State Unions Bracing For No Pay Raises

HARTFORD (AP) — State union leaders said Friday they are not expecting the state to willingly hand out pay raises as it negotiates half of the state contracts.

Governor M. Jodi Rell’s administration is projecting a $1.2 billion deficit for the new fiscal year that begins on July 1. On December 17, Gov Rell and her budget staff met behind closed doors with union leaders for about an hour, outlining Connecticut’s fiscal challenges.

Half of the state’s unionized employees are already taking a wage freeze this year, Gov Rell said. The remainder of the contracts are being negotiated or arbitrated.

Steven Perruccio, president of the Connecticut Employees Union Independent, said his 7,000-member union met with state negotiators and were not offered any pay increases. He predicted the union would take the matter to arbitration.

“We provided them with our proposal and they gave us nothing in return,” he said. “It appears for the three-year contract that would begin July 1, 2005, they’re proposing zero in every year. No increases anywhere.”

Gov Rell’s meeting with the labor leaders was one of many preemptive warnings she has been giving to legislators, newspaper editors, and others, hoping to curb appetites for spending.

The state comptroller’s office is predicting a $186 million surplus for the fiscal year that ends June 30, but the new fiscal year could be $1.2 billion in the red.

Much of that gap is attributed to one-time revenue fixes lawmakers used last year to cover spending, such as a 20 percent corporate tax surcharge and transferring money from one account to another. The gap also comes from an increase in the property tax credit on the income tax, burgeoning health care costs and underfunding of state grant programs to cities and towns.

This latest budget crunch comes on the heels of a past $1.2 billion deficit in 2003, which prompted former governor John G. Rowland to issue 3,000 layoff notices. Ultimately, some were rehired after the state offered an early retirement plan.