 The leaders of the American Federation of State, County and Municipal Employees
have been trying for nearly two years to cram a new contract down on taxpayers,
which would cost $3.1 billion more than what the state has proposed. The union
has gone so far as to call a strike vote in an attempt to get its way.
AFSCME demands ignore the fact that the state is in a financial crisis, its
population is shrinking, and overburdened taxpayers already have to pay for
state workers’ generous benefits. These benefits include: the highest salaries
in the nation when adjusted for cost of living, heavily subsidized health care,
free retiree health insurance for most workers, and overly generous pensions.
All those benefits mean the average AFSCME member makes over $100,000 a year in
total compensation.
So what’s in that $3.1 billion in additional costs to taxpayers? What are the
components that make up the difference between the state’s offer and AFSCME’s
demands?
Health care benefits account for the biggest portion of the $3.1 billion
difference: These benefits would cost taxpayers $1.7 billion in additional
expenses if AFSCME gets its way. Salary and overtime benefits would cost an
additional $1 billion. And other miscellaneous costs would add $400 million to
taxpayers’ burden.
Health care costs: AFSCME’s demands would cost taxpayers $1.7 billion more than
the state’s offer
AFSCME is fighting to keep its members’ platinum-level heath care benefits at
bronze-level prices. This would cost taxpayers $1.7 billion more over three
years compared with the state’s plan.
Today, taxpayers are forced to pay not just their own insurance costs, which
have jumped dramatically under the Affordable Care Act, but also for Cadillac
health care coverage for AFSCME employees.
Illinois taxpayers on average subsidize more than three-quarters of each AFSCME
worker’s health costs. That means nearly $15,000 in taxpayer subsidies for each
worker.
In contrast, the state has offered health care reforms for workers that would
maintain effective, affordable coverage for state employees while bringing costs
more in line with what taxpayers can afford.
Under the state’s reform plan, Illinois taxpayers would still subsidize 60
percent of AFSCME workers’ annual health care costs, or over $11,600 per worker
annually.
This reduction in taxpayers’ costs for AFSCME workers’ health care would have
major implications for Illinois’ budget because other union contracts contain
“copycat” clauses that are affected by changes to AFSCME’s contract. The state’s
reforms would also involve university employees and other state workers who are
part of the State Employees Group Insurance Plan. The reforms would affect over
200,000 workers and their dependents.
Salary and overtime benefits: AFSCME’s demands would cost taxpayers $1 billion
more than the state’s offer
AFSCME leaders are seeking four-year raises ranging from 11.5 to 29 percent, as
well as a 37.5-hour workweek before overtime kicks in. Union leaders are also
fighting for overtime rates of 2.5 times regular pay on “super holidays,” such
as Christmas Day, and two times regular pay on “regular holidays,” such as
Presidents Day. These salary and overtime demands would cost taxpayers $1
billion more over the next three years than the state’s plan offers.
Hitting taxpayers with these additional costs simply isn’t fair, especially when
the growth in private-sector salaries is compared with that of AFSCME salaries.
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 Private-sector workers – who pay for AFSCME and other state
worker benefits – have seen their own earnings outpaced by inflation
from 2005 to 2015. In contrast, the AFSCME worker median base
salary, at $63,660, has risen by 43 percent over that same time
period.
The state’s counteroffer proposes a more reasonable plan on
behalf of taxpayers: a temporary salary freeze in return for new
merit pay and incentive bonuses, a 40-hour workweek, two times
regular pay on super holidays, and 1.5 times pay on regular
holidays.
The state has already negotiated salary reforms with 20 other unions
– from affiliates of the Teamsters to the Illinois Federation of
Teachers – and it is looking to do the same with AFSCME.
AFSCME pay and benefits are already generous
AFSCME’s demands must be taken in the context of its members’
already generous pay and benefits:
- Highest-paid state employees: Illinois state workers are the
highest-paid state workers in the nation when their pay is
adjusted for cost of living.
- Cadillac heath care: AFSCME members get platinum health care
coverage, but pay little for it. Taxpayers subsidize more than
three-quarters, or nearly $15,000, of each state worker’s yearly
health care costs.
- Free retiree health insurance: State workers receive free
health insurance during retirement – even if they retire in
their 50s – as long as they work 20 years for the state. These
benefits are worth $200,000 to $500,000 in today’s dollars.
- Generous pension benefits: The average lifetime pension
benefits of a career state worker exceed $1.6 million. These
benefits come on top of Social Security, in which a vast
majority of state workers also participate.
In light of these and other generous benefits AFSCME workers
enjoy, the state’s proposed reforms are fair and responsible.
Next steps
The Illinois Labor Relations Board last year determined that AFSCME
and the state were at an impasse in contract negotiations, which
meant the state could begin implementing its last, best contract
offer to AFSCME employees.
However, AFSCME has petitioned state courts to stop that
implementation. And since the labor board’s ruling against AFSCME,
the union has offered new “compromises” on wages and health
insurance that are not really compromises at all.
This latest “offer” is a desperate attempt by AFSCME to restart the
game after it’s already been lost. AFSCME is still seeking to
increase the burden on taxpayers, only now the union is using its
“offer” as a pretext for a strike vote. The union is expected to
finish voting by Feb. 19.
AFSCME’s demands will only lead to higher taxes on struggling
taxpayers and will drive more families and businesses out of
Illinois. That will only push Illinois further toward the financial
death spiral indicated by Moody’s Investors Service’s latest warning
about Illinois’ deteriorating fiscal health.
Instead of demanding additional benefits, AFSCME should follow the
lead of the 20 other state unions that have reached an agreement
with the state and accept a contract that brings state worker costs
in line with what Illinoisans can afford.
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