State, largest employee union reach tentative agreement

DES MOINES – New labor agreements hammered out between Gov. Chet Culver's administration and unionized state workers that call for higher wages over the next two years drew the wrath of Iowa's incoming Republican governor and House speaker who warned Friday of future layoffs or other options in the wake of action they deemed reckless, irresponsible and unaffordable.

"Taxpayers are the losers in this backroom deal,” said Jeff Boeyink, who will serve as chief of state for Governor-elect Terry Branstad when he is inaugurated on Jan. 14 after defeating Culver in the Nov. 2 election. “Gov. Culver's decision to rush through a collective-bargaining deal with state employee unions before he leaves office is reckless and irresponsible. This will cost Iowa taxpayers $103.5 million the first year alone, and hundreds of millions in subsequent fiscal years.”

Branstad previously had indicated that he wanted his administration to be involved in finalizing the labor agreements that are negotiated with the state's unionized workers for the next two fiscal years. He pointed to the 1998-99 transition from his fourth term to Gov. Tom Vilsack's new administration where his team started the negotiating process and then handed the talks over to Vilsack's administration to finalize a deal that stretched two years into his first term.

With history-making speed, negotiators for the state and its largest employees union, American Federation of State, County and Municipal Employees (AFSCME) Council 61, reached a tentative settlement Friday on a new two-year contract that would provide an across-the-board wage increase beginning next July 1. The state negotiated a similar deal on a new two-year contract with the State Police Officers Council (SPOC) on Thursday.

“We made a fair and reasonable proposal and the state accepted it,” said AFSCME Council 61 President Danny Homan. The proposal, which would cover nearly 21,000 AFSCME members from July 1, 2011, through June 30, 2013, likely will be finalized sometime in December after union leaders review the proposal and submit it to rank-and-file members for ratification.

Jim Hanks, an attorney who led the state's collective bargaining team, announced during an abbreviated open bargaining session Friday that the Culver administration had decided to accept an initial contract offer made by AFSCME negotiators two weeks ago.

“The governor appreciates the proposal and accepts the offer made by AFSCME,” Hanks told Homan and other union bargaining team members. “We want to thank the union for making proposals that are fair and reasonable. We've accepted your proposal and it's done.”

“We're there,” Homan responded during the bargaining session that spanned less than five minutes. “I believe this is historic.”

During the 2010 election campaign, Branstad said he was interested in revamping employee health insurance benefits and “step” wage increases for employees not at the top of their pay scales as part of his goal of reducing state government by 15 percent over five years. However, the proposed two-year contracts with AFSCME and SPOC likely will be signed before Branstad is sworn into office in January.

“At a time 113,000 Iowans are out of work and thousands more are seeing significant pay reductions, it is the wrong time to ask taxpayers to pick up the enormous cost of these pay raises,” Boeyink said in a statement. “Iowans elected Terry Branstad on a promise to reduce the size of Iowa's budget and Gov. Culver has taken the unprecedented step of effectively removing to voice of the taxpayers from this process. This is unaffordable, and we will review all of our options.”

Hanks said the decision to settle was influenced by the fact that AFSCME members during the current contract to voluntarily agree to accept five unpaid furlough days and forego deferred compensation payments to help the state weather a 10 percent across-the-board budget cut after state revenues plunged due to affects of the national recession. Those sacrifices were taken into consideration in today's decision to accept the new contract offer, he said.

“It was his (Gov. Culver's) obligation to respond and it was his opportunity to settle a contract on a fair and reasonable basis,” Hanks said. “There isn't any precedent for any one of the state unions coming to the table, making an initial proposal on only one subject and making a proposal as modest as the one that was made to us by AFSCME. I think the governor did what he believed to be appropriate under the circumstances.”

Culver, in a statement issued by his office, said state employees have struggled through a historic recession like other Iowans and agreed to sacrifice paid days and compensation to help the state better adjust to economic conditions and lower revenues. “These people are on the front lines of delivering vital services and information to the people of Iowa and deserve to be paid in accordance with their qualifications and efforts,” he said.

House Speaker-elect Kraig Paulsen, R-Hiawatha, said he was disappointed that Culver proceeded to a tentative agreement this quickly, saying the proposed settlement likely will add about $100 million to state costs annually at a time when the 84th General Assembly and Branstad will be looking to reduce state spending for the current fiscal year. The proposed labor agreements would span fiscal years 2012 and 2013.

“Gov. Culver should have permitted Gov. Branstad to complete those negotiations just like Gov. Branstad showed Gov. Vilsack that courtesy 12 years ago,” Paulsen said during a taping of Iowa Public Television's “Iowa Press” show on Friday. “Regardless, what's done is done and we'll have to move forward.”

Paulsen said the proposed two-year labor pact could “lead to layoffs in certain areas” as lawmakers and Branstad craft future state budgets. The House speaker-elect said his newly elected 60-member caucus would like to reduce spending in the current year that ends next June 30 by $200 million to $300 million. He said ending the Power Fund, selling the state vehicle fleet and halting the practice of paying faculty at regent universities for sabbaticals are among the ways to reduce spending that are under consideration.

Ray Walton, director of the state Department of Administrative Services and a member of the state collective bargaining team said “the governor believes that AFSCME made a reasonable and fair and responsible offer and he responded in kind.” At the same time, he conceded this year's quick end to collective bargaining talks was unusual. “I've never seen anything like this,” he said.

While AFSCME officials limited their proposed changes to their proposed wage increase, SPOC officials requested a number of contract changes in the initial proposal they submitted to the state.

State Police Officers Council negotiators made no specific wage increase request, indicating they planned to seek a “fair and equitable, yet-to-be-determined increase.” The proposal sought to raise “step” wage increases from 3.5 percent to 4.5 percent, requested the state pick up a larger share of health and dental insurance premiums and provide coverage for vision, increase pay for shift differential hours worked by 4 percent, increase the number of yearly paid holidays from 11 to 13, as well as changes to the sick leave and deferred compensation provisions.

However, Hanks said state negotiators proposed the same wage increase to SPOC officials with no other contract changes and the union accepted that offer.