State unions must be part of fair fiscal solution

Washington state Gov. Chris Gregoire is required to produce a budget that closes the $2.6 billion gap without new sources of revenue, and she did so on Wednesday. Then she announced that this all-cuts budget is one she cannot live with, so she is exploring tax and fee increases in the neighborhood of $700 million. She hopes the federal government will cover some of that, but there are no guarantees.

With the additional revenue, she would like to restore Basic Health, which offers insurance for working poor people, and the General Assistance-Unemployable program, which offers temporary aid to people unable to work because of disabilities. She also wants to restore school-levy equalization (which shifts funding to poorer school districts), subsidies for all-day kindergarten and financial aid for college students.

She was not able to achieve savings in employee salaries and benefits. She said she asked and was turned down. That makes any pitch for tax increases untenable.

The people who have struggled most in the economic downturn would be asked for more because state employees were unwilling to make significant concessions. Thousands of state workers could lose their jobs because the unions would not renegotiate contracts. And that means a reduction of service.

This is a formula citizens cannot live with. The shielding of public employee pay and benefits, which has been aided and abetted by state leaders for decades, must end.

The unions have more clout than the vulnerable people facing the loss of critical state aid, so legislators need to step up and make the case. Last summer, union leaders howled when their health care costs were bumped up. But they still pick up only 12 percent of their premiums. The average share for workers at large private employers is 23 percent, according to a 2008 Tower Perrins study. The overall health costs for state workers must be brought into line with those of private workers.

This is a problem in all states. A 2007 USA Today report noted that “a typical full-time state or local government worker made $78,853 in wages and benefits in the third quarter of 2006, $25,771 more than a typical private-sector worker, the Bureau of Labor Statistics reports.”

It would be unconscionable to raise taxes and kick people out of vital programs while preserving this gap. It may turn out that targeted tax increases would still be necessary, but the state needs to have the compensation discussion first.

“Don’t waste the crisis; this is the moment,” Gregoire said, as she discussed ways to reorganize government and rethink the delivery of services. That holds true with employee pay, too. We cannot afford to ignore it anymore.