Part 11: In labor standoff, Malloy refused to blink
HARTFORD -- "Well, if nothing else, it'll be good for our poll numbers," Ben Barnes says dryly.
It is 8:30 a.m. on June 22, and the small conference room next to Barnes' office at the Office of Policy and Management is slowly filling with the top advisers of Dan Malloy's administration. They are here to prepare for the event they'd all hoped to avoid: the layoffs of thousands of state workers.
Malloy has flown to Washington at 6 a.m., for a summit on health care policy, though he's been in contact that morning and the previous night with several of the people who now gather at the table. They begin with the obvious. Yes, says Linda Yelmini, the longtime director of the state's Office of Labor Relations and Mark Ojakian's negotiating partner, the union concession deal is definitely dead.
Already there are rumors that the unions will try some method of revoting the deal, or resurrecting it, but that comes with the expectation that Malloy will agree to renegotiate some of its terms. The governor, in his early morning conversations, wants that to be shut down.
"He would like some definitive action today," Roy Occhiogrosso says. "This thing about, `OK, Dan, come back to the table.' He wants that conversation cut off immediately."
Andrew McDonald, the general counsel, says even lawmakers who would rather raise taxes than do layoffs will have to back up the administration now, given the public appetite for sacrifice."The population is, I think, going to be strongly behind the governor on this," he says.
Still, they look at those numbers. Malloy had run as a centrist Democrat, on "right-sizing" the state workforce and on his background in finding management's beloved "efficiencies" to save money. But still these are a lot of job cuts, and the obvious but often-missed result is clear to them: a government that has to shed a quarter of its workforce in a period of months would simply have to "stop doing stuff" that its citizens now expect it to do, Barnes says.
"I think we need to bring him slightly down from the abstract about what 7,500 layoffs would mean programmatically for the state," McDonald warns. "Because he's going to have to live with the number. It can't just be, `He said the number, and we've got to meet it.' He's got to see it. And at that point, if he sees it, and still wants to do it, that's fine."
SENSE OF RESIGNATION
The black sedan pulls through the motorized entrance gates later that day and up the driveway, stopping at the portico of the great house on Prospect Avenue. It is a little after 4 p.m., an insistent rain falling on the grounds of the Official Residence.
Dan Malloy walks in through the front door, up the two steps to the landing, shedding his suit jacket on the way, fresh off his flight back from Washington, worried and ready to work.
Ahead of him, the long dining table is covered in a white tablecloth, with platters of cookies, crackers and cheese, and melon chunks. A carafe of coffee steams on the low sidebar against the wall, next to an ice bowl full of Diet Cokes. Other than the coffee and a few sodas, the spread is untouched.
Around the table are Malloy's people, who he greets matter-of-factly as he moves down the table to its head.
Barnes starts running through the numbers hastily pulled together by his staff, dishing out stapled sheets of figures like a dealer distributing cards. The bottom line stands now at $600 million, the amount they need to cut to make the budget balance before the new fiscal year starts, nine days from now. The quick math, subject to change, says that would mean shedding about 10,700 jobs, Barnes says, or about a quarter of the state workforce. McDonald rolls his eyes as he glances down the list. Wyman exhales sharply, closes her eyes and shakes her head. Malloy, for the moment, says nothing.
For savings, they'll reduce the scope of what the government does. They'll eliminate some or all of the vocational-technical high school system. Same with the State Library, the Department of Agriculture. "The Department of Veterans Affairs... doesn't exist," Barnes says wearily, and turns a page.
Malloy interlaces his fingers, twisting them back and forth, then leaves them folded together on the tabletop.
"I'm not shocked," he finally announces. "I've been resigned to this."
And it's true the signs have been clear for weeks, if not months. The labor unions don't like this package of givebacks, they resent the way he's talked about their salaries and benefits, even if Malloy has consciously tried to be less harsh than his fellow governors have in this long, contentious half-year. Quite frankly, to use a Malloy phrase, they never really trusted him, and they must not believe now that he'll really go through with it, a Democrat who wouldn't be here without their help, laying them off to balance his budget.
