Labor deal savings questioned
House finalizes budget despite budget office’s inability to
back up governor’s numbers
By Ed Jacovino
Journal Inquirer
Published: Tuesday, June 7, 2011 11:31 AM EDT
HARTFORD — Just how much the state would save
under the deal struck between Gov. Dannel P. Malloy
and labor leaders hadn’t been determined early today by legislative analysts —
but the House of Representatives voted to count $1.6 billion in the two-year
budget for the deal anyway.
“Our own Office of Fiscal Analysis says they don’t have enough information to
verify it,” House Minority Leader Lawrence F. Cafero
Jr., R-Norwalk, said in debate late Monday of the savings from state employee
unions. “Yet we are going to pass this bill on June 6, based on that?”
The Office of Fiscal Analysis is the legislature’s nonpartisan budget office. Cafero had asked Alan Calandro,
the office’s director, for his own projections of how much the concessions
package would save. Administration and union officials say it’s worth $1.6 billion
over two years. That’s roughly $900 million in the budget’s first year and $700
million in the second.
Calandro’s answer: “We don’t have enough information
to judge the likelihood of the savings estimates coming to fruition,” he said
in an interview.
Lawmakers were debating one of several bills to finalize the
state’s two-year, $40.1 billion budget that starts July 1. The 277-page omnibus
measure the Democrat-controlled House approved early today sets the policies
creating the budget’s $2.6 billion tax increase, spells out the savings
expected to be reached by the labor package, and allows the legislature to
reconvene to approve or reject the deal if union members approve it, among
other things.
If the concession and savings projections are off, the budget would be thrown
out of balance.
The measure passed the House in an 83-63 vote that mostly followed party lines.
It now heads to the Senate, which Democrats also control. The regular
legislative session ends Wednesday.
Rep. Kathleen M. Tallarita of Enfield was one of 11
Democrats who voted against the measure, saying she couldn’t support the tax
hikes. She also voted against the budget when the legislature approved it last
month.
Cafero and other Republicans criticized lawmakers for
relying upon the administration’s numbers on the concession deal. “We are a
legislature,” he said. “We are a separate but equal branch of government.”
He pointed to a letter from Calandro, who’d asked
administration officials for documentation detailing how savings figures were
reached. The information provided wasn’t sufficient to verify the savings, Calandro wrote.
The concession agreement calls for two years of wage freezes for state
employees followed by three years of 3 percent raises, with a four-year,
no-layoff guarantee. Also contained in the package is a preventative health
insurance system called the “Health Enhancement Program,” which requires
doctor’s visits and certain screenings. If employees
don’t comply, they’d pay $100 more a month toward health insurance. The deal
also hikes by two years the retirement age for most employees, and doubles the
financial penalty for retiring early.
Employees will vote on the deal over the next several weeks. The health
insurance and retirement changes require approval from 14 of the 15 unions.
Each of the 34 individual bargaining groups will decide on the pay changes and
layoff protection.
But many of the savings aren’t predictable, Cafero
said. He pointed to areas of the deal that aren’t concessions, including $90
million over two years in unidentified changes to technology, $180 million in
savings from employee suggestions, and $130 million from an extra 1,000
employees retiring because of the deal.
He called $600 million of the proposed $1.6 billion “wishful thinking.”
“No answers have been provided here because there’s no data to provide,” he
said.
Cafero and Republicans also said the legislature
should sign off on any deal the unions ratify. The measure allows the
legislature to accept or reject the agreement, but the concession package can
go into effect without a legislative vote.
“We’re abdicating our responsibility,” Cafero said.
One amendment Republicans proposed would have required the legislature to call
a special session to approve the agreement. They also would use the session to
apply the changes to nonunion employees. It failed in a party-line vote.
Mark Ojakian, Malloy’s deputy budget director and the
administration’s lead negotiator, stood by the savings figures.
“We’re very, very confident that we’ll be able to achieve the $1.6 billion over
the biennium,” Ojakian said.
Actuaries calculated the savings for health insurance and pension changes, he
said. Those from union members’ money-saving ideas were vetted by
administration experts.
“We have savings targets which have been developed after extensive discussions
with front-line state employees,” Ojakian said.
“They’re confident that we can achieve these savings.”
Ojakian also expressed surprise that Calandro and the Office of Fiscal Analysis reported not
having enough information to reach their own projections.
“We have made ourselves available to OFA,” he said.
Benjamin Barnes, Malloy’s budget director, gave OFA officials a briefing on the
concessions and savings package. Letters from consultants and actuaries were
turned over to Calandro, Ojakian
said.
“This is the first I’ve heard that they did not have the information,” he said.
Calandro, meanwhile, was careful to say that not
being able to confirm the $1.6 billion figure doesn’t mean he’s refuting it,
either.
“For most of the stuff, we need more information,” Calandro
said. He also said his office hasn’t had much time to devote to working with
administration officials on the issue.
House Speaker Christopher G. Donovan, D-Meriden, said it’s not uncommon for the
legislature to rely on administration figures. Legislative analysts often don’t
address contract changes until they’re before the legislature, after the unions
have ratified them.
“We know the governor did some actuarial studies working with the unions on
some of the savings,” Donovan said. “We believe that the savings are there.”
Allowing the concession package to be ratified without a legislative vote also
is typical, he said. To do otherwise could interfere with the ratification
process, Donovan said.
Rep. Toni E. Walker, D-New Haven and co-chair of the legislature’s
budget-writing Appropriations Committee, said it’s important that the labor
changes take effect as soon as the fiscal year starts July 1 so the savings can
be realized. Calling lawmakers back for a special session could delay that, Walker said.