Breaking down contract talks with Illinois’ largest government union

Breaking down contract talks with Illinois’ largest government union

Rauner is asking for sensible reforms to scale back the extremely lucrative contracts given by union political allies in the past. These contracts helped put Illinois on a road to ruin.

Contract negotiations between the American Federation of State, County and Municipal Employees Council 31 and the state of Illinois will likely continue for another two months, thanks to a July 29 contract extension.

“The agreement says that ‘neither side will resort to strike, work stoppage, work slowdown, or lockout between August 1, 2015 and September 30, 2015, or until impasse is reached, whichever comes later,’” according to the State-Journal Register.

If a new labor agreement is not reached by the end of September, both sides will meet no later than Sept. 29 to negotiate whether to further extend the negotiating period.

The Chicago Tribune reported that if AFSCME and the state don’t reach a deal by October, the governor could “impose his own terms for a contract. That could force unions to choose between going along with the governor’s demands or going on strike.”

But AFSCME will have a difficult time going on strike. The union has no strike fund.

Jason Barclay, general counsel to Gov. Bruce Rauner, sent a memo on July 29 to agency directors and general counsels noting that the governor and AFSCME had made progress on some issues but were still far apart on others. The memo also stressed that the governor “will not lock out state employees.”

The memo stated the governor’s office had “made significant concessions from the initial proposal” including:

  • Dropping the request that employees voluntarily move into the Tier 2 pension system
  • Withdrawing the proposal to unilaterally implement new work rules
  • Withdrawing the proposal to change the rate at which current employees earn vacation
  • Maintaining the current number of holidays at 12 and a half days a year
  • Agreeing to a “thorough listing of which bargaining unit employees are ‘working supervisors’ and therefore subject to discipline for not enforcing the collective bargaining agreement on behalf of management.”

Rauner is pushing for a contract with terms similar to those that the Teamsters agreed to in June. These included a 40-hour workweek, four-year wage freeze and a reduction in the amount of unused vacation days one can cash in from 75 days to 45 days, among other compromises.

The agreement also included several benefits for the Teamsters, including performance incentives, collaboration for low-cost outsourcing and funding for a union-sponsored education fund for members.

In contrast, Barclay’s recent memo states AFSCME’s demands “would add $1.6 billion in salary and pension costs and would eliminate $500 million per year in healthcare savings,” according to financial estimates from the governor’s office.

Drivers of those cost increases include:

  • Full health-insurance benefits to laid-off employees for up to two years
  • Full health-insurance benefits to intermittent employees
  • Full health-insurance benefits to part-time employees
  • A new, more expensive health-insurance package that covers new procedures such as oral surgery (which is currently covered by the dental plan) and orthodontics for those over 18 years old, without any additional employee contributions
  • Allow laid-off employees to move to a lower employee position but keep their same wage rates indefinitely
  • Pay lawyers in the union time and half for any time over 37.5 hours per week and pay for them to attend legal conferences
  • Impose a penalty by doubling wage increases anytime agreed increases are delayed because of budget constraints
  • Increase overtime pay at the Illinois Department of Corrections to double time after six overtime sessions every three months

Rauner is asking for sensible reforms to scale back the extremely lucrative contracts given by union political allies in the past. These contracts helped put Illinois on a road to ruin.

The state is in dismal financial shape. The state comptroller estimates Illinois holds a total bill backlog of nearly $6.5 billion. It’s also home to the nation’s most severe pension crisis and the worst credit rating of any state.

The governor is asking for sensible reforms to bring the state’s financial house in order. AFSCME continues to push for contracts the state simply can’t afford.

Both sides are dug in. The difference is that the governor is trying to dig Illinois out of the hole his predecessors put it in while AFSCME wants to continue digging in the same direction; down.

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