It seems many people are having trouble facing the reality of the fiscal crisis confronting Connecticut.

State union leaders continue to expect sympathy from the public as they refuse to negotiate potential concessions in their generous benefit plans. Union TV commercials urge a simple solution — tax the wealthy — oblivious to the reality that the wealthy can move themselves and their money elsewhere if taxes keep going up.

Do state labor leaders really expect those in the private sector to rally to the cause of their privileged state counterparts? Many private sector workers have seen their benefits trimmed and their contributions toward medical insurance increase as their companies try to remain viable. Meanwhile, their state taxes have gone up.

By negotiating to realign benefits to modern realities, the state unions could help put Connecticut back on a sustainable fiscal path. That in turn would provide an environment for some genuine economic growth, the only way to boost tax revenues without new and ever-higher taxes. It is in the long-term interest of the state unions to entertain concessions.

The other option is significant layoffs. Gov. Dannel P. Malloy warns that he needs to reduce the state workforce by about 2,500 to rebalance the budget for the fiscal year that begins July 1. Connecticut faces a projected $930 million shortfall. The administration has issued 250 layoff notices and projects eliminating another 650 jobs through retirements and by freezing vacant positions, but that would still require an additional 1,600 layoffs.

While the unions are in negotiations on wages, with contracts expiring June 30, the agreement with SEBAC (State Employee Bargaining Agent Coalition) locks in health insurance and other benefits through 2022. A refusal to renegotiate now could lead to much bigger givebacks come 2022.

Also having trouble with reality are Democratic leaders in the legislature, as is the powerful Appropriations Committee. The budget proposed by Appropriations came up $340 million short of the projected budgetary gap. Meanwhile, Democratic legislative leaders keep talking about what they don’t like in the governor’s updated budget proposal — the layoffs, social services reductions, and education and municipal aid cuts — but offer no alternative.

The Republican minority, meanwhile, is content to let the Democrats deal with the budgetary abyss into which the majority’s policies have led the state. The Republicans will then renew the debate come the election. One can hardly blame them.

Only Malloy is making a serious attempt at balancing the budget without resorting to state tax increases. In addition to personnel and service cuts at the state level, his budget would result in 118 towns seeing a net loss in state revenues next fiscal year, while 51 municipalities would see increased aid, but not as much as projected in the Fiscal-Year 2017 budget the legislature approved a year ago.

The governor suggests reductions in both Education Cost Sharing grants and in Municipal Revenue Sharing programs. Some towns with strong local tax bases, such as Waterford, would see their entire ECS funding eliminated. All told, Waterford would lose $1.4 million in state aid, Groton about $870,000, while New London would gain $2.2 million and Norwich $2.5 million, a recognition that urban communities need more help.

Cuts in municipal aid may avoid state tax hikes, but they are likely to lead to property tax increases at the local level. As noted in prior editorials, property taxes are particularly regressive. The better move is major changes in how government is organized and funded in Connecticut, with more regional approaches, less duplication of services, and reduced administrative overhead.

But you can’t redesign a building while it is burning down, and Malloy is trying to put out the fire.

If the Democratic majorities in the House and Senate don’t like their governor’s approach, they need to produce alternative plans. And maybe they can persuade their friends in the state labor unions to consider concessions. So far, the hose they’ve laid out doesn’t even reach the fire.

Impact of Gov. Malloy’s proposed education and municipal aid cuts

Norwich: +$2.5 million

New London: +$2.2 million

Stonington: -$27,556

North Stonington: -$83,772

Salem: -$96,810

Preston: -$103,703

Lyme: -$134,547

East Lyme: -$212,924

Montville: -$396,853

Ledyard: -$400,992

Old Lyme: -$575,760

Groton: -$870,252

Waterford: -$1.4 million

Norwich: +$2.5 millionNew London: +$2.2 millionStonington: -$27,556North Stonington: -$83,772Salem: -$96,810Preston: -$103,703Lyme: -$134,547East Lyme: -$212,924Montville: -$396,853Ledyard: -$400,992Old Lyme: -$575,760Groton: -$870,252Waterford: -$1.4 million