State Employee Union Ratifies Concession Agreement

HARTFORD, CT — Members of the state employees union have decided to ratify a contract concession agreement with the state. The agreement is part of Gov. Dannel Malloy's plan to mitigate a multi-billion biannual budget deficit.

"This agreement contains significant short-term savings that will be the foundation of a responsible, balanced budget," Malloy said. "More importantly, the agreement delivers over 20 billion dollars in savings to taxpayers over the long term and ensures that the promises we make to our employees today are promises that we can afford to keep."

The total savings is estimated at $24 billion over 20 years with $1.569 billion in savings during fiscal years 2017 and 2018. In exchange for the concessions, the health and benefits of the contract will be extended through June 30, 2027. The agreement was set to expire in 2022.

Legislative Democrats also hailed the union passages as a success.

“I applaud the hardworking men and women who voluntarily voted for significant contractual givebacks and structural changes to our labor agreements,” said Senator Looney. “Independent analysts confirm that this agreement makes important long-term changes to our state employee pension and benefit programs resulting in significant savings for taxpayers - roughly $24 billion over the next 20 years."

Senate Republican President Pro Tempore Len Fasano called on Malloy's office to released the proposed contract to the state legislature.

“Not releasing these contracts makes me question, and should make every legislator question, what is in them that the administration does not want us to see," he said. "From the few contracts that are already public, we see many increased costs. We need to know what we are voting on before we actually vote."

The state legislature must now vote on the matter. (Get Patch's Daily Newsletter and Real Time News Alerts. Or, if you have an iPhone, download the free Patch app.)

Among the savings:

• Health care savings of $136 million in the first two years. Savings increase to about $100 million a year down the road.
• $200 million a year savings in the 2020’s as retiree medical insurance switches to Medicare Advantage.
• Pension savings for the state of $210 million in FY18 and $238 million in FY19. Over the course of the deal the state could save $400 to $500 million per year.
• Wage freezes will save $716.4 million over the next two fiscal years and $500 million a year thereafter.
• At least a quarter of the state workforce will likely retire before the existing SEBAC agreement ends and the framework of the agreement between Malloy and SEBAC allows benefits to change five years sooner. This could lead to 10,000 new employees on a combined pension/401k-style plan that is predicted to save money. Eventually the state will save $97 million annually by 2037.

At least a quarter of our workforce is likely going to retire before the existing SEBAC agreement ends. This deal allows the state to change the benefits structure five years sooner, meaning there will be more than 10,000 employees with the new Tier IV pensions on July 1, 2022. This attrition will save the state almost $77 million in the first two years, with the savings increasing to $97 million annually by 2037.

Image via MTA/Flickr Commons