House Approves Malloy’s Budget Plan; Nonpartisan Analysis of Plan Raises Questions

By David Moran
June 7, 2011

The Connecticut House of Representatives passed a bill early Tuesday that essentially accepts Gov. Dannel P. Malloy’s proposal to plug a $2 billion hole in the upcoming $40.1 billion budget with $1.6 billion in union concessions and an additional $400 million in spending cuts and surplus revenue.

But it remains unclear if the governor’s plan will balance out. The nonpartisan Office of Fiscal Analysis issued a fiscal note Monday saying it could not verify the savings and concessions estimated by Malloy’s administration due to lack of information.

According to an Associated Press report, the 277-page bill passed early Tuesday morning in an 84-63 vote, after six and a half hours of debate.

The union concessions – which include a mix of wage freezes and modifications to current health care and pension agreements – still have not been ratified by the state’s more than 45,000 unionized employees, while the additional $400 million in savings relies mainly on funds from the $1 billion in surplus or “rainy day” account built into the coming budget.

Republicans and some Democrats who opposed the bill argued that the state should not be dipping into its “rainy day” fund to balance its budget, according to the Associated Press report. Yet, supporters said it was important to approve the plan before the legislature adjourns for the year on Wednesday.

“The passing of the implementer was another step in bringing closure to the budget process that was begun almost five months ago by Governor Malloy,” State Rep. Jason Rojas, a Democrat who represents parts of Manchester, Glastonbury and East Hartford, said. “While I did not support the budget for a number of important policy reasons this implementer was key to articulating policy that came out of the budget statement that was passed in early May.”

“There are two sections that that I am very supportive of: canceling the need to issue Economic Recovery Revenue Bonds, which were passed during the last biennium allowing for the elimination of the Competitive Transition Assessment on consumers electric bills, and the creation of a Regional Performance Incentive Grant Program that provides funds to municipalities for jointly performing a service they currently perform separately which will allow for great cost and service delivery efficiency,” Rojas said.

The bill moved to the state Senate for debate Tuesday.

Monday’s report by the OFA appears to further complicate the process, according to CT News Junkie, an online news Web site.

Republican Party Chairman Chris Healy issued a statement soon after the OFA analysis criticizing Malloy and legislative Democrats for producing a budget that he said “doesn’t add up.”

“Gov. Malloy’s grand plan to ring $1.6 billion in savings from state employee unions has been long on rhetoric and short on reality,” Healy said in the release. “Now it has been revealed to be a outright fraud.”

And then there is the issue of the union concessions themselves, which would need to be ratified by July 1, the beginning of the new fiscal year, in order for the state budget to balance by that date.

Matt O’Connor, a spokesman for the State Employees Bargaining Agent Coalition, which represents more than 45,000 of the state’s unionized employees, said that union leaders had finished informing rank and file members about the basics called for under the concessions deal, and would be holding a series of votes to ratify the agreement. He said that at least 14 of SEBAC’s 15 unions would have to ratify the agreement for it to take affect, and that he expected the voting to conclude by June 25. (The SEBAC’s analysis of the concession agreement is attached as a PDF to this article)

O’Connor said that although union members were having difficulty accepting some of the concessions for contracted benefits they had previously negotiated, he expected the agreement would be ratified. He said he thought the agreement of no layoffs of state employees over the next four years would overrule all other factors.

“It’s going to be a tough decision for everybody, no question about it,” O’Connor said. “But I think workers realize that it’s fair.”

CT News Junkie reported Tuesday that Malloy told a group of reporters during a ribbon cutting ceremony at the Connecticut Center for Advance Technology in East Hartford that he was “confident” that his administration would reach “those dollar amounts” called for under the implementer.

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