(Adds byline, details, union comments, paragraphs: 4, 10-11)
By Joan Gralla
NEW YORK Aug 18 Connecticut's unionized state
workers ratified a new cost-cutting contract, accepting bigger
penalties for retiring early and agreeing to help pay for
healthcare, just four days before thousands of lay-offs would
have taken effect, the governor said on Thursday.
"The real value of this agreement lies in the $21.5 billion
it will save taxpayers over the next 20 years in the form of
lower healthcare and retirement costs for state employees,"
Governor Dannel Malloy, a Democrat, said in a statement.
"When you negotiate in a respectful manner real fundamental
change is possible," he said in a webcast news conference.
The former Hartford mayor often contrasts his approach with
that of his peers. One year before the U.S. presidential
elections, the list of possible GOP candidates includes New
Jersey Governor Chris Christie, who has blasted public unions.
Malloy has differed with many of his peers by closing the
state's deficit with tax hikes, in addition to spending cuts.
Under the new contract, Connecticut public workers will
have to work longer and be older to retire, wait 10 years
instead of five to get retiree health benefits, and make a 3
percent contribution to a health care trust for a decade.
State workers hired after July 1 will not get longevity
payments, will have to work 15 years to qualify for retiree
health benefits and their pensions will reflect their last five
years of service instead of the highest-earning three years.
Saying Connecticut's government still has too many layers,
Malloy said there could be more agency consolidations.
Some lawmakers have doubted that the contract will succeed
in closing a $1.6 billion budget gap. Some recalculations will
be needed because the contract was approved later than
expected, Malloy said, adding: "We will spell out over time how
we are reaching those savings."
In June, the 45,000-strong State Employees Bargaining Agent
Coalition rejected the labor contract. The 15-member group
responded by relaxing its rules to make it easier for members
to approve the accord, and clarified and improved some of the
terms, said Matt O'Connor, a union spokesman.
For example, almost all of the union members will have four
years of job security and will no longer face the risk that
their pay or benefits will be pruned when their contract
expires in 2017.
Malloy -- who had threatened even more draconian budget
cuts if the contract was again spurned -- said Connecticut's
politicians could never again put the state's finances in peril
by approving overly generous pay and benefit packages, noting
the state would follow the strict Generally Accepted Accounting
(Reporting by Joan Gralla; Editing by Dan Grebler, Bernard