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Connecticut unions reject givebacks, kill budget

Jeff Tyler Jun 24, 2011

Connecticut unions reject givebacks, kill budget

Jeff Tyler Jun 24, 2011

Kai Ryssdal: Next week is gonna be a heckuva week business and economy-wise. On Wall Street, it’s the end of the quarter. Congressional debt talks will heat up before the July 4th recess. And in a lot of states, it’s the end of the fiscal year. So the clock is ticking for legislators scrambling to cut expenses and paper over their fiscal problems and get a budget deal done. As we’ve seen already this year, state employees are convenient targets. Yesterday lawmakers in New Jersey voted to cut state employees’ health and pension benefits. Today a union vote in Connecticut rejected a cost-cutting deal, sparking a budget standoff in the Nutmeg state.

Marketplace’s Jeff Tyler has more.

Jeff Tyler: Connecticut lawmakers thought they had a budget compromise involving shared sacrifice. Some spending cuts, of course. And also some tax increases. And, some concessions by state employees on benefits. The union leadership was on-board. But members voted to kill the deal.

Matt O’Connor is spokesman for a coalition of state employee unions.

Matt O’Connor: I hate to use the term “dead.” But, yes, the agreement is not ratified.

He says most members actually voted in favor of the agreement. But it takes a higher threshold than usual to change health care benefits.

Connecticut Senate President Donald Williams says the union’s move plays into the hands of its enemies.

Donald Williams: This was perhaps the worst time for public sector employees in Connecticut to turn down reasonable concessions and therefore contributing to what some people are already pushing as a political agenda, which is that public sector employees just don’t get it.

Eileen Norcross is with the Mercatus Center at George Mason University.

Eileen Norcross: Unions protest at the drop of a hat if you even, you know, look at a pension system. And we’re seeing that in New Jersey. We’re seeing that in Atlanta, Ga. We’re seeing that in Wisconsin. And I think it’s self-defeating.

Norcross says the pension problems are generally worse than states admit.

Norcross: States are systematically under-estimating how big their pension liabilities are due to an accounting rule. It’s going to take a lot more for them to patch the hole in these systems.

Normally, Connecticut’s legislative session would be over by now. But lawmakers have to go back to work next week to find a new solution to the budget shortfall. That could mean laying off more than 7,000 state employees.

I’m Jeff Tyler for Marketplace.

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