At Home In A Budget Crisis

As Gov. Dannel Malloy marked a budget victory and continued rancor-free talks on labor givebacks, his mansion seemed a world, not 42 miles, away from City Hall.

Malloy invited the state’s news editors Wednesday morning to the governor’s 19-room residence on the bucolic far western fringe of Hartford for a chat about the $40.1 billion two-year state budget. The legislature passed the budget around midnight; Malloy signed it Wednesday afternoon. Officials claimed it was the earliest anyone remembered a budget passing, despite its controversial inclusion of $2.6 billion in tax hikes over two years.

Malloy also offered only a partial update on his talks with state employee unions, during which he’s seeking a whopping $2 billion in concessions. Those talks are headed to a best-scenario denouement — or else a fateful impasse — Friday. Malloy said in the meantime he would continue to honor a ​“blackout” on the state’s specific demands and labor’s response.

“I don’t think we’d still be having conversations if we hadn’t done that,” he said.

Meanwhile, down the highway in New Haven, Malloy’s alter ego Mayor John DeStefano remained in a bitter, vitriolic impasse with his own unions. One in which both sides have made their cases publicly, in detail.

Like Malloy, DeStefano faces a budget crisis; Malloy had to close a $3.2 billion gap in the upcoming fiscal year budget, DeStefano a $57 million gap. Like Malloy, DeStefano identified out-of-control pension and health care costs as the biggest cause of the problem, not just now, but for the indefinite future. Like Malloy — a fellow hands-on, policy-wonk Democratic urban mayor who set his sights on becoming Connecticut’s governor — DeStefano decided to use a budget crisis to seek structural changes in his administration’s relationship with labor in order to make government ​“sustainable” over the long term.

And both set out on their quests promising a ​“transparent” process.

What they meant by transparent turned out different. DeStefano started as early as last fall to publicize New Haven’s position going into negotiations. Urging all participants to understand the stakes, he detailed what he called unsustainable pension and health costs. He estimated that the two city pension funds, currently only 47 and 52 percent funded, would go bankrupt in under 20 years if left unchecked. He publicized the city’s demands, including requiring cops to work longer than 20 years to earn a pension and having city workers contribute more to their health plans.

Only three city labor unions have reached agreements; 11 others are facing contracts that will have expired by June 30. Some have already ended up in arbitration, where the mayor is trying to convince decision-makers that the city’s can’t afford to continue benefits at current levels.

Meanwhile, labor has organized protests. In one case 200 cops blocked downtown streets and marched into DeStefano’s office. Another time unions brought Al Sharpton to town. Protesters have directed their greatest vitriol at the mayor — who in his 18-year career had previously enjoyed strong support from unions. Some even compared Democrat DeStefano to union-busting Wisconsin Gov. Scott Walker. Labor negotiators have gone public with accusations that the mayor cut off negotiating sessions and wouldn’t consider their positions; DeStefano responded with claims that the unions are ignoring fiscal reality and refusing to come to the table with reasonable positions.

Even before Malloy barely won last fall’s gubernatorial election, he too laid out unpopular positions — namely, that he wouldn’t rule out raising taxes to solve the state’s budget mess.

Since his election he laid out a ​“shared sacrifice” plan that included a wide range of tax increases as well as the $2 billion in labor givebacks.

But he didn’t go into specifics. Labor did rally in Hartford — and Malloy and Lt. Gov. Nancy Wyman joined them onstage.

At Wednesday’s governor mansion gathering, Malloy welcomed dozens of editors from around the state to the dining room, then fielded questions from the head of the table as a painting of former Gov. Samuel Foot watched him from a wall.

It was clear from the back-and-forth that Malloy still has hard bargaining and other potential roadblocks to overcome before he can term his inaugural budget challenge a victory. If he and the coalition representing 45,000 unionized state workers don’t reach agreement on concessions by the end of Friday, he plans to start notifying more than 4,000 state workers that they face layoffs when the new budget takes effect July 1, he said. (Contracts require weeks of advance notice.) He has to return to the legislature for approval of that ​“Plan B.” The expiration of 69 nursing home contracts could lead to strikes, and a costly crisis for Malloy to tackle. Once Osama bin Laden’s demise no longer monopolizes the 24/7 news cycle, Republicans might succeed in whipping up a backlash of protest to new taxes.

But Wednesday’s gathering was undeniably a moment of triumph for the first-term governor. While governors from both parties have been slashing workforces and eviscerating aid to their social safety nets and to cities and towns, Malloy managed to get business and labor to support a basic budget that included tax hikes and estimates of labor givebacks. He actually increased aid to some cities. He’s receiving national plaudits as the antidote to slash-and-burn governors like New Jersey’s Chris Christie and Wisconsin’s Walker. He succeeded in moving the state to GAAP (Generally Accepted Accounting Principles) budgeting and avoiding major cost-delaying gimmicks. (One exception: He revealed Wednesday morning that he has no idea how the state will collect a new tax on interstate commerce.)

Unlike his predecessor, who maintained her residence in Brookfield, Malloy has moved into the governor’s mansion. That’s where he’s sleeping at night. (His wife’s still staying largely back in Stamford.) The family photos (plus a grinning shot with Bill Clinton) are on display. He appears settled in to his role as the state’s chief executive.

“At 55,” Malloy said, ​“it’s nice to have a change.”

New Haven’s DeStefano, meanwhile, is sampling just how deeply the public is responding to charges that he has ​“lost touch with the people” after nearly two decades in office.

DeStefano and Malloy have had similar approaches as elected officials in the past. Why the different outcomes this season?

Larry Dorman — spokesman for the 1,400-strong AFSCME unions negotiating with DeStefano and the SEBAC (State Employee Bargaining Agent Coalition) negotiating with Malloy — said it comes down to ​“tone.”

“I can’t promise you that the story [at the state level] has a happy ending,” Dorman said Wednesday. ​“But I can say there’s a completely different tone and a completely different atmosphere that makes it healthier to have discussions about finding solutions. That’s absent in New Haven. This mayor has demonstrated a real lack of respect and a kind of tone-deafness to discourse and conversation and to working together.”

New Haven State Rep. Gary Holder-Winfield noted that DeStefano has more ​“history” with the unions in New Haven. He negotiated contracts with them in the past, contracts he now blames for causing the largest portion of the city’s long-term budget problems.

The state unions, on the other hand, have never negotiated with Malloy before. They’ve negotiated with Republican and Republican-turned-independent governors for 20 years. New mayors or governors often get more leeway from unions on the first go-around. And in this case, with governors in other states fighting to take away organized labor’s basic bargaining rights, unions might not want to ​“damage the new shine” on Connecticut’s first Democratic governor since 1990, Holder-Winfield noted.

“It’s harder for the unions to see themselves as the problem” and ​“to be called repeatedly the PacMan of the city’s budget and the albatross around the city’s neck” with DeStefano, agreed New Haven State Rep. Roland Lemar. Malloy can convincingly point to contracts struck by past governors as the problem.

“The state unions are frustrated. But they also feel like they’re an active participant in the conversation. They’re not being made to be the excuse in the situation,” Lemar said. In New Haven, the mayor has already laid off workers and he’s seeking to privatize custodial work, Lemar noted. In Hartford, Malloy is still holding out hope that he can avoid layoffs.

If the two sides can reach a historic deal by the close of the week.

If not, the governor’s mansion may still feel at home, but the warm welcome feel might pass sooner than later.