Republican gubernatorial hopeful says labor needs to compromise

By Scott Benjamin

BRANFORD – Republican gubernatorial contender Bob Stefanowski says “dramatic changes” will have to be made in the pensions and fringe benefits for state employees, and given his executive experience at General Electric and UBS he can to negotiate a “real compromise” instead of leaving Connecticut with “paychecks that are going to bounce.”

He said the state has $100 billion in unfunded employee pensions and fringe benefits “over the next 10 to 15 years” that it will never be able to pay for. He added that he agrees with the recent report by the 14-member Commission on Fiscal Stability and Economic Competition that the General Assembly should play a larger role in the contract negotiations with the state employee collective bargaining units.

The leaders of those units contend that the concessions agreement reached last summer will save taxpayers $1.57 billion over the current two-year budget cycle and $24 billion over the next 20 years.

“The current concessions are not enough,” Stefanowski said in an interview. “It’s a step in the right direction.”

CTNews Junkie reported last year that the pensions are only 35.5 percent funded. State Comptroller Kevin Lembo (D-Guilford) has credited Gov. Dannel Malloy (D-Stamford) as being the first governor in a generation to adequately the fund the pension system annually after decades of neglect.

State Rep. Steve Harding (R-107) of Brookfield has said that after only paying 0-2 percent of their pensions the agreement would boost that contribution for state workers to 4 percent. He has said that the goal should be 6 percent, which is the average for national employees.

Stefanowski, who lives in Madison, said he doesn’t have an exact percentage that he would seek from the collective bargaining units.

Would he take the same step as Rhode Island Democratic Gov. Gina Raimondo? She reformed a pension system that was only 48 percent funded by suspending increases for current retirees and placing part of the defined benefit package for the current workers into a 401-K plan, according to The New York Times.

“There are some good things there,” said Stefanowski.” But I’m not going to commit to doing something like that.”

“I would like to preserve for our current state retirees what they currently have,” he added.

Stefanowski indicated that he would be even “more aggressive” on curtailing health care benefits.

Former two-time Democratic gubernatorial nominee Bill Curry has said that he was indicating in the early 1990s when he was state comptroller that the “800-pound gorilla” was the long-term health care costs.

Stefanowski acknowledged that since at least 1975 when then-Gov. Ella Grasso (D-Windsor Locks) sought major concessions in the spring and then in the fall proposed increasing the work week from 35 to 40 hours, Connecticut governors have faced stiff resistance from the collective bargaining units, who reportedly have among the most generous fringe benefit packages in the country.

“I am sympathetic to that they were promised something,” he said of the agreement with the state employee collective bargaining units that was approved last summer.

“However, the money is not there,” Stefanowski declared. “We need to have a fair compromise that has the best outcome for everybody. That is what leadership is about. I’ve been doing it for 25 years in the private sector.”

“You sit down, you build a relationship,” he added. “You have a tough discussion. You make them believe that something is going to change this time. I don’t think anyone has talked to them and said, ‘Guys, we need to have a real compromise here’ when it comes to getting the right compromise.”

Stefanowski, who has written a book on mergers and acquisitions and has another that will be published this spring, said the keys to success in that area are, “Being truthful, fair and being ethical. You also need fiscal discipline. Would you overpay for a company? That’s the worst thing you can do in negotiations. We have zero fiscal discipline in this state.”

“You need to be able to relate to people,” he added. “When I was at G.E., I was rarely at the office. I was with customers, I was on the shop floor. I was out meeting people and building relationships.”

Would he continue Malloy’s efforts to trim the state full-time work force? The governor said earlier this year that it is 12.6 percent smaller than it was when he took office in 2011 by not filling some existing positions after employees left.

“I don’t like the part of the last budget where there are no-layoff provisions,” Stefanowski said for the four-year period that will conclude in mid-2021 in which state employees can’t be laid off.

“That binds someone’s hands coming it,” he said. Malloy had a four-year provision in the 2011 share sacrifice budget agreement and former Gov. M. Jodi Rell (R-Brookfield) agreed to two years of no layoffs in 2009.

“There are too many layers of government,” said Stefanowski, indicating that he would make major revisions in some departments.

“Forty percent of this budget is still discretionary,” he added.

Stefanowski said he opposes Malloy’s proposal from last year to have the municipalities fund one-third of the teacher pensions, a severely underfunded system that the state has been financing since 1939.

“The state created the problem and the state should fix it,” he said.

“Almost every town does a better job of managing its money that the state has done,” Stefanowski explained. “You almost get penalized in this state for being fiscally responsible.”

