The Register Citizen (Torrington, CT)
Lamont’s union ploy comes with high risk
Connecticut ends the decade of the teens the same way it started: A newly elected Democratic governor who never served in the Legislature, catapulted to power by public employee unions, confronts a budget deficit and asks those same workers for givebacks.
That’s what happened with former Gov. Dannel P. Malloy in 2011. We thought it would be different for Gov. Ned Lamont in 2019.
The state is in far better shape. Lamont had insisted on the campaign trail, and since, that he wouldn’t reopen the state employees’ long-term pension and health contract that expires in 2027. “A deal’s a deal,” he said.
He has said all along that he’d look for win-win options to save money, and he has kept close contact with union leaders. On Wednesday, he did offer some of those money-saving win-wins for labor — health care changes that will save $50 million next year by tightening up negotiations with hospitals.
But he also made the ask on givebacks. He wants state employees to agree to a new way to calculate cost-of-living adjustments, or COLA’s, for future retirees. The COLAs would tie retirees’ raises to market performance for the state’s main pension fund, but still set limits on the upside.
Lamont didn’t have to do it, certainly not to balance the budgets for the next two years. The savings will amount to an average of $20 million a year, according to Lamont’s budget chief, Melissa McCaw — or about one-tenth of 1 percent of the budget.
That’s scant payoff for the political risk Lamont is taking by going after his core supporters right out of the box. And he has little leverage.
Remember, these are the unions he said he’d protect and have their backs as hundreds of them knocked on doors and staffed phone banks, helping Lamont beat a Republican who yelled from every town square that he’d cut union benefits down to size.
On Wednesday, the question the unions were asking was: why would Lamont risk a backlash?
The answer is related to who Lamont is — the ultimate mediator — and how he appears to view the world, as a place where opposing parties can work out their differences without a hammer.
Union leaders aren’t playing ball.
“It’s unclear what he’s asking and we’ve been very clear that it’s won-win only. I don’t see the other half of the win. The answer is no, we’re not opening this up,” said Jody Barr, executive director of the AFSCME Council 4 union, which represents 15,000 state employees.
Details of the plan remained unclear Wednesday. Most perplexing to the unions was that, as they see it, Lamont knows he can’t win this one. The state’s union workforce has had six years of pay freezes in the last eleven, agreed to a 3-percent surcharge for health care and higher payments for retirement, among other changes.
The unions also agreed to let the state hire two new tiers of employees under Malloy, each with lower benefits. Without all the givebacks that started in 2009, the state would have to pay $2 billion more per year for salaries and benefits, union leaders say.
And the governor has little leverage because unionized state employees have two years left in a no-layoff deal, and they already have their current benefits package in place until 2027.
Lamont has plenty of options. While Malloy inherited a mess — a $3.5 billion shortfall with freshly issued, $900 million debt he had to pay off for recession-era government expenses — Lamont took over a fiscally stronger state.
Despite all that, Lamont said the change makes sense as part of his balanced approach — bitterly contested by people who had hoped to see higher taxes on wealthy households. He’s sticking to the idea that success in these talks will help everyone, period.
Malloy, by contrast, took a more pragmatic — some would say hard-headed — approach in which transactions ruled the day.
“Some of you think Connecticut needs a ‘Wisconsin Moment’ — where we walk away from collective bargaining and tear up the contracts,” Lamont said, referring to that state’s former governor, Scott Walker, who stripped union rights. “I want an anti-Wisconsin moment — a Connecticut moment — where we show that collective bargaining works not just for retirees but also for the next generation of state employees and the next generation of taxpayers.”
Currently, the floor for retiree COLAs is 2 percent and it’s based on the most common measure of inflation, the Consumer Price Index. Retirees after June 30, 2022 will have a floor of zero, in years of very low inflation.
Lamont’s plan would have a floor of zero and tie it to the fund’s performance — similar to a plan in place in some other public unions, including teachers.
Republicans support Lamont’s plan and many want far more givebacks. To a person, all the pro-union Democrats I spoke with, including the four highest ranking leaders, said the same thing: Let the process play out, let Lamont negotiate and we will see what happens.
If this really is just a small ask, the unions should give it. But for now, they’re showing annoyance and resolve. Salvatore Luciano, president of the state AFL-CIO, said he’s pleased with measures such as Lamont’s support for a $15 minimum wage, but added, “We are disappointed that Gov. Lamont has broken his campaign promise to not seek further givebacks from state workers after they made concessions three times over the last decade.”
Lamont’s tone is remarkably subtle. “Threatening to lay off our newest employees who are doing important work is not how I negotiate and not how I treat people,” he said.
But then: “How we work together to fix our long-term pension and health care costs will impact my thinking on the mix of state employees and outside providers in our government’s future.”
Translation: Give me this pension change or I’ll outsource more jobs, he’s saying — further perplexing union leaders. He dropped a similar hint in his speech on inauguration day, and Republicans heard it clearly, as Democrats and labor leaders waved it off.
Such a nice way of playing hardball. It’s a sign that Lamont has total faith in his ability to govern in a conciliatory way. Everyone wants him to succeed. It’s just a question of whether the pieces can add up.