The Malloy administration and the State Employee Bargaining Agent Coalition, known as SEBAC, are close to a deal that could act a safety valve for the state’s dire fiscal situation.
NBC Connecticut obtained a draft of the concessions that have been the subject of negotiations between the unions and the governor’s office since last year.
A spokesman for Gov. Dannel Malloy declined to comment on the details of the draft.
Overall, the two year savings of the concessions would total $1.6 billion, but are projected to yield savings worth more than $1 billion annually by 2019.
State employees would be asked to pay more for health insurance premiums and co-pays, have frozen wages for three fiscal years, and all current employees will be asked to pay two percent more for their retirement plans.
State employees would receive wage increases in 2020 and 2021 of 3.5 percent each year. The savings from three straight years without increases total more than $380 million.
In addition, all new state employees would be entered into a new tier of retirement, known as Tier IV, which would be a hybrid of a defined benefit plan and a 401k, like those found in the private sector. Once again, the target for the Malloy administration is to save money in future years.
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In return for those givebacks, SEBAC units would receive a five year contract extension starting in 2022 for all benefits that would terminate June 30, 2027. Wage agreements would remain intact through June 30, 2021, remaining unchanged.
The politics of the five year extension are significant. By moving the end of the contract past 2027, it ties the hands of future legislators with an agreement struck in the past, and it does the same for future governors.
Malloy has already announced he would not seek reelection, meaning a new chief executive, possibly three since there are elections in 2018 and 2022, and 2026, would have to live with the implications, good or bad, of the deal struck in 2017.
Republican Sen. Len Fasano, the GOP president pro tem, had asked for even more concessions and says he will reserve judgment until he’s seen the entire proposal.
“An extension of a bad deal is a bad extension. An extension of a good deal is a good extension so you have to look at the numbers and see where this thing falls out and what are you getting for that bargain and consideration,” Fasano said.
The two sides first have to come to an agreement before the next steps can be taken. Each SEBAC union would need to approve opening their contracts for renegotiation, and would then need to approve the modifications agreed to with the Malloy administration.
Since those processes could take as long as 30 days, the Malloy administration is looking for an agreement very soon.
