With news that state employee unions are on the verge of approving their 2013-15 contracts with Governor Gregoire, an interesting questions comes to mind: Will voters support increasing taxes to pay for public employee compensation improvements?

While these numbers will change based on caseloads and the remaining revenue forecasts for the year (one is tomorrow), the most recent Office of Financial Management (OFM) 4-yr budget outlook projects a $1.043 billion budget shortfall for 2013-15 (despite projected revenue growth of $1.5 billion). The same outlook also projects $1.033 billion in compensation related issues for public employees. Here are the projected compensation details for 2013-15:

  • Restore K-12 Salary Reduction – $166 million
  • Restore 3% Salary Cut – $171 million
  • I-732 K-12 and Community Colleges Teachers/Staff Pay Increases – $292 million
  • Collectively Bargained Additional Pay Step – $38 million
  • Preliminary Pension Rate Changes (based Actuary’s estimate) – $366 million
  • Total compensation related changes: $1.033 billion

If these compensation related issues are reflected in the 2013-15 budget, the implication would be any proposed tax increases would be directly related.

As for the current contract negotiations, here are the questions I have:

  • How will splitting off health care negotiations from the rest of the agreement affect the final deal – what are the potential additional costs?
  • Will the Governor’s budget recommend non-represented employees receive the same compensation increases as union employees? If yes, costs? If no, why the difference?
  • By agreeing to these increases is the Governor signaling that the state’s budget situation is better than expected and she believes the contracts would be financially feasible with the economic outlook and budget needs (McCleary)?
  • What if any say will lawmakers (or the next Governor) have on tweaking these details as they address the budget next January?

Ok, I know the answer to that last question: None.


[Reprinted with permission from the Washington Policy Center blog]