Governor Deval Patrick in recent weeks approved state union contracts that grant 7 percent raises to tens of thousands of employees over the next three years, but, with the ink barely dry, the deteriorating economic forecast has already forced him to seek concessions.
The four-year contracts call for no raise in the current fiscal year, which ends June 30, and only 1 percent next year. But starting in July 2010, state workers would get a 3 percent raise, followed by another 3 percent increase the following year.
Patrick’s secretary of administration and finance, Leslie Kirwan, called the agreements "very favorable" for the state and said it was "unprecedented" for the state’s union workforce to go without a raise in a year. By keeping the raises low for the first two years, Kirwan said, the state saved $595 million over four years.
But cost of the pay boosts for the eight of 10 unions that have settled with the state so far would be at least $370 million over the course of the contracts, administration officials said this week. The raises, which would require funding by the Legislature, come as tax revenues plunge far beyond expectations and state officials warn that drastic cutbacks and state employee layoffs will be required.
Several of the largest labor groups representing the majority of the state’s 60,000-member unionized workforce – including the National Association of Government Employees; Service Employees International Union; and Association of Federal, State, County and Municipal Employees – agreed to the contract terms in March and April.
Richard R. Tisei, a Wakefield Republican and the Senate minority leader, said doling out raises as the state cuts employees and services "makes no sense."
"You’re asking taxpayers, many of whom have no job security right now and are taking it on the chin, to foot the bill," he said. "The governor is obviously planning a reelection campaign and trying to curry favor with the unions. There’s no other explanation."
The first of the 3 percent raises will be triggered just as Patrick will be in the throes of his likely 2010 reelection bid.
Patrick spokesman Joe Landolfi, asked to comment, did not respond directly to Tisei’s criticism. "These collective bargaining agreements are a somber reflection of the economic climate and the fiscal realities the Commonwealth is dealing with," he said.
On Tuesday, Kirwan sent a letter to lawmakers asking them to set aside $35 million for the 1 percent pay raises starting July 1. On the same day she met with leaders of several unions to try to win some voluntary concessions, including unpaid furloughs or delaying the raises.
"We talked about the kind of steps we’re taking to balance the budget, the sacrifices that have been made, and asked them to think about what they could do to help solve the problem," Kirwan said.
The administration cannot order furloughs or any other concessions; any changes would have to be voluntary. If conditions became dire, Kirwan said, the administration could seek to renegotiate the contracts.
It was unclear whether any of the eight unions that have already settled with the state would agree to any significant givebacks.
"We would be adamantly opposed to giving up any of the contract increases," said David Holway, president of the National Association of Government Employees, which represents 10,000 state workers. "They’re slim enough."
Holway said it is possible that his members would agree to furloughs.
"We certainly realize that these are tough economic times, and we’re willing to discuss anything that saves our members’ jobs," he said.
The unions that haven’t settled – the Massachusetts Nurses Association and the State Police Association of Massachusetts – traditionally get more generous contracts, according to lawmakers and union officials.
Administration officials also pointed out that health costs are likely to increase for almost all state employees starting next year. Patrick proposed increasing their 15 percent contributions to 20 percent or 25 percent, depending on their salaries.
"The administration deserves credit for holding the increase to 1 percent for the first two years," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation. "But the state will still be in the midst of a fiscal crisis when the 3 percent increases take effect. In the end, most state and local governments are facing a tradeoff of salary increases or laying off employees."
David Tuerck, executive director of the Beacon Hill Institute at Suffolk University, told Senate lawmakers this week that they should consider imposing pay cuts on state workers to solve part of the budget problems.
"In the course of all this debate over this budget, I have heard not a word about wage cuts to state and local workers," Tuerck said. "I know from personal experience that wage cuts are going on outside of state and local government . . . why not among state and local workers?"
Majority Democrats in the Legislature, most of whom took automatic, 5.5 percent pay increases earlier this year and are receiving political backing from unions, did not want to comment on the union raises. They said they were torn between paying decent wages and balancing the state’s books.
"People have earned their salaries and are entitled to an increase," said one House Democrat. "On the other hand, we’re in a fiscal crisis and they’re lucky to be employed. I have conflicted feelings."