A state employee union vote on Friday scuttled a labor-concessions package that Gov. Dannel P. Malloy was counting on to balance a two-year state budget, setting the stage for cuts that could include thousands of layoffs.
The new Democratic governor, who has prided himself on being more pro-union than some of his Republican colleagues across the country, had offered workers four years of no layoffs in return for a two-year wage freeze and changes to health and retirement benefits.
But ultimately there was not enough support to clear the high bar set by union rules to make changes to a coveted, 20-year contract that's not set to expire until 2017.
With the deal rejected, Malloy said he had no choice but to begin issuing layoff notices to as many as 7,500 employees. He said the number could be higher if there's a delay.
"We will move quickly and resolutely and that's what we're going to do," Malloy said shortly after a union local representing prison workers essentially blocked the agreement's ratification.
The deal reached between Malloy and union leadership was supposed to save $1.6 billion in the two-year, $40.1 billion budget that takes effect on July 1 and covers a $3.3 billion deficit. Malloy has called the General Assembly back to the state Capitol for a special legislative session on Thursday to seek more budget-cutting authority to balance the plan and possibly make cuts.
Malloy said the process would move faster if lawmakers simply expanded his authority, currently limited to 5 percent of any appropriation, to 10 percent, and let him decide how to cover a $700 million deficit in the first year.
It's unclear whether they would agree to do that. The Democratic controlled legislature turned down Malloy's request for more authority earlier this year.
Union officials, meanwhile, urged Malloy and the legislature not to take the "nuclear option" and give the unions some space to figure out the next step. Larry Dorman, a spokesman for the State Employees Bargaining Agent Coalition, said the leaders still hope there's a way to avoid the layoffs. There are more than 50,000 state employees, including about 45,000 unionized workers.
"Difficult as these times are, difficult as this moment is and painful as this moment is, we need everyone from our members and their leadership, to the legislators and the governor, to step back and figure out what's truly in the best interest of the citizens of the Connecticut and what's truly in the best interest of preserving the services our members provide," Dorman said.
Some Democratic state lawmakers, disappointed by the vote, have suggested that workers re-vote, but Dorman said it's premature to discuss specific options. The union leaders are scheduled to meet on Monday.
As of Friday afternoon, more employees — at least 60 percent — had voted in favor of the tentative agreement than opposed it. But the deal died because of the union coalition's rules, which requires 14 of the 15 unions to support any change to the retirement and health care benefits package that it negotiates. In this case, 11 unions had voted in favor of the agreement while two opposed it. Two unions were still voting on Friday.
"I'm disappointed and I'm angry at the same time. I was really confident in the deal that was presented to us," said Dawn Tyson, 35, a processing technician at the Department of Social Services who supported the agreement. "A lot of people really didn't think that layoffs would be a real reality. They just thought, oh, he's bluffing."
Malloy addressed reporters after meeting with the mayors of five large cities. He said most of the likely cuts in state aid to cities and towns would come in the second year of the budget, given the fact that so many local budgets have already been settled.
"I will do everything in my power to avoid serious and devastating cuts to local governments" in the first year, said Malloy, a former mayor of Stamford.
State employees had various issues with the deal, with some saying they wanted promises that big businesses and wealthy taxpayers would be asked to pay more if they agreed to givebacks. Others questioned a voluntary wellness plan that required workers to get annual physicals and age-appropriate tests, expressing fears they would have to pay large fees or lose coverage if they skipped appointments or didn't make healthy lifestyle choices.
Union leaders said many of the workers fears were unfounded and blamed outside groups for spreading misinformation, saying the employees had been bombarded with emails and social media, urging rejection of the deal.
Malloy, who received strong support from state employee unions during last year's close gubernatorial election, has said for months that he didn't want to lay anyone off and has made a point of talking about how he respects the workers' collective bargaining rights. He often contrasted himself with the governors of Wisconsin, New Jersey and Ohio who have been at odds with organized labor.
"Listen, I don't want to be laying off 7,500 people or more. I think it's bad for the economy, I think it's bad public policy. There were preferable ways to go. Those preferable ways are no longer available to us," he said. "The big promise I made is that we would have a balanced budget and it would be balanced without gimmicks and that's what I'm going to do."
Rejection of the labor deal is the latest political blow to Malloy, whose popularity has suffered because of his approach to solving the budget deficit. A Quinnipiac University Poll released last week shows that 38 percent of voters said they approve of the job Malloy is doing as governor while 44 percent disapprove.
Many voters have voiced concern over how the budget raises taxes by $1.4 billion in the first year and $1.2 billion in the second. Many of those tax hikes kick in on July 1.