Taxpayers lose first round to AFSCME in appellate court

Mailee Smith

Senior Director of Labor Policy and Staff Attorney

Mailee Smith
March 3, 2017

Taxpayers lose first round to AFSCME in appellate court

An Illinois appellate court issued an order on March 1 preventing Gov. Bruce Rauner from implementing his contract offer to AFSCME, the union that represents approximately 35,000 state workers. That means the state and Illinois taxpayers will continue to lose millions of dollars a month while the case proceeds.

The stall tactics of Illinois’ biggest government-worker union are costing state taxpayers $35 million to $40 million a month – and that’s in health care costs alone.

And on March 1, an Illinois appellate court granted the union’s request to drag things out even longer.

The case involves the contract impasse between the American Federation of State, County and Municipal Employees and the state of Illinois. In November 2016, the Illinois Labor Relations Board determined that the parties are at impasse, or stalemate, and that the governor could implement his last and best offer to the union. After the impasse ruling, AFSCME officials turned to the courts, seeking an immediate review of the labor board’s decision in the 1st District Appellate Court.

The state appealed issues to the 4th District Appellate Court, and ultimately AFSCME’s appeals in the 1st District were consolidated in the 4th District Appellate Court case. There, AFSCME asked the court to prevent the labor board’s decision from going into effect as long as the appeal proceeds. On March 1, the court granted AFSCME’s motion. Preventing the labor board’s decision from going into effect means the governor cannot implement his offer while the appeal continues.

For each month AFSCME’s contract with the state is not in effect, Illinois is paying an additional $35 million to $40 million – in health coverage alone. Over the course of the more than 20 months the state has been without a contract, that’s $700 million to $800 million.

Unfortunately, the appellate court’s March 1 order indicates that it may ultimately rule against Illinois taxpayers in its final decision. The court has signaled that it might disagree with the labor board’s determination of the impasse, despite the fact that the labor board is the authority most knowledgeable when it comes to AFSCME and its negotiations with the state.

Any decision issued against the state in this case is ultimately one against the taxpayers.

AFSCME’s demands

Throughout negotiations, AFSCME persisted in its expensive contract demands: pay increases up to 29 percent, overtime starting after just 37.5 hours in a week, and platinum-level health care coverage at little cost to state workers.

AFSCME’s demands would cost taxpayers $3 billion in increased wages and benefits, compared with the state’s offer.

The union made these demands despite the fact that Illinois state workers are already the highest-paid state workers in the nation when adjusted for cost of living, and despite the fact that AFSCME salaries outpace those of Illinoisans working in the private sector.

When the most recent AFSCME contract expired in 2015, the median AFSCME salary was $63,660 – compared with just under $32,000 for an Illinois worker in the private sector. In fact, according to the U.S. Census Bureau, the median income for an individual AFSCME worker is higher than the median income for an entire Illinois household in the private sector (just under $60,000 in 2015).

The state’s offer

On the other hand, Gov. Bruce Rauner’s offer to the union is one that is fair to both taxpayers and state workers.

Rauner’s offer includes a temporary wage freeze, but also provides incentive bonuses for the more than 35,000 employees covered under the contract. The state has said employees would be eligible for merit pay by meeting simple, objective standards, such as not having unauthorized absences or violating pre-established work rules.

The state’s offer also provides overtime after a typical 40-hour workweek – as opposed to AFSCME’s demand that overtime kick in after 37.5 hours.

And instead of continuing to provide platinum-level health care coverage at bronze-level prices, the governor is asking AFSCME workers to pay 40 percent of their health care premiums – up from the 23 percent they pay now. This means state taxpayers would continue subsidizing 60 percent of an AFSCME employee’s health care, at $11,600 per worker annually – still a significant amount by any standard.

But AFSCME rejected the governor’s offer – and the 4th District Appellate Court’s order continues to delay implementation of that offer.

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