Added Luciano, “Governor Rell is not interested in helping the middle class face the real retirement crisis affecting most Connecticut workers. She has just offered up empty rhetoric before her commission has even taken a vote on final recommendations.”

Governor Rell is already on track to leave behind her a legacy of economic devastation, home foreclosures and terrible human suffering. To distract from the fact that neither she nor her hoped for successor have any realistic plan or program to solve the real problems of the middle class, she has now put forward a series of proposals which both break her binding promise to 45,000 working families, and would not create a single job or help a single community. If adopted, they would only further delay our economic recovery.

Said CSEA/SEIU Local 2001 Executive Director Robert Rinker, “Governor Rell has shown that she’d rather play politics than put forward real solutions for Connecticut middle class families. But she has also shown that she’s not interested in dealing with the state pension and retiree healthcare plans’ unfunded liabilities. If she were, the governor would have recommended using some of last year’s budget surplus to reverse recent pension fund deferrals to the unfunded liability. Instead, she called for cancelling bonding in the current year’s budget, which produces far less bang for the taxpayers’ buck.”

Added Rinker, “The governor’s representatives who negotiated a nearly $1 billion cost savings agreement last year didn’t put forward changes like she has presented here; they couldn’t with a straight face. Instead, she waited until an election year in order to offer up talking points for Tom Foley’s campaign for governor.”

The coalition’s leaders look forward to working with a new administration in an honest and concerted effort to help solve the real problems that confront the people of the state.  Working together, elected leaders, business leaders of good faith, and Connecticut’s middle class both in the public and the private sectors, can help build a future where every family has a chance for a decent job, with decent benefits, and a safe and dignified retirement.

Council 4 and CSEA are two of the thirteen unions in the State Employee Bargaining Agent Coalition (SEBAC), which serves to unite approximately 45,000 Connecticut State Employees to address issues of common concern. To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

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Just last week, the Connecticut State Employees Retirement System’s (SERS) independent actuaries projected that under current methods, the pension fund’s assets will increase by more than 45% over the next 10 years. In contrast to Rauh’s “doomsday by 2019″ conclusion, Cavanaugh MacDonald Consulting’s actuaries project Connecticut’s retirement system will be fully funded by 2040.

The Administration of Governor M. Jodi Rell and others who push “defined contribution plans” or 401(k) savings accounts over real pension protection for working families have seized upon Rauh’s April 2010 paper. In recent news articles, it has been cited as the source for promoting a policy where workers take all the risk and Wall Street makes higher profits.

But studies show that the cost to provide the same level of retirement benefits by a real defined benefit pension plan is 12.5% of payroll versus a comparable 401(k) at a cost of 22.9%. And while real pension plans are “counter-cyclical” — they help moderate downward turns in the economy by providing stable income to retirees during a recession — 401(k) type plans actually help pull the economy further down.

The reality is that dropping less costly pensions in favor of risky savings accounts does not make economic sense.

“As a member of the Governor’s OPEB (State Post-Employment Benefits Commission) Panel, I have seen the Administration’s push for a defined contribution plan for State employees,” said Sal Luciano, Executive Director of Council 4 AFSCME. “But we know that when taxpayers pay into a pension fund, they get a four to one return back into the economy as retirement income. Pensions are good for workers and they are good for the economy. Pensions are not the problem.”

The State Employees Bargaining Agent Coalition (SEBAC) continues to advocate for real solutions to Connecticut’s fiscal problems, not phony solutions that scapegoat hard-working state employees. The current state pension plan costs less than 4.7% of payroll for the typical employee, much less than many large corporations pay. Connecticut needs responsible leadership committed to making payments to unfunded liabilities and to the retirements of public service workers.

