September 23, 2009

Did the Governor Just Set a Time Bomb?

Justin Katz

Just out from the governor's office:

Today, Governor Donald L. Carcieri and several state employee labor unions, including the RI Alliance of Social Service Employees (Local 580), RI Laborers' District Council Locals 808 and 1033 (LIUNA), the RI Parole and Probation Associates (RIPPA), and the RI Employment Security Alliance (Local 401 SEIU), announced that a tentative agreement has been reached.

Under this tentative agreement, the respective labor unions have agreed to eight one-day pay reductions in FY 2010. In return, employees will earn 10 leave days, four of which can be cashed out at retirement or voluntary termination from state employment.

In FY2011, the unions have tentatively agreed to delay the implementation of the three percent COLA for six months to January 2, 2011, as well as four one-day pay reductions, in exchange for five leave days, four of which may be cashed out at retirement or voluntary termination from state employment.

The tentative agreements have been approved by the leadership of the respective unions, but must still be ratified by the members. These union leaders are recommending ratification of the agreement by the unions' members. The State is reaching out to the remainder of the State employee labor unions to offer the same agreement.

"The agreement by these labor unions demonstrates that they recognize the seriousness of our state's fiscal crisis, and they are willing to address the issues we are faced with today," said Governor Donald L. Carcieri. "I commend them for their leadership and cooperation in helping the state through this difficult time."

"For the remaining state employee unions, I extend an offer to participate in this agreement, and receive the same benefits, including deferred compensation, additional leave time, and job security, as those unions who have already agreed," continued Carcieri. "We have no objection to Council 94, or any other union, sending this agreement to its full membership for consideration. For those unions who reject the offer, we will continue with our layoff plans. To continue to ignore the fiscal crisis of our state and refuse to be part of the solution is short sighted, and only hurts hard working rank and file state employees."

"The most equitable method is for all state employees to participate in a plan of pay reduction days. Ratification of this agreement will keep people working, eliminate additional layoffs through FY 2011, and keep government services operating without interruption," continued Carcieri. "While as a state and a nation we don't know when our economy will recover and we don't know when our revenues will improve, this agreement will help us to manage through this difficult time without raising broad-based taxes."

"Both sides worked diligently, honestly, and cooperatively to come to terms on an agreement that responds to the State's fiscal problems and provides a mechanism to respond to budgetary needs while managing our existing workforce in a way that delivers services more efficiently while protecting the jobs of our employees," said Gary Sasse, Director of Administration.

Phil Keefe, president of the Rhode Island Alliance of Social Service Employees (RIASSE Local 580) stated, "We believe this agreement is good for our members because it will provide job security."

"This memorandum of agreement has resulted from intensive negotiations over the past several weeks in which all parties have dealt fairly and responsibly with the pressing issues of existing collective bargaining obligations, job security and fiscal reality. The outcome not only validates the process of collective bargaining, but also demonstrates that by working together, the State and its employees are capable of addressing and mutually resolving issues with which the problematic economic situation has presented them," said representatives of Local Unions 808 and 1033 of the Rhode Island Laborers' District Council.

Perhaps I'm missing something, but it looks to me like the governor essentially relied on a line of credit that the unions are extending to the state: Savings now for future paid days off and retirement/layoff/quit bonuses. Plus, it looks like the no-layoffs-through-2011 promise holds.

Abandon hope.

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My point exactly!

Posted by: Ken Block at September 23, 2009 8:54 PM

Ken, what would a Moderate Party governor have done differently in this situation? Solutions man. What are they? If you don't have any, then I'm not sure how credible your party can be. And believe me, I want your party to be credible probably almost as much as you do. Help me out here.

