Gov. Dannel P. Malloy has reached a deal with the state-employee unions after months of talks that will save $1.6 billion over the next two years in exchange for a four-year, no-layoff deal.
Malloy came up short of his goal of $2 billion in concessions and savings over two years, but the $400 million shortfall will be covered by spending cuts and better-than-expected tax collections.
"I'll confirm there's an agreement,'' Roy Occhiogrosso, Malloy's senior adviser, told Capitol Watch on Friday afternoon. "That's it.''
Malloy, Occhiogrosso, and the unions all declined to provide any details until the unionized workers are notified of the deal - a process that will last into next week. But multiple sources confirmed the outlines of the deal to Capitol Watch.
While the provisions are tentative, sources said the deal is a four-year, no-layoff agreement through June 2015 that applies only to current union employees. In exchange, there would be a hard wage freeze for all unionized employees that includes wages, longevity pay, increments, and lump sums that would last for two years. There would also be no longevity pay for newly hired state employees.
After those two years, the unions would receive 3 percent pay increases on the first day of the new fiscal year on July 1, 2013, 2014, and 2015, according to sources.
The agreement also calls for the creation of a Tier III in the complex state pension system for new employees hired after July 1. This would be the fourth level in the system, following the most lucrative Tier I for the longest-serving state employees, along with Tier II and Tier IIa.
The deal does not include any unpaid furlough days, which have become common in recent years as a cost-saving measure.
The plan also calls for extending the 2017 SEBAC agreement by five additional years, but there would be some changes in the deal that was originally signed by then-Gov. John G. Rowland and ratified by the legislature.
None of the details would be confirmed by the Malloy administration or union officials, but insiders spoke about it on the condition of anonymity. Union officials have also told their members that plenty of rumors have been flying around state offices, and they should wait to hear details from their individual unions.
Despite statements by Republicans, the Malloy administration is emphasizing that the deal does not provide any guarantees of job security for non-union managers, and there is no job guarantee for any state employee - union or non-union - who is hired after the start of the new fiscal year on July 1.
While the top four Democrats in the legislature surrounded Malloy for the announcement on the third floor in the state Capitol, Republicans immediately questioned the deal. The state Republican chairman said it was another victory for the unions that was awarded by a Democratic governor.
House GOP leader Lawrence Cafero of Norwalk said it seems that the state employees got the upper hand in the negotiations.
"It's not like we're looking for everybody to bleed a little bit, but just from what I understand now, if you were to measure who got the better of this deal, I'm sure that the state employee union feels that they do - that they got the better of the deal,'' Cafero told The Courant's Jon Lender at the Capitol.
Cafero noted that there are no furlough days and a guarantee of no layoffs for four years, regardless of economic conditions, for unionized employees.
"No one loses their job. No one loses a nickel of pay," Cafero said. " And ... we're bound the next four years with ... a no-economic-layoff [provision] ... That means regardless of what happens to the world economy, by this agreement, we are bound to keep the exact same number - 54,000 full-time employees - as we do right now. That could be troublesome."
Occhiogrosso strongly rejected Cafero's statement and came to the Capitol press room Friday afternoon to say that non-union employees can be laid off and that there will be fewer than 54,000 fulltime employees as the years progress.
Malloy repeatedly said that he wanted $2 billion in concessions, but the deal actually reached $1.6 billion. The savings are expected to be spread from $700 million in the first year and $900 million in the second year of the two-year budget.
The deal that was announced Friday means that Malloy will not need to lay off 4,742 workers who were expected to receive layoffs.
It is also a long way from over. The deal must be approved by 15 unions and 34 bargaining units. That does not mean there will be 34 separate votes, but the unions could not provide the exact number of votes Friday.