Published February 17. 2011 12:26PM Updated February 17. 2011 2:00PM
Hartford — A state employees union that represents some 25,000 workers put out a statement Thursday saying that Gov. Dannel P. Malloy is asking middle class families to make “significant sacrifices” while letting the rich off easy.
“Asking middle class workers to accept higher taxes, and asking those middle class workers who are state employees to accept $1 billion in concessions, while asking Connecticut’s wealthiest residents to increase their tax rate only two-tenths of one percent does not seem balanced to us,” said Matt O’Connor, the communications director for the Connecticut State Employees Association/Service Employees International Union (CSEA/SEIU).
In his budget, Malloy has proposed raising the tax rate on the state’s wealthiest residents from 6.5 percent to 6.7 percent.
Roy Occhiogrosso, the governor’s senior adviser, said Thursday that while the staff involved in preparing the budget has had some informal meetings with some union employees, there have been no formal negotiations and the governor has not been involved.
And he took issue with O’Connor’s characterization of the governor’s proposed tax hikes as being particularly onerous for the middle class.
“If you are a millionaire, your tax is going up about $6,000 a year, and you’ll be paying more luxury tax and more on estate transactions,” he said.
Occhiogrosso that the new tax rates would make the income tax more progressive, distributing the burden more equally across income levels, with the working poor receiving earned income tax credits and lower income residents paying less.
“If you’re making $60,000 a year, your tax burden would increase by $70 a year,” he said. “That’s about $6 a month, or about $1.50 a week. If you’re making $100,000, your tax would go up by $350 a year or about $30 a month or $7.50 a week. And if your incomes is $50,000 or less, your tax goes up by zero dollars.”
Occhiogrosso also pointed out that the new tax rates only apply to the amount a person makes over the cutoff points. So, for example, a person making $100,000 a year would pay at the 5 percent rate on that income. The 5.5 percent rate would only apply to any income over $100,000.”
“So when they say the governor is soaking the middle class, that’s just not true,” Occhiogrosso said.
Malloy’s proposed budget will only be balanced if he can squeeze $2 billion in cuts out of state employees over the next two years.
Some of the suggestions Malloy made Wednesday for cutting the cost of state employees by $2 billion in costs over the next two years:
* Save $100 million over two years by moving state employees to a health benefits package like the one that covers federal employees.
* Save close to $300 million over two years by requiring state employees to accept a wage freeze.
* Save $80 million by requiring state employees to take three furlough days per year over the next two years.
* Save close to $300 million by adjusting the retirement age.
* Save millions more by freezing longevity payments and increasing medical co-pays for unnecessary emergency room visits.
Occhiogrosso said these were not formal proposals but simply ideas that the governor was suggesting and “there are others.” He did add, however, that “there are only so many ways you can go to cut costs.”
O’Connor said state workers have offered Malloy “ideas to produce savings and efficiencies that don’t damage, and in fact enhance, the critical services and public structures needed to turn the economy around. We firmly believe these ideas will generate significant savings to protect education, health care, public safety and all the vital services our members provide.”
In his budget address, Malloy said he has received some cost-saving suggestions from state employee union leaders, “but they’re not nearly enough. The time has come to take the next step and begin discussions regarding concessions. I don’t make these suggestions to be antagonistic. Just realistic.”
And, in the event state unions don’t want to negotiate, Malloy said, the state would have no alternative but to “completely shred the safety net and lay off thousands of state workers.”
O’Connor said Thursday that discussions “so far have not included collective bargaining issues. Should that change, not only would our members need to be informed, but those discussions would not take place through the media. We have never found ‘bargaining through the press’ to be an effective way to work together to reach agreements.”
He also said that the State Employees Bargaining Agent Coalition (SEBAC), the umbrella organization for the state’s employee unions, “joins many other groups in expressing concerns that the broad structure of the budget suggests too much emphasis on cuts, and not enough on raising revenue from Connecticut’s largest corporations and very wealthy.”
SEBAC represents roughly 50,000 full- and part-time state employees.
“Connecticut is already the fifth leanest state in the country in terms of public spending,” O’Connor said. “Meanwhile, the very rich pay less than half what the middle class pays in state and local taxes (4.9% of income as compared to 10%), and many big corporations like Bank of America pay no state income taxes at all.”
In addition, he said, “thanks to the extension of the Bush cuts, Connecticut’s wealthiest five percent of wage earners realized a $3 billion windfall last year.”
O’Connor said his union looks forward to working with the governor’s office and the General Assembly to “find the right balance of savings, revenue, and investments in Connecticut’s future ... that moves our state towards a better future.”