Governor Should Renegotiate with State Labor Unions

negotiate_contractWith departments recommending over 700 layoffs of state employees, now is the time for the Governor to call the unions back to the bargaining table and renegotiate union contracts.

In 2009, House Republicans offered the “Principal Plan” for state employees. The plan was modeled after the salary reductions implemented by the Principal Financial Group.

Those making under $40,000 per year would have their salary reduced by 2 percent, those making $40,000 to $49,999 would be reduced by 4 percent, those making $50,000 to $99,999 would be reduced by 7 percent and those making over $100,000 would have their salary reduced by 10 percent.

Fiscal Services estimated this would save the state’s general fund $72 million annually. Implementing the Principal Plan would significantly lesson the need for layoffs and furlough days.

On October 21, Governor Culver’s Chief of Staff John Frew said deepening budget problems likely are going to require the Governor to seek to reopen contract talks with state employee unions who negotiated incremental pay raises. Executive Branch employees not at the top of their pay ranges will receive a 4.5 percent raise in FY 2010 and a 5.5 percent raise in FY 2011.

“We are going to request concessions,” Culver chief of staff John Frew said. Frew said there have been several preliminary discussions with the state’s three employee bargaining units regarding the likelihood of large-scale layoffs and the procedures that must be followed to implement a workforce reduction over the next two months or so. (Cedar Rapids Gazette, October 22, 2009)

The unions have resisted salary reductions, stating that they prefer layoffs so the former employees can collect unemployment benefits. According to a statement from the American Federation of State, County and Municipal Employees, or AFSCME, Council 61, “We want to reiterate our expectation that going forward, the state of Iowa should treat this current situation the same as it would a major plant closing, and provide all appropriate support to workers who are being laid off that is available to them.”

With unemployment at a 26-year high, House Republicans believe we shouldn’t make the unemployment rate higher by laying off state employees when salary reductions would allow most employees to keep their jobs and maintain services for Iowans.