Posted by: Patrick at September 23, 2009 9:21 PM

Justin, you think this is a ticking time bomb?? You've got to be kidding.
The pension system is a ticking time bomb only the Gen Ass can disarm.
The welfare/ritecare system is a ticking time bomb only the Gen Ass can disarm.
Our gold plated public education costs are a ticking time bomb only the Gen Ass can disarm.
The ticking time bomb of zero management rights that are fiscally choking our cities and towns is about to explode.
Our tax policy is the ticking time bomb that keeps/chases business away from here and who-know-who are the ones who can disarm it.
Yet somehow in your mind it's the governor, who's already slashed the state workforce by 3,000...who's already saved millions by changing health insurance coverage for these state workers...who leveraged dissident Democrats to get the start of pension reform going with these same state workers ....he's the one who has somehow set off a time bomb in this state because he cut a deal with unions to save/defer what amounts to chump change in the large budgetary scope of things??? The time bomb is now ticking because he's attempting to take the state worker (did I mention HE'S ALREADY REDUCED THEIR NUMBERS BY 3,000???) off the table as annual budgetary caulk?
That's laughable!!
The governor has been downsizing and streamlining the areas in state government he can get at all along.
This budget and this state will get fixed when the structural defects in the budget get fixed.
Your bomb makers and your bomb breakers are found in the General Assembly.

Ken, this is all you bring? Quite unimpressive.

Posted by: Tim at September 23, 2009 10:53 PM


While I would prefer more in the way of true concessions (pay cuts in exchange for nothing), instead of savings in the short-term in exchange for some form of payback in the not so near future, I don't think the plan which was proposed was unreasonable. The governor either has to do layoffs or convince the unions to take voluntary pay cuts -- he has no other unilateral powers without the General Assembly taking action, and as we all know, they are AWOL.

Because the unions have current contracts in place, for the unions to agree, they at least have to think there is something in it for them (one would think job security would be enough). Dangling out a "we'll give you some credit for those days later" carrot, yes, is a kind of line of credit, but not one that has to be paid back in the near term. It's not the optimal solution, but honestly, what else is he supposed to do on his own?

I hear a lot of people ragging on the governor, rightly or wrongly, but very few who have their own solution to the mess. The General Assembly is the one responsible for this mess, and I don't really hear any blame being put in their lap, because they've smartly (for them) kept out of it completely.

Of course, the content of this press release did not specifically mention the rejection by the leaders of Council 94 of the proposal. I suspect that wasn't unintentional. Being that they are the largest state union, their support is absolutely critical for any "no layoff" savings plan to succeed.

I think it's good that Council 94 rejected the "no layoff" compromise. It gives the governor some political cover for what's going to be coming.

PS I believe the "bomb" is what's coming on Friday. From what I understand, the layoff notices will be in the mail very quickly. Once those are received by the employees, it may change the over all dynamic.

Posted by: Will at September 24, 2009 1:32 AM


I said "a time bomb." Not "the biggest time bomb," not even "the final time bomb." Just another one.


It can hardly be said that we haven't faulted the General Assembly. The governor's options are surely limited, but it seems to me that his central goal in all of it should be to highlight where the problem lies, and I don't see that.

Posted by: Justin Katz at September 24, 2009 5:36 AM

A wise man once said "I'll gladly give you a dollar on Tuesday for a hamburger today!"

Posted by: Patrick at September 24, 2009 7:42 AM

What good is making a threat if you don't follow through on it? The governor & the unions played chicken & the governor blinked!

Posted by: Chris at September 24, 2009 8:00 AM

I agree with Chis. The Governor has failed to seize the upper hand on behalf of the people. When the union rejected the 12 furlough days and then scrambled back to the table to avoid layoffs, he should have said: "OK, now it's 20 days or 2000 jobs".

Posted by: George at September 24, 2009 9:10 AM

As for the layoffs, don't forget that RI is already in the top 2 for unemployment in the country. If we lay off another 1,000 or more, we start getting really close to #1.

And when those people are laid off, they're entitled to unemployment benefits. Those 1,000 are removed from the "pay in" group and added to the "pay out" list. A net change of 2,000 people. At some point, we end up with more people receiving from that fund than paying into it.

I think layoffs really is the last option the Governor wants to resort to.

Posted by: Patrick at September 24, 2009 10:06 AM

Laying off 1000 state employees can't be compared to the loss of productive, private sector jobs.

It's the bloated size of government that drives away the kind of jobs we really need in Rhode Island.

Posted by: George at September 24, 2009 12:13 PM
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