union concessions deal

Connecticut would have to pay 35 percent of its tax revenue over 30 years in order to meet all its pension and retiree healthcare liabilities, according to a report by financial powerhouse JP Morgan. In their ARC of the Covenants 2.0 report, which examines credit risk for municipal bond holders, JP Morgan listed Connecticut as one of four states including New Jersey, Illinois and Kentucky, as having the highest retirement liabilities.

Noticeably absent from the latest budget by House Democrats are 11 of the 12 reforms Democratic senators requested as a condition of their approval of the union concessions deal passed on July 31st. In exchange for their votes, the Senators composed a list of 12 cost-saving reforms, which included requiring a vote on every union contract, reforming arbitration laws and ending overtime in pension payment calculations after the expiration of the SEBAC agreement in 2027.

There’s no getting around it: this SEBAC vote was a tremendous disappointment for the people of our state. But even as we regret the outcome, we should not be dismayed. Connecticut IS changing. Four years ago, there wouldn’t have even been a fight over this concessions package -- and that, at least, is cause for optimism.

The agreement negotiated between Gov. Dannel Malloy and government union leaders contains a provision that would provide healthcare for retired state employees through Medicare Advantage. But the inclusion of the Medicare Advantage switch in the deal with government unions may hamper future lawmakers’ ability to make administrative changes to the way Connecticut handles retiree healthcare.

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.

Tucked inside the concessions package negotiated between union leadership and Gov. Dannel Malloy is a provision which would implement a $250 copay for “unnecessary” emergency room visits. The provision would not affect retirees and was included in the section labelled “Design Changes to Save Money and Improve Health.”