State workers voting on new contract that “pays back” employees with raises, no furloughs

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By Megan Poinski
Megan@MarylandReporter.com

The O’Malley administration and the American Federation of State, County and Municipal Employees have agreed on a three-year contract that would turn furloughs into paid days off, give employees a $750 bonus, and schedule raises and cost-of-living adjustments.

The roughly 24,000 members of AFSCME, which represents the vast majority of state employees, are now voting to ratify the contract. The contract proposal was finalized within the last week, state and union officials say, and was posted on AFSCME’s website this week. If the new contract is approved by the time voting closes on Jan. 31, it will take effect July 1, the first day of fiscal year 2012.

AFSCME's Patrick Moran

AFSCME Maryland Director Patrick Moran said that the union’s team of 40 negotiators has been working on the new contract for about six months.

“It was tough, considering the conditions the state is in right now,” Moran said. “Our feeling is that we have endured several cuts in the last few years. There have been furloughs, unpaid days off, changes in health care. We have been trying to get those sacrifices to be recognized in the contract.”

Gov. Martin O’Malley’s spokesman Shaun Adamec said that the governor entered negotiations with the same goal.

“It was a very specific objective the governor had going into talks: Despite economic challenges, he was interested in finding a way to pay back the employees,” Adamec said.

O’Malley’s Chief of Staff Matt Gallagher agreed, saying employees have suffered quite a bit with more than 25 unpaid furlough days in the last three years.

The proposed contract includes:

  • A $750 bonus in fiscal year 2012, beginning July 1.
  • Five paid furlough days – reclassified as paid administrative leave – for the years represented in the contract.
  • Depending on revenues, a 2% COLA in 2013.
  • Depending on revenues, a 3% COLA in 2014.
  • If there are enough increased revenues, reinstating of step salary increases starting April 1, 2014.
  • Guaranteeing raises for employees working at jobs above their current pay grades.
  • Holding down increases in insurance costs for fiscal year 2012.

Adamec said that the provisions of the new contract should cost about $39 million in fiscal year 2012. However, the state is anticipating a savings of $40 million in the next fiscal year from employees who have taken buyouts, freeing up funds for the contract.

As for the years after 2012, the government has safeguards to ensure that the state’s coffers are not severely impacted. In 2013 and 2014, the state can negotiate to get rid of the promised COLA if revenues are $150 million below projections.

“We can’t spend money that isn’t there,” Adamec said.

Conversely, the union can negotiate for a larger COLA in 2013 and 2014 if state revenues are more than $300 million above projections.

All parties said that the negotiations were neither easy nor difficult, but they ended with a tentative agreement in place.

The union’s current contract is set to expire on June 30, Adamec said. In general, there is an understanding that contracts expiring during the fiscal year should be renegotiated by the end of the calendar year – so Adamec said the AFSCME contract was expected to be finished on Dec. 31. According to that schedule, Adamec said it was “a couple weeks late.”

Whether the contract is adopted is up to union members.  Moran said he is confident that they will ratify the contract.

“Given the incentives, employees will vote for it,” Moran said. “They will end with money in their pockets at the end of the day.”