A formal State budget has yet to be adopted. However, separate proposals from the Governor’s Office, the Legislative Appropriations Committee, as well as Republican leadership all seek $700 million in “labor savings” in the upcoming fiscal year. Obviously, this will have a significant impact on state employees. How that impact finally materializes is unknown. But we do know that “labor savings” can be achieved in various ways, including layoffs, attrition, and pension and healthcare modifications. The Governor’s Office estimates 4,200 layoffs will be needed in “labor savings” absent a modification to healthcare and pension cost sharing agreements. Layoff notices are being prepared, and we expect layoff notices to commence in the coming weeks, becoming effective prior to the beginning of next year’s budget, July 1st. The financial situation has worsened since the budgets were proposed, as new estimates project a tax shortfall of $450 million in the coming year.
The Legislature and the Governor are turning to SEBAC to see if there is any possibility of a labor agreement that could forestall the projected 4,200 layoffs. SEBAC leadership met with the Governor’s representatives several times this past week to discuss the proposed budget’s impact on labor. As a result of those discussions, several potentially viable cost saving measures were identified. These will be vetted by an actuary to determine their actual financial impact prior to further discussion. The situation remains very dynamic. While the parties are working together to explore potential cost saving measures to avoid or minimize layoffs, no items have been agreed upon at this point. If an equitable solution cannot be reached, layoffs appear inevitable.
A&R leadership, in conjunction with our SEBAC brothers and sisters, is committed to this process. However, this should not be read to mean that A&R is ready to make a SEBAC agreement. On the contrary, despite the threat of layoffs, we will not support a SEBAC agreement unless an equitable agreement for all members can be reached. We need to secure the future for all members, not just those under immediate threat of layoff.
At SEBAC, we adopted four guiding principles to ensure that employees aren’t simply run over in the process of an agreement. The following principles were articulated to the Governor’s Office:
1. We will not accept wage losses. We understand wage freezes. But no employee should suffer wage losses. Top step payments shall be paid, retro-active to July 1, 2016.
2. We will not negotiate any SEBAC deal unless and until our contracts are finalized.
3. We will not negotiate any SEBAC deal unless wage increases are included in the “out-years” of the contract. The out-years must include step increases.
4. We will not negotiate any SEBAC deal without protections against layoffs and contracting out. Any agreement shall include a lengthy extension of our pension/healthcare plan.
To reiterate: It is a dynamic situation. We are under threat of layoffs. We, along with other SEBAC leaders, are working with the Governor’s Office to see if an equitable solution can be reached to avoid layoffs, but we must find an equitable solution with all of the respective parties. To be clear however, threat of layoffs does not mean that A&R will automatically capitulate. We need to preserve our long term benefits. The budget process will move fast over the next few weeks. We will ensure that A&R and all State employees are properly represented throughout this process. Stay tuned and don’t be shy about contacting your legislator to let them know that you expect them to protect the middle-class workers employed by the State.
4/27/17