July 1 (Bloomberg) -- Governor Dannel Malloy, who called himself the “anti-Christie” for his conciliatory approach toward Connecticut’s state workers, has changed his tune after they rejected his plan for pay and benefit concessions.
The Connecticut governor, 55, a Democrat who was endorsed by public-sector unions in his campaign last year, can start firing thousands of workers to close a $1.6 billion budget gap after the Democratic-controlled Legislature passed his plan in a special session early today.
While lawmakers failed to back a separate proposal to curb collective-bargaining rights, the strategy marks a reversal for Malloy. In February, he said he was the antithesis of New Jersey Governor Chris Christie, contrasting his approach of negotiating concessions with the Republican’s attacks on unions. He abandoned that tack when workers voted down givebacks last week, creating a gap in his $40.1 billion, two-year budget.
“The irony is he so wanted to be the anti-Christie and couldn’t be,” said Jonathan Pelto, a Democrat and former deputy majority leader of Connecticut’s House of Representatives. “He so wanted to pull this off but didn’t.”
Workers Targeted
The longest recession since World War II triggered an avalanche of measures across the U.S. targeting public employees, with states enacting wage freezes and benefit cuts. Some, including Wisconsin, took most issues, such as health care and pensions, off the negotiating table. There were 856 bills concerning collective bargaining introduced in this year’s legislative sessions, according to the Denver-based National Conference of State Legislatures.
Malloy, who won election by less than 6,500 votes in November, vowed to forge a shared sacrifice among taxpayers and state employees to close a budget hole estimated at $6.2 billion over two years. In February he unveiled a package of tax increases, raising levies on sales and income, combined with about $2 billion in union concessions.
Lawmakers ultimately adopted most of his proposals, in May passing the spending plan for the biennium that starts today. It raises taxes by $2.6 billion, the biggest increase in state history. The budget included a $2 billion placeholder for the savings to be provided from Malloy’s promised deal with the state’s 15 labor unions.
“Make no mistake: come July 1, Connecticut will have an honest, balanced budget in place,” Malloy said May 4 in a statement. “No smoke, no mirrors.”
Waiting for Jobs
Christie, 48, who slashed local and school aid by $1.3 billion after taking office last year and campaigned for freezing teachers’ pay, pounced. In an appearance on MSNBC’s Morning Joe program on Feb. 23, the Republican said he would be “waiting at the border to take Connecticut’s jobs” when the state raised taxes.
Malloy responded in a briefing with reporters in Hartford, when asked about Christie’s comments.
“I suppose I’m the anti-Christie,” Malloy said. “Their governor has to be their governor. I have to be the governor here. I assure you that when everything is said and done, our taxes will be lower than New Jersey’s.”
New Jersey residents bear the highest state and local tax burden, at 12.2 percent of income in fiscal 2009, followed by New York, at 12.1 percent, and Connecticut at 12 percent, according to the Tax Foundation, a nonprofit research group in Washington. Connecticut was the only one of the three to enact tax increases this year.
Union Vote
The war of words resumed this week after four of Connecticut’s government unions voted against the $1.6 billion package of wage and benefit concessions that Malloy had negotiated with labor leaders, killing the deal. The givebacks were less than originally proposed partly because state tax collections have grown faster than forecast, narrowing the budget gap.
“All I know is Dan Malloy was lecturing me about look how he could get it done,” Christie said on June 27 in another appearance on Morning Joe. “He’s conciliatory. He negotiates with people. He got these big concessions in return for big tax increases.”
“So now what do the people of Connecticut have?” Christie said. “Big tax increases with no concessions, ‘cause the unions stuck it to him. The fact of the matter is what these folks in the public-sector unions respect is strength.”
Public Spat
Malloy responded today in an appearance on the MSNBC show, making a comment that alluded to Christie’s weight.
“People say things that sometimes don’t make any sense,” the Democrat said. “This is a debate that’s more important than who’s got the bigger belt. It’s about policy.”
Asked to respond, Michael Drewniak, a Christie spokesman, suggested the Connecticut governor should focus on issues in Hartford, the state capital.
“Malloy’s failure to deliver on contract talks, public- sector union concessions and his imposition of historically large tax hikes in Connecticut speaks for itself,” Drewniak said by e-mail. “That’s some record.”
Connecticut’s House of Representatives voted 78-56 at 12:14 a.m. and the Senate 21-14 at 2:29 a.m. to give the governor authority to cut spending in the executive, legislative and judicial branches by as much as 10 percent over the next three months.
Job-Cutting Plan
Malloy this week presented his plan for slashing about 6,500 jobs, including eliminating 1,000 that are vacant. The law gives unions until Aug. 31 to revive the concession deal to avoid some of the cuts.
“If they choose to ratify the agreement that was recently turned down, and if they do so in a timely fashion, much of the pain that’s been inflicted over the past few days can be reversed,” Malloy said today in a statement.
The Senate passed the governor’s proposal to change benefits including the way pension payments are calculated, making them no longer subject to collective bargaining. The House didn’t take up the bill last night, according to Doug Whiting, a spokesman for the Democratic leadership.
“A negotiated solution is what everyone wants right now, and respecting the collective-bargaining process is the best way to allow that to happen,” Larry Dorman, a spokesman for the State Employee Bargaining Agent Coalition, said by e-mail.
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