SEA fires back at Lynch

Diana Lacey launches another broadside against Governor John Lynch in this morning's Union Leader.

Lynch's layoff predictions were grossly overstated; the threat of "across-the-board" cuts was disingenuous at best. There were fewer than 300 full-time layoffs, and only in certain agencies.

Lynch gave his agency heads alternatives he would not entertain in contract negotiations. In Administrative Services Commissioner Linda Hodgdon's Oct. 27 column, she states: "Once the serious decision was made by the union to reject furloughs, the governor allowed department heads to be as resourceful as possible, and for that he should be applauded." Every taxpayer should be asking Lynch, "Why weren't you resourceful in the first place? Why did you try to take all that money from employees instead?"

SEA got $74 per hour stat from DAS

Yesterday, we linked to DAS Commissioner Linda Hodgden's op-ed claiming that the State Employees Association was using faulty information, including the claim that some part-time workers were making $74 an hour. SEA President Gary Smith posted his response in the comments section of the Union Leader article.

The numbers for how many part time state employees and what they're paid came straight from Administrative Services (Commissioner Hodgdon) in reporting to the Legislature for the Fiscal Note in HB 662. Follow the below link to look it up for yourself.

http://www.gencourt.state.nh.us/legislation/2009/HB0662.html

HB 662 FISCAL NOTE

AN ACT relative to paid sick leave for employees.

FISCAL IMPACT:

The Department of Labor states this bill will increase state expenditures by an indeterminable amount in FY 2009 and each year thereafter. The Department of Administrative Services, New Hampshire Association of Counties, and New Hampshire Municipal Association state this bill may increase state, county, and local expenditures by an indeterminable amount in FY 2009 and each year thereafter. This bill will have no fiscal impact on state, county, or local revenues.

METHODOLOGY:

The Department of Labor states this bill requires employers to provide paid sick leave for employees. The Department states a poster, rules, and forms would need to be developed, increasing the Departments costs by an indeterminable amount. The Department currently has a process for filing complaints and holding administrative hearings, including administering civil penalties. However, because the Department has no data to estimate how this activity may increase under this bill, the full fiscal impact cannot be determined at this time.

The Department of Administrative Services states this bill will allow paid sick leave for both full-time and part-time employees. The state does not provide leave accrual for part-time employees at the 40-hour amount identified in this bill. Because the Department cannot estimate the number of employees taking sick leave, or the extent to which additional human resources will be required to cover sick employees, the fiscal impact cannot be determined at this time. However, the Department estimates if every part-time employee took the full sick leave amount and each employee was required to be covered by another employee at the average pay for that position, the cost for a 40-hour week would be as follows:


Type of PT Employee
Number of Employees
Average Hourly Wage
Total

Adjunct Faculty
1,727
$306.80
$21,193,744

Classified Employees
3,628
$13.42
$1,947,510

Judicial Branch
211
$57.71
$487,072

Non-classified Employees
1,473
$74.11
$4,366,561


The New Hampshire Association of Counties states to the extent full and part-time county employees are not already provided 40 hours of paid sick leave each calendar year, or to the extent employees are not currently allowed sick leave for all of the reasons identified as allowable reasons in this bill, county expenditures may increase if other personnel are required to cover the sick days. As the Association cannot estimate the number of employees without sick leave or how many may require coverage by other personnel, the fiscal impact cannot be determined at this time.

The New Hampshire Municipal Association states to the extent full and part-time municipal employees are not already provided 40 hours of paid sick leave each calendar year, or to the extent employees are not currently allowed sick leave for all of the reasons identified as allowable reasons in this bill, local expenditures may increase if other personnel are required to cover the sick days. As the Association cannot estimate the number of employees without sick leave or how many may require coverage by other personnel, the fiscal impact cannot be determined at this time.

This bill does not include an appropriation or establish positions.
- Gary Smith, Concord NH

Linda Hodgdon: Faulty information harming SEA members

Department of Administrative Services Commissioner Linda Hodgden writes a column in this morning's Union Leader claiming that bad information is harming members of the State Employees Association.

The union claimed that the state has part-timers earning $74 an hour, which is simply not correct. Part-time employees are paid a range of salaries depending on whether they are part-time judges, adjunct faculty at a community college, cleaning staff or toll attendants. The most recent data from 2009 indicates the average rate of pay for a part-time classified employee to be $14 per hour.

