This is Part II (for Part I, click here).
We already know that Jerry Brown has it 'on the agenda' to extract concessions from California Unions--a reduction in Union pensions in order to close the gap on a $26.6 Billion shortfall in revenues.
Malloy, here in Connecticut announced on May 13 that he had negotiated a $1.6 Billion dollar deal with the Unions in order to avert a threatened layoff of 5,000 state workers. The Governor originally sought $2 Billion in concessions.
Several points need bearing in mind.
First, there is no real deal until 14 of 15 state unions ratify it and there are 34 bargaining units in toto. In addition 80% of the Union members must vote for it. Then the final deal must still be approved by the state legislature. Thus, there are still major hurdles to overcome.
Malloy agreed not to lay off any of the 45,000 unionized workers for four years.
The deal included no furloughs (mandatory temporary layoffs with no pay) and no reductions in hours for permanent workers; a two-year freeze in salary was included and then here would be a 3% increase in salary for each of the next 3 years. For employees retiring after 2017, there would be a 3 year rise in the retirement age. Undisclosed pension and health benefits would be scaled back.
Should not enough union members ratify the proposed deal, the two year budget would collapse!
The republican minority opposition in the Connecticut legislature has pointed out the government spending is staying at the same level (with no cuts); this is concommitant with a massive increase in state taxes--the largest in its history.
According to the New York Times, "the new budget depends in large part on almost $1.5 billion in increased taxes on personal income, corporations and an array of purchases and services, from yachts to inexpensive clothing, to plug a deficit once estimated between $3.2 billion and $3.5 billion."
The state still must find an additional $400 million in revenue to balance the budget. It is unclear what the source of these unaccounted funds will be though the Governor made a surprise announcement on Friday, May 27th on the eve of the Memorial Day weekend.
Finally, it could take over a month for the unions to ratify the deal.
At this point Jerry Brown has a longer way to go to balance his California's skewered budget--he has yet to cut a deal with the state unions! ; on the other hand, Malloy has initiated a process that has many steps to climb before his two year budget will be cemented in place!
The blogger wishes to acknowledge the Stamford Advocate, The Hartford Courant and the New York Times for their input in composing this blog.
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