In a cautiously worded opinion issued Thursday, Attorney General George Jepsen said the state legislature does have the ability to change existing labor contracts but would need “substantial justification.”
Union members will receive $2,000 lump sum payments, which will count toward their pensions, next July as part of the concessions deal worked out between Gov. Dannel Malloy and union leaders. SEBAC, the bargaining coalition that negotiates benefits for state government unions, represents approximately 40,000 members, meaning the state of Connecticut could have to make a payout as high as $80 million, although the lump sums will be pro-rated for part-time employees.
On the same day that state employee unions announced the ratification of Gov. Dannel Malloy’s concessions deal by union rank and file, House Republican Leader Themis Klarides, R-Derby, held a press conference saying the concessions deal is “tying the hands of the Connecticut taxpayers for the next ten years.”
Connecticut's top union official wrote a letter to state employees asking them to approve a concession deal negotiated with Gov. Dannel Malloy and warned of "projected budget deficits in the billions." In a letter to state union members, AFL-CIO President Lori Pelletier told union members they could secure their benefits until 2027 and gain four years of layoff protections under the concessions agreement.
Despite being rejected by the state appropriations committee and denounced by municipal leaders across the state, Gov. Dannel Malloy’s plan to transfer one-third of teacher pension costs onto towns and cities is still being considered during budget negotiations. However, during a June 22 press conference, House Speaker Joe Aresimowicz, D-Berlin, and House Majority Leader Matthew Ritter, D-Hartford, floated the idea of raising the state sales tax to 6.99 percent and using the increased funds to help municipalities pay for teacher pensions.
In an effort to deal with the skyrocketing cost of teacher pensions, Gov. Dannel Malloy has proposed shifting one-third the cost of the pensions onto towns, a move that will likely drive up property taxes as municipalities scramble to come up with $408 million in 2018. Michigan, on the other hand, has taken step in the opposite direction.