Pay raises likely to be in Gregoire’s final budget

bshannon@theolympian.comDecember 14, 2012 

Gov. Chris Gregoire’s budget office has ruled that a slew of labor contracts negotiated for 2013-15 are “feasible” for the state to pay, opening the door to including them in a budget plan she expects to make public Tuesday.

The cost of the contracts, which are part of the shortfall calculation, has been estimated at about $238 million from the state’s general fund. That includes $171 million for ending the 3 percent pay and hour cuts for most of the state’s nearly 59,000 general-government workers — and $30 million for possible 1 percent raises in mid-2014 if the state’s revenues grow to a certain level.

Virtually all of that cost is included in state Office of Financial Management estimates that show the state faces a shortfall of about $904 million in the next two-year budget cycle. The pay changes vary quite a bit between higher-education unions in the new contracts, which are more generous in many cases than for general-government workers.

“It’s good news and a real morale boost for state employees who sacrificed to save the state during dire economic times. But now we have to work hard to make sure the Legislature goes along,” said Tim Welch, spokesman for the Washington Federation of State Employees, which represents about 40,000 workers in general government and higher education who bargained for the pay adjustments.

One union contract with the Inlandboatmen’s Union was declared infeasible. But negotiators were back at the table and a new agreement was near, according to Ralph Thomas of the governor’s Office of Financial Management.

Other nonstate employee groups such as home-care workers also bargain for contracts, but OFM did not issue a determination whether an arbitrator’s finding for SEIU Local 775’s home-care workers is affordable. An arbitrator had awarded SEIU’s home-care workers two yearly raises of 5 percent and other contract improvements, which could cost an extra $134 million that is not included in the state’s $904 million shortfall.

The feasibility determinations, issued Thursday, were a bit of a formality under terms of the state’s decade-old collective-bargaining law. But the review is considered a bit of a pressure valve when economic conditions quickly go bad — as they did in 2008, scuttling pay deals.

And putting out the feasibility letters lets the governor include the labor costs in her two-year budget, which she intends to make public at 10 a.m. Tuesday in Olympia.

Top House budget writer Ross Hunter, D-Medina, said the state’s November revenue forecast did not change enough since the contracts were negotiated in the fall to allow a change, so he didn’t see a way the contracts would have been rejected.

That said, he added, “I still don’t know that the Legislature is going to do them or not.”

Rep. Gary Alexander, the top Republican on the budget in the House, said a key for his caucus is whether all contract costs can fit under the $900 million shortfall estimate, which he said he has been developing a plan to deal with.

“I think it’s far from a done deal” at the Legislature, Alexander said.

“From our standpoint, we’re looking at the total overall budget number. If we can accommodate the education-funding needs, protect the most vulnerable populations and be responsible on public safety — and do that within the current resources available — then we’ll be fine,” Alexander added. If that can’t be done, he thinks Republicans would like to reconsider the agreements.

The various contracts include larger raises of 2 percent or more per year for some higher-education workers and nurses. Alexander, who represents parts of Thurston and Pierce counties, said it appears there “are a lot of variables” in the agreements.

The union with the most generous pay adjustment is the Masters, Mates and Pilots Marine Operations Watch Supervisors. Its members are getting pay raises of 16.125 percent in 2013 and 2014 — for a total pay adjustment of almost one-third.

Legislative dynamics might change this year. Democrats strongly control the House, but a new Republican-dominated coalition has grabbed the reins of power in the Senate, and it is unclear whether the new group would be very committed to honoring the contract details.

Under the state’s collective-bargaining law, state employees bargain directly with the governor for wage and health care benefits. This year’s agreements deal only with wages, leaving health care contracts still in negotiation for about 26 labor groups.

If no deal is reached, the state will continue to contribute a fixed amount per employee for coverage — amounting to about 85 percent of premiums — for another year. After that, terms could be changed.

Overall, Gregoire’s labor office negotiated more than two dozen agreements on wages with public-employee groups.

Brad Shannon: 360-753-1688 @BradShannon2

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