Labor talks likely to restore state employees' pay cuts

By RACHEL LA CORTE, Associated Press Published: Sep 27, 2012 at 11:58 AM PDT Last Updated: Sep 27, 2012 at 1:10 PM PDT
Labor talks likely to restore state employees' pay cuts
OLYMPIA, Wash. (AP) - State workers who saw a smaller paycheck over the past two years because of the state's budget woes are likely to see pay cuts restored under tentative contract agreements with the state after months of negotiating. Yet to be agreed to, however, is a contract on health benefits for about 60,000 state employees.

The state has been negotiating with more than two dozen unions since May. The state has reached tentative agreements with 15 unions on pay, and is in arbitration with 10. Another union, Teamsters Local 117, is still at the table on pay.

The proposed new contract would reverse the 3 percent pay cuts of the past two years. The separate health care talks are currently being done between the state and a coalition of the unions. Negotiations continue as an Oct. 1 deadline looms, in which contract agreements must be reached and ratified in order to allow inclusion in Gov. Chris Gregoire's December budget proposal for 2013-15.

The state budget director, Stan Marshburn, said he couldn't talk about specifics surrounding current negotiations, but that all parties are aware of the tight timeline.

"We're keeping an eye on the clock and trying to resolve the differences," he said.

If agreements aren't reached by Monday's deadline, but reached later, the Legislature could approve the extension of the agreement date. If no agreement is reached at all, the provisions of the existing contract continue for the next year.

Concerning pay, aside from the restoration of the 3 percent pay cut, the tentative agreement also restores a step increase of 2.5 percent for more than 29,000 employees. That step increase was agreed to in 2008, but was deferred until 2011 for implementation. However, due to budget concerns that year, the state negotiated another deferral until the next budget cycle that begins July 2013.

The two-year contract would also promise the possibility of a 1 percent raise in the second year of the contract for all state employees if state revenue rebounds faster than expected. Marshburn noted that that was solely a one-year possibility, "not a promise that it will continue into future biennia."

Tim Welch, a spokesman for one of the unions that have reached a tentative agreement - the Washington Federation of State Employees - said that workers wanted "to start getting back a little bit of what they had to sacrifice."

"The economy is slowly recovering," he said. "Nobody asked for the moon. But we are slowly getting back some of what we gave up over the past four years."

The economic agreement tentatively agreed to will cost $238 million from the state's budget over the next two years, an amount already taken into account by the Office of Financial Management for their four-year budget outlook.

Finance officials expect that the state will have a roughly $500 million shortfall in the next two-year budget, with more needed as a buffer, and lawmakers are also looking to add some $1 billion in funding to education.

Marshburn said that the contract obligations were already taken into account for the budget projections.

"The agreement that we reached does not make the situation any worse," he said.

Marshburn said that the state went into negotiations willing to honor prior obligations, noting that state employees over the years have been subject to furloughs and pay cuts and higher health care costs.

"They've been feeling the pinch in multiple ways," he said. "Our goal then was to hold the line against any other financial obligation, given the budget situation being what it is."

Under state law, once an agreement is reached, the Legislature can only vote yes or no on the contract negotiated by Gregoire and the unions. No changes can be made to the agreement by lawmakers, something that Republican gubernatorial candidate Rob McKenna doesn't agree with.

"Spending on salaries and benefits ought to compete with every other state priority and shouldn't be put at the front of the line," he said.

McKenna also questioned the restoration of pay cuts, noting that Gregoire and some legislative leaders have said that tax increases would be needed to adequately pay for basic education in the state.

"Now they're turning around and saying we can afford to restore the salary reduction," he said.

McKenna's Democratic opponent, Jay Inslee, said that state employees have been doing more work with less people in current years, and have already

"The fact that they have at least restored some of those previous cuts doesn't appear to me to be unreasonable given the fact that we do hope the economy is going to start growing again and there's tentative signs that is the case," he said.