Illinois’ government union laws drive up costs as negotiations drag on

Mailee Smith

Staff Attorney and Director of Labor Policy

Mailee Smith
/ Labor
December 15, 2017

Illinois’ government union laws drive up costs as negotiations drag on

Unlike most of its neighbors, Illinois places no limits on the types of provisions that can be negotiated into government worker contracts.

As 2017 ends, at least one thing will remain the same in 2018: Illinois state workers will still be without a contract.

Negotiations between the American Federation of State, County and Municipal Employees – the government union representing approximately 35,000 state employees – came to a standstill in early 2016. Since then, the state’s labor board declared the parties at impasse, which meant the state could implement its last contract offer to AFSCME. But AFSCME appealed to state court, where the case is languishing and unlikely to reach resolution anytime in the near future.

The deadlocked negotiations highlight a major pitfall in Illinois’ government worker union bargaining laws. Among many provisions that are unfair to Illinois taxpayers, the Land of Lincoln places no limits on what can be negotiated into government worker contracts. Not only does this result in endless, costly negotiations at the state level, but at the local level as well.

The result? Illinoisans shoulder some of the heaviest property tax burdens in the nation, and have seen property taxes grow three times faster than the median household income.

Under Illinois law, government worker unions can negotiate “wages, hours, and other conditions of employment.” That’s an incredibly broad range of negotiable subjects – including provisions as minute as school calendars or start times. A government union contract with the city of Kankakee even guarantees municipal workers an extra paid day off each year just for their birthdays.

But that isn’t the case in most neighboring states. Wisconsin and Iowa, for example, limit collective bargaining to base wages only for general state and local government worker unions. Other benefits – such as overtime, holiday pay and vacation time – cannot be negotiated. Similarly, Indiana and Michigan prohibit some subjects from negotiations, such as school calendars or teacher merit pay.

The AFSCME situation serves as the perfect example of how Illinois’ virtually unlimited range of negotiable subjects drives up costs and bogs down the negotiation process.

Illinois’ failure to limit negotiations drives up costs

At the crux of the stalemate between AFSCME and the state are AFSCME’s unreasonable demands. AFSCME workers already receive incredible wages and benefits. In fact, Illinois state workers are the highest-paid state workers in the nation when adjusted for cost of living. On average, AFSCME workers receive nearly $110,000 a year in total compensation.

But AFSCME wants more, including pay increases up to 29 percent, platinum-level health insurance at rock bottom prices and overtime after just 37.5 hours in a workweek.

Those demands come at a cost to taxpayers.

Just look at health insurance coverage. Under the previous contract with AFSCME, taxpayers subsidize a whopping 77 percent of the average AFSCME worker’s health care costs, which costs taxpayers an average of $14,880 a year per worker.

The state would like to bring those costs more in line with what taxpayers can afford, while still subsidizing 60 percent of an AFSCME employee’s health care at $11,600 per worker annually – still a significant amount by any standard.

The state estimates that by subsidizing 60 percent rather than 77 percent of the average AFSCME worker’s health care, it could save taxpayers $35 million to $40 million a month.

That would have meant a savings of over $1 billion since the AFSCME contract expired on June 30, 2015.

But the state’s hands are tied by its unfair collective bargaining laws. And AFSCME, tone deaf to the economic climate in the state, refuses to budge.

In neighboring Wisconsin and Iowa, provisions such as health insurance are non-negotiable. If Illinois implemented similar limitations, it could save cash-strapped taxpayers billions of dollars.

Illinois’ failure to limit negotiations inhibits a timely negotiation process

In addition to driving up costs, the broad array of subjects negotiated into contracts bogs down the process and undermines the “labor peace” Illinois’ collective bargaining laws were supposed to support in the first place.

It is not uncommon in Illinois for government workers to go months – or even years – without a contract. Once again, AFSCME provides the perfect example. The government union’s contract with the state expired on June 30, 2015, meaning workers have gone more than two years without a contract.

The reason: The parties must come to agreement on every single detail before authorizing a collective bargaining agreement. And when those details include everything from overtime pay to sick leave to health insurance, that can take a significant amount of time.

And that leaves both taxpayers and workers in limbo.

Other states – including most of Illinois’ neighbors – have recognized the benefit to limiting the subjects that can be negotiated into government union contracts. It’s time for Illinois to follow their lead.

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