Midnight Budget Passes; Clock Ticking On Labor Concessions

With final legislative passage of the $40.1 billion biennial budget by the House late Tuesday night, the administration of Gov. Dannel P. Malloy now turns its attention to a significant missing piece of the fiscal puzzle -- $1 billion in concessions and labor savings.

The House Democratic leadership of Speaker Christopher G. Donovan and Majority Leader J. Brendan Sharkey produced a solid win for Malloy moments before midnight as the House approved a series of politically risky tax increases that the new governor assures will restore the state's fiscal health.

The roll call vote for the governor's first budget was 83 to 67, with 15 Democrats joining all 52 Republicans in opposition. Others had been on the fence, troubled that Malloy relied more on tax increases than neighboring governors have to erase his inherited deficit.

"Now it's up to my administration to reach an agreement with our fellow state employees and to present it to the legislature for ratification. I remain hopeful that we'll get there. If we don't, I remain committed to presenting an alternative budget to the General Assembly in the next couple of weeks," Malloy said in a statement issued early today.

Without the labor deal, the budget is out of balance, forcing another round of spending cuts and another debate by the House and Senate. The Republican minority had tried to stop the vote, questioning the propriety of the legislature adopting a budget with a $1 billion IOU in each year of the biennium.

"Make no mistake: come July 1, Connecticut will have an honest, balanced budget in place," Malloy said. "No smoke, no mirrors. A solid foundation for the future."

Negotiators for the adminisration and state employee unions exchanged updated offers and counter-offers throughout the day Tuesday as the House endorsed a budget that depends on the most significant labor savings ever sought by a Connecticut governor.

With the recent receipt of improving revenue estimates, the administration could afford to lower its demand for labor savings to around $700 million, although the administration's official position still calls for the full $1 billion, at least for the moment.

The administration is fast approaching a May 6 deadline to begin issuing layoff notices if Malloy intends to cut the workforce by the July 1 start of the new fiscal year. Malloy told a business group this week he would lay off 5,000 employees if the labor talks fail.

Failure could be disastrous for Malloy and labor. The unions are trying to protect their members while delivering sufficient savings to hand a political victory to the first Democratic governor in 20 years, a governor they helped elect by the thinnest of margins.

At the outset of the 10-hour debate in the House, Sharkey, the new majority leader from Hamden, declined to say how many of the 99 Democrats were flinching at voting for a record tax increase, but an administration official said the leaders promised at least 80 votes.

Republicans tried to portray an unpublicized visit by Malloy to the House Democratic caucus before the debate as a sign the governor needed to shore up support for the House to give final approval to a tax-and-spending plan passed by the Senate earlier Tuesday on a 19 to 17 vote.

"The support for this budget is slipping significantly," said Rep. Lawrence F. Cafero Jr., R-Norwalk, the leader of the 52-member GOP minority. "The reason is the representatives are listening to the people who sent them here."

Democrats said there was no slippage, and the best evidence of that was the absence of Democrats being invited to one-on-one chats in the governor's office a few dozens paces from the House chamber.

"He trusts us that we knew what we were doing here and in the Senate," Sharkey said.

But later in the day, a half-dozen legislators did meet individually with the governor.

"Some legislators asked. Some he asked to see," said Roy Occhiogrosso, the governor's senior adviser.

Sharkey said Malloy, who was out of state at an education conference while the Senate debated the budget, asked to address the House caucus. He arrived with Lt. Gov. Nancy Wyman, a former House member, to cheers and applause.

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