Gregoire and unions reach agreement on pay, benefit cuts

OLYMPIA — State workers will take a 3 percent pay cut in each of the next two years through unpaid leave in a tentative agreement reached Tuesday with Gov. Chris Gregoire.

The agreement also calls for state workers to pay 15 percent of their health-care premium costs, with the state picking up the other 85 percent in the next two-year budget. That deal, which would apply to all state workers, had been announced earlier in the month. The state currently pays 88 percent of the premium, and state workers pay 12 percent.

The unpaid leave would amount to about $139 per month on average, equal to about 5.2 hours of work per person.

The cut would apply to about 54,000 state workers, or roughly 90 percent of the work force not including teachers and higher-education employees, according to the Governor's Budget Office.

Certain workers, including Washington State Patrol employees and those earning less than $30,000 a year, would not have to take the furloughs.

The Governor's Office projects the move would save $269 million over two years, including about $176 million in the state general fund — the operating budget that pays for schools, social services, prisons and other programs.

The state faces a $4.6 billion shortfall in the next two-year general-fund budget, and lawmakers are scrambling to find ways to reduce costs.

Gregoire said all statewide elected officials are asking for the same pay cut. Their salaries are set by the Washington Citizens' Commission on Salaries for Elected Officials, which would have to approve the reduction.

The agreement to cut pay and benefits for state workers has to be ratified by the unions and approved by the Legislature.

State Sen. Joe Zarelli, the ranking Republican on the Senate Ways and Means Committee, said he wasn't happy with the pact. He said employees should agree to work the same number of hours for less pay.

"It's kind of hokey. You are either reducing pay or you are not," he said. "You're shorting the citizens again. ... It's not a permanent reduction in salary. It's not what I was hoping for."

The governor, however, defended the deal.

"My state employees have been struggling and sacrificing. Anybody who criticizes this deal, I say to them these (workers) are the model of sacrifice," Gregoire said, noting that 30 percent of state workers already have taken unpaid furloughs and pay more for health care to deal with earlier budget shortfalls.

State Sen. Ed Murray, D-Seattle, the new chairman of the Senate Ways and Means Committee, called the pay cut "significant. That's more than I would have expected." Murray said he believes state lawmakers also should take a pay cut.

Greg Devereux, executive director of the Washington Federation of State Employees, which represents about 40,000 state workers, said the union's goal in negotiations was to prevent permanent layoffs and try to maintain health-insurance benefits.

"Management didn't get everything they wanted in these negotiations. We didn't get everything we wanted. It's probably the sign of a fair agreement," he said.

Devereux said the union knew it would have to give up something because of the budget shortfall. "You have no choice," he said. "We could say no, and there would be permanent layoffs for a lot of people. Our members don't want to be under that workload pressure."

It wasn't clear how workers would reduce their hours. Gregoire said the agreement is flexible.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com