Mental Health and Addiction Services.

WCBS 880 Connecticut Bureau Chief Fran Schneidau On The Effect The Governor’s Plan Will Have On Cities

Malloy’s plan also reduces state aid to cities and towns by $54.4 million in each of the two years of the budget. It equates to a 2.4 percent reduction in statutory formula grants to municipalities.

Jim Finley, executive director and CEO of the Connecticut Conference of Municipalities, said he’s concerned about the cuts in state aid. Malloy, a former mayor of Stamford, said he tried to limit the reductions as much as possible to avoid forcing cities and towns to raise their local property taxes. Also, many municipalities already have passed their local budgets and issued tax bills.

“We don’t have all the details yet but it if affects the Education Cost Sharing Grant, that’s going to be a body blow to school districts across the state,” said Finley, adding how CCM will ask state lawmakers to avoid imposing the municipal aid cuts.

Senate Minority Leader John McKinney, R-Fairfield, sent a letter to all state lawmakers on Tuesday urging them to oppose Malloy’s request for greater budget-cutting authority, saying it’s the legislature’s responsibility to balance the budget. Sen. Andrew Roraback, R-Goshen, the ranking Republican on the tax-writing committee, agreed.

“Quite frankly, I think it’s a disservice to every citizen of the state of Connecticut who has elected a state representative, who has elected a state senator, for us to take a pass and give a blank check to the governor to solve a crisis of unprecedented proportions,” he said.

Meanwhile, Malloy suggested Tuesday that he wants to make changes in the coming months to the state employees’ retirement system, now that workers have shot down the concession deal, which included various changes such as older retirement ages for new employees. While he offered no specifics and acknowledged any changes cannot occur until after the current 20-year health care and retirement agreement expires in 2017, Malloy said he wants to “put down a marker” to ensure changes are made after that agreement ends.

“Connecticut, over the next few months, needs to get to a position where we have systemic change,” he said, adding how the state’s pension and retiree health care system is currently financially untenable.

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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