‘Capitol Connection’ Special Session Update

On Thursday, June 30th, the General Assembly convened for a special session at the request of Governor Malloy. As mentioned in last week’s column, the Governor had initially set out to re-coup a savings of $1.6 billion through concessions from the state’s workforce in order to balance the state budget. However, labor unions did not receive the necessary votes from union members to ratify the deal, requiring the legislature to come in for special session before the start of the new fiscal year – which began July 1st.

The State Senate debated two bills during Thursday’s session. The first bill, Senate Bill, 1301, AN ACT CONCERNING THE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2013, included Governor Malloy’s recommendations to make changes to the collective bargaining process. The basis of the bill was to make spending reductions in an effort to balance the state’s budget. Language within the bill would freeze longevity bonus payments for those currently receiving them, and eliminate longevity for those not currently eligible. Longevity payments are simply twice-a-year bonus payments for state employees who have fulfilled at least ten years of state service and are based upon a percentage of their salary. Senate Bill 1301 would also redefine how state employees’ compensation is calculated for the purposes of determining retirement benefits – reconfiguring it to no longer include overtime, mileage or longevity.

While these measures are a step in the right direction in terms of dealing with the state’s out-of-control spending levels, it is unfortunate that it took a failed concession package for this to be debated. The bill, which I supported, passed the Senate 30-6, but was not debated or voted on in the House of Representatives.

The second was House Bill 6701, AN ACT CONCERNING THE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2013, which passed both the State Senate and House of Representatives. Before going into special session, Governor Malloy had stipulated that he was seeking greater rescission authority to make unilateral spending cuts in order to fill the $1.6 billion gap in the state budget. Recommendations set out by Governor Malloy had originally sought to double his rescission power from 5 percent to 10 percent, and to grant him cognizance over municipal aid reductions. Governor Malloy will now have until July 15th to make his recommendations known to the Appropriations Committee and until September 30th to use his increased power to impose rescissions of up to 10 percent of the total Fiscal Year 12 and Fiscal Year 13 appropriations from any fund. Other provisions in the bill reduced the value of the Earned Income Tax Credit by 5 percent. Ultimately no provisions included granting authority to cut municipal aide. Lastly, the bill extends a possible union ratification until the end of August.

The passage of this legislation marks an unprecedented increase in rescission authority in state history. Notably, Connecticut’s constitution states that it is the responsibility of the General Assembly to debate and pass a balanced budget. The Governor is tasked with presenting a budget and then the legislature deliberates, adjusts and votes on the final budget package. With the passage of this new bill, Governor Malloy now holds that control.

After the special session, Governor Malloy indicated that he will be utilizing his new rescission authority to make more than 6,500 state employee layoffs and to eliminate 1,000 currently vacant positions in order to fill the $1.6 billion hole in the budget. In an attempt to prevent these layoffs, union leaders are currently looking to reopen concession talks with Governor Malloy. They are using House Bill 6701’s August extension to either re-work the concession package or re-vote on the current agreement to prevent the governor from taking action. Governor Malloy has reiterated, many times, that the contract will not be renegotiated, but has agreed to re-clarify what is in the package however. As this is a negotiation matter, no member of the legislature is involved. I too anxiously await any revealing information and will continue to provide you with updates as they become available.