State Workers

Contract talks 'tough' for all

The Washington State Capitol in Olympia. (Tony Overman/The Olympian)
The Washington State Capitol in Olympia. (Tony Overman/The Olympian)

Contract talks between Gov. Chris Gregoire's labor office and the largest union representing general-government workers have hit roadblocks that are pushing their negotiations past an Oct. 1 deadline and possibly into next year.

Gregoire’s team formally proposed a freeze on so-called “step” pay increases this week – in addition to a previous proposal to more than double workers’ share of health care premiums to 26 percent next year. Gregoire also is proposing no cost-of-living increases for another two years.

The Washington Federation of State Employees said Friday that it had rejected the compensation offer, calling it a pay “take-away” for 6,743 of its 30,000 general-government workers who would be eligible for step increases. The union says it now will have to seek help in the Legislature after Jan. 1 in order to allow fair compensation – including step pay and higher state contributions for health care.


Diane Leigh, who leads the governor’s Labor Relations Office, said the step pay for federation workers alone would cost about $12.5 million over two years. It was not immediately clear how much step pay costs for the other 26 contracts Leigh’s office is negotiating.

Leigh offered a more hopeful tone, saying the bargaining team still hopes to reach some agreements by Oct. 1 – the deadline for identifying new labor contract costs that would be put into Gregoire’s budget proposal for 2011-13. But, she said, the union and labor relations have scheduled several bargaining dates in the next three months, with the final ones Dec. 9-10.

“We just knew this was going to be tough. We knew it was going to be tough for the employees,” Leigh said. “The compensation (package) we had to put on the table I’d say was … tough for everyone.’’

The state faces a budget shortfall of $3 billion to $3.3 billion in the two-year budget cycle from mid-2011 to mid-2013. And Gregoire’s budget director, Marty Brown, has said the state simply lacks money to allow cost-of-living pay raises or step pay, or to increase the $850 per month for insurance-related costs that the state already pays on average for nearly 110,000 state employees.

The union’s health insurance request – to keep worker contributions at 12 percent of insurance premium costs – would cost $280 million, requiring cuts of that size in other programs, Brown said. Cost-of-living increases tied to the inflation rate could cost about $150 million and are not being offered in any contracts.


But Tim Welch, a spokesman for the Washington Federation of State Employees, said the state has options, and the Legislature holds the keys to solving the funding problem he thinks Gregoire’s bargaining team is avoiding. For instance, lawmakers could approve policy changes that let the state tap more deeply into health care reserves and allow a bigger state contribution toward insurance premiums, Welch said.

Lawmakers also could approve closing tax loopholes that would raise additional money for step pay and help hold workers’ share of health premiums to 12 percent, he said.

The health care issue has been negotiated since late August at a single table for 27 unions, including those representing several colleges. But other compensation and nonpay issues have been bargained separately, and some colleges have bargained on their own directly with staff members.

Welch said Eastern Washington University employees were continuing their old contract, which had step pay in it. So he believes there is a precedent for the Labor Relations Office to offer step pay to general government workers.

But Leigh said that EWU’s step pay was the result of the contract being “rolled over” – or extended two years – without changes in its terms.

If the federation and state failed to agree on a contract, the same step-increases would be in effect for general-government workers, Leigh said. But the step pay might be available to eligible workers for only one year, when terms of the old contract would lapse.

After that, Leigh said, it is still a legal “unknown” what the state and union would be able to do.


Republican state Sen. Joe Zarelli of Ridgefield was critical late last year of giving any step increases and sought to reopen labor contracts to deal with pay and health care costs. But neither Gregoire nor majority Democrats in the House and the Senate were willing to do that.

Zarelli also argued that workers should pay 18 percent of insurance premiums, and he said recently that Gregoire’s team made a good start with its 26 percent proposal.

The federation disagrees on health care and step pay. It contends that step pay is a good policy that lets the state phase in the cost of adding new employees over a worker’s first several years of employment. Welch said it is not fair to workers who were hired five years ago, believing their full pay would be reached over several years.

Rep. Gary Alexander, R-Thurston County, the top voice for the GOP minority in the House on budget issues, said he thinks it will be hard for the administration to give step increases this time around.

He said he doesn’t think 12 percent is a reasonable share for state workers to pay on insurance, but he doesn’t think 26 percent is reasonable either. He said it makes sense for the state and labor groups to consider a “graduated,” or tiered, rate that ties the workers level of pay to the cost so that higher paid workers contribute a higher share of the health care cost.

But Alexander said it is not his role as a lawmaker to enter the fray.

The contracts under negotiation are the result of the Legislature passing a major civil service reform act in 2002 that gave employees the right to bargain collectively with the governor on wages and benefits. The act limits lawmakers to voting up or down on the agreements.

Brad Shannon: 360-753-1688