The State Worker

The State Worker: Union, Jerry Brown stuck on pay vs. benefits

Gov. Jerry Brown is pressing unions for state workers to raise employee payments for retiree health care coverage.
Gov. Jerry Brown is pressing unions for state workers to raise employee payments for retiree health care coverage.

After 28 bargaining sessions in nine months, despite a contract that expired last July, the state’s 10,000-employee maintenance workers’ union hasn’t reached a labor pact with Gov. Jerry Brown.

The snag, says Tim Neep, director of the International Union of Operating Engineers Bargaining Unit 12, is that Brown wants employees to start paying into a retiree medical benefits fund but he’s too skimpy on salary increases.

Neep didn’t offer the exact terms discussed. However, he confirmed what The State Worker had heard: Brown wants Unit 12 to pay new retiree health contributions that would incrementally rise to 4.6 percent of pay in 2019. The state would match. Employees would get a 3 percent raise in July and a 4 percent raise a year later.

“We’re going backwards,” Neep said, considering higher out-of-pocket employee and family medical insurance costs in the future.

A spokesman for Brown’s labor-relations department had no comment.

The long, difficult talks underscore the challenge that Brown faces: He wants state employees to start paying toward retiree health benefits, while the unions think salary increases should offset the new out-of-pocket expense – and give them a decent raise.

Brown has proposed $350 million for raises next year. That’s about $145 per month per state employee, far below expectations for many who have endured years of stagnant pay, furloughs and higher pension costs. And now a new retiree medical expense to pay.

The budget is flush, they reason, so if they can’t bargain substantial raises now, when?

No one is arguing that unfunded obligations for retiree health care are not a problem. The tab is now $74 billion, according to a new government estimate. Unlike pensions, there’s next to nothing saved for those future costs. The state pays the bills as they come due.

As the number of retirees grows along with the cost of their care, the bills to the state get bigger and bigger. The money to pay them gets pulled from other government programs.

Brown’s plan would save ahead and eventually knock the unfunded obligation to virtually nothing, but compromise has been elusive.

The correctional officers’ union, like the maintenance employees, is working under an expired contract. The state scientists are voting on the same deal that they rejected last year for offering too little in raises on top of the new retiree health payments. Talks with more than a dozen other bargaining units with expiring contracts are underway.

Neep said that when surveyed, 91 percent of Unit 12 members said they’d reject Brown’s current proposal. A few sent in pictures of their pay stubs, he said.

Brown has warned that the economy is due to slow down and squeeze the budget with it. Neep understands the point, but, he said, “We can talk about today. I’m bargaining today.”