State union workers will see a temporary 3 percent pay cut and two-year pay freeze as part of a tentative two-year contract deal reached Thursday as Vermont continues to grapple with a budget deficit that could top $150 million this year.
If rank-and-file union members ratify the agreement reached between negotiators and the Douglas administration, it would be the first time in memory that a pay cut had been built into a contract between the state and the Vermont State Employees Association, officials said.
"In this economy, as thousands of Vermonters are unemployed and tens of thousands more have seen their pay, hours and benefits cut, and as our state faces massive budget shortfalls in the coming years, it is appropriate that public employees share in the sacrifice," Gov. Jim Douglas said in a statement announcing the agreement. "This contract is a critical step towards bringing state spending in line with declining revenues."
VSEA Director Jes Kraus said the union had been willing to take a temporary pay cut for months.
"Our bargaining team members understand the reality of the current economic crisis, and they have been trying to help for nearly a year," Kraus said. "Ultimately, it took a decision by an experienced fact finder to get the administration to accept any help from state employees."
A key sticking point was whether the cut would be temporary or permanent; Kraus noted that the 3 percent reduction would be rescinded and pay levels would revert to their current levels at the end of the new contract, which runs from next July 1 through June 30, 2012.
The union and administration have frequently been at odds as the administration has sought to shrink the state payroll during the past two years as state revenues have declined and red ink has grown.
Secretary of Administration Neale Lunderville said Thursday that the state has used attrition, early retirements and layoffs to reduce its unionized work force by 782 employees _ about 7.5 percent _ since July 1, 2008.
The administration used the occasion to press its case for similar savings among Vermont schools, municipal governments and nonprofit groups that get the bulk of their funding in public dollars.
"This deal sets the new standard for all public employee salaries in Vermont, as well as for non-profits who get a significant portion of their revenue from the State," Lunderville said. "As families struggle to make ends meet, this agreement shows a commonsense approach that should be applied to salaries for public sector employees and can serve as a blueprint for teachers, municipal workers and others who receive a paycheck from taxpayers."
Not so fast, said Darren Allen, spokesman for the state's largest teachers' union, the Vermont chapter of the National Education Association.
"We don't believe that it is fair to ask any working person, union or not, public or private, to earn less next year than they earn this year," Allen said. He said teachers' salaries are set in talks with local school boards, and that process should not get interference from the governor.