State workers face possible pay cuts

Pay freeze? It?s worse than that. On top of eliminating the jobs of hundreds of state workers, the Pawlenty administration now wants to cut the wages of those state workers who keep their jobs.

In contract proposals made to AFSCME Council 6 on June 26 and to MAPE on July 7, the state not only refuses to offer any pay raises this year or next year, it actually wants to cut pay by 1.5 percent across the board, effective this Dec. 31.

And that?s only the direct pay cuts. The Pawlenty administration continues to pursue health plans ?designed to shift every penny of additional health insurance costs onto state employees and their families,? in the words of AFSCME Council 6 executive director Peter Benner.

Health costs eat at take-home pay
Combining the proposed wage cut with higher health-insurance costs means ?the state is proposing $140 million in absolute takebacks over current levels of spending,? Benner said.

The combined effect is the equivalent of pay cuts of at least 10 percent for workers who carry family health insurance, Benner said.

Because economic terms negotiated with AFSCME and MAPE typically set the pattern for other state workers, the proposed wage cuts and higher health insurance costs give eight other unions that represent state agency and state university employees a good look at what awaits them.

In addition to the pay freezes and across-the-board pay cut, the state is proposing further pay reductions for people who transfer or bump into lower job classifications, elimination of step increases and some other automatic pay raises, and a reduction in shift differential payments.

Out-of-pocket costs soar
The proposed pay cuts are one way the state hopes to cover soaring health insurance costs, Benner said.

State negotiators told unions during coalition insurance bargaining that, without changes, premiums would rise by $190 million during the current two-year budget cycle ? by 18 percent in 2004, and by another 18 percent in 2005, Benner said. Workers not only would absorb all those increases, but actually would have to pay a portion of what the state now covers. That means workers would pay at least three times more for family insurance.

Monthly premiums for dependent coverage would skyrocket from $59 this year to $195 in 2004 and $224 in 2005. Meanwhile, the state would cut its share by $126 in 2004. In 2005, the state still would pay $60 less than it pays now. In addition, workers would get stuck with higher deductibles, higher co-pays and higher co-insurance amounts, Benner said. Access to the most-affordable clinics and doctors would be reduced significantly and, in many cases, eliminated for all practical purposes, he said.

Access to clinics restricted
Insurance currently is structured so workers can control their out-of-pocket costs, to an extent, by deciding which health provider to use. This is similar to private-sector workers choosing an in-network or out-of-network doctor.

But under the state?s proposal, Benner said, ?For many people, there will be no clinic in their immediate area that offers them the lowest out-of-pocket costs.?

More than half the state workers in the Twin Cities would have to change doctors to maintain what are known as Level 1 benefits, ?and almost all employees in greater Minnesota would have no Level 1 clinic to go to at all,? AFSCME says. Overall, 89 percent of state workers would have to change clinics to keep Level 1 benefits ? and half of those could do so only by driving several hours round trip, the union says.

Further, the state is slashing the benefits covered under its dental insurance. One example: Coverage for all new orthodontics procedures would be eliminated beginning Jan. 1, 2004.

AFSCME, which represents about 19,000 state workers, resumes negotiations on other contract issues the week of July 28. MAPE, which represents about 9,900 state workers, also resumes negotiations that week.

Both AFSCME and MAPE are seeking 3 percent across-the-board pay raises in each year of their proposed two-year contracts, which replace agreements that expired June 30.

Adapted from The Union Advocate, the official newspaper of the St. Paul Trades and Labor Assembly. E-mail The Advocate at: advocate@mtn.org

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