OLYMPIA – Gov. Chris Gregoire wants state employees to pay more for their health insurance, and is asking union leaders to reopen labor contracts. Their initial response: Not unless businesses give up some tax breaks.
In a letter to the unions, Office of Financial Management Director Marty Brown cites the projected imbalance of $1.4 billion between state revenues and scheduled state expenses in General Fund programs as the reason.
“Due to the continuing decline in revenue, the state is requesting that the coalition of unions agree to reopen the 2011-’13 health care benefits agreement in order to negotiate a reduction in the employer premium contribution,” Brown says in the letter.
The letter surfaced a day before Gregoire is scheduled to unveil her proposals to close the budget gap and provide some money for reserves. The Legislature returns for a special session on the budget on Nov. 28.
Brown acknowledges that unions have made concessions in their current contract, which was approved by the Legislature earlier this year. “However, because of the seemingly unrelenting pressure that the Great Recession has had on revenues and increased caseloads, state employees may be called upon yet again to sacrifice.”
The unions can refuse. The Washington Federation of State Employees, which represents about two-thirds of the union workers, signaled it is unwilling to reopen the contract.
“Before there’s any talk of taking more from the state workforce, (Gregoire) must convene a meeting of corporate entities and ask them to take a 3 percent cut in any tax break they are receiving from the taxpayers,” Greg Devereux, the union’s executive director, said in a message posted Wednesday afternoon on the union’s website.
If the businesses agree to those cuts, “we will be happy to come back to the table,” Devereux said in a later interview. If not, “we have no interest in going back.”
Under state law, the unions must agree to contract talks if the governor declares a financial emergency. But a spokeswoman for Gregoire emphasized this was a request. If the unions agree to reopen the contract, they would still have the right to negotiate any cuts.
The contracts were negotiated by Gregoire’s office and approved this year by the Legislature. State negotiators at one point requested to change the split on health insurance costs from about 88 percent for the state and 12 percent for the employee to 74 percent for the state and 26 percent for the employee.
But the state was also seeking lower wage costs. The final agreement on the split was 85 percent and 15 percent, and workers also agreed to a 3 percent cut in hours and a corresponding reduction in pay. Those contracts were part of the budget bill the Legislature approved in May.
Unions joined with other progressive groups last spring urging the Legislature to avoid an “all-cuts” budget by ending some tax exemptions. For the most part, the Legislature refused.
Jason Mercier, a budget analyst for the Washington Policy Center, said a split in medical insurance costs that’s closer to what workers in private industry pay would be 75 percent for the state and 25 percent for workers. That would save the state an estimated $30 million a year, based on preliminary figures.
A 2002 law limits the Legislature to passing or rejecting labor contracts after they’ve been negotiated by the governor’s office. Mercier contends that law should be repealed to prevent collective bargaining by state unions and give the Legislature more control over setting wages and benefits.