AFSCME takes pay freeze to keep health benefit

DES MOINES – Members of Iowa's largest state employees' union will not get a uniform wage increase for the next two fiscal years, but some will get individual pay boosts and most will not have to pay health insurance premiums as a result of an arbitrator's ruling Thursday.

“I'm ecstatic,” said Danny Homan, president of American Federation of State, County and Municipal Employees (AFSCME) Council 61, who was surrounded by members of his jubilant bargaining team.

“I've been sweating this award since Feb. 13,” he said. “I might for the first time in a long time be able to get a decent night's sleep tonight because I know that our members' benefits and their rights have been for the most part preserved.”

Arbitrator Marvin Hill Jr. rejected Gov. Terry Branstad's insistence that all AFSCME members pay 20 percent of their health insurance costs in maintaining current contract language that allows many covered workers to continue paying no monthly premium in exchange for taking a base wage freeze under the contract that runs from next July 1 through June 30, 2015.

Members of the roughly 20,000-worker union who are not at the top of their pay grades will receive automatic “step” increases of 4.5 percent annually under the arbitration award that also modified contract language dealing with layoff and attendance policy language, Homan said.

Branstad called the outcome of contract talks “fair results” and pledged to “live with today's result.”

“I am disappointed that Iowa will continue to be one of only six states where the overwhelming majority of state employees will continue to pay nothing toward their health insurance,” Branstad said in a statement. “This is simply unfair to the vast majority of Iowans who pay some, if not all, of their own health insurance cost and whose tax dollars continue to fund this expensive benefit for most state employees.”

The Republican governor noted that members of the State Police Officers Council bargaining unit agreed to pay 20 percent of their health insurance premiums with incentives to lower their costs by participating in a wellness program and he hoped other state workers would follow that example.

“It is right, it is fair, and it will make our state worker population healthier,” added Branstad, who estimated the state would have avoided $45 million in costs over the two-year contract had the arbitrator ruled in favor of the state's offer regarding health benefits.

The state Department of Management issued estimates indicating the new AFSCME contract would cost the state's general fund $56 million over the next two fiscal years.

Homan described the just-completed bargaining session as “an all-out attack” on the employee rights and benefits covered by the agreement, and he hoped his union and the Branstad administration could begin building an improved working relationship now that the contentious battle is over.

He said the negotiations were a continuation of Branstad's gubernatorial campaign and the governor “would not back off an issue that was going to be as earth-shaking as it was” so it required a binding arbitrator to decide the health insurance issue.

“We were able to defend our members' rights, we were able to defend our contract and we were able to defend their benefits,” Homan told reporters at an afternoon news conference.

“The arbitrator's award speaks for itself. We won, we won on the issue of health insurance and that's extremely important to our membership. The No. 1 issue for our members is their health care,” he said. “It was a huge deal for this group of employees.”

Back in November AFSCME's bargaining team made an initial offer that requested a 1 percent across-the-board pay increase in the contract's first year and 2 percent in the following year. The union also asked to maintain annual 4.5 percent step increases for employees who qualify based on their date of hire, but did not propose any changes to its health-care coverage.

State negotiators countered by proposing a freeze in base pay and wage “steps” for AFSCME members the next two fiscal years, as well as a requirement that state employees start paying 20 percent of their insurance premiums, which would be a first for many state workers who have paid nothing for coverage in the past.