Tuesday, January 16, 2007
Labor Accord Ignores What’s Headed Our Way
The state is about to enter into contracts with three of its major labor unions that will require workers and retirees to contribute to health care coverage while partaking of wage increases of 3 percent in 2008 and 2009 and a final 4 percent in the final year of the contract. Bear in mind that though the Governor characterizes the pact as good since “our workers had sacrificed to get us out of the deficit situation we faced”, they only had a one year wage freeze and did get 3 percent and 3.5 percent raises in the past two years.
So while this is sold as a “win-win” for the employees and the taxpayers, don’t feel too bad for the employees having to make health care contributions and don’t feel too good that your pocketbook is safe. The state’s pension funds for school employees and state employees are on a trajectory to be enhanced nicely, long after the officials who negotiated this contract are gone from office.
Thanks to benefit enhancements negotiated by previous administrations and legislators, the “the cost of subsidizing pensions for state workers and school employees is expected to jump from less than $1 billion to more than $3 billion a year”, according to an AP series. A June 2006 projection from the school employees’ retiree system shows that the total employer (school district) contribution rate for pensions will jump from 4.7 percent in 2012 to 18.7 percent in 2013. An actuarial report from the state employees’ system projects that the employer share of contributions (as a percent of pay) will jump from 3.5 percent in 2011 to 13.3 percent in 2012. That money has to come from somewhere, and taxpayers are going to get the bill.
Pension enhancements, looming tax increases for transportation needs, new spending plans from the Governor, and no remedies for controlling the growth in state spending: sounds like a lot of aggravation is on the way.
So while this is sold as a “win-win” for the employees and the taxpayers, don’t feel too bad for the employees having to make health care contributions and don’t feel too good that your pocketbook is safe. The state’s pension funds for school employees and state employees are on a trajectory to be enhanced nicely, long after the officials who negotiated this contract are gone from office.
Thanks to benefit enhancements negotiated by previous administrations and legislators, the “the cost of subsidizing pensions for state workers and school employees is expected to jump from less than $1 billion to more than $3 billion a year”, according to an AP series. A June 2006 projection from the school employees’ retiree system shows that the total employer (school district) contribution rate for pensions will jump from 4.7 percent in 2012 to 18.7 percent in 2013. An actuarial report from the state employees’ system projects that the employer share of contributions (as a percent of pay) will jump from 3.5 percent in 2011 to 13.3 percent in 2012. That money has to come from somewhere, and taxpayers are going to get the bill.
Pension enhancements, looming tax increases for transportation needs, new spending plans from the Governor, and no remedies for controlling the growth in state spending: sounds like a lot of aggravation is on the way.
