For those still with jobs, pay, benefits will shrink

State Workers: Even labor negotiations are being scrutinized

January 10, 2011 

State employees will take a hit on pay and benefits because of the state's budget crunch. A key question as lawmakers head back to work this week is: How much?

Gov. Gregoire already turned up the pressure, negotiating contract agreements with three major unions that call for 3 percent pay cuts for all state workers.

The cuts would be part of what the Washington Federation of State Employees calls a “prepaid furlough” plan. This would shrink pay for about 90 percent of state workers by 3 percent each month, while also reducing their hours worked by the same amount. So they’ll be off work another 5.2 hours or so per month over the next two years.

Spokesman Tim Welch has said the federation, which represents 40,000 state workers, expects to walk arm-in-arm to the Legislature to argue for funding of the contracts. And workers plan a noon rally today to lay out their demands to preserve some state institutions and to approve the contracts.

Ratification votes on the tentative agreements begin later in the month. The proposals cap the state’s contribution for health care and other insurance at about $850 a month per worker, on average. Employees’ share of health insurance premiums also would climb from 12 percent to 15 percent.

Republicans led by Sen. Joe Zarelli of Ridgefield have argued for a higher worker payment on health care and against giving step pay increases for workers that are based on years of service. But Zarelli has agreed with Gregoire’s insistence on no cost-of-living raises, and he has said he thinks the governor’s pay reduction proposal is in the ballpark.

Gregoire said the contracts, if extended statewide, would reduce payroll costs in all state government accounts by about $330 million over two years.

Gregoire also is proposing pension reforms that would prevent automatic cost-of-living raises for state employees. Some Republicans have suggested ending traditional pensions for new employees in favor of 401(k)-type investment accounts.

Gregoire also is proposing to cut up to 2,600 more jobs in the state’s general-government agencies and higher education, with potentially 1,600 more public school jobs eliminated as local districts put her budget cuts into effect. That is on top of roughly 6,000 jobs eliminated in the past three years, according to the governor who has said “enough is enough” and more should not be asked from workers.

The right-of-center Washington Policy Center has suggested it is time lawmakers scrap the collective bargaining law from 2002 that lets employee unions bargain directly with the governor on pay and benefits.

Majority Democrats are not the least interested in making that change, and House Republican leader DeBolt said his caucus is divided on the question.

Senate Republican leader Hewitt said there isn’t a strong sentiment to scrap collective bargaining, but he thinks collective bargaining hamstrings the Legislature and needs to be discussed.

“It’s something I think we’ll be addressing as we move forward,” he said. Labor costs make up a significant part of state funding, so it is “much more difficult for the Legislature when all the bargaining is done by the governor and all we have is a thumbs up or a thumbs down’’ on the contracts, Hewitt said.

Sen. Brown disagrees sharply. “Collective bargaining is not the fundamental cause for the recession that we are experiencing or the budget situation we are in,” Brown said.

Brown also said employees already are sacrificing to help the state balance its budget. She said they face lower pay and more out-of-pocket medical costs and premiums, and thousands have lost their jobs altogether.

“That is kind of the ultimate sacrifice when a family loses its source of income. Is that over? No, it is not over because we have not reached a solution on the two-year budget yet,” Brown said. “But it is sometimes suggested that if only we would increase premiums for state employees that that would solve the budget problem. If we would only look at compensation it would solve the budget problem. And that will not solve the budget problem. A 1 percent reduction in state employee compensation saves about $60 million. We’ve got a multibillion-dollar issue in front of us.”

Brad Shannon: 360-753-1688

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