Malloy To Unions: Accept A New Reality

Christopher Keating

3/24/2016

HARTFORD — The stalemate between the governor and state labor unions continued Thursday.

While Gov. Dannel P. Malloy again chided state employee unions for not accepting that the economy has changed and that, unlike in the past, tax revenues won't come roaring back to pay for state services, the state's top union official repeated labor's position that raising taxes on the wealthy would help close current budget shortfalls.

State AFL-CIO President Lori Pelletier Thursday cited New York state, where 40 millionaires said in an open letter this week that they are willing to pay more in taxes for government services for the homeless and the needy.

"There's no reason Connecticut can't do that,'' Pelletier said.

She also urged the legislature to pass the so-called Wal-Mart bill, in which employers with more than 500 workers would pay fines to the state if they fail to pay wages of at least $15 per hour. The fine in some versions would be $1 per hour per employee and could raise as much as $305 million for the state in fiscal year 2017. That money could then be used for child care and for home care for the elderly.

The Walton family that founded Wal-Mart has "five of the 10 richest people in the world,'' Pelletier said.

Labor and the administration continue to skirmish over how to deal with deficits in this and next year's state budgets. Based largely on an unexpectedly sharp drop in tax collections in a still-sluggish economy, the state faces shortfalls of $220 million this year and nearly $900 million next year.

The administration has already proposed tens of millions of dollars in cuts, as well as layoffs. Lawmakers plan a vote Tuesday on the current year's budget.

In comments after Thursday's State Bond Commission meeting, Malloy said he is still willing to speak to unions about possible concessions to close the budget deficit.

"I think this is very difficult for labor. That doesn't escape me at all,'' the governor said. "I think labor, like our citizenry, became used to an economy where growth was more rapid.

"They're in a very difficult position," he said.

"This recovery is totally unlike every other post-World War II recession," Malloy said. "We've had 11 recessions. We've never seen this before.''

"If we hadn't had the Great Depression, we wouldn't call this the Great Recession. We would call it a depression. The Great Depression, for historical purposes, if you take out the Second World War, it had an impact on our economy for 30 years. We're in a different time.''

Since the legislative session opened on Feb. 3, Malloy and the unions have been clashing

"The governor said in his State of the State address that he wouldn't negotiate in the press, but he does,'' Pelletier said.

She also noted that the State Employees Bargaining Agent Coalition, known as SEBAC, scheduled a meeting with Malloy on Feb. 23 "that he canceled.''

There was a dispute because SEBAC wanted about 15 union leaders in the room, and Malloy wanted about three, she said. No further meetings were scheduled.

Malloy's administration declined to comment Thursday.

In other developments, Senate President Pro Tem Martin Looney of New Haven and Majority Leader Bob Duff of Norwalk say their caucus will have enough votes to pass the budget-adjustment package Tuesday. Lawmakers have been pushing for bipartisan votes on the package, but the language on the deal has not been finalized.

While the deficit is currently projected at $220 million, lawmakers are still awaiting the annual income tax returns that are due this year on April 18. When legislators passed a budget-mitigation plan before Christmas, they thought they had solved this year's fiscal problems. Now, they are not sure if the deficit will get even bigger after Tuesday's vote.

Jeffrey Walter, interim chief executive officer of the Connecticut Community Nonprofit Alliance, said that next week's vote on the short-term budget problem will largely avoid some of the more difficult and painful cuts that are expected.

"We are grateful for all legislative proposals that make human services a budget priority, especially as the discussion shifts in the coming weeks to the spending plan for the coming year,'' Walter said. "We encourage the General Assembly to adopt this plan, understanding that they are supporting life-sustaining services for a half-million individuals who would otherwise have nowhere to turn."