Pay for contracts with long-term plan

Posted: Sunday, February 27, 2000

The state's tentative labor agreements with its employee unions and non-union workers will cost an additional $25 million this year, while at the same time the state's facing an $800 million shortfall and the Republican-led Legislature wants to cut $30 million out of the budget.

Somehow, it doesn't look like those numbers will add up.

Unions argue they've lost substantial buying power over the past few years as previous contracts didn't keep up with inflation. Opponents to the proposals have a simple answer: there's no money.

It's a simple rule of business that when revenue projections aren't met, employees are the first hit - they don't get raises and may lose their jobs. Yet, we believe the Legislature should fund the proposed raises - we can't continue to have employees making less and less and expect to keep qualified staff.

And we have faith that the Legislature can fund these contracts and get the deficit under control by moving forward with some plan that taps the Permanent Fund. In other words, let's do something. Let's address the wages and deficit in one fell swoop.

The contracts with the 12 unions are all basically the same: $1,200 bonuses this year, 2 percent raises next year and 3 percent raises the following year. The proposals also call for increased state funding for health insurance. Similar deals will be applied to non-union employees in the executive branch, court system and Legislature.

There are some strong arguments for giving the raises. Over the last four years, employees got increases of half the rate of inflation for three years and no cost-of-living raises last year. A recent study said inflation-adjusted wages for state workers dropped more than 13 percent between 1995 and 1998. And the state is way behind federal government wages, especially in higher-end jobs.

Critics point out some pretty strong points against the increases. State workers still make more on average than the private sector; they get more leave time and holidays and have a shorter work week. The state also pays more for health insurance than the average private sector employer.

While we support the raises, there may be some negotiation over increased health benefits. More and more in the private sector, employees are picking up an increased share.

And then of course there's the big gorilla - how do we give $25 million in raises and increased health costs while at the same time cutting $30 million, as the Republicans want to do.

We say it's paramount the Legislature come up with a plan that taps into the Permanent Fund to address these raises and the continuing deficit. We've said it before and we'll say it again, the Fund was set up to address the days when oil revenues started to dry up. Those days are here.

It's ridiculous to talk about income taxes or this tax or that tax when we have billions of dollars sitting around designed to address this type of situation.

We need a plan and we need it now. Then we'll be able adequately fund state government and pay our employees fair wages.

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