March 4, 2010 in Opinion

State worker contracts must be part of budget fix


At a Monday press briefing, Washington Gov. Chris Gregoire signaled a willingness to reopen state worker contracts to achieve more budgetary savings.

“I am prepared to open up the issue of 88-12. I am prepared to open up the issue of deductibles and co-pays,” she said.

The “88-12” issue relates to the 88 percent of health care costs picked up by the state versus the 12 percent paid by workers. Republican lawmakers have said that an 80-20 split would be more in line with the private sector, though many workers pay more than that. A Towers Perrin study of 20 large employers found that workers pay on average about 24 percent of costs.

Gregoire’s comment is quite a change from a Feb. 11 speech to the Washington State Labor Council, where she declared her disgust at calls to make further employee-related cuts. (The Seattle Times editorial board has posted video of both comments on its Ed Cetera blog.)

Presumably, the pressure to justify tax increases and find sufficient spending cuts to fill a $2.8 billion budget shortfall has forced some rethinking. In addition, the state insurance commissioner has warned that the state-managed health care fund for employees is strapped for money.

In any event, a reopening of the contracts is warranted because the concessions achieved last summer still left workers with enviable health care plans. As The Spokesman-Review reported at the time:

“Even with the increases, however, premiums for state employees will remain relatively low compared to what many private employers offer. Individuals in the most popular ‘Uniform Medical Plan,’ for example, pay just $26 a month. That will rise to $41. For full family coverage, the premiums will rise from $82 a month to $123.”

Raising taxes on Washingtonians, especially those who have no health insurance, cannot be justified without more concessions from state workers.

On Monday, Gregoire suggested that she needed the Legislature to provide her “a way forward” on reopening contracts. But a reading of state law calls that into question. She only needs to issue a proclamation declaring a fiscal crisis, says state Sen. Joe Zarelli, R-Ridgefield. The Legislature could do the same.

While the state is studying savings on benefits, it ought to also consult the National Compensation Survey produced by the U.S. Bureau of Labor Statistics. The version for the Seattle-Tacoma-Olympia region shows that for many positions government pay is significantly higher. In jobs such as police officer and firefighter where it is difficult to find private sector equivalents, it would be helpful if the state studied turnover rates and local market conditions to get a better sense for whether pay is excessive.

The state budget outlook promises to be grim for years to come. Drastic cuts have already been made and more are on the way. Our state’s leaders can no longer afford to ignore unrealistic pay packages.

Reopen the contracts.

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