(Editor's Note: This was originally posted on the Evergreen Freedom Foundation's Web site. It is a good follow on to the previous two articles and goes into detail of the mechanics of renegotiating state employee contracts, which represent about $83 million of the $2.6 billion budget deficit.)
To close the state’s $2.6 billion budget deficit, Governor Gregoire would rather propose tax increases than modify one of the state’s largest expenses—state worker salaries and benefits. In a December press conference, the governor said unions will sue if she tinkers with contract recommendations, but our state’s collective bargaining laws allow labor agreements to be modified in the event of a significant revenue shortfall.
RCW 41.80.010(6) states: “If, after the compensation and fringe benefit provisions of an agreement are approved by the legislature, a significant revenue shortfall occurs resulting in reduced appropriations, as declared by proclamation of the governor or by resolution of the legislature, both parties shall immediately enter into collective bargaining for a mutually agreed upon modification of the agreement.”
Because the governor has refused to reopen contracts with state workers, the ball is now in the legislature’s court.
“Many legislators have been unwilling to seriously consider renegotiating state employee contracts, since unions are generally their largest campaign contributors. But that shouldn’t preclude them from doing what is best for Washington citizens,” says Amber Gunn, Economic Policy Director for the Evergreen Freedom Foundation.
“Public employees are a significant budget driver. If legislators refuse to pare down benefits and salaries, then it is likely that private employers and employees will bear the brunt of closing the budget deficit, and they are already facing significant hardship.”
The average state employee salary is approximately $19,500 higher than its private-sector counterpart, and since most state employees will receive STEP pay increases of approximately 5 percent and will only pay 12 percent of their health premiums, modifying their contracts would be far less economically harmful than tax increases.
While some raise concerns that renegotiating state contracts will lead to higher public-sector unemployment, modifying contract salaries and benefits may actually prevent lay-offs. Alternatively, increasing tax burdens on the private sector will guarantee job losses due to unsustainable expenses for small businesses and employers. Action must be taken now to bring spending in line with new levels of reduced revenue.
Amber Gunn is available for comment at 360-956-3482 or Agunn@effwa.org.