MONTPELIER — The Shumlin administration may look to lay off as many as 400 state employees if it cannot extract concessions from the Vermont State Employees Association that helps reduce the budget by more than $10 million.
Administration officials are seeking $5 million in generic personnel savings, and another $5 million or so in savings from the Pay Act, which includes state employees’ contractual raises, in the 2016 fiscal year budget.
Both the administration and the union are posturing before any formal negotiations take place. Secretary of Administration Justin Johnson issued a memo this week to agency and department heads declaring that all new hires must be cleared through his office. And the VSEA is distributing a petition that calls for no cuts to state government. It was the memo, Johnson said, that prompted his memo to slow hiring because lay offs are likely.
The union is under no obligation to revisit the current labor agreement that provided state employees with 4 percent raises in next year’s budget. But unless the union makes some concessions, a massive reduction in force will be needed, Johnson said Thursday.
“Worst case, you’re looking at probably 400, and perhaps, even a little more,” he said. “Obviously, until we’ve finished putting the final budget together, it’s difficult to determine what the mix between revenue and cuts will be.”
According to Johnson, the average compensation package for a state employee totals $85,000 — including salary and benefits. But the general fund only contributes about 40 percent of the cost, he said, which means a higher number of lay offs are needed to meet the financial targets.
The administration is preparing for a range of potential lay offs, depending on how much savings can be agreed on.
“There’s not a set number, certainly, in my mind. But it could, depending on what plays out, whether we get any concessions, be between 100 and 400,” Johnson said.
The Legislature’s Joint Fiscal Office has projected a need to cut between 100 and 200 positions if negotiations between the union and the administration do not achieve any savings.
Union officials, meanwhile, say they are not interested in opening the existing contract.
“I think those numbers are, first of all, very disturbing. It’s disturbing for the people who will lose their jobs. It’s bad news for Vermonters who will have a hard time getting the services they need from state government. It’s also counter productive,” VSEA Executive Director Steve Howard said.
Union President Shelley Martin said state workers have already given enough in recent years. More than 600 workers were laid off during the administration of former Republican Gov. James Douglas. And employees have not received a raise in the past two years, she said, and all “step” increases that come with pay raises were on hold.
The labor contract calls for a 2.5 percent increase in the 2016 fiscal year, and a resumption of step increases.
“Our contract looks good because it says we get a 2.5 [percent] increase … but the actual picture is we never got a raise for two years,” Martin said.
Howard said members have indicated they are not interested in reopening the contract. Instead, the administration should look to raise additional revenue from those who can afford to contribute, he said.
“It’s hard for us to say to our members that we’re going to entertain taking money out of your paycheck while you’re already struggling … when we’ve got a political establishment that seems hell bent on protecting the wealthiest Vermonters. The governor needs to be a leader. The governor has leadership abilities,” he said.
Martin said the union is willing to “negotiate,” but “we don’t even want to talk about jobs.” Rather, the union can help find alternative sources of revenue, she said.
“We can come up with revenue ideas,” Martin said. “We do want to be at the table. We do want to be a part of the process.”
Johnson said he has extended an invitation to union officials to discuss how to collectively find savings.
“I expect they will sit down and talk with us. I don’t think they would not accept that. I just haven’t heard yet that they have,” he said. “I’m not sure what happens when we sit down.”
Exactly how many lay offs might be needed won’t be known until the budget is finalized, which won’t occur until the final day of the session. That’s typically when the governor, speaker of the House and Senate president pro tem huddle together to hash out the final details.
“The ultimate answer is probably not going to be known until we pass the budget at the very end,” Johnson said. “Obviously, I have to start thinking about it and we all have to start thinking about, but we are not making any decisions.”
A full story will appear in Friday’s editions of the Barre-Montpelier Times Argus and the Rutland Herald.