Posted on April 9, 2015 by Neal Goswami | Times Argus
MONTPELIER — Ongoing talks between the Shumlin administration and the Vermont State Employees Association have resulted in some identified savings, but the union is still not interested in reopening its contract to help secure the remainder of the $10.8 million in labor savings the administration is seeking.
The administration says it needs to cut $10.8 million in labor costs in order to close a $113 million budget gap. The union, meanwhile, has proposed ways to raise revenue instead. The administration has shrugged off those proposals, however, and says it will seek as many as 300 layoffs to achieve the requisite savings if the union does not renegotiate some terms.
The House has passed a passed a budget that incorporates a generic $10.8 million in labor savings.
Secretary of Administration Justin Johnson, following another meeting with the union Thursday, said his team has found about $2 million in savings by freezing salaries for exempt employees earning more than $100,000 a year, reducing the use of temporary employees and rescinding some benefits to designated managers.
The administration is also considering encouraging employee retirements.
“We have had a long conversation about the idea of retirement incentives,” Johnson said.
But the full benefit of offering retirement incentives is unclear. Johnson said the state treasurer’s office has some concerns because savings to the general fund would be offset elsewhere because of the need to begin paying out benefits. He said the expected savings is between $500,000 and $1 million.
“That would require us not to fill any of the positions that retired. That’s problematic,” Johnson said.
If all of the proposed savings were realized, that would leave about $7.3 million that still needs to be achieved.
With the union’s blessing, Johnson said the administration would look to institute a six-month delay in the 2.5 percent cost of living salary increase the contract calls for in the 2016 fiscal year. That would save about $2.5 million.
“It wouldn’t cost anyone anything because no one’s pay would go down,” he said.
Eliminating one year of “step increases” would save $3.9 million. State workers are grouped into various pay grades, each containing 15 steps. The first five step increases occur in successive years. The next few step increases come every two years, and the remaining step increases come every three years. The pay raises average out to 1.7 percent annually.
Those ideas would require approval from the union.
“There are some big chunks of money that you could save by doing things, but they are contractual,” Johnson said.
The administration is also considering instituting five furlough days to save $3.5 million.
“That in some ways is worse than delaying the cost of living because it means people would actually get a cut in pay,” Johnson said.
Finally, a 50 percent reduction in mileage reimbursements would save more than $800,000.
All of those ideas were outlined in a memo to VSEA President Shelley Martin following a meeting between the two sides on Thursday.
“We’re just making the point that you could get to the numbers by doing some of these things. But, we can get to the numbers anyway,” Johnson said.
VSEA Executive Director Steve Howard said the union is willing to work with the administration on savings “right up to the last hour of the legislative session, but we’re not opening our contract.”
“We have been consistent throughout the whole effort … that state employees cannot be asked to dip into their paychecks to balance the state budget before wealthy Vermonters are asked to pay more,” he said.
Union members have been “actively engaged” in the process are not interested in renegotiating the terms of their contract.
The two sides are expected to meet early next week to continue discussions.