No COLA but no cuts for state employees

bshannon@theolympian.comJuly 7, 2013 

State employees will see few major gains — but also few pains — as a result of the 153-day legislative session that ended June 29.

Pay for most Washington state government employees snapped back to 2011 levels on July 1 as a two-year, 3 percent cut in compensation and hours worked was allowed to expire.

Just as they have for four previous years, most state agency workers will not see cost-of-living pay hikes this month. But there will be changes for many, and the question of pay is complicated — with most workers becoming eligible for 1 percent pay raises in July 2014 if state revenue recovers enough to trigger a provision in contracts.

Also, nearly 17,000 general-government workers — out of roughly 59,000 on the payroll — become eligible to get step-pay raises of 2.5 percent this month if they have worked at least six years and are at the top of their pay range.

On the down side, some workers can expect to pay more for health care. The biggest hits may be felt by smokers, who must pay a $25 monthly surcharge for health care coverage starting in July 2014, and by employees who must pay a new $50 surcharge if they want to include a spouse on their health plan. The health care surcharge applies only if similar coverage options are available through the spouse’s job.

“I don’t think there is anything to run up the flag pole and say ‘Woohoo!’ about,’’ said Rep. Sam Hunt, an Olympia Democrat who typically goes to bat for state workers and teachers in budget talks. “I think we are most fortunate to have a state collective bargaining law that provided a shield for our state employees’ pay and benefits.’’

Senate Republican Leader Mark Schoesler of Ritzville said he thinks the eventual agreements on pay were “reasonable.” Some contracts were more generous than others, but Schoesler said the final result was affordable for the state as it continues recovering from the Great Recession while boosting investments in K-12 public schools.

Schoesler also said that even without COLAs over the past four years, many state employees — typically about 30 percent — are eligible for step pay increases.

Schoesler’s extremely conservative caucus was divided on the labor contracts, and Schoesler said he did not like that former Gov. Chris Gregoire was able to negotiate terms of the pay agreements last year and then leave it to others to figure out how to pay for them.

NO TAKEBACKS ON PENSIONS, HEALTH CARE

In the end, the Republican-steered Senate did not make a big deal over pay, agreeing with Senate Democrats on a budget that assumed more than two dozen contracts would be funded. And the Senate Majority Coalition and Democrat-controlled House ended up fighting to a standstill on other issues affecting public employees.

The result: There were no big takebacks of workers’ benefits.

In fact, the Washington Federation of State Employees’ post-session wrap-up celebrated what didn’t happen. It noted that the Legislature avoided a government shutdown that threatened to put more than 26,000 public employees out of work July 1.

The roughly 40,000-member union also celebrated the death of several Senate Majority Caucus bills that would have changed pension benefits or pushed part-time employees off health coverage and into the Obamacare insurance exchange.

Dave Schiel, president of the Washington Public Employees Union, said he had worries near the end of the session after “bad things happened” for collective bargaining late in the 2011 session.

“So mainly I’m relieved — and I think most other union officials are too. Relieved that we got through it and that worse things didn’t happen,’’ Schiel said.

Schiel also said his members are concerned about how the insurance surcharges for smokers and coverage of a spouse will work.

As finally negotiated by Republican Sen. Andy Hill of Redmond, the health care coverage question for part-timers is left up to individual unions. They can negotiate with the state to seek coverage through the exchanges if it is a better deal for the workers.

HEALTH CARE BENEFITS REMAIN IN NEGOTIATION

State budget director David Schumacher said Hill’s provision for part-timers “showed up pretty late in the movie,” so details of how to implement it still must be worked out. It’s not clear any unions will want it.

“I think the understanding is that if there are parts of state government where it’s a good deal for (workers) that we would certainly look at it,” Schumacher said. “But there is not any interest in forcing big groups of people into something that they don’t want to go into.’’

There also is a $10 million cut in the state’s allocation for the Public Employees’ Benefits Board, which administers public employees’ health plans. How that is to be saved needs to be worked out.

Thuy Hua-Ly, chief financial officer for the Health Care Authority, which oversees PEBB, said one option might be to use reserves to cover the cost but that it is too early to say. Hua-Ly said an increase in co-pays and deductibles would be a “last resort.”

Despite agreeing to the labor contracts on pay, the governor and state worker unions still have not agreed on what share of health costs the state will cover in 2014 or 2015. Talks broke down under the former governor, and Gov. Jay Inslee has expressed interest in talking to the unions about ways to encourage wellness.

“I expect those to be negotiated over the summer,’’ Schumacher said.

K-12 PAY ISSUES UNSOLVED

The questions of pay and benefits are similar but a bit different at the state’s universities, regional colleges and community colleges. Unions representing faculty and classified staffs at each have arrived at different pay deals, although most are similar to those for general-government workers and some offer larger COLAs.

It is in the K-12 public schools that workers may be most upset.

That’s because legislative leaders from both parties have touted the way their budget deal puts nearly $1 billion of new money into basic education. But teachers get no cost-of-living increases in the 2013-14 and 2014-15 school years, and lawmakers agreed to suspend Initiative 732’s guarantee of COLAs for a third straight budget cycle.

“We just had some buttons made up that go — zero, zero, zero, zero, zero, zero, zero. … After going six years without a COLA or any kind of state funded salary increase, that’s just not fair,” Washington Education Association spokesman Rich Wood said, noting the Legislature’s own work group found teachers were underpaid and recommended nearly 50 percent pay raises for starting teachers.

“Both the House and the Senate voted to suspend the COLAs, and both ignored the recommendations of the work group,” Wood said, noting that by suspending I-732, the Legislature was able to divert $320 million to other K-12 education purposes. “That’s a $320 million tax levied solely on K-12 (employees) and some community and technical college educators.’’

Long term, the WEA wants to see the Legislature take up the broader question of how much teachers and other K-12 employees should be paid in order to attract bright new teachers and retain those already in the profession.

“In a perfect world we would have provided a COLA this year. But you saw in both Gov. Gregoire’s budget and Gov. Inslee’s budget, there was not a COLA,’’ House Majority Leader Pat Sullivan, D-Covington, said.

Teachers can get a $5,000 bonus if they are national board-certified and twice that if a certified teacher goes into a high-poverty school to teach.

Sullivan said teachers in some districts also have seen pay increases in recent years despite no state-paid COLAs. Those raises were bargained directly with school districts that had the funds to pay for them.

Brad Shannon: 360-753-1688 bshannon@theolympian.com

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