Arbitrator issues split-decision in state employee wages, health insurance case

DES MOINES - Members of Iowa's largest state employees' union will pay a share of their monthly health insurance premiums while receiving wage increases of about 6 percent over the next two fiscal years under an independent arbitrators' agreement Saturday that broke an impasse between state and union negotiators.

Under the binding decision handed down by arbitrator Curt Behrens, members of the American Federation of State, County and Municipal Employees (AFSCME) will pay a minimum of $20 per month in premiums for their state health insurance coverage for the first time in nearly 40 years, said AFSCME Council 61 President Danny Homan. 'In my opinion, this is a big deal,” he said.

The health insurance issue was a major sticking point in reaching a new two-year collective bargaining pact with state negotiators unsuccessfully seeking a 10 percent share of premium share for AFSCME members in fiscal 2016 and 15 percent in fiscal 2017 during talks that started in November and failed to net a voluntary agreement by the mid-February deadline.

In making his ruling, the arbitrator accepted the union's position to resolve the impasse on health benefits and he awarded the state's final offer of wages that called for a 2.5 percent raise on July 1, 2.25 percent on July 1, 2016, and 1.25 percent on Jan. 1, 2017. Some state workers also will be eligible for annual step increases of 4.5 percent under the new contract.

Jimmy Centers, Gov. Terry Branstad's communications director, said the arbitrator's decision to rule in favor of the union's final health insurance offer 'cost the Iowa taxpayers an additional $24 million” in comparison to the state's position.

'Gov. Branstad and Lt. Gov. (Kim) Reynolds are disappointed in the decision. Though the majority of Iowa taxpayers are picking up a portion of their own health care, they are still picking up a vast majority of the tab for AFSCME employees' health care,” Centers said in a prepared statement.

'It is notable that the union has finally agreed, for the first time in Iowa, to pay something - anything - toward their health care,” Centers added. 'This contribution, though modest, is a step in the right direction, especially considering what other state employees and Iowans in the private sector contribute for their health care.”

Homan called the arbitrator's split-decision a 'fair” outcome and a 'win-win” for both sides.

'We are pleased that the arbitrator found in our favor on health insurance. We believe the process worked in such a way as to appropriately balance the interests of state employees and state government,” Homan said. 'Today's arbitration award shows that Iowa's current collective bargaining process works.”

Homan said the new labor agreement that will take effect July 1 and run through June 30, 2015, will 'put money in the pockets” of the roughly 18,000 AFSCME-represented state employee members in Iowa when the first pay raise since 2013 is balanced with the new monthly health insurance cost.

Centers said the overall cost of the new two-year AFSCME agreement was not available Saturday, but state negotiators pegged the cost of the 2.5 percent wage increase for fiscal 2016 at $30.6 million and the second year raises of 2.25 percent on July 1, 2016, and 1.25 percent on Jan. 1, 2017, at $43.9 million in fiscal 2017.

Earlier this year, Branstad told reporters he does not plan to propose a state salary bill to lawmakers this legislative session to fund increased compensation for state employees, saying agencies and departments would be expected to absorb costs within their budget allotments and use attrition or other means to balance their ledgers.

Branstad did not include a line item in the $7.3 billion fiscal 2016 budget he submitted to lawmakers in January and indicated he did not plan to propose a separate salary bill as the split-control Legislature starts piecing together a spending plan for the next fiscal year.

'I don't think we have the money to provide for that, so it's going to come out of the agency budgets,” the six-term GOP governor said. Branstad said he expected increased compensation costs could be covered via attrition as state workers retire or positions become vacant, noting state employment has been reduced over the past four years as his administration strives to achieve a 'lean, efficient and a very prudent operation.”

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