Federation of Connecticut Taxpayer Organizations

One of Connecticut's largest public employee unions is trying to rally support in the waning days of the General Assembly session for a study of whether state government should offer a retirement plan to private citizens.

But one of the key lawmakers behind the proposal conceded late last week that the chances of passage this year are poor with the legislature scheduled to adjourn in less than two weeks.

"I think it's very slim it is going to happen this year, but it is still a very good idea," Sen. Edith G. Prague, D-Columbia, co-chairwoman of the Labor and Public Employees Committee, said Thursday.

But if the bills should die this year, the concept likely won't go away, Prague added. "So many folks are struggling to get by with just their Social Security," she said.

Both the labor panel and the Committee on Aging raised bills that would mandate a study of whether state government should offer a retirement plan to the increasing number of people whose employers don't provide a pension or a 401(k) savings program.

Council 4 of the American Federation of State, County and Municipal Employees, one of the leading groups advocating for the bill, has argued that two of the three tiers of the traditional American retirement income plan -- personal savings and an employer-sponsored retirement plan -- are missing from many households. And Social Security simply isn't sufficient, advocates of the bill say.

About 61 percent of employers nationwide sponsored plans in 2000, but just 53 percent did by 2010, according to the Schwartz Center for Economic Policy Analysis in New York. Over the same period in Connecticut, the percentage dropped from 64 percent to 58 percent.

But the state's chief business lobby, the Connecticut Business and Industry Association, opposes the study, arguing it would harm the private financial services industry and expose taxpayers to financial risks.

"If the state goes down that road, it needs to be ready to absorb the fiduciary responsibilities," said CBIA Associate Counsel Eric George, who added that not only includes the costs of administering private citizens' investments, but covering any penalties should funds be mishandled.

"We already have a private market that services (retirement planning,) and by all accounts, very efficiently, George said, adding that a state program for the private sector might ultimately lead to job losses in the financial services community.

But Teresa Ghilarducci, a labor economist and pension expert with the New School for Social Research in New York, said the same argument was used during the 1930s in a failed effort to block enactment of the Social Security Act.

Ghilarducci, who visited the Capitol Thursday with Council 4 representatives to advocate for the study, said a state-run investment plan ultimately would bolster the private financial services sector, just as Social Security did nearly 80 years ago.

"When more people begin to save for retirement, even a little bit, they become more aware and it increases the overall demand for retirement security," she said.

Ghilarducci also rejected the argument that state taxpayers might be saddled with paying penalties stemming from potential misuse of retirement dollars. "It happens all the time in the private sector, but there is no incentive for that in a state plan," she said. In the private sector, "the loyalty of the fiduciaries is to the firm and the shareholders who stand to profit."

And because Connecticut government already invests a huge pot of money annually -- more than $25 billion in assets tied to pension programs for state employees and for public school teachers -- it has the ability to manage a more diverse investment portfolio, Ghilarducci said.

Under the proposed legislation, an 11-member task force would study the availability of retirement plans and trends in retirement savings, as well as the projected needs of future retirees.

The study panel would include representatives from the governor's budget office, other constitutional officers, the state Commission on Aging and experts in the field to be appointed by legislative leaders and Gov. Dannel P. Malloy

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Governor's disputed education reforms turn on politics, policy and labor law

April 27, 2012 By Mark Pazniokas and Jacqueline Rabe Thomas�� CTMirror.org

http://www.ctmirror.org/story/16158/education-reform-turns-politics-policy-and-labor-law

Gov. Dannel P. Malloy and Senate Democrats remained at odds Friday over the union rights of teachers in the troubled schools that are at the heart of Malloy's education reforms, with legislators questioning if some of the proposed reforms run afoul of labor laws.

Malloy said he supports a continued role for unions at the troubled schools, but he sees conventional arbitration rights as a time-consuming impediment. Senate Democratic leaders said they are unsure if the administration can legally force teachers to give up arbitration rights or even reopen existing contracts.

"Quite frankly, there is a threshold question that we need to have answered as to whether you can force the reopening of a contract," said Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn.

How can the question be resolved?

"We've asked the administration for legal support to the idea that you could just willy-nilly open a union contract without their consent," Williams said.

Reforms in New Haven, which has been regarded by many as a model for reform, were negotiated with teachers. "A lot of that came as part of a new contract," Senate Majority Leader Martin Looney, D-New Haven, said.

Only one-third of teachers' contracts in the state will expire this year, according to the Connecticut Association of Boards of Education.

But Malloy has said he does not want to have to wait for union approval or for their contracts to expire to get involved in the state's 25 worst schools. His proposal gave the education commissioner broad authority to make certain changes without requiring union support.

Malloy told reporters at the state Capitol complex Friday he disagrees that turnaround plans should have to wait for the union nod or after their legal options to run out.

"Arbitration, as you know, is a very timely process. So do we think arbitration is the way to settle that issue? The answer is no," he said.

Senate Democrats are correct to worry about the legality of negating union contracts, a spokesman for the state chapter of the American Federation of Teachers said.

"Yes, we would definitely be in court ... and guess what? We would probably win because you can't just throw out contracts," said Eric Bailey of AFT Connecticut.

A spokesman for the State Department of Education said Michigan, Tennessee and Louisiana have all survived legal challenges and successfully carried out state takeovers of their worst-performing schools.

"Such states have also taken steps to eliminate or overturn collectively bargained agreements. In contrast, we suggest that Connecticut take much more moderate steps. Schools would remain within their local districts when they participate in the Commissioner's Network, returning fully to local oversight when the turnaround has been conducted," said Jim Polites with state education department.

Officials at the Center on Education Policy and the National Association of Boards of Education said they are not aware of any cases where the courts have overturned the state takeover of low-performing schools.

"State takeover is a re-emerging trend," said Diane Rentner, the executive director of the OCEP, a non-profit think tank, specifically mentioning Louisiana and Michigan. "States have created completely new districts for certain schools. If it's a new district then there is no existing contract... They negotiate from scratch."

Patrice McCarthy, a longtime education lawyer, said the Connecticut Association of Boards of Education thinks that creating this so-called Commissioner Network district is "completely in the authority of the legislature. Someone can challenge that in the court of course. We don't think that they'll be successful."

But Senate Democrats are looking for a much more diplomatic approach with the unions to getting change in these districts.

"When the governor sought concessions last year to help balance the budget deficit, we just couldn't simply legislate that contracts be reopened. The unions had to agree to reopen those contracts," Williams, the Senate president, said.

"I think all of the points that folks are making in terms of collective bargaining come back to that threshold question: Can you force a union to reopen a contract if that contract is not expunged?" he said.

Williams and Looney, who answered questions about education reform at a news conference on a jobs bill before the Senate session Friday, downplayed the continuing conflict they have with the Democratic governor over his major priority.

"I still believe that when this session is over, we'll be on the same page," Williams said. "We'll have some good initiatives that help improve education."

Time is growing short. The legislature's constitutional adjournment deadline is midnight May 9, but Williams and Looney said the relationship with the governor remains constructive, and their talks are positive.

"Look, we've obviously had some policy disagreements or else we would have passed the governor's bill right out of the box. These disagreements are fair. They are reasonable," Williams said. "It is my expectation we will have resolved all of those in the not too distant future."

Looney said the Democratic majority and Democratic governor have worked together on controversial matters.

"On major issues like the creation of the earned-income tax credit, in-state tuition and now, this year, the death penalty, we've worked in close partnership with a Democratic governor," Looney said. "We expect we will continue to do that on issues that are easy and issues that are hard."

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