Unions, Carcieri slug it out

It was a victory of sorts for Gov. Donald L. Carcieri, even before the final outcome of the standoff with the state’s largest public employees union was decided.
After leaders of Council 94, American Federation of State, County & Municipal Employees, rejected Carcieri’s cost-savings plan late last month, the governor refused to return to the negotiation table.
Instead, Carcieri said he would proceed with layoffs to get the millions in savings he needed to help balance the state budget.
The threat worked: Two days after their initial rejection, the same union leaders were forced to backtrack. Fearing job losses, they decided to allow rank-and-file members to vote on the proposal.
If Council 94’s approximately 4,000 members ratify the contract changes – which include lower pay in exchange for a no-layoff clause – the Carcieri administration says it will save about $18 million this fiscal year and another $18 million next year.
Now that Council 94 has flinched, Carcieri can be expected to try and build on his success in future budget negotiations, say some political observers. But the state employee unions, however temporarily weakened, have long held the collective ear of state legislative leaders. And as long as that continues, they will remain a powerful political force in the Ocean State, say observers.
Maureen F. Moakley, political science professor at the University of Rhode Island, said the Council 94 reversal clearly shows that the bargaining position of public sector unions has weakened as the state’s fiscal problems have gotten worse.
Also not helping labor’s cause: The public – enduring record-high unemployment, sagging home values and depleted nest eggs – has grown far less sympathetic.
“I think it makes it hard for the unions to demand something more,” Moakley said last week.
But, she added, it’s too early to determine how Carcieri’s facing down of Council 94 will play out in the coming months.
The unions continue to be influential with lawmakers, getting bills introduced and passed, Moakley said. And that influence will be illustrated when the Democrat-controlled General Assembly returns to the Statehouse at the end of the month.
“George Nee [president of the Rhode Island AFL-CIO] will be there; he’ll be there all day long,” Moakley said. “Unions will remain in a force in Rhode Island politics.” “There are more difficult discussions ahead,” she added. “The showdown is really not over.”
Last budget season, Carcieri proposed drastically changing Rhode Island’s public-employee pension system, which included doing away with cost-of-living adjustments for most new retirees and raising the minimum retirement age.
Legislators altered that plan, allowing retired state employees or some long-time workers to receive the 3 percent guaranteed adjustment and others to receive an annual adjustment based on the consumer price index, not to exceed 3 percent, upon retirement.
The Rhode Island Public Expenditure Council has forecast huge annual budget deficits in the coming years, if the state does not change its tax-and-spending policies.
In addition to a $61.8 million shortfall last year, the business-backed fiscal watchdog group said Rhode Island will finish this fiscal year with a $60.6 million deficit and will experience deficits of $244 million and $484 million in the following years.
Faced with those numbers, how will the governor proceed?
Carcieri spokeswoman Amy Kempe indicated last week that tax reform and revisions to aid to cities and towns will likely receive the most attention from budget writers for fiscal 2011, but she declined to elaborate.
“Right now, we’re just starting the budget process,” Kempe said, adding that new revenue forecasts are due in November. “I can’t speak to what’s going to be in the budget.”
As of now, the Carcieri administration has been focused on this fiscal year, wrestling with how to achieve $67.8 million in savings mandated by the General Assembly in its budget package.
In August, Carcieri said he planned to shut down government for 12 days and sought to withhold $32.5 million in auto-tax payments from cities and towns.
When the unions temporarily blocked Carcieri in R.I. Supreme Court from instituting the shutdown, the administration and labor hammered out the proposal that was initially rejected – then passed along to the members – by the two dozen local presidents of Council 94.
The agreement calls for state employees to work unpaid for eight days this fiscal year and another four next year, and they will be compensated with personal days off. In addition, a 3 percent raise scheduled for July 1, 2010, would be delayed for six months. In return, the Carcieri administration has agreed not to order layoffs, shutdowns or furloughs through June 2011 (Carcieri’s term ends in January 2011).
Union officials were most concerned about Carcieri’s demand for greater flexibility in reassigning workers. A spokesman for Council 94 could not be immediately reached for comment last week.
Robert Walsh Jr., executive director of the National Education Association-Rhode Island, disagreed with the notion that Carcieri won a showdown with the Council 94.
“He didn’t get what he originally proposed, either, which was furlough days,” said Walsh, whose teachers’ union also represents 190 professional staff members at the R.I. Department of Health. “I don’t think any side can claim victory.”
The difference in this situation, he said, was that the “give and take” that would normally take place behind the scenes received “an unprecedented level of scrutiny.”
And Walsh didn’t foresee any implications as budget season approaches because job reductions and benefit cuts have left “people straining as it is,” he said.
June Speakman, political science professor at Roger Williams University, said Carcieri might be more empowered by the fact that his term ends in January 2011 and he can’t seek re-election.
No longer concerned about wooing voters, Speakman said, has enabled Carcieri to take actions such as proposing government shutdown days and cutting aid to cities and town.
“Those are rather bold moves,” said Speakman, who is also town council president in Barrington.
So when Carcieri threatened to lay off 1,000 state workers last month, union officials had to believe he was serious, Speakman said.
Harry Staley, chairman of the citizens advocacy group Rhode Island Statewide Coalition, said the standoff between Carcieri and Council 94 could have a lasting effect.
“The unions lost a great opportunity to impress the public with their willingness to be part of the solution,” he said. “But I think they showed a lack of awareness of what’s happening in this state, and I think they were very badly hurt.” &#8226