Branstad wants more contract talks with union workers that include pay freeze

Governor-elect Terry Branstad, who is slated to begin his fifth term Jan. 14, said Tuesday he wants to resume contract talks with unionized state employees to discuss a two-year pay freeze like President Obama has proposed for federal workers as part of a new effort to reform state spending.

Branstad, a Republican, said Democratic Gov. Chet Culver broke with tradition and negotiated a new two-year deal that includes wage increases ranging from 5 percent to 14 percent over the life of the contract that are not sustainable given the current economic situation and spiraling programs costs in areas like indigent defense and Medicaid funding.

“I just think it's wrong. It's not fair to the taxpayers of Iowa and I think it needs to be revisited,” Branstad said in an interview. “I'm deeply disappointed.

“We had told them that they should not do this. This message was delivered very clear to them,” Branstad said of transition discussions with the Culver administration in which he conveyed an expectation that he – as the incoming governor - would be allowed to complete collective bargaining negotiations as had been the past practice when Robert Ray left office in 1982 and when Tom Vilsack succeeded him in 1998.

“It's unprecedented to just accept the union's first demand without any negotiations, which is what Gov. Culver has done,” he said.

With history-making speed, negotiators for the state and its largest employees union, American Federation of State, County and Municipal Employees (AFSCME) Council 61, reached a tentative settlement Nov. 19 on a new two-year contract that would provide an across-the-board wage increase beginning next July 1. The state negotiated a similar deal on a new two-year contract with the State Police Officers Council (SPOC) one day earlier.

Under the proposed settlements, covered state employees would receive a 2 percent increase in base wages on July 1, 2011, and a 1 percent increase on Jan. 1, 2012, in the first year of the agreement, and a 2 percent increase on July 1, 2012, and a 1 percent on Jan. 1, 2013, in the contract's second year. The proposal would not change the current 4.5 percent “step” increases in wages for state workers who are not at the top of their pay scales.

“We cannot sustain government as usual,” said Branstad, who indicated during the 2010 election campaign he was interested in revamping employee health insurance benefits and “step” wage increases for employees not at the top of their pay scales as part of his goal of reducing state government by 15 percent over five years.

“I think the negotiations should be reopened. I just think that we deserve an opportunity to try to come up with something more realistic,” he said, noting that 70 percent of state government costs relate to personnel. “I think we're going to have to do major spending reforms again.”

Branstad said Iowa should follow Obama's lead in calling for a two-year pay freeze for federal workers by negotiating a new two-year contract with state employees that does not increase state costs, noting that “a pay freeze in most people's minds means you don't get increases.”

Danny Homan, president of AFSCME Council 61, said the situation as he sees it is that the current governor/employer has accepted his union's contract proposal.

“Right now (Branstad) is not the governor, he won't be sworn in until Jan. 14,” Homan said. “If once Governor-elect Branstad is the governor and he wants to talk to me about our agreed-upon collective bargaining agreement or contract negotiations or anything else, he's got my phone number. He knows how to get a hold of me.”

Regarding the situation at the federal level, Homan said “I think it's very unfortunate what President Obama is doing what he's doing to federal employees – period.”

Absent renewed contract talks, Branstad said he would have to review available options, which would include layoffs to offset increase costs but he added “that's not really a good option, in my opinion” because seniority rights usually mean that people who lose their jobs are the most-recent hires with the lowest paid, “which means you have to lay off twice as many people.”

Culver had said the decision to settle quickly was influenced by the fact that AFSCME members agreed during the current contract to voluntarily accept five unpaid furlough days and forgo deferred compensation payments to help the state weather a 10 percent across-the-board budget cut after state revenues plunged due to affects of the national recession. Those sacrifices of paid days and compensation were taken into consideration in deciding to accept the contract offer now that the state's financial position has improved, he said.