“Rauh’s report confuses the issues, which include how Wall Street’s interests conflict with secure retirement for workers,” said Carol Thomas, a member of the State Treasurer’s Investment Advisory Council who retired from the Department of Mental Retardation after more than 30 years of public service in 2003. “Retirees who rely on a 401(k) have no recourse for looking over corporate executives’ shoulders to make sure they are being responsible. These CEOs think public pension funds are a nuisance because we’re looking for secure and cost-effective investments and controlling run-away executive pay,” said Thomas, who is also a member of CSEA/SEIU Local 2001’s retiree council.

Council 4 and CSEA are two of the thirteen unions in the State Employee Bargaining Agent Coalition (SEBAC), which serves to unite approximately 45,000 Connecticut State Employees to address issues of common concern. To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

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June 1 NASRA Analysis of Joshua Rauh’s Paper “Are State Public Pensions Sustainable?”

June 21 Actuarial Projection of State Employees Retirement System

“SEBAC has been advocating for a pooling mechanism for years,” said Sal Luciano, Executive Director of AFSCME Council 4. “Governor Rell had fought us by vetoing the bill each time it was passed by the General Assembly. We are very happy to see that she has finally acknowledged the benefits of increased access to quality care and increased savings to employees’ wallets as well as to state and municipal budgets.”

Twice before under the leadership of House Speaker Chris Donovan, the General Assembly had passed and Governor M. Jodi Rell had vetoed bills that would allow municipalities, non-profits, and small businesses to buy into Connecticut’s State employees’ and retirees’ health plan. This year the legislation focused on municipal and school employees gaining access to the pool for prescription drugs. The bill passed both chambers of the legislature with overwhelming approval in part because members of the General Assembly recognized and fought for the potential savings to the state budget and the increased access to quality affordable healthcare that the bill provides for those workers in the state’s cities and towns.

“I’m thrilled that workers like me will be able to save money by joining the pool,” said Karen Pratt-Szilagyi, an employee in Newtown’s Finance Department and the President of the CSEA/SEIU Local 2001 chapter representing the town’s municipal public service workers. “This gives me another choice for buying my families’ prescriptions. The power of bulk purchasing means that we can drive down the high price of expensive medications. Now we need to convince our next governor to support pooling for all of our health insurance costs.”

Skyrocketing health costs and a deepening budget deficit continue to dominate Connecticut’s political debate this election season. SEBAC leadership will join supporters in the legislature to advocate for additional mechanisms to provide more choices and improved benefits for its members while reducing costs for the state’s bottom line in the months and years ahead.

Council 4 and CSEA are two of the 13 unions in the State Employees Bargaining Agent Coalition (SEBAC), which serves to unite approximately 45,000 Connecticut State workers to address issues of common concern. To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

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Public Act 10-131 “An Act Concerning The Purchasing Of Prescription Drugs By Nonstate Public Employers”

Now that the campaigns are in full swing, the candidates are being asked again and again how they plan to solve Connecticut’s significant economic problems. Considering the state’s down economy, the serious struggles facing the state’s working families, some of their answers ring hollow. Worse, some of them fit the oldest political maxim — if you don’t support honest solutions to people’s problems, try scapegoating someone else. That way it looks like you have answers, even when you don’t.

SEBAC is calling the Republicans’ statements on the economy and their solutions for solving budget deficits misguided and dangerous. More importantly, their shortsighted plans threaten to impact job growth in the state. Foley, for example, has proposed reducing the number of public service workers to levels following massive layoffs in 2003. 4 Lt. Gov. Fedele was quoted as saying that Connecticut cannot afford its State employee workforce. 5

In a Hartford Courant article published just before the May conventions, Griebel was quoted as saying “I will take an immediate accounting of all state agencies and consolidate, eliminate and privatize government services as appropriate.” 6

When asked how he would fix the state’s economy, Lt. Governor Fedele said he would institute a four-year State employee hiring freeze, restructure employee salaries and benefits, and privatize certain state services because private providers deliver services at half the cost of state-run services, state group homes and other state facilities 6.

Finally, in the same article, GOP gubernatorial nominee Tom Foley stated that he would “shift state services to outside contractors where it can be shown that equivalent service levels can be provided at less cost.” 6

This slash and burn approach to deficit mitigation has been proven ineffective.

