The Douglas Administration today announced that they would seek two furlough days and five unpaid holidays as a means to find $7.4 million in labor savings as directed by the Legislature s Joint Fiscal Committee. This proposal is an effort to reach a compromise on labor savings and avoid reductions in force at this time. To find middle ground, the offer today does not include a FY 2010 pay reduction as did prior Administration offers and relies on furlough days and unpaid holidays, which are temporary savings that complicate budget problems in coming fiscal years. Last week, the union offered a similar plan of four furlough days and four unpaid holidays plus eliminating a wellness program to achieve a similar level of savings. The state had set a deadline of September 18 to avoid about 200 more layoffs.
However, the offer does require the Vermont State Employees Association (VSEA) to agree to find long-term savings, which are essential, the Administration maintains, to bend the curve on labor costs and fill a more than $200 million budget gap for FY 2011 and FY 2012.
This proposal is a big step for the Administration in our efforts to reach a compromise that prevents the need to make reductions in the state workforce at this time, said Secretary of Administration Neale Lunderville. It is now up to VSEA to decide if they are willing to compromise with us and work to find long-term sustainable labor savings over the next two years.
For its part, the VSEA feels that tying strings to this year's deal with negotiations for a new, two-year contract through 2012 complicates the issue at what is becoming a last-minute situation.
I guess the governor s representatives weren t listening last week when several JFC members reminded them that the committee s request was to find $7.4 million in FY 2010 savings, said VSEA Director Jes Kraus. VSEA members did just that, but today the Governor polluted the VSEA members good-faith offer by insisting that any savings for FY2010 be tied to specific wage reductions in FY2011 and FY2012. The State s new counter offer completely ignores the JFC s instructions to find savings for FY2010 only.
Kraus added that VSEA believes the Douglas Administration is intent on ignoring the directive of the Joint Fiscal Committee to find a short-term fix to avoid hundreds of layoffs this Friday.
The Administration is looking at cutting payroll $16.1 million for FY2011 and $21.9 million in FY2012 to help thwart that potential $200 million budget deficit.
The Administration pointed out that over the last two fiscal years, in the midst of the worst recession since the Great Depression, state employees have enjoyed on average a 7.0% pay increase at a time when state revenues are declining and thousands of private sector employees have been laid-off or had their wages cut. Many elected officials and Administration appointees have already seen a 5% pay cut as well as a salary freeze since July 1, 2008.
This level of growth we have seen in labor costs is simply unrealistic and unsustainable, Lunderville continued. Our fiscal challenges demand difficult choices, not more quick fixes. The Administration is willing to make a short-term deal only if we have a commitment for real and long-term savings next year.
This compromise offer is fair in the short-run and responsible for the long-run, Lunderville concluded. It acknowledges the challenges ahead while avoiding layoffs in the near-term.
The details of the offer:
Applying two furlough days in FY 10: $1.9 million
Accepting five unpaid holidays in FY10: $3.7 million
Using projected surplus in state medical plan: $1.7 million
Eliminating tuition reimbursement: $0.1 million
Total: $7.4 million (all $GF)
Also:
The Administration will not seek additional layoffs if November 2009 consensus revenue forecast declines not more than $14 million. The Administration retains rights to reduce workforce under normal stipulated conditions.
Both parties will agree to sustainable labor cost savings as part of their FY 2011 & FY 2012 agreements to produce $16.1 million and $21.9 million in savings, respectively.
Discussions between the Administration and the VSEA are expected to continue throughout the week.
Source: Douglas Administration. 9.14.2009