The union claimed the number of paid consultants has increased in this budget, which is also not true. Consultant salaries did not increase 40 percent. They are simply being reported in a much more transparent way under the new financial system that went into effect in July. A large portion of departments' contract expenditures are now correctly reported as consultants. The biggest change was at the Department of Transportation.

SEA chief re-elected to 6th year

Karen Langley reports in the Concord Monitor that SEA President Gary Smith has re-elected to another year at the head of the union.

Union delegates meeting in Nashua yesterday cast 120 votes for Smith and 93 votes for opponent Ed Hager, said SEA spokesman Mike Barwell.

The election was the outcome of a Department of Labor investigation into complaints made by Smith's opponents after the union elections last year. The Department of Labor and the union settled with no admission of fault and an agreement to hold new elections for the second year of the term.

Smith said yesterday the vote was a vindication.

"We ran a fair and open campaign and election last year. We ran a fair and open campaign and election this year," he said. "It ought to clear up any doubt about the veracity of our process."

SEA realism: It's about time

The Union Leader blasts the State Employees Association for changing its tune on job losses.

The lead contract negotiator for the State Employees' Association, who previously urged SEA members to reject a job-saving employment contract because it didn't guarantee that no employees would be laid off during the recession, now says it's time for state employees to get realistic.

"This is not a time for people to expect raises to come out of a contract agreement. This is the time to save jobs, and if the administration doesn't want to save jobs, I don't know what we'll be looking at," Diana Lacey told The Associated Press.
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This is the time to save jobs? The time was weeks ago and the SEA leadership blew it.

AP: NH's workers sue to get 'bumping' rights back

The Union Leader runs the AP story on the State Employees Association going to court to restore bumping rights for senior state workers.

The State Employees' Association filed suit Thursday in Merrimack County Superior Court arguing that the Legislature violated senior workers' constitutionally protected contract rights when it suspended bumping rights as part of the budget.

The union argues bumping rights are protected for employees with at least 10 years experience even though bumping is part of personnel rules, not in the union's contract with the state. The union says senior workers have an expectation of the right as part of their overall compensation.

New Hampshire governors from both parties have tried with little success to get rid of bumping rights, which prevent allow highly-paid employees to take the jobs of more junior colleagues if they get laid off. The practice delays the savings from any layoffs, possibly forcing more drastic cuts down the line, and sets off a chain on demotions through state government.

Lynch tells his side of union dispute to voters

The Union Leader runs an AP article reporting that Governor John Lynch is emailing New Hampshire voters about the layoffs he announced last week.

Gov. John Lynch has sent an electronic letter to New Hampshire voters explaining why he ordered roughly 250 layoffs last week after state workers rejected a furlough plan.

Lynch said that New Hampshire's economy is in better shape than some states, but state spending still had to be cut. He said the state budget required him to cut $25 million in labor costs. He said state workers got a 10 percent pay raise over two years and he asked them to give back part with 19 unpaid furlough days.

It takes two to negotiate a deal

James Cole writes in the Concord Monitor that the paper has not done enough to investigate the State Employees Association case against the state contract rejected last week.

As the only newspaper originating from the state capital, the Monitor has the responsibility to do more for the public. Instead of putting the union's negotiating team, and to no small extent state workers, on the pillory, the Monitor could be researching whether cuts to state workers are the only or best way to close any budget gap. It could be looking at whether there is a budget gap and what caused it.

The SEA has claimed that the state:

• has 1,473 part-time non-classified employees with an average pay of $74 an hour.

• has increased spending on outside consultants by 40 percent.

• has rejected proposals from the SEA that would have saved the state over three times the $25 million figure floated in the budget.

• spends more than twice as much on outside contractors as on state employees.

State union has itself to blame

The Portsmouth Herald says that the State Employees Association is responsible for the round of layoffs now hitting state workers.

While the SEA membership can have many reactions to the layoffs the one reaction they have no right to is surprise.

The governor made it absolutely clear that if the union rejected a plan that included 19 furlough days he would have no choice but to go forward with layoffs. He was also clear that he didn't want to pink-slip state employees.

In our view, the union left him no choice. So 250 state workers will receive layoff notices and 60 others will be moved to lower-paying jobs. Another 60 vacant positions won't be filled.

In what 'ballpark' did the crunchers of numbers play?

Foster's editorial page wants to know why the Governor is laying off 250 state workers, when he insisted that he'd have to fire 750 if the state contract was rejected.

