Narrow path to union deal and labor reforms

Republicans in the Connecticut legislature have proposed a series of reasonable structural changes to balance the collective bargaining rights of state workers and the need to control long-term spending and protect the interests of taxpayers.

Republicans would remove overtime earnings from pension calculations. Going forward state workers would be assured equitable pensions based on their base salaries. Eliminated, however, would be the practice of fattening pensions based on a few years of excessive overtime.

Another bill would mandate that all worker contracts reached through negotiation or via arbitration would have to win legislative approval. Currently the legislature can, and usually does, allow contracts to become official via its inaction. Knowing a contract must gain legislative approval would provide an incentive to hold down the size of raises and would moderate benefit awards. It’s time for the legislature to take ownership of the labor deals that can determine spending and taxing for many years.

A third proposal would end traditional pensions and establish a 401(k)-style retirement plan for future state employees, with the state matching employee contributions.

And Republicans would follow the practice seen in most other states by no longer making pension and health care benefits part of collectively bargained contracts, but instead afford such benefits through legislation. This would provide the legislature the flexibility it needs to adjust pensions and retirement health care benefits if they threaten to bust the budget.

Pay and other benefits would remain subject to collective bargaining.

State labor leaders have reacted with the usual sound and fury, saying that it is unfair to try to balance the budget on the backs of working people rather than forcing the rich to pay more through higher taxation.

The problem is that the backs of many working people in the private sector are already near breaking due to the taxes they pay to support workers in government who often receive better pay and benefits than they do. As for hiking taxes on the very rich, experience has shown they can easily move to friendly tax havens, driving down revenues to the state despite the tax hikes.

But there can be no snapping of fingers to implement these ideas. Republicans remain a minority party, though their numbers have grown in recent elections. The GOP shares an 18-18 tie in the state Senate, giving Democrats the edge only by way of any tie-breaking votes cast by the Democratic Lt. Gov. Nancy Wyman. In the House the Democrats hold a slim 76-72 advantage.

Meanwhile, Gov. Dannel P. Malloy remains in negotiations with the labor unions. The talks are complex because the state negotiates wages and working conditions separately with each bargaining unit. However, the administration negotiates health care and retirement benefits collectively with the State Employees Bargaining Agent Coalition, representing all the unions. That SEBAC contract runs through June 2022.

Malloy has set a goal of getting roughly $1.5 billion in concession savings over the next two years, as the state tries to close a projected $3.6 billion deficit over that period. Republicans are worried that in return for concessions, Malloy will lock in benefits for several more years and block the structural changes they propose.

Yet Malloy recognizes he will have to give up something in return for concession savings and that something is mostly likely a SEBAC contract extension several years past its current 2022 expiration date.

It’s a conundrum.

One path forward might be a deal that saves the state money in the long term while shoring up the pensions workers will be counting on in retirement.

The most likely candidate is to get the unions to agree to end or at least significantly curtail the practice of using overtime to calculate pension amounts. It is a relatively painless way to bring down long-term pension costs and improve the viability of the pension system.

As for mandating that the legislature vote on all worker contracts and arbitration awards, it could be accomplished outside of the bargaining process by a vote of Republicans and fiscally moderate Democrats.

That would leave pensions and health care benefits still collectively bargained and the traditional pension system in place for state workers, at least for a time. Malloy would be left with negotiating room to get his concession deal. The unions would likely get their extended contract. And Republicans could celebrate some success — ending pension overtime abuses and getting legislative contract votes — but still have a couple of labor issues to run on in coming elections.

That’s hardly a perfect ending, but it would be progress.