State makes counter-offer to cut pay 5 percent in lieu of layoffs

Vermont Secretary of Administration Neale Lunderville yesterday made a counter offer to the state s unionized workforce to reduce pay across the board by 5 percent for workers in the executive branch making $30,000 or more per year. He said it would save $8.1 million. Governor Douglas had originally suggested that the state would need to layoff at least 600 total state workers.
Lunderville's proposal also included increasing the share of the health plan premium from 20 percent to 30 percent. This would save the state almost $4 million.
Following the governor's original proposal, the union representing the workers (Vermont State Employees Association) made a counter-offer that it said would save about $20 million. It suggested freezing pay and forcing furloughs. Lunderville said the union proposal would only save $8.4 million for the General Fund.
Of the union s proposals, Lunderville said the state could go along with some (elimination of pay raises and salary step increases), but those would still only save $4.1 million. The state needs to cut $17 million in employee compensation as part of its total expense reductions. Lunderville said the union offer was only a one-year solution and did not address the question of sustainability in future years. The union s initial response to Lunderville s counter-offer was that its members probably would not go along with it.
Lunderville also recommended 320 positions that would be the first to go if an agreement were not reached soon with the union (see table below for summary).
The largest part of those employment cuts would come from the Agency of Human Services with 194 layoffs to save $4.5 million. The bulk of that would come from closing the Northeastern Regional Correctional Facility facility in St Johnsbury (67 jobs). Many of the prisoners there would be sent out of state. The out-sourcing of prisoners costs the state 60 percent less than housing them in Vermont.
Other cuts of note include the elimination of one of the two Deputy Secretary of Agriculture positions currently held by David Lane and Anson Tebbetts. Agriculture Secretary Roger Allbee did not indicate which one would be laid off. Some of the other cuts in Agriculture are redundant to federal agencies, he said.
Another item on Lunderville's list is the reduction of man hours at some of the rest stops, which would save $127,376, but could require further negotiation with the union. The rest stops in Williston (northbound and southbound), Randolph southbound, Hartford southbound, Georgia southbound, Derby, and Bradford would be cut to 14 hours each.
Because of the collective bargaining process, the state cannot simply reduce pay levels on its own. The state can, however, lay off workers without negotiating with the union. Lunderville said under his counter proposal there would not be any layoffs.
The state is facing tax revenue shortfalls projected to be about $250 million over the next two fiscal years (current FY 2009 and FY 2010) from original projections. The state has been furiously cutting the budget and is hoping that the federal stimulus will also help plug the gap.