CT Officials Pass Pension Concession Labor Pact

The state seeks to close a $5.1 billion shortfall in two years.

Thanks to a Democratic tiebreaker on Monday, Connecticut officials approved a new public employees labor contract that will save the state a projected $1.2 billion in mostly pension concessions.

Although the deal was approved by the Connecticut House of Representatives 78-72 last week, it wasn’t officially passed until late Monday, when Lt. Gov. Nancy Wyman broke an 18-18 tie in the Senate. According to a report from the state Office of Fiscal Analysis, the total savings are combined from fiscal 2017-2021.

However, the state failed to pass a biennial budget for the current and next fiscal year by its July 1 deadline. State spending and cost-cutting measures will be handled by Gov. Dannel P. Malloy, who called the labor pact “a key piece toward adopting a budget for our state.” in a post-vote statement. “I am urging legislative leaders on both sides of the aisle to work with our administration on finding a solution on this as soon as possible so that the most vulnerable populations do not suffer long-term consequences.”

The deal also extends pension and healthcare provisions until 2027, which would save $24 billion over 20 years, according to Malloy.

When it comes to budget negotiations, the main issue has been labor costs. The state looks to close a $5.1 billion shortfall over two years.

Malloy also said the agreement will eliminate $1.6 billion from the deficit. According to Reuters, Malloy worked out a deal with public employees through the State Employee Bargaining Act Coalition (SEBAC), which has roughly 42,000 members across 15 different unions.

The largest concessions will come from public pensions and retiree healthcare reforms, which will see higher employee pension contributions, and tying the annual cost of living adjustments to the Consumer Price Index. In addition, wages will be frozen for three years ending fiscal 2019. In each of the following two years, wages will rise 3.5%.

Tags: , ,