Malloy Given Latitude to Cut Budget
By SUSAN HAIGH, Associated Press
HARTFORD, Conn. (AP) _ Connecticut lawmakers, hours into the new fiscal year early Friday morning, voted to give Gov. Dannel P. Malloy more budget-cutting authority to balance the state’s new, two-year $40.1 billion budget, which has a $1.6 billion deficit now that state employees have rejected a labor savings and concessions agreement.
On a 78-56 vote in the House of Representatives and a 21-14 vote in the Senate, lawmakers essentially gave the Democratic governor the go-ahead to begin the process of making sweeping spending reductions across all state agencies and issuing thousands of layoff notices.
Malloy acknowledged that closing the deficit involves a lot of pain for people.
“But putting Connecticut on firm fiscal footing– which is what we’ve done– sends an important, much-needed message to the business community and to Wall Street. Now people will know we’re serious about getting our fiscal house in order, and now we can re-focus our attention on job creation,” he said in a statement shortly after the Senate passed the bill.
Lawmakers and Malloy were relying on the $1.6 billion deal to balance the new budget, which they passed in May and takes effect on Friday. But the labor unions last week did not have enough votes to ratify the agreement reached between
Malloy’s administration and labor leaders, creating a massive hole in the plan that raises taxes by $1.4 billion in the first year and $1.2 billion in the second to cover a $3.3 billion deficit.
Many legislators said they hoped the budget fix will ultimately become moot if state employee union leaders find a way to somehow still ratify the savings and concessions agreement. The state began issuing layoff notices to some workers Wednesday. At least 200 were expected on Thursday.
“If they can do new negotiations, old negotiations, any negotiations that comes to an agreement where there would be $1.6 billion, that is what we’re hoping happens,” said House Speaker Chris Donovan, D-Meriden. “We don’t want to take the tack of laying people off or cutting services throughout the state of Connecticut. We want there to be an agreement and we’re hoping that that takes place.”
Sen. Toni Harp, D-New Haven, pleaded with union members to reach a deal. She said lawmakers didn’t want to impose far-reaching cuts and layoffs, but had little choice but to grant Malloy the expanded budget-cutting authority.
“We will do it this way if we have to, but I say to you there is a better way,” she said.
Under the bill, Malloy’s budget-cutting authority is expanded from 5 percent of any appropriation to 10 percent. But the legislation prevents Malloy from reducing state aid to cities and towns. Malloy already proposed reducing aid by $54 million in each of the next two fiscal years.
Without those savings, said Roy Occhiogrosso, Malloy’s senior adviser, up to 1,000 more state employees will lose their jobs. That’s on top of the nearly 5,500 layoffs and the elimination of 1,000 vacant jobs that the Democratic governor has recommended to balance the new budget without the $1.6 billion in labor savings.
The bill requires Malloy to submit his proposed reductions to the General Assembly by July 15. The legislature would be able to hold a hearing on those cuts and make changes if it decides that’s necessary. Malloy’s extra budget-cutting authority would expire on Sept. 30.
House Minority Leader Lawrence Cafero, R-Norwalk, criticized the bill for not requiring the legislature to sign off on Malloy’s cuts. He said lawmakers were surrendering their fiscal duties to the executive branch.
“We’re giving up our power,” he said. “Can’t we make the tough decisions?”
Rep. Vincent Candelora, R-North Branford, said lawmakers were taking a leap of faith by letting Malloy make the budget-cutting decisions, just as the legislature took a leap of faith by passing a budget without having first secured the labor savings.
“It seems to be a troubling theme here,” he said.
But House Majority Leader Brendan Sharkey, D-Hamden, insisted the bill does not cede the legislature’s authority to the governor. He said lawmakers are taking decisive action, allowing Malloy to take immediate steps to balance the budget and satisfy bond rating agencies, while also maintaining their authority to oversee what he’s proposing.
The bill does not include Malloy’s request to expand privatization of state services, something state employee unions have opposed for years. It was one of the many changes made during closed-door negotiations that stretched throughout the day.
Sal Luciano, executive director of AFSCME Council 4, one of the 15 State Employee Bargaining Agent Coalition unions, said he’s hopeful SEBAC can come up with a deal to prevent the layoffs before Aug. 31, the deadline the legislature and Malloy are now giving union leaders to somehow ratify the agreement. SEBAC leaders were scheduled to meet on Friday.
“If we can do a better job of explaining what it is, and slightly modifying this, I think hopefully we can pass something similar,” Luciano said. Malloy has said he will not renegotiate the agreement but is open to clarifying sections of the deal.
Meanwhile, the unions managed to at least temporarily fend off an effort by Malloy to impose changes to future union contracts, such as limiting sick leave, capping longevity payments to veteran employees and no longer counting overtime, longevity pay and other fees toward a person’s pension payment.
On a 30-6 vote, the Senate approved the changes in a separate bill. Donovan said the House would not vote on it on Thursday, but warned that the chamber could vote on the changes later this summer, if necessary. The bill was only expected to save about $4 million in each of the next two fiscal years but advocates said it represented a change in attitude at the state Capitol about how something must be done to address the state unfunded pension and retiree health care liabilities.
Senate President Donald Williams, D-Brooklyn, also made a point of saying the effort to roll back some employee benefits should not be characterized as punishing union members for not ratifying the labor agreement.
“If we don’t start taking action like this, then what has been taken for granted, in previous years and previous decades, is in jeopardy. It’s at risk,” said Williams, referring to the financial stability of the state’s unfunded pension system.
(Copyright 2011 by The Associated Press. All Rights Reserved.)