Bargaining Tilted Toward Unions

Grant D. Bosse

July 7, 2013

As originally published in the Concord Monitor

New Hampshire’s public sectors unions have tilted the bargaining table toward themselves, and who could blame them for wanting it that way? The union representing the bulk of state employees has rejected a contract that would have given workers a 6.4 percent raise over the next 18 months, confident that they can get a better deal.

Gov. Maggie Hassan broke the news of a pending contract agreement with state employees at the 11th hour of budget negotiations last month, using the labor deal as a gambit in her fight to get more money out of Senate Republicans. This marked a substantial shift from her predecessor. Gov. John Lynch repeatedly asked the Legislature to put language in the budget forcing him to cut labor costs, in order to strengthen his position with the unions. By contrast, Hassan fought to reduce the amount of labor savings in the current budget.

The deal Hassan brought to the budget talks included a 1.5 percent across-the-board raise for all state employees effective July 1, a 2.25 percent raise next July and a 2.5 percent raise on Jan. 1, 2015. In exchange for this 6.4 percent increase in salary, state workers would have to pay a deductible for health care costs, along with some changes to sick-time policies.

New Hampshire self-insures its health care benefits, which has helped hold down increases in health care costs over the past decade. But taxpayers are on the hook for almost every dollar, since employees pay no deductibles and nominal co-pays. This provides little incentive for workers to limit their consumption of medical services.

The State Employees’ Association won’t be voting on this contract, because the union get three chances to negotiate. The governor reached a tentative agreement with the SEA’s master bargaining team. But the deal was rejected by 56-48 by the union’s collective bargaining senate, which chose not to send it to the full membership for approval.

Taxpayers have to rely on the governor to make a good deal for them. The Legislature could, of course, decline to fund salaries and benefits agreed to under any contract, but that’s neither feasible nor likely. But unions get three chances to get the deal they want.

The House this year soundly rejected an attempt to give taxpayers another layer of protection from expensive contracts. Senate Bill 153 would have required the Legislative Fiscal Committee to approve any costs associated with new state labor agreements. Voters in every city and town get a chance to approve local contracts, either at town meeting or through their elected representatives. But at the state level, the governor has unilateral authority to both negotiate and approve labor deals.

Attempts to get rid of the “evergreen clause,” which keeps the current contract in effect even after it has expired, drew unruly protests from unions. Letting contracts, and the annual raises including in them, expire would force them to the bargaining table. The evergreen clause lets them reject any deal unless it’s a better deal for them.

Teamsters Local 633, which represents corrections officers, has approved the deal Hassan negotiated.

The New England Police Benevolent Association and the New Hampshire Troopers Association are still pondering it.

The Legislature included $17 million in the budget to fund Hassan’s agreement but would be forced to come up with more money if the SEA reduces deductibles or increases salaries. And you can bet the other three unions representing state employees will come back looking for the same concessions.

It’s important to note that the proposed contract includes the first cost-of-living increases in several years, but it would not be the only raises that state employees have received. In fact, the bulk of state workers get a raise almost every year.

The state increased the number of “steps” in its labor grades several years ago, giving workers more annual increases in the same job. Roughly a quarter of state employees are now in their top step, and unions did agree to forego step increases in 2011, but workers otherwise get annual raises.

None of this begrudges state employees negotiating for the best deal they can get. But the current system, tilted so favorably toward the unions, can hardly be called bargaining. The governor should tell the SEA that the current deal is the best they can expect from New Hampshire taxpayers this year.