Linda Hodgdon, the commissioner of Administrative Services, has been reported as saying initial projections were made without knowing whether employees would be willing to retire, what the potential was for moving employees paid from general fund monies and the effect of laying off "higher cost" employees.

If there were so many unknowns, so many questionable elements, why so much talk of laying off 750 employees?

"It was absolutely not a negotiating tactic," Hodgdon was quoted as saying last week. "It was a ballpark estimate" of employees earning about around $50,000 in salaries and benefits.

Now the situation stands at laying off 250 employees, demoting another 50 or 60 and not filling some 60 vacancies. Assumedly, some of the higher-paid employees will feel the cuts.

Apparently, the ballpark's fences were pulled in so the administration could hit more home runs with the loss of fewer players.

Union suspects activists targeted in NH layoffs

The Union Leader runs Holly Ramer's AP piece citing union allegations that correction officers are being laid off in retaliation for union activism.

The governor's office has declined to specify which departments and workers are affected, but some agencies and the union representing most of the state's 11,500 workers have been providing numbers as workers are notified.

Thursday's update included 37 workers laid off from the Department of Corrections, plus at least 20 who were reassigned or demoted. Twenty workers were laid off from the Youth Development Center in Manchester, said Mike Barwell, spokesman for the State Employees Association.

A number of the corrections workers have been vocal participants in union activities, Barwell said, and union officials are looking into whether they may have been singled out for that reason.

State workers take a stand; choose layoffs over furloughs

The Nashua Telegraph editorial page looks at the aftermath of the State Employees Association rejecting the new contract put before them.

With a spread of 59 percent against the deal, the message is clear: “Let’s get back to the bargaining table,” said Gary Smith, president of the State Employees Association, SEIU Local 1984.

Unfortunately, there’s not much more to bargain for. Gov. John Lynch and his bargaining team have already rejected the alternatives the union is proposing. Voluntary furloughs, early retirement incentives, four-day work-weeks, and allowing unfilled positions to stay vacant are all good ideas, but won’t get the state the $25 million in savings needed quickly enough.

There is no alternative now except layoffs, which will be somewhere between 500 and 750 depending on the state’s revenue receipts in the months ahead, and the outcome of a lawsuit over a medical malpractice insurance fund that has been raided to balance the budget.

State union employees hit hard by job cuts

In the Nashua Telegraph, Kevin Landrigan takes a personal look at the impact of layoffs on state employees.

Worried about the jobs of his co-workers, state Revenue Operations Officer Bill Champagne said Monday he voted for a pending labor contract, that if approved, would have cost him $3,300 in unpaid furlough days.

On Tuesday, Champagne, 63, listened in stunned disbelief while being told he was one of seven Department of Revenue employees to be let go.

“I was just flabbergasted. I would have bet the farm I was the last one to go and that would have been after the commissioner,” Champagne said. “I am just devastated. It does bring your self-worth and self-esteem down to zero.

What happened to those 750 layoffs?

Tom Fahey reports in the Union Leader on the State Employees Associatin promise to fight to keep every job that Governor Lynch wants to cut. He also shows where the cuts are coming.

Nearly half the workers affected by the changes are at the Department of Health and Human Services, the state's largest agency. HHS Commissioner Nicholas Toumpas said in an e-mail to workers that HHS's share of the cuts comes to $8.8 million, and that he'll cut or transfer 150 workers.

The cuts Lynch is making are well below the 750 jobs he and his staff warned would go if the SEA rejected a contract that called for 19 unpaid furlough days over two years.

Lynch said Tuesday that the first estimate of 750 jobs was not based on hard math, but on averages, figuring between $50,000 and $70,000 in wages and benefits per job. As department heads dug deeper into how they'd implement layoffs, the number of cuts began to fall.

The SEA's loyalty: What about public service?

The Union Leader wonders what state employees were thinking when they chose layoffs over furloughs.

So why in the world did union members choose layoffs instead? The answer probably lies in this quote from SEA board member Chuck Koontz: "If you're laid off, you can always get rehired, but if you agree to a pay cut, no one's going to come around and increase your pay."

"If you're laid off, you can always get rehired ..." Always?

Not in the private sector. The state's new unemployment numbers confirm that. But many state employees believe that union membership guarantees them permanent access to a state job.

Lynch Layoff Roundup

In the Telegraph, Kevin Landrigan says Governor John Lynch is moving forward with plans to lay off 250 workers and demote 60 more.

Some of the savings will occur through the elimination of vacant jobs that are paid for in the existing $11.5 billion state budget, Lynch told reporters.

