The Agency of Administration released Friday details of the Legislature-approved Retirement Incentive Program and Joint Fiscal Committee approved Labor Saving Plan. As a result, the administration plan calls for only 37 actual layoffs instead of upwards of 300 in order to save the state $7.4 million in the current fiscal year. The administration and the union had failed several times to reach agreement on a downsizing plan to avoid any layoffs throughout the summer. The administration had sought pay and benefit concessions this fiscal year and an agreement of a similar nature going into the next biennium. The union balked at pay cuts, instead offering similar savings through unpaid holidays and furloughs, but declined to look beyond FY 2010 and instead wait for negotiations on a new, two-year contract. The administration had sought some guarantee of savings going forward because what is expected to be a large state shortfall in revenue the next two years. Governor Douglas said last week that the projected deficit over the next biennium could be in the order of $230 million.
“I want to thank department heads for their commitment to meeting our fiscal challenges in a responsible manner that minimizes lay offs and the impact on critical state services,” said Deputy Secretary of Administration Tom Pelham. “Reductions-in-force have always been the administration’s last resort, that’s why we worked so hard to avoid them.”
The Retirement Savings Program was targeted to save $2.2 million in general funds as part of the fiscal 2010 budget and the Labor Savings Plan was targeted to save $7.4 million in general funds as a result of a $28 million revenue downgrade in July.
To achieve the $7.4 million in labor savings that the Joint Fiscal Committee required as part of the latest rescission, Secretary of Administration Neale Lunderville offered a plan to avoid lay offs while sustaining labor savings in fiscal 2011 and 2012. He proposed that the VSEA accept a 5 percent across-the-board salary reduction similar to that taken by non-union employees. The VSEA rejected the proposal as it wanted to avoid future commitments at this point. The administration had accepted the basis of the union’s labor savings plan – furloughs and unpaid holidays – for fiscal 2010 and promised not to resort to reductions-in-force to address future downgrades this fiscal year if the union made that commitment to carry forward fiscal 2010 labors savings to subsequent fiscal years.
As a result the administration approved the following position reduction plans, which are not subject union approval:
Savings from the Retirement Incentive Program:
o Positions: 82.5 $2,360,522
Savings from the Labor Savings Plan
Elimination of Vacancies
o Positions 40.5 $2,413,365
Reductions-in-Force
o Positions 37 $1,049,675
Other (Pay Act reductions, Health Benefit
Premium holiday, etc.) $4,126,839
Detail information regarding specific positions approve for elimination will be made public once notification process has been completed.
Source: Douglas Administration. 10.9.2009
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