Republicans eye state workers’ pay to fix budget woes

Republicans in Olympia say they have an alternative to raising taxes: slash compensation for state workers.

The minority party has demanded that Gov. Chris Gregoire or the Legislature bring employee unions back to the bargaining table. The contracts that run through 2011 would have to be renegotiated before lawmakers could tamper with pay or benefits.

“I don’t think we’ve asked them to give up much at all,” Sen. Joe Zarelli, the top Republican on the Senate budget-writing committee, said of state employees.

It’s unclear, however, how going back to negotiations would persuade workers to give up anything.

Unions such as the Washington Federation of State Employees have ruled out changes, pressing the Legislature to raise tax revenues to fill a $2.8 billion shortfall.

Last year’s all-cuts budget and instability in the state’s retirement and health care benefits have hit state employees hard, said Tim Welch, a spokesman for the largest state-employee union. He said unions saw their contracts effectively reopened last year after they thought they had a deal.

“We’ve already done that,” Welch said. “We have sacrificed enough, and now it’s time for somebody else to sacrifice.”


Some top Democratic leaders agree state employee contracts need work, but raise questions about timing and authority.

The Federation and other unions won the right to collective bargaining for compensation in 2002, after years of the Legislature setting their pay. The governor now negotiates with 22 unions, according to Gregoire’s budget director, Victor Moore.

Gregoire says she wants to renegotiate contracts, but with unions balking, she can’t.

“It takes two,” she said this week, “and they wouldn’t agree to do it.”

Gregoire at first said she couldn’t unilaterally reopen bargaining. But the law indicates, and her budget office advises, that she could do so by issuing an emergency proclamation. Conceding that point, she said she won’t declare a fiscal crisis since she has offered a solution: $967 million in spending cuts and $759 million in new tax revenues.

Nor are legislators inclined to step in.

“I don’t think it’s the role of the Legislature to try to provoke that right now,” Senate Majority Leader Lisa Brown said.

With a week left before the scheduled end of the annual legislative session and a budget yet to be worked out, they have too much on their plates, House Majority Leader Lynn Kessler said.

“I think the governor will have to do it,” Kessler said.

Kessler said legislators may “urge” Gregoire to reopen contracts.


Yet the real question is what would force union concessions if negotiations did restart.

“I think there’s some misconception out there that if we open the contract we can mandate the outcome,” said Moore.

Moore said failure of any talks would simply leave the current agreements in place.

Zarelli sees it differently. He says if the Legislature passed a resolution ordering the talks to reopen, state employees would then be working out of contract.

“By our action, we’d be saying we can’t fund that contract,” he said.

Moore says he’s open to hearing that argument but it seems to run afoul of constitutional restrictions on impairing contracts.

With no mass layoffs looming, state employees may have little incentive to agree to pay cuts.

One proposal being considered would allow agencies to furlough employees without pay by shutting down operations on 11 days, while leaving open the possibility for agencies to save the same money by other means.

Other budget proposals could eliminate some 700 jobs, in addition to the 3,000 filled and unfilled positions cut last year.


Whether the governor’s office and unions bargain on the current contracts or those starting in 2011 – negotiations begin this spring – Republicans and Democrats have different ideas about what needs to change.

Democratic leaders see any potential contract changes as a brake on the cost of employee benefits, not a way out of the budget crisis.

Costs for the health insurance plans offered by the state Health Care Authority have ballooned as state employees receive more treatment, and the authority expects a $220 million deficit by June 2011.

The rising costs have state leaders seeking to have employees shoulder more of the burden for their own health insurance costs.

The state pays 88 percent of the cost of premiums, leaving 12 percent for employees.

A typical state government employee in an average state pays 18 percent of costs for family coverage, according to the National Conference of State Legislatures.

Brown and Kessler said employees should pay more to keep their own out-of-pocket costs for treatment down. While Kessler cited that formula as a reason to reopen talks, Brown downplayed it, saying the federal government’s decisions on health-care reform will make the real difference in whether health costs continue to soar.

Welch, the employees union spokesman, said legislators caused the problem by underfunding state health insurance and should fix it without raising premiums.

Zarelli and Republicans say more than health-care costs should be on the table for cuts.

Senate Republican Leader Mike Hewitt suggested rolling back salaries. Zarelli wants to eliminate step increases in employee pay.

Welch said step increases should remain since they are phase-ins of wages that employees were promised when hired, not raises. He notes that employees are not receiving raises or cost-of-living increases.

All that can be discussed in the new contract, he said.

“We go to the table in a couple of weeks, and they can propose whatever they want.”

Jordan Schrader: 360-786-1826