Connecticut has experienced the failure of private contractors and has paid the price for outsourcing. One need only remember the I-84 debacle to be reminded that going private does not save the state precious dollars.

Similarly, studies have shown that cutting public services, particularly during a recession, means losing jobs in the private sector. With the reductions made under Governor M. Jodi Rell’s tenure, Connecticut has lost over 50,000 jobs. In addition, these cuts mean the loss of direct services like access to job training services, educational programs, healthcare, senior services, and public safety functions.

The cycle of lost earnings and the desperate need for vital services constricted by political leaders is perpetuated and the state’s economy spirals ever downward in the Republicans’ vision for Connecticut.

All of this, because Republican Party candidates won’t ask the wealthy few and large corporations to pay their fair share. They insist on a slash and burn approach and scapegoating state employees as the way out of this mess. Connecticut needs real solutions, not phony methods, to achieve economic recovery.

Middle-class families — including public service workers — in Connecticut currently contribute around 10% of their income to state and local taxes, and the poor pay close to 12%. Taking into account federal deductions they claim for local taxes and the increase included in last year’s budget of 1.5% on income over $1 million, the very rich only pay around 5% of their income in state and local taxes.

SEBAC leaders continue to reach out to Governor Rell and all of the candidates who seek ideas to help reduce the budget deficit, achieve greater government efficiency and help grow jobs. By focusing on Connecticut’s economy as a whole, and jobs in particular, we believe we can help bring the state and its working families back from recession and into a brighter future.

To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

Footnotes:
1 “The state needs to cut spending by outsourcing some government services and other measures.”
Tom Foley, Business Council of Fairfield County Gubernatorial Debate, Feb. 26, 2010.

2 “We need deep spending cuts that would include a four-year hiring freeze, merging state agencies, capping pensions and eliminating bonus payments for state employees.”
Lt. Gov. Michael Fedele, Press Conference, Mar. 17, 2010.

3 “It’s critical that the next governor bring the state employee unions to the negotiating table and discuss ways to cut costs.”
Oz Griebel, Republican NBC Gubernatorial debate, Mar. 18, 2010.

4 “I would bid out human service functions to private agencies, such as for clients at the Southbury Training School; reduce state workers to 2003 levels through attrition; and eliminate duplication of services.”
Tom Foley, Hamden Chamber of Commerce’s Business and Community Expo, Apr. 13, 2010.

5 “Connecticut cannot afford its approximate 50,000 state employee work force and the benefits they receive.”
Lt. Gov. Michael Fedele, NBC Gubernatorial debate, Mar. 18, 2010.

6 Governor’s Challenge: How I Would Fix It, Hartford Courant Commentary, May 16, 2010

Printable version of statement

Learn the facts about these two proposals by downloading the leaflet below and contact your legislator to ask them to support SEBAC’s 18-point plan, which creates jobs and helps put Connecticut’s economy back on track.

The Truth About the Newest Early Retirement Controversy

State Workers ‘Jobs for All Working Families’ Proposals (18-Point Plan)

Union leaders reiterated the obligation of both parties to negotiate and, if necessary, arbitrate the wisdom of any retirement incentive program, and pressed for information on the impact the governor’s ERIP would have on public services and the state’s already underfunded pension plan. The response of Administration representatives was to storm out of the meeting.

“We’re terribly understaffed already,” said Carmen Boudier, President of New England Healthcare Employees Union, District 1199/SEIU. “We have healthcare workers and corrections officers struggling through mandatory double shifts, and the state trooper force is below its statutory minimum. When bridges are found to need repairs, we don’t even have enough maintenance professionals to repair them,” she said.

Dave Walsh, President of the American Association of University Professors – CCSU, noted that, “college students are struggling to find courses they need to graduate, and we have backups and waiting lists for workers needing job services, and for businesses needing permits to create jobs. Why would the governor want to make a bad situation worse?”

