Malloy Orders Layoffs Today; No Deal Reached With Unions

The Hartford Courant

Despite numerous hours of talks over the past two months, Gov. Dannel P. Malloy ordered layoff notices to start going out Tuesday because no deal has been reached between his administration and the state employee unions.

Malloy had been warning workers about potential layoffs since he unveiled his budget on February 16 - although it seemed like a remote and faraway possibility at the time. He and his staff said repeatedly that he wanted to avoid layoffs -- which he said could number 4,000 or more -- as the discussions continued with the unions that represent about 45,000 state employees.

"It's disappointing that the governor has decided to go forward with issuing pink slips," said Matt O'Connor, a spokesman for the coalition of state employee unions that has been in discussions with the administration about possible concessions. Malloy had delayed the pink slips on Friday in hopes of reaching an agreement over the weekend, but no accord was reached.

O'Connor said as of Tuesday morning, more talks were scheduled later in the day between the union coatlition and the administration. O'Connor said the leaders of individual bargaining units in the coalition were being briefed Tuesday morning on the talks by coalition leaders involved, to bring everyone up to date about what has happened and what may be expected now.

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Some of the largest layoffs would come at the state's vocational-technical high schools, where parents say that many children are receiving a solid education that suits their needs better than traditional community high schools.

Some insiders said for weeks that the two sides were never really close to a deal, while others expressed more optimism that an agreement could be struck.

It was clearly a somber day in state government, and it seemed relatively quiet in the hallways of the state Capitol.

"We held off on any layoff notifications while we tried to complete a deal over the weekend and on Monday night,'' Malloy said in a statement Tuesday morning. "Unfortunately, absent an agreement and in order to comply with contractual notice requirements and the provisions of the budget agreement signed last week, we need to begin those notifications today. Therefore, I have directed OPM to begin issuing layoff notices in an orderly fashion to the first 4,742 state employees.''

Malloy had been trying to reach $1 billion in savings and concessions per year that would have included a variety of givebacks by the workers. The issues under discussion included a two-year wage freeze, additional unpaid furlough days, pension and healthcare changes, and allowing the creation of a 401 (k) program for all new state employees who were hired after July 1. Currently, all state employees are eligible for a traditional pension plan as long as they meet the age and service requirements.

For months, Malloy had said that reaching $1 billion was achievable because the state could save $300 million through wage freezes and another $100 million by switching to a health plan similar to the one used by federal workers. The unions, however, said the proposed givebacks amounted to an average of more than $20,000 per worker. No workers, however, would have seen their salary cut by that amount.

The layoffs mark a 180-degree turnaround in Malloy's relationship with organized labor.

Only last year, the layoffs would have been unthinkable as Malloy enjoyed a very close relationship with the unions during the gubernatorial election campaign - as the unions helped provide the margin of victory in a close election with Republican Tom Foley. Malloy won by one-half of 1 percentage point, and he actually lost the race in a solid majority of the towns in Connecticut. But a large turnout in cities like Bridgeport helped push Malloy over the top and into the governor's office.

Despite the layoffs, the state employee coalition, known as SEBAC, says it will continue to meet with Malloy's chief negotiator for "at least one more day'' in an attempt to reach a last-minute deal.

"The discussions have been extraordinarily complex and demand our continued efforts to find mutual resolution,'' the unions said in a statement.

"Our discussions with the administration cannot be separated from the broader struggle for a fair economy based on shared sacrifice. Middle-class workers, whether public or private, did not cause Connecticut's economic problems and should not be asked to bear an unfair burden in their resolution,'' the unions said as the layoff notices were going out. "This is especially true when Wall Street and the super-rich who have profited at our expense during the economic downturn have been asked to sacrifice so little.''

Sticking to a confidentiality agreement that they had made at the start of the talks, the negotiators were largely successful in refusing to discuss the substance of the talks. Even two of the legislature's biggest supporters of unions - House Speaker Chris Donovan of Meriden and state Sen. Edith Prague of Columbia - both say they have had no details on the talks.

"The Governor's Plan B proposal paints a bleak picture for Connecticut,'' Donovan said Tuesday in a very brief statement. "I ask Governor Malloy and the leadership of the state employee unions to stay at the negotiating table and get the job done."

Under the law passed as part of the two-year, $40.2 billion budget, the cuts that will be necessary in addition to the layoffs would require approval by the Democratic-controlled legislature before the end of the legislative session on June 8.

Overall, the options include $1.67 billion in cuts and layoffs to fill a hole of $1 billion, including $455 million that would be saved from the 4,742 layoffs of both unionized and non-union workers. The cutbacks would include nearly 4,200 layoffs in the executive branch agencies, 470 in the judicial branch, and 80 in the legislative branch.

The layoffs represent about 10 percent of the state's 46,290 full-time workers who are paid with state funds. The totals do not include part-time workers or those paid with federal funds.

Under Malloy's plan, the layoffs would occur at more than 40 different departments and agencies, ranging from the state prisons to the University of Connecticut.

While the agencies would have an average cutback of 10 percent of the workforce, the numbers vary widely from agency to agency. At the Department of Revenue Services, where the state is trying to collect as much in taxes as possible, only 1.6 percent of the workforce would be laid off. At the Department of Developmental Services, which is one of the largest agencies with 3,617 employees, only 1.5 percent would be laid off.

The highest number of layoffs would come at the State Department of Education, which would lose 1,413 of its 1,706 employees - or 82.8 percent. Those include a large number of teachers at the vocational-technical schools. The plans also include eliminating all 80 positions at the Hartford-based Commission on Human Rights and Opportunities in order to save more than $6.3 million in the fiscal year that starts in July.