The three-term Democratic chief executive said some employees at all levels of authority will be let go, but whole agencies and specific jobs solely paid for with federal or other nonstate dollars would be exempt from the layoff.

Many of those vacancies were already included in the budget, which extended the partial hiring freeze imposed by Lynch in February 2008.

Shira Schoenberg gets reaction from the head of the State Employees Association in the Monitor.

"Services are going to go unprovided," said SEA President Gary Smith. "Kids are going to go unprotected. Elderly are going to freeze. And we're going to be able to say this didn't have to happen. . . . This happened because the governor didn't recognize the need and didn't give the resources to it."

Smith said the union is considering whether it has any legal avenue to challenge the layoffs.

He added that after the vote, Lynch had little choice.

"(Lynch) built his own political box," Smith said. "He had nowhere to go but to show that he's tough and can follow through on his threat."

In the Union Leader, Tom Fahey reports that the cuts will come from departments funded with state General Fund dollars.

Lynch would not specify what government agencies will be hit. Only jobs that will save the state money will be cut, he said.

That means layoffs are unlikely at the Department of Employment Security, which is federally funded. Banking, Insurance and the Public Utilities Commission appear safe, too, since they run on fees from companies they regulate.

Many Safety and Transportation jobs rely on highway funds, not general tax revenues. Safety Commissioner John Barthelmes told his workers in a memo yesterday "there will be no layoffs" in his department.

Layoffs are now the option of choice

Foster's is disappointed in the results of the State Employees Association vote on the proposed contract, and says layoffs are now the option of choice.

The State Employees Association rejected a fair contract brought forth by the state — one offering 19 unpaid furlough days instead of the state having to implement large-scale layoffs. The union's leaders recommended rejection of the contract and, on Monday, the general membership fell into lockstep with its leaders. The balloting split with 41 percent voting to accept the contract and 59 percent voting against it.

What do the SEA and the members who voted to reject the contract hope to gain from their action? While the employees represented by the SEA won't be forced to take the 19 days off without pay, a large number of them will lose their jobs. What is the SEA's next step, a search for a friendly judge to force a stay of the layoffs or a complaint to the National Labor Relations Board or some other act of desperation?

Charles M. Arlinghaus: Lynch should meet union heads and craft lasting savings

By CHARLES M. ARLINGHAUS

The fight over the state employee contract may generate a lot of hard feelings in the short term, but the solution that will come out of renewed negotiation should have more lasting benefits.

After the contract's rejection, the union wants to bring a few new ideas to the table that could help reduce layoffs and also provide significant long-term benefits for the taxpayers. The administration should follow suit with similarly creative proposals and craft a compromise agreement with the most promising ideas from each side.

The state government and the State Employees' Association negotiate a new contract every two years. This year's negotiation has been somewhat more contentious than usual. The state's budget difficulties have created significant pressure for reductions. A slow economy and revenues that continue to decline even below budgeted numbers have only made the situation worse.

As part of the state budget process, Gov. John Lynch asked for and received a requirement to cut $25 million over two years from employee salaries and benefits. The directed management cut does not specify what should be cut, but gives the governor discretion to reduce those line items in any way he deems most efficient. In addition, nine other general cuts in budget footnotes gave him similar flexible management authority in finding another $25 million to cut in specific departments plus an across-the-board overtime reduction.

In negotiations, Gov. Lynch has said that the directed management cuts require the union to choose between laying off 750 state employees or accepting 19 furlough days over two years. The rejection of the furlough-based contract means the governor will announce specific layoffs this week.

The SEA has publicly identified two areas it believes can save money without layoffs. Although the governor had talked publicly about curtailing consultants and association memberships as a first step to reducing the budget, the SEA's data found consultant contracts and contracted services had increased by $118 million in the current budget.

Most businesses during an economic downturn significantly curtail their consultants, eliminating them or reducing their contracts. No one would seriously suggest eliminating all consultants. Some no doubt are saving us money on other services. However, it seems likely that a $118 million increase could be slowed somewhat.

Just as important, greater scrutiny of each contract will allow us to better measure what each consultant delivers and at what cost. Is the $118 million increase delivering at least $118 million in benefits or savings?

