State employee unions resist further cuts to offset revenue losses

Washington's state employee unions are on the hot seat as Gov. Chris Gregoire searches for ways to keep the state from going off a budgetary cliff.

The state reopened contract negotiations last month with some of their unions, and negotiators met for the first time on Tuesday to discuss agreements that expire in June. Possible concessions being proposed by the state include furloughs, pay cuts and reduction in work hours.

The state faces a $1.1 billion budget shortfall in the current biennium, which ends June 30, and projects a $5.7 billion shortfall in the 2011-13 biennium.

"The financial situation for our state is significant and will continue to require all of us to work together," Gregoire said in calling the unions back to the bargaining table last week.

Union leaders say they're being unfairly targeted. They note that they agreed to a two-year wage freeze beginning in 2009, accepted several unpaid furlough days, and also absorbed hefty increases in health-insurance co-pays and deductibles at the beginning of 2010.

"We have taken significant cuts, over a billion dollars and counting," said Tim Welch, spokesman for the 31,300-member Washington Federation of State Employees. "We've had pension-fund money diverted, we've had pay cuts because of the furloughs, we've had layoffs, and our members have had increased workloads. We do feel a little miffed that we still get pressure from editorial writers and some politicians who kind of ignore everything that we have given up."

Gregoire has said she wants state workers pick up a larger share of their health-insurance benefits in contracts being negotiated for the 2011-13 biennium. But the state doesn't expect to ask for health-care concessions in the current contracts.

Under terms of their current contracts, most state employees pay 12 percent of their health-care premiums; the state pays the remaining 88 percent. Gregoire has asked unions to increase their contribution to 26 percent in the next two-year budget, enough to cover inflation-driven increases in health-benefit costs.

That concession would be worth about $500 million to the state in the 2011-13 budget cycle.

Under the state's proposed increase in employee contributions to health benefits, the typical worker with full-family coverage would take a pay cut of $2,316 a year, nearly an 8 percent reduction for a low-paid custodian, Welch said.

The call to reopen negotiations for the current contracts became necessary after Gregoire's budget director, Marty Brown, determined that existing collective-bargaining agreements and arbitration awards "are not feasible financially."

In plain English: The state can't afford them.

Demands for further concessions are likely.

The state must go beyond bargaining pay freezes and seek across-the-board pay reductions from workers, said Sen. Joe Zarelli, R-Ridgefield, Clark County, who is working closely with Gregoire to get a special legislative session scheduled this month to deal with the immediate budget crisis.

"I believe that has to be a part of the solution, an actual reduction in what we are already paying," he said.

It's not an unreasonable request in a time of persistent high unemployment, he contends.

"A lot of people are just happy to be employed."

Welch dissents.

"We have sacrificed a whole lot," he said. "Wholesale wage reductions are not something we're interested in."

Wage and benefit concessions won't make much of a dent in the immediate budget crisis: finding enough cuts to make up the $1.1 billion shortfall in the current budget cycle. Washington is prohibited by its constitution from running a budget deficit.

On Monday, Gregoire notified legislators that she is prepared to eliminate the Basic Health Program, which provides subsidized medical insurance to tens of thousands of low-income Washington residents not covered by Medicaid, and do away with cash grants and medical care for childless adults who are unemployed and disabled but not eligible for other assistance.

The governor said the state may also have to reduce levy equalization payments, which help K-12 school districts in property-poor taxing districts fund basic education.

All those steps require legislative action.

Immediate cuts will be the hardest to make, in part because the law requires the state to provide notice to clients who are about to lose benefits.

The original version of this story incorrectly reported that the state would seek health-care concessions from state employees after reopening negotiations on existing state contracts, set to expire in June. In fact, those concessions are being sought for contracts that would cover the next two-year state budget. Also, the story incorrectly reported the size of the projected state budget shortfall for the current biennium. It stands at $1.1 billion. The state reopened contract negotiations last month. A previous version of this story said they opened earlier this month.