Unions reject talks with governor to renegotiate health care benefits. State budget director says governor will move forward anyway.
One of the recommendations that Gov. Chris Gregoire forwarded to the legislature for closing the $1.4 billion 2011-2013 budget shortfall yesterday was lowering the state’s monthly payment to employee health care costs from $850 per employee to $825. She estimated that the change would save the state $16 million in the hunt for $2 billion in cost reductions.
The change, the state says, would not require formally reopening contract negotiations because the state would still honor the 85/15 split in health care coverage between the employer (the state) and employees that state unions already agreed to in contract talks, up from an 88/12 split. (That three percent change, part of the state’s efforts to cut $4.6 billion from its budget earlier this year, increased out-of-pocket costs for employees by about 25 percent, the union says.)
The state believes they can lower the monthly commitment without changing the negotiated split because “utilization rates” have gone down.
Still, Gregoire’s budget guru, state Office of Financial Management Director Marty Brown, sent the unions a letter this week asking the unions—the Washington Federation of State Employees (the largest bargaining unit of state employees), along with the Teamsters and SEIU—”to reopen the 2011-2013 health care benefits agreement in order to negotiate a reduction in the employer premium contribution.”
Brown says that even though lowering the state contribution isn’t technically tied to the contract, Gregoire and OFM do want to revisit the contract to discuss ways to find health care savings in general. It was also, he says, “the polite thing to do.”
The unions were not interested. In a letter to Brown yesterday, the unions flatly rejected the overture. Citing the three percent increase in their members’ share of monthly health care payments as well as a three percent pay cut they agreed to for the current biennium, the Federation letter said:
[Members] have given and given. Enough is enough. It is time for other organizations who benefit from the state budget to embrace a fair share of concessions as well. All organizations should share equally in this sacrifice.
Federation public affairs director Tim Welch clarified exactly who those “organizations” are, telling PubliCola this afternoon: “Ask the corporations to take a three percent cut in corporate tax breaks. And then come back to us.” He added: “It’s a simple matter of fairness. I have to say we’re offended.”
Welch says the Federation will be sending out a separate letter to the governor focusing on corporate tax loopholes.
Reacting to the union’s rejection letter, Brown says: “[Employee health care] is another cost driver, and we’re going to leave no stone unturned. We had every right to ask. And they had every right to say no.”
Asked if the governor would make the change without union consent, Brown told PubliCola: “Yeah.”
In addition to paying an increased share of health care costs and the three percent pay cut, state workers also took a five percent pay cut through furloughs in 2010 and 2011 as mandated by the legislature during last year’s budget crunch.
As for the lower utilization rates, Welch points out the irony in that reasoning, speculating that employees aren’t going to the doctor as much lately because their costs have already risen.
“This is another attack on state employees,” he says. “Ultimately, employees will end up paying more.”
Lefties may like the union gumption, but Jason Mercier, a state budget analyst for the conservative Washington Policy Center, sees a larger point—one that plays right in to the Republican idea that union negotiations should not transcend legislative budgeting power:
He writes:
The unions’ refusal to cooperate with the Governor’s request is not surprising. Unions exist to fight for their members, not to advocate for policy that is in the best interest of taxpayers. This why it is incumbent on the Legislature to have the authority to weigh all spending requests equally in the context of the priorities of all taxpayers and citizens and not be cut out of budget decisions totaling millions of dollars.
In fact, the legislature can make the change Gregoire has asked for without union consent. Shifting the state’s commitment from $850 to $825, as Brown said, is a legislative budget decision and not technically tied to the contract.