The union contract covers most classified employees. Outside of the contract, there are a few hundred senior managers who are in unclassified positions at pay rates two to three times higher than the average state employee. In addition, the union has found 1,473 positions in the nebulous and poorly tracked area of "non-classified" state employees, which covers political appointees among others. The union claims they average $74 per hour (an annualized cost of $150,000) which seems a little high for irregular positions. However, clearly this is an area that is not well understood, hard to track and where some money might be saved.

Finally, as I wrote last week, the union correctly has suggested that a tighter hiring freeze and leaving vacant positions open can save money.

None of these ideas is a silver bullet that will solve the state's budget problem. But with growing pressure on this budget and a looming $625 million gap in the next budget, every idea is important.

Some furloughs may be part of the final package, but ultimately furloughs are a bandage. A furlough is a one-time savings that doesn't reduce the underlying cost. Next year's salary doesn't change, and the cost going forward is unaffected. If the state had saved $25 million through furloughs, the same $25 million would reappear next year and have to be dealt with again. A problem wouldn't be fixed, merely delayed for someone else to deal with.

To do something with a lasting impact, both sides should come to the table with open minds and new proposals. Some may be part of a new contract. Others should be looked at for longer term budget savings. Either way, the long-term budget problem will be one step closer to a solution.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.

Demotions on tap instead of layoffs?

UPDATE- The Concord Monitor's Shira Schoenberg has more solid numbers on the layoffs and demotions planned by the Governor's Office.

Gov. John Lynch announced this afternoon that he will lay off 250 state employees, and reassign 60 more to lower-paid positions. Layoff notices are starting to be sent out today, and will continue throughout the week

The Union Leader's Tom Fahey reports that Governor John Lynch plans to layoff or transfer 300 state workers by the end of the month in an attempt to save the $25 million in personnel costs mandated by the state budget.

Lynch said he is acting on a choice he warned about throughout the last several months of contract talks with the State Employees' Association. A vote by SEA members to reject a proposed contract that contained a mandatory furlough plan made layoffs unavoidable.

“It’s going to be a difficult time for the affected state employees,” Lynch said. “The opportunity was there to avoid this situation.”

Before the State Employees Association voted down the state's contract offer, Lynch had said up to 750 workers could be laid off. Fahey does not report how many workers would be laid off, and how many would be demoted. Obviously, cutting employees' pay saves much less money than firing them and leaving those positions vacant.

Rejection Reaction Roundup

Mark Hayward covers the State Employees Association vote against the new contract offered by the state.

Unionized state workers have rejected a contract proposal that called for 19 days of furloughs over two years, setting the stage for hundreds of layoffs, a State Employees Association official announced last night.

Fifty-nine percent of voting SEA members rejected the deal, which also would have restored some bumping rights for state workers who might be laid off. The contract covers about 11,500 state workers.

Shira Schoenberg reports in the Concord Monitor that SEA President Gary Smith thinks there's room in the budget to save $25 million, or at least some of it, without layoffs or furloughs.

SEA President Gary Smith said he hoped the governor would look to vacant positions, the state's rainy day fund and nonclassified (often higher-ranking) part-time state employees before resorting to layoffs. With growing need for food stamps, Medicaid and unemployment benefits, Smith said, "This is just the worst time for the governor to be diminishing public services from people in New Hampshire who need them the most."

Kevin Landrigan gets the Governor's reaction in the Nashua Telegraph.

“I am deeply disappointed the state employees union has rejected a contract that would have implemented furloughs and preserved jobs,” Lynch said in a statement after the vote. “Unfortunately, this vote means the state must now proceed with layoffs.”

Affected employees will be informed in their paychecks Thursday and most will have been let go by the end of this month, the governor said.

“I will continue to work with agency heads to help ensure these layoffs have as little impact on state services as possible,” Lynch said.

Foster's run Holly Ramer's piece for the AP, which looks at the impact mandatory unpaid furloughs would have had if the contract had been approved.

Under terms of the rejected contract, workers would have had to give up 19 days of pay over the next two years.

"If I have to take 19 furlough days, that will likely mean 19 times, my rent won't get paid, or it won't get paid on time, or I might face a disconnect notice from my electric company," said Diana Richard, a secretary at the Department of Health and Human Services and a member of the union bargaining team. "If I am laid off, that means public assistance for me and my son. That's my reality, and so many others as well."

The Portsmouth Herald runs an AP article saying that the Governor is meeting with Department Heads this morning to go over layoffs.

A day after members of New Hampshire's largest state employee union rejected a contract that included 19 furlough days, Gov. John Lynch was meeting with department heads to start plans for hundreds of layoffs.