The Douglas administration announced that it would seek two furlough days and five unpaid holidays as a means to find $7.4 million in labor savings as directed by the Vermont Legislature's Joint Fiscal Committee.
This proposal is an effort to reach a compromise on labor savings and avoid reductions in force at this time. To find middle ground, the offer today does not include a FY 2010 pay reduction -as did prior administration offers-and relies on furlough days and unpaid holidays, which are temporary savings that complicate budget problems in coming fiscal years.
However, the offer does require the Vermont State Employees Association (VSEA) to agree to find long-term savings, which are essential to bend the curve on labor costs and fill a more than $200 million budget gap for FY 2011 & FY 2012.
"This proposal is a big step for the Administration in our efforts to reach a compromise that prevents the need to make reductions in the state workforce at this time," said Secretary of Administration Neale Lunderville. "It is now up to VSEA to decide if they are willing to compromise with us and work to find long-term sustainable labor savings over the next two years."
In the midst of the worst recession since the Great Depression, state employees have enjoyed on average a 7.0 percent pay increase at a time when state revenues are declining and thousands of private sector employees have been laid-off or had their wages cut. Many elected officials and Administration appointees have already seen a 5 percent pay cut as well as a salary freeze since July 1, 2008.
"This level of growth we have seen in labor costs is simply unrealistic and unsustainable," Lunderville said. "Our fiscal challenges demand difficult choices, not more quick fixes. The administration is willing to make a short-term deal only if we have a commitment for real and long-term savings next year. This compromise offer is