He said, for example, that he opposes the state’s proposed $50 million economic rescue package for Hartford, which appears to be on the brink of financial default.

Stefanowski said he supports the recent recommendation of the Commission on Fiscal Stability and Economic Growth that would allow municipal coalitions to add one-half of one percent to the sales tax rate to fund regional services and diversity local budgets that rely exclusively on property taxes.

On another topic, did Malloy, who is not seeking a third term this year, make the correct decision in 2011 in merging the state university system, the community colleges and Charter Oak College into the Board of Regents?

“I don’t know,” said Stefanowski.

“I do think that we should have more coordination between the different universities,” he added. “There should be more dialogue between the employers and colleges” to help determine if the schools are preparing students for the current labor market.

Does he support the Board of Regents Students First proposal to consolidate the administrative functions at the community colleges into the central office and take other steps to save $28 million to keep the system solvent and avoid having to close a campus?

“I don’t know,” Stefanowski said.

He said he opposes Malloy’s plan to increase the gasoline tax by seven cents a gallon and install electronic tolls to help pay for a $100 billion, 30-year plan that was devised by an ad-hoc committee in 2015 and ensure that the special transportation fund doesn’t run out of money in the short run.

“The government is never going to come up with $100 billion,” Stefanowki declared said. “I’m against tolls. it’s just another tax.”

“There’s a ton of money in the private sector,” he said. “There’s billions of dollars in equity capital. They would love to invest. Other states have done it.”

Malloy has said companies have bypassed Connecticut because of its crumbling infrastructure and chosen to build operations in Westchester County in New York state or northern New Jersey.

Stefanowski said he’s against the recommendation by the Commission on Fiscal Stability and Economic Growth to gradually increase the minimum wage to $15 an hour.

“I think we should let the private sector determine what we should pay people,” he explained.

Has Malloy’s support of a minimum wage that has increased from $8.70 per hour to the current $10.10 per hour over the recent years hurt Connecticut’s economy?

“I think it makes it harder for businesses to be competitive,” Stefanowski said.

Regarding the recent shootings in Las Vegas and Parkland, Fla., the candidate said future efforts to combat gun violence should be “focusing on the mental health of the people that are causing the problems.”

Stefanowski made a media splash last December as famed economist Art Laffer, who helped design his plan to phase out Connecticut’s income tax in eight years, appeared with him at five forums over two days.

He said both Florida and Tennessee have no income tax and currently boast budget surpluses.

“I’ve got the same economist who wrote my tax plan for Connecticut who wrote Trump’s and Reagan’s,” said Stefanowski.” [Trump’s] tax plan has been amazing for this country.”

During a talk in Washington, Conn. in 2016 on his book on the Kennedy and Reagan tax cuts, Redding’s Larry Kudlow, who was recently appointed as Trump’s National Economic Council director, said those across-the-board tax cuts generated about five percent annual gross domestic product growth in the years immediately after they were enacted.

However, Washington Post economics columnist Robert Samuelson has stated that the Kennedy tax cut, which the later Reagan tax reduction was modeled after, is probably the worst domestic policy decision in the United States since World War II. He has written that instead of deficits being acceptable during economic downturns, they became the norm. Since former President Lyndon Johnson signed the Kennedy tax cut in 1964, there have been 49 annual federal budget deficits and only five budget surpluses, with the most recent being for the fiscal year ending in 2001.

Stefanowski, who is not seeking the Citizen Election Program grants since Connecticut faces a projected budget deficit, has not participated in any of the three debates among the Republican candidates that have been coordinated by the state GOP. Two more are scheduled before the state GOP convention in May.

He said that he has commitments from some delegates to the convention but has opted not to announce them at this time. He indicated that there are two ways to get on the ballot for the August 14 primary, which apparently means that he will seek to collect the needed petition signatures if he doesn’t have the required 15 percent of the convention delegates to qualify.

The GOP field includes former Trumbull First Selectman Tim Herbst, former U.S. Comptroller General David Walker of Bridgeport, former hedge fund manager David Stemerman of Greenwich, state Sen. Toni Boucher of Wilton, Danbury Mayor Mark Boughton, Shelton Mayor Mark Lauretti, state Rep Prasad Srinivasan of Glastonbury, Stamford Chief Financial Officer Mike Handler of New Canaan, businessman Steve Obsitnik of Westport, New Britain Mayor Erin Stewart, former Secretary of the State nominee Peter Lumaj of Fairfield and former West Hartford Town Councilman Joe Visconti