Home Economy Gov. Dannel Malloy announces tentative agreement with state unions

Gov. Dannel Malloy announces tentative agreement with state unions

Gov. Dannel Malloy announced today that his administration has signed a tentative contract with the state employee unions that will “help create significant, long-term structural reforms to pension and benefit costs, generating billions in savings for taxpayers for many years to come.”

The tentative agreement could save the state more than $24 billion in taxpayer dollars over the next 20 years, Malloy said. “There are still several steps remaining,” he said, “but it is truly a credit to our partners that the rhetoric surrounding the deal did not stifle their willingness to help.”

The concessions are projected to be worth $1.57 billion over the next two fiscal years. Included in the proposal are a wage freeze for each of the next two fiscal years and the forfeiture of any retroactive pay raises for those employees who have been working this fiscal year under contracts that expired last June.

The cumulative three-year wage freeze would provide $769 million, or nearly half, of the total projected savings over the next two fiscal years. Workers would receive 3.5 percent increases in 2020 and in 2021, and also would be eligible for step increases. State workers would be required to take three furlough days, saving the state another $36 million.

The deal would also double pension contributions for most workers; create a hybrid pension/defined-contribution plan for future employees; increase health care co-payments and premiums; require active workers to contribute more toward their retirement health care benefit; and reduce health care benefits for existing retirees.

Earlier this month, an actuarial analysis confirmed that the proposed structural reforms will produce more than $24 billion in savings.

Ballots by union members are expected to be cast in mid- or late July.

Some Republicans in the state legislature have indicated that they will not support the package as it would extend the benefits program for five more years, through 2022.


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