The governor has argued that her ERIP will save the state budget $65 million in the next fiscal year. A drop in the state’s $17 billion annual budget, it would dramatically increase the unfunded liability of the pension plan. The promised savings are also less than the state would save from the coalition’s ‘Jobs for All Working Families’ proposals, which actually improve public services and reduce the unfunded liability.

“I sit on the governor’s Post Employment Benefits Commission, which she created because of her concern over the underfunded pension as well as other costs, such as retiree healthcare,’” said Sal Luciano, Executive Director of Council 4 AFSCME. “I’m stunned that now she proposes to make that liability much worse. It will cost the state at least $1.2 billion in the long-run — clearly not a plan to help the state out of this financial mess,” he said.

In 2009, Governor Rell justified a retirement program by claiming it was a better alternative to layoffs. SEBAC members went on to ratify an agreement that will provide over $900 million in savings to the state before the end of the current budget, and includes concessions in healthcare, wage freezes and furloughs, as well as a retirement incentive. That agreement was by far the greatest contribution by any group towards helping with the state’s budget woes, but needs to be followed by real action by political leaders to address the economic problems that plague the people of our state.

Union leaders expressed concerns that the governor’s call for another ERIP could further destabilize the economy by putting younger pre-retirement workers back into the workforce with incomes that cannot sustain them. The reality is that Connecticut’s people need more jobs, not more jobseekers.

District 1199, AAUP, and Council 4 are four of the thirteen unions in the State Employees Bargaining Agent Coalition (SEBAC), which serves to unite approximately 45,000 Connecticut State workers to address issues of common concern. To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

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Administration’s ‘Proposed Early Retirement Incentive Program 2010′

State Workers ‘Jobs for All Working Families’ Proposals (18-Point Plan)

At a previously scheduled meeting Tuesday morning, SEBAC leadership expressed disappointment that the governor had raised the retirement plan with legislative leaders. Any such plan can only be approved through direct negotiations with the coalition’s unions. SEBAC leadership is currently working to schedule meetings with leaders of both the House and Senate to discuss their concerns about further early retirements.

Leaders also reaffirmed their commitment to meeting with the Rell Administration to discuss the plan they put forward in January to help resolve the state’s budget woes and spur economic recovery.

SEBAC leaders and members presented the governor with their “Jobs for All Working Families” plan, which would preserve vital public services and help shore up the state’s pension funding. Two months later, the Administration has not responded to the proposed 18-point plan.

In advance of any meetings with legislative leadership or the governor, union leaders expressed deep concerns about the potential impact of any ERIP on public services and on the state’s pension fund. Years of hiring freezes and the 2009 retirement incentive have already left the state dangerously understaffed in core areas such as public safety, health, and education. An ERIP will also have a negative impact on pension plan funding.

The real solution to Connecticut’s budget dilemma is what it has always been — not fewer public services just when they are needed the most, but a program for creating strong jobs. The priority should be to jump start the economy and put people back to work. Until the governor faces this reality, her solutions to the state fiscal’s troubles will still leave the family budgets of Connecticut’s people without the economic security they really need.

January 28 SEBAC “Jobs For All Working Families” Proposals (18-Point Plan)

To learn more about SEBAC’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

Printable version of statement

But the remainder of the cost savings came from still more cuts to public services. While the package contained fewer cuts than what the governor originally proposed, because of her adamant opposition to revenue increases even from multi-millionaires, the plan continues the illusion that we can cut our way out of Connecticut’s economic crisis. The plan does nothing to provide jobs or help struggling families, which leading economists from both sides of the political spectrum have consistently said is what matters most in spurring real long-term recovery.

