Bloomberg News

Connecticut Unions Back Concessions, Avoid ‘War’ With Malloy

August 18, 2011

(Updates with job security in second paragraph.)

Aug. 18 (Bloomberg) -- Connecticut’s state-worker unions, after rejecting Governor Dannel Malloy’s demand for $1.6 billion of concessions in June, have relented to stop thousands of job cuts.

A collection of 15 unions today authorized the approval of Malloy’s deal including a two-year wage freeze and changes to pension and health-care benefits projected to yield $1.6 billion of savings over two years. In return, workers will get a guarantee of four years of job security, according to Larry Dorman, a spokesman for the group.

“We have achieved something the skeptics said was unachievable: we’ve made the relationship between the state and its workforce sustainable,” Malloy said today in a statement. “Unlike in most other states, we did it without going to war with public employees.”

Malloy, a Democrat, had notified about 3,000 workers of impending job losses, out of 6,000 cuts he threatened to make, after the unions in June rejected proposed concessions. The governor kept negotiating with labor leaders, while they changed their rules to make approving a deal easier.

The Democratic-controlled Legislature in May passed a two- year, $40.1 billion budget that included a record $2.6 billion in higher income and sales taxes, as well as the proposed worker concessions that were then projected to save $2 billion.

“The real value of this agreement lies in the $21.5 billion it will save taxpayers over the next 20 years in the form of lower health-care and retirement costs for state employees,” Malloy said.

--Editors: Ted Bunker, Walid el-Gabry.

To contact the reporter on this story: Michael McDonald in Boston at mmcdonald10@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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