Malloy takes his budget woes directly to the unions

http://newhavenregister.com/articles/2011/03/04/news/doc4d718ebb9341b138254831.txt?viewmode=fullstory

March 4, 2011

By Mary E. O’Leary
Register Topics Editor

HARTFORD — Labor leaders Friday heard Gov. Dannel P. Malloy tie his political fate and the fate of union workers together as he stuck to his script that he needs $2 billion in savings from them to balance the $40 billion biennium budget.

“The consequences are unimaginable for me and for you,” Malloy said if they are unable to come to an agreement as he attempts to close a $3.5 billion deficit by cutting $800,000 from state agencies, raising $1.5 billion in taxes — the largest in the state’s history— and nailing down concessions from the 45,000 state workers.

“I’m not going to say anything different in this room than I say outside,” said the governor,who reiterated that there will be thousands of workers laid off, possibly half his deputy commissioners and a shredded safety net if talks with labor fail.

Beyond that he predicted he would not be re-elected and the workers would no longer have a governor “who actually believes in government and believes in unions at the same time.”

He said his approach of balancing cuts with tax increases stands in contrast to New Jersey, Ohio, Wisconsin or Indiana, where collective bargaining rights are under siege and unions are seen as the enemy. “Understand in many ways, I represent the difference,” Malloy said.

While the 200 union leaders at the Hartford Hilton mentioned the things they liked in his budget plan — particularly funding of the Educational Cost Sharing grant — they did not feel his request represented “shared sacrifice” when he will only increase the tax rate on the highest earners by 0.2 percent.

As members of the middle class, they said they will pay more taxes, in addition to the request that they cut wages, benefits and pension changes.

“I’ll acknowledge it, in some senses I’m asking your public (union) members for even more. But I guarantee you, if we get by this, if we restructure, we cut, we put ourselves on a road to sustainability, in the long run, we will be better off,” Malloy said, as he appealed for a quick resolution.

Bette Marafino, a retiree with the Connecticut State Education Association, drew cheers from the crowd when she called “lame” Malloy’s argument that the rich will move out if the tax rate is any higher, particularly since they have benefitted from extension of the Bush tax cuts. She said a Wall Street poll found that 77 percent of the public wants millionaires taxed more.

“I don’t think we will see a scenario of moving vans lined up outside of Darien waiting to come in and move people to Alabama and Mississippi,” Marafino said. Malloy countered that he needs to maintain a tax advantage over neighboring states and said the top group was hit with a full 1 percent tax hike some 20 months ago.

Malloy warned that he saw how mobile jobs are in and out of the state when he was mayor of Stamford for 14 years and he warned once the real estate market stabilizes, more companies may move once their core workers are able to sell their homes unless Connecticut stabilizes its finances.

“I’m not stupid folks and I’m not evil. I’m really trying to do my best job,” Malloy said, as he looks for the right balance.

Labor felt stung by Malloy’s remarks last month when he said that while he believed “in a progressive income tax, I do not believe that we should punish success, or wealth.”

John Olsen, the head of the Connecticut AFL-CIO, said Malloy probably didn’t mean it the way it sounded. He said people who made money “by manipulating markets,” may be wealthy, but they are not successful, as opposed to working people making $30,000 to $50,000. He said the unions have waited “twenty years” for a government leader who will hold the manipulators accountable. “We believe that is you. We want to work with you to get that done.” Olsen said.

Laurie Pelletier, vice-president of the Connecticut AFL-CIO, said Malloy’s bill requesting that the general assembly vote on union contracts was an attack on collective bargaining and she was critical of his cozying up to the United Technology Corporation leadership.

“I will not apologize to anyone for trying to build a new relationship at UTC. But when I use the wrong words to describe something or if what I’m trying to do is misinterpreted, I will always apologize for that and accept responsibility,” Malloy said.

The governor later said his budget plan may not have all the answers and he would probably modify his proposed repeal of PILOT (payment in lieu of taxes) for manufacturers equipment. Malloy also hoped that negotiations with nursing home owners in the near future will not result in strikes and “let’s not let our organized nursing homes to be at a deficit in comparison to our non-organized nursing homes. I’m committed to that.”

He spent an hour at the hotel taking questions and listening to both criticism and praise from the group that helped him win his narrow victory over his Republican opponent, although he pointed out their support was a double-edged sword.

The governor attributed his razor-thin gubernatorial contest to his support of repeal of the death penalty, his refusal to take a no-tax pledge, as well as “my support from you and my support for you,” which he said he never wavered on.

The state last week began formal talks with representatives of the unionized state workers, most whom have wage agreements in place until 2013 and a pension/benefit contract in effect until 2017.

After the session, Olsen told the press that the rich in Fairfield County have a lot of disposable income and they won’t be hurt by a higher tax.

“They spend $20,000 over the weekend having a cocktail party,’’ Olsen said. “They spend $20,000 on a cocktail party without even batting an eye. Why can’t they pay some taxes?’’ he asked.

Olsen reiterated that residents of nearby Westchester County pay high property taxes in addition to state and county taxes so Malloy should not just look at the income tax when comparing the tax burdens of Connecticut compared to New York.

Leave a Reply