“It is good to see the governor finally working with legislative leaders towards a common goal,” said Blair Bertaccini, a wage enforcement officer with the Connecticut Department of Labor and president of AFSCME Local 269. “However she really needs to work with legislative leaders on the fundamental economic issue facing the state – jobs. It’s the budgets of the people, not the budget of the state that our elected leaders should be most concerned with,” Bertaccini said

SEBAC members and leadership presented their “Jobs for All Working Families” proposals to Governor M. Jodi Rell and her Administration in January. The plan provided clear and distinct ideas for jump starting Connecticut’s economy, increasing government efficiency, and creating job growth. In the following days of the legislative session, members of SEBAC’s unions will continue to remind political leaders that the people have waited long enough for bold action that will help end the recession not just on Wall Street, but for the working families that make up the vast majority of Connecticut’s people.

“The legislature’s vote is a reminder that Governor Rell and the legislature must work on a serious plan to put people back to work,” said Vincent Steele, a correctional lieutenant with the State Department of Correction. “We cannot afford politicians who play it safe. What we need is an FDR of our time with the wisdom and the courage to lead us toward a more prosperous and economically secure future. What we need are leaders who understand that helping working families improve their budgets is how you balance the state budget. You do that by getting the people of Connecticut back to work,” Steele, a member of CSEA/SEIU Local 2001, said.

The budget did provide one small victory for vital public services in that funding for the licensed practicing nurse program was preserved. This program provides training for LPNs who serve the vulnerable aging in population in Connecticut. It is exactly these types of services, those that impact both the health and well-being of our seniors as well as the economic future of hard working citizens, that SEBAC has and will continue to fight to protect.

Local 269 and CSEA are two of the thirteen unions in the State Employee Bargaining Agent Coalition (SEBAC), which serves to unite approximately 45,000 Connecticut State Employees to address issues of common concern. To learn more about the coalition’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

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State Workers ‘Jobs for All Working Families’ Proposals (18-Point Plan)

Breaking those agreements, the unions pointed out, would cut needed services and harm an already fragile economy:

Where the sides really differed in the winter and spring of 2009 was in the Administration’s faith that it could somehow cut its way out of the budget crisis, and our warning that Nobel Prize-winning economists all agreed that approach was economic suicide. In fact, we told you in writing in February of 2009 that while our members were willing to be part of the solution to Connecticut’s economic and budgetary woes:  The supposedly easier alternative of cutting public services not only abandons Connecticut’s people just when they need services the most – thereby building up more costs that will need to be paid in the future – it makes the economy worse, which will only cause more suffering and future budget crises.

SEBAC did meet with the Administration early this year to discuss concrete ideas for saving precious budget dollars and for involving frontline workers in improving government efficiency. Governor Rell refused to implement or accept those ideas and has only wanted to seek further concessions at the expense of job losses.

The leaders wrote:

Even though the very rich in Connecticut pay about half as much as a percentage of their income on state and local taxes as the middle class does, the governor went on to insist on a budget that had only a token tax increase for Connecticut’s richest few, and had billions in public service cuts. This drew demand and resources away from the private sector economy, and will cost Connecticut’s economy as many as 50,000 additional jobs — a 50% increase in Connecticut’s already spiraling unemployment rate.

Governor Rell stubbornly insists on breaking labor agreements reached in good faith last year even while alternative solutions are presented that can create jobs and bring Connecticut’s economy out of recession.

SEBAC leadership concluded:

So we decline your invitation to “deal with the budgetary situation through collective bargaining changes,” not simply because it is unfair, but because it would only make the real problems of this state worse.

January 28 SEBAC “Jobs For Every Working Family Proposal”
March 23 Second Letter to SEBAC from Sec. Robert Genuario
March 26 Response to Sec. Genuario from SEBAC Leaders

To learn more about SEBAC’s campaign for a fair budget and a livable state with great public services visit www.InThisTogetherCT.org.

Printable version of statement

Watch the video online to see how the candidates responded to some of your concerns and learn about their approaches to solving the state’s economic crisis.

But don’t stop there — get active! Click here to refer friends and fellow union members to sign our petition and start receiving updates and to become more involved in “2010 – A Better Vision for CT.”

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• Dan Malloy
• Ned Lamont
• Rudy Marconi
• Juan Figueroa
• Mary Glassman
• Tom Marsh