Malloy: Agreement With Unions to Save $1.6 B [News Release]

Editor's note: Gov. Dannel P. Malloy issued the following news release Friday afternoon, based on comments made at his 3 p.m. news conference (statements by other state leaders in reaction to the announcement follow below it):

Governor Dannel P. Malloy made the following remarks at a news conference this afternoon announcing an agreement between his administration and state employee union leaders.

“I am pleased to announce that we have reached an agreement with our fellow state employee leaders that will, over the next 20 years, save Connecticut taxpayers a total of 21 and a half billion dollars.

“This is the most significant agreement with state employees in Connecticut history, not just because it solves a short-term problem – but because it produces the kind of long-term, structural reform WE – Connecticut’s residents, elected leaders and our state’s workforce – so desperately need if we are to again grow, produce new jobs, and prosper together.

“Our agreement is also historic because of the way we achieved it. We respected the collective bargaining process and we respected each other, negotiating in good faith, without fireworks and without anger. To my friends in SEBAC, thank you. You have stepped up to the plate and said you want to be part of the solution. Under this agreement, we will all share in the sacrifices necessary to stabilize the state’s finances.

“In the short-term, over the next two years, this agreement will save taxpayers 1.6 billion dollars. The remaining 400 million dollars we need to balance this budget will come from a mix of additional spending cuts and existing budgeted revenues. 
 
“Taxes will not rise beyond what is already in this budget.

“This is the definition of structural savings: these savings are real, and they will provide relief to Connecticut taxpayers now and into the future for years to come. This agreement should serve as the foundation for affordable public services for a generation, and does not leave the bill for those services to the generations that follow.

“These savings were achieved in the areas of healthcare and pension benefits, and wages.  Our fellow state employee leaders have asked us to refrain from discussing the specific details within each of those categories until they’ve had a chance to communicate them to their members.  We’re happy to comply with that request.  

“One more point: there are no furlough days in this agreement, nor is there a reduction in the 40-hour work week.  This means we’ve achieved these savings without reducing government’s ability to serve its constituents, and without reducing employees’ productivity.   “I want to thank the Democratic leaders for the strength and leadership they have demonstrated. We would not be standing here today without them. 
 
“I want to thank Mark Ojakian and Linda Yelmini. They negotiated on behalf of my Administration, and that we are standing here today is in part a testament to their thoughtfulness, patience, and determination.

“I also want to thank the person who has been my true partner in this Administration since Day 1: Nancy Wyman, the best Lt. Governor a Governor could ever ask for.  As many of you know, Nancy has a long-standing relationship with our state employee unions and their members, and her guidance and wisdom throughout this process has been invaluable.  Thank you, Nancy.

“I want to be very clear that, as I said the day I signed the budget that was passed by the Legislature, this is not a day to celebrate. Yes, it’s a significant accomplishment, and yes, it will save taxpayers an enormous amount of money over time – but anytime you ask sacrifices of people you need to be mindful of the impact on their lives. And I am.

“In return for all the sacrifices they have made, state employees have received job security. But let me be very clear about this: the work of revitalizing state government has just begun, and it will continue. Over the next few years, I intend to reduce the number of state employees, but rather than doing that by layoffs, we will do it by attrition, and by eliminating managerial positions. And we will make the state workforce more efficient by making smart investments in technology. We will give our state employees the tools they need to succeed. 

“Now this agreement must be ratified by the individual employee bargaining units. As a show of good faith, I’ve directed OPM to immediately suspend the issuance of layoff notices, and to rescind the ones that have been issued so far. I urge my fellow state employees to approve this agreement in a timely fashion. Once ratified by the rank-and-file workers, we stand ready to work with the leadership of the General Assembly to secure final approval.  When that happens, come July 1, the state will have in place a budget that is balanced with no gimmicks, and one that provides something the state hasn’t had in many years: fiscal stability.  

“Most of all, it will contain the type of structural reform Connecticut so desperately needs.  

“Finally...so much for Friday the 13th being an unlucky day!  

“Thank you.”

Republican leadership in state House of Representatives reacts:

"While details are in short supply until rank and file union members vote on the package in the coming weeks, sources say the deal is a 4-year, no-layoff agreement through 2014. This provision essentially guarantees there will be no reduction in the size of the state workforce for the length of the deal, regardless of the state’s fiscal health.

"In exchange, sources said there will be a hard wage freeze for all managers and employees but the deal does not eliminate the so-called longevity bonuses. Longevity payments are bonus payments for employees who remain on the job for more than 10 years and cost the state $19 million annually.

"Reacting to the Governor’s announcement, House Republican leader Rep. Larry Cafero said he is reserving judgment on the agreement until the full details are released. However, he said extending the 2017 SEBAC agreement by five additional years is very troubling and could hamstring Connecticut in the future."

Statement of state Senate Minority Leader John McKinney, a Fairfield Republican

"Because the Governor has not provided me with the full details of the concession package, it is premature to draw a final conclusion. However, I have two primary concerns with the framework the Governor outlined today.

"The four-year no-layoff clause in this proposal, which applies even in times of fiscal crisis, completely ties the state’s hands with respect to making further consolidations and structural changes necessary to right size government.

"And the Governor further ties the state’s hands by extending the SEBAC agreement an additional five years, meaning state government will continue to operate in a ‘business as usual’ manner for another 11 years."

Statement of Senate President Donald E. Williams Jr., a Brooklyn, CT Democrat

"This was an extraordinarily difficult challenge, and the governor and state employees stepped up to meet that challenge. As a result, ‘Plan B’ will not go forward and the devastating cuts to cities and towns will not go forward. We asked the governor and state employees to deliver for the people of Connecticut, and they delivered. This is a huge victory for the future of our state."

Statement issued by House Speaker Christopher G. Donovan, a Meriden Democrat:

“I am pleased to hear that Governor Malloy and representatives of the state employee unions have reached a tentative agreement. We counted on an agreement in the budget we passed just over a week ago, and once again it appears that our state employees are willing to help out in a crisis.

“I commend and thank the Governor and union leadership for their hard work in making the tough choices. To move Connecticut forward, we knew that everyone in the state would have to contribute. In avoiding massive layoffs that would hurt our state, and by working together, we are stronger and Connecticut can prosper.”