Hartford - The pressure is back on state union leaders to somehow ratify their labor concessions deal with the governor.

During Thursday night's special session, state legislators were poised to preserve aid to cities and towns in the new state budget at the expense of as many as 1,000 additional worker layoffs.

And if the layoff threat isn't enough to force union action, the legislature could adopt a measure that caps state workers' longevity payments and eliminates certain pension sweeteners.

Both measures may well loom over union leaders as they meet this morning to decide how to proceed.

A top aide to Gov. Dannel P. Malloy said the governor is willing to issue the additional pink slips - on top of 5,466 layoffs already in the works - as part of his plan to rebalance the state's new two-year, $40.5 billion budget.

Malloy's labor deal fell apart last week when it failed to achieve the union coalition's strict ratification requirements, even though 57 percent of union workers endorsed it.

The Democratic-controlled General Assembly was in special session Thursday to address the resulting $1.6 billion hole in the biennial budget, which began at midnight today. Both the Senate and the House appeared ready late Thursday night to approve some but not all of the additional budget-cutting powers that the governor sought to enact his alternative plan.

Instead of granting Malloy two years of expanded rescission authority, legislative leaders said they were prepared to give him those powers through Sept. 30, and with a requirement that he submit a full budget readjustment plan to the General Assembly by July 15 for a hearing and eventual vote.

After hours of debate, both the Senate and the House approved some but not all of the additional budget-cutting powers that the governor sought for enacting his alternative plan.

The House voted 78-56 along party lines to pass the rescission bill shortly after 12:10 a.m. on Friday. Senators voted 21-14 at 2:28 a.m.

"This is the right thing to do, this is the responsible thing to do,…and it does what the people of Connecticut want," said Senate President Donald Williams, D-Brooklyn.

Malloy also said in the statement that with the passage of the bill, he could now focus on getting the state back on track.

"Our goal has been achieved: Connecticut has a budget in place that is balanced honestly, with no gimmicks," Malloy said. "To be clear, that's not a reason to celebrate. The $1.6 billion deficit we just closed involves a lot of pain for a lot of people in the form of thousands of layoffs and deep spending cuts. But putting Connecticut on firm fiscal footing – which is what we've done – sends an important, much-needed message to the business community and to Wall Street. Now people will know we're serious about getting our fiscal house in order, and now we can re-focus our attention on job creation."

But Republicans in both chambers objected to handing over such authority to the governor, even for a shortened period of time.

The 1,000 additional layoffs entered the budget-cutting equation after some House Democrats resisted the governor's suggestion of slashing $54.4 million a year from state aid grants to Connecticut's 169 cities and towns, a 2.4 percent reduction. New London alone would have lost about $371,000.

State Rep. Diana Urban, D-North Stonington, was one of at least several dozen legislators who objected to those cuts, telling House leaders that they couldn't support the governor's plans if the cuts stayed in.

Urban said the grant reductions would be unfair to local governments, which have already approved budgets and sent out tax bills.

"We can't at this late date say, 'Guess what, we're cutting your aid,'" Urban told The Day. "There was a very vocal group of legislators who said we just can't go down that path, and to their credit, leadership listened."

House balked

House leaders chose to not take up part of Malloy's Plan B that called for curbing some collective bargaining rights of the state's public sector. It would have included restrictions on longevity payments, sick day accrual and overtime in calculating workers' pensions. But House Speaker Christopher Donovan, D-Meriden, said they could still vote on those changes later this summer.

A bill containing restrictions similar to what the governor sought passed the Senate by a 30-6 vote Thursday night. The measure, introduced by Sen. Edith Prague, D-Columbia, would ban longevity pay in all future collective-bargaining contracts with state workers. It also caps the size of current longevity payments when most labor contracts expire next year. For nonunion employees, longevity pay would get capped Aug. 1.

The bill also limits overtime and longevity pay from counting toward workers' pensions.

Prague is a longtime supporter of labor causes but was livid last month when the 15 state unions representing 45,000 workers failed to ratify the concessions agreement with the Malloy administration.

"I know a person in state government making $180,000 [a year] getting longevity payments," Prague said during Senate debate. "I think something like that is outrageous."

Prague emphasized that she is not opposed to collective bargaining - just the practice of longevity pay and pension sweeteners that the state can no longer afford.

"I'm a very strong supporter of collective bargaining. I think without it, people would be working for very low wages, and I could never stand that," she said.

Under current labor contracts, twice-a-year longevity payments can begin after 10 years of employment. The bonus increases every five years.

Sal Luciano, executive director of AFSCME Council 4, said leaders of the State Employees Bargaining Agent Coalition are scheduled to meet this morning to discuss the next step for the concessions agreement vote, which they held off from certifying Tuesday. Options include organizing a re-vote or modifying the coalition's bylaws, which require that no fewer than 14 of 15 unions and 80 percent of voting members vote yes on labor agreements.

j.reindl@theday.com