The other agencies with large layoffs would be 471 jobs in higher education, including the Connecticut State University system, 319 at the Department of Corrections, 285 at the University of Connecticut, 277 at the state transportation department, and 188 at the newly formed Department of Energy and Environmental Protection.

In the governor's office, three of the authorized 27 positions would be eliminated. In addition, 12 of the 148 positions in the governor's budget office - a separate entity - would be eliminated.

While the corrections department has a relatively large number with 319 layoffs, it represents about 5 percent of the department's 6,493 employees.

At the Department of Children and Families, a long-troubled agency that has often been in the headlines with problems overseeing troubled children, 3.2 percent of the agency's 3,284 workers would be laid off.

The additional spending options that Malloy will be facing include eliminating both Governor's Horse Guards in Avon and Newtown, reducing millions of dollars in scholarships for students in private colleges in Connecticut like Quinnipiac University, and closing the workers' compensation district offices in Middletown, Norwich, New Haven and Stamford.

The options also include eliminating 25 positions by attrition in the Department of Public Safety to save $2 million per year, as well as eliminating police and fire training services to save more than $8 million over two years. All funding for the Office of the Child Advocate, which serves as a watchdog over the Department of Children and Families, would be eliminated in order to save about $1.4 million over two years. The New Britain branch of the motor vehicles department would be closed, and staffing at the New Britain-based Department of Public Utility Control would drop by 27 percent.

The state would save more than $300,000 over two years in operating and insurance costs if officials sell the state police helicopter.

Malloy's budget director, Ben Barnes, wrote last week in a one-page letter to Malloy that he was hoping to avoid cuts.

"These options are unattractive policy choices, and I offer them with a sense of reluctance and even regret,'' Barnes wrote. "Clearly, implementing these reductions would be a worst-case outcome - painful for our citizens, our employees, and those who rely on state services. It is my fervent hope that an agreement will be reached in short order, obviating the need for either personnel reductions or additional programmatic cuts.''

Malloy, who avoids using the word "unions'' and instead refers to the workers as "our employee group,'' has been criticized harshly by Republicans for ignoring them during the budget talks. The Republicans said Malloy had raised their hopes when he was first sworn in back in January, but now they say they were systematically cut out of the budget negotiations over a period of weeks.

A longtime Capitol insider said there is a sense of unease in state government as the new fiscal year approaches.

"Some agencies are spending money like they're going out of business before July 1,'' the insider said.

The Hartford Courant's Jon Lender reports:

Roy Occhiogrosso, senior adviser to Malloy, told reporters Tuesday afternoon that layoff notices had begun being handed to state employees by administrators at various agencies, but he didn't know how many.

"On Thursday, we will give you a detailed breakdown on paper of everyone who has received a notice up until the close of business on Wednesday," Occhiogrosso said.

Tuesday morning's announcement by Malloy signaled the beginning of what Occhiogrosso described as "an orderly [process] of notifying the first [4,742] people. But that is a process that takes time. You start with the people who require the most notice, and wherever possible they're doing it in person - so that's obviously a time-consuming matter."

If in-person handling of the pink slips isn't possible, then employees will receive them by certified mail, Occhiogrosso said.

"It will take weeks for all of the first 4,742 layoff notices to go out," he said.

Moreover, there could be significantly more layoffs than the 4,700 already mentioned, Occhiogrosso said - perhaps driving the total above 5,000. "That group of 4,742 ... is not the final group of people," he said, because there are "programmatic cuts" in the Plan B options that would result in additional layoffs. He said it "could be a significant number," potentially in the hundreds.

Larry Dorman and Matt O'Connor, the two union officials who have served as the chief spokesmen for the state employees' bargaining coalition, talked with reporters outside the state Capitol and said although it's disappointing that Malloy has started to move forward with layoff notices, more talks were scheduled with the administration later in the day Tuesday. They would not go into specific issues that are hanging up the talks.

"We're expecting those talks to continue," O'Connor said. "We'll take the administration at their word. They said they want to keep talking. We said, 'great,' we're ready to keep talking. We'll take this day by day, understanding all of the pressures and the deadlines that are out there, until we reach a mutual agreement."

Asked what would happen if the negotiators reach an agreement with the administration but the rank-and-file union members fail to ratify the agreement, O'Connor said that is a "down-the-road scenario that quite frankly distracts from us reaching a mutual agreement now, and coming up with a solution where we don't have to look at massive job cuts."

Rather than focus on Malloy's Plan B, O'Connor preferred to talk about what he called "Plan A," adding: "Plan A is a way in which the state's workforce contributes, and we get this economy moving again, [and] we do something about the backwards policies that have been hurting working and middle-class families for the last decade in this state. That's what we're focused on."

Leo Canty, a vice president for the American Federation of Teachers in Connecticut, said the issues being worked out are extremely complex, affecting not just state employees but also the state economy, and he likened the situation to a "pretty complicated, three-dimensional chess game."

One of the variables, Canty said, is which of the "plan B" options Malloy and the legislature would choose to implement. For example, one of those options would bring "almost an entire elimination of the [state] Board of Education, which would include the vo-tech system," he said. If Malloy chooses that option, Canty said, "that's a question that gets posed back to the legislature - do you really want to do this? ... Plan B is a work in progress."

"It's an incredibly complex situation, dealing with issues that ... are very deep ... [and] have huge impacts and ramifications," Canty said. "So it's in our interest and everybody's interest that we spend the time and do it right, and get it right - and we can't afford to get it wrong."

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