In truth, they do look shocked, all of them at the table. Dan Malloy in deep, uncharacteristic silence. Nancy Wyman closing her eyes as they discuss how to float the news of the impending layoffs. Arielle Reich just watching Malloy, one end of the table staring at the other, then looking down. He means it. By God, he'll show them.
The gloom in him is not gone. He is worried -- and, yes, shocked -- that it will come to this. He remembers labor fights, being mayor, the pickets outside his house in Stamford, the bitter things they said of him for years after, and still say. But he comes alive now, seizing on the argument he is still shaping, with their help, in his head.
"What I need is the deepest and broadest possible discretion," he tells Tim Bannon, who will be back on the phone with the legislative leaders, to tell them to call their members back in, and vote Dan Malloy the ability to cut out of the budget unilaterally what they couldn't get by working with the unions. "That's what I need."
"If they don't come back and accept this package," Malloy announces, "we have to move in the direction of privatization. There's no way to afford this level of service."
The governor stands up from the table, and they all gather their phones and jackets, tossing Barnes' gloomy lists of cuts to the center of the table, to be shredded. There is a lot of work to do.
`READY TO DO LAYOFFS'
It's June 23.
The unions understand the severity of the problem. Even as the last of the units are still voting on whether to ratify the concession deal, John Olsen, the raspy-voiced AFL-CIO president and former Democratic Party chairman, is calling multiple times a day, wanting to get involved. Olsen himself is being besieged by national labor leaders, he tells Occhiogrosso. Roy relays the message to Malloy, as McDonald and Bannon listen.
"He spoke to national leaders and they were like, `What is the matter with you?' " Occhiogrosso says. The national leaders have begun to lean on state union officials like Olsen and Sal Luciano of AFSCME Council 4, wanting to know how their members could have rejected a deal that seemed so much more generous than the ones being forced on public-sector workers in Ohio, Wisconsin and other states.
Dan Malloy is not in the mood for them today.
"I am ready to do layoffs as soon as Ben tells me," he says. Even McDonald, who has believed all along that political acceptance of their budget will come only when people see some union workers getting axed, urges caution now. The governor wants his budget director to send a layoff notice to everyone with 10 years of state service or fewer, to show them he means business.
"You don't send off notices before there's a plan," McDonald says.
"All these DOT people and all these DCF people think I can't get to them," Malloy snaps. "I could privatize DCF tomorrow."
It's exactly the sort of rash privatization Lori Aronson considered so risible about the Republicans' budget four months earlier. Now they are so close to a drastic shift that Aronson's husband, Bannon, will ponder that afternoon whether they should go out to bid for state services like social work and child protective care, to send a message that they're serious. Malloy knows the political cost -- a full term of open warfare with the unions -- but for now he is willing to embrace it.
"We could outsource all that stuff," Malloy says, walking to the Armory for the meeting where he will shock his commissioners with talk of layoffs. "I don't know what they're thinking, but frankly, it's a little liberating."
It's not quite so easy for Nancy Wyman. The lieutenant governor was the reason some of these unions endorsed Malloy, despite their skepticism about him. In her, they found a known quantity, a stalwart Democrat and champion of labor. But Wyman now, despite a mournful tone and a nagging summer cold, says they shouldn't underestimate her own resolve to take a more conservative fiscal course.
And yet it still felt painful, being the people who might actually do this brute culling of the workers around them. That's why she was still pulling for them to add revenue -- not tax hikes, but maybe Keno, or some other new source of funds.
"Everyone called me a liberal," she says. "I'm a fiscally conservative person who went nuts in the comptroller's office, because we've been telling (past Legislatures) the same thing over and over again. If you have a surplus, you don't have to spend it, especially on ongoing expenses."
Now, she says, "my hope is that maybe when they realize this is really happening, they'll ask for a revote."
THE LOBBYING CAMPAIGN
By July 22, the hottest day of the year, the mood has shifted. The union leaders reconvene, change their rules to allow a simple majority of workers to ratify a give-back deal. Mark Ojakian comes in to give steady updates about the unions' latest requests. They just want some small morsel of renegotiation to take back to their membership, to help the sale stick this time.The first agreement called for doubling the penalty for retiring early, from 3 percent to 6 percent of the pension value; couldn't they drop that term from the deal?
Malloy tells O.J. to hold firm on that provision. If they want their jobs, they'll come around, the governor says.
"It's fine. I'm getting more and more comfortable with laying off all these people."
In the car, heading out to Manchester at midday, Malloy calls Pat Sullivan, the Republican strategist and lobbyist. Sullivan is gauging Malloy's flexibility about the early retirement penalty.
"The answer's no and they know it," Malloy says, his voice rising enough that Reich looks up from the back seat, wary. "A s--tload of people at DOT are going to lose their jobs.And next year, more of 'em. And next year, more of 'em. It's pretty straightforward.
"If their membership turns it down, the Legislature is going to let me do whatever the hell I want to do," he continues. "And they've got to wrap their minds around that."
When the phone rings again, still on the way to Manchester, it's Mary Kay Henry, the national president of SEIU. She's calling about the retirement penalty, too. The car rolls past hair salons and nail places, gas stations whose signs seem to wilt in the heat.
Henry gets it with both barrels, a blast of an argument from a governor very much out of patience.
"The folks that have asked you to make this call, I assume, are DOT folks," Malloy says, in a one-way conversation. He's swamping her, filibustering as he does with TV anchors and others who he expects to try to take the lead when he wants it for himself. "They had actually convinced themselves there was no way they could be laid off."
He lays out chapter and verse for Henry, explaining that the local unions aren't telling her they're trying to get him to change a deal their own leaders had agreed to, warning her that if the locals don't take the deal they've offered, he's "got to do some of the things the other states are doing." That means ratcheting back on binding arbitration, playing to the public's resentment of the unions' benefits and pay.
By now, the Lincoln has reached its destination: A senior center with TV cameras clustered in the front doorway, awaiting Malloy and Sen. Steve Cassano, who will brag about their energy reform and then urge residents to beware the day's brutal, deadly heat. But first, Malloy has to finish this conversation. He gets out of the car, then walks behind it, down the sidewalk a short ways, on the phone as the cameras train on him from a distance.
"I don't mean to be preachy, but I don't have room," he tells the union boss. "And," and on these words, some extra emphasis, "I know my politics."
AT LONG LAST
Ratification will come. The workers overwhelmingly approve the deal in mid-August, months later than Malloy and the team had hoped. Even the union that refuses to go along, the state police, is easily handled. After deciding to follow through with his commitment to laying off workers who have not accepted wage freezes, the administration quickly accumulates enough retirements among aging workers hoping to avoid the new changes in retirement benefits. They have the money to bring the young, laid-off troopers back on board.
Still, as Malloy's aides wait for the final ratification that came in late summer, a new kind of serenity has set in, that of sacrificial victims who have looked over the volcano's rim and found the lava unpleasant but not unsurvivable.
Tim Bannon sits behind his paper-laden desk, shaking his head at the irony. The unions overplayed their hand, from where he sits, and ruined a chance to prove that a state that played well with labor could succeed better than one that tried to declaw them entirely. If they somehow had rejected the concessions again this time, there were few in the administration who would have hesitated to make the layoffs real and alter the scope of public sector employment forever.
"At a time when unions are needed probably more than ever, they're being destroyed by the actions of union members," Bannon says. And the deliverer of the euthanizing blow would have been -- almost was -- a Democrat.
Tomorrow: In town after town, an often-sullen citizenry came out to see in person the governor who wanted to cut programs and raise taxes.