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The $1.5 Billion Question Hanging over Malloy’s Budget: Big Labor

May 4, 2017 By Staff
The $1.5 Billion Question Hanging over Malloy’s Budget: Big Labor

The governor has promised $1.5 billion in labor savings in 2018 and 2019 to help balance the budget. Can he deliver?

Gov. Dan Malloy (D-Conn.) warned labor leaders on Tuesday he needs “real savings” from them to avoid layoffs this year, in the latest sign negotiations between the governor and Big Labor in Connecticut are tense.

CTNewsJunkie‘s Christine Stuart reported that Malloy needs either $700 million in concessions from labor in 2018, or he’ll lay off “about 4,200 state employees.”

Connecticut’s two-year deficit may be as much as $4.7 billion, so the $1.5 billion Malloy hopes to extract over two years from labor – $700 million in 2018 and $868 million in 2019 – are crucial to balancing the budget. If Malloy wants to avoid signing off on tax hikes or drastic spending cuts, he’ll need to earn even more concessions from labor.

Complicating matters is the fact that Connecticut’s speaker of the house, Joe Aresimowicz, is a union employee. He is an aide for the American Federal of State, County and Municipal Employees (AFSCME), one of the state’s most “influential public-employee union[s].”

Even if Malloy gets his $1.5 billion, the state still faces a drastic problem with the retirement benefits for state employees and teachers, as well as health benefits for state retirees. Total unfunded debt obligations, including debt service, add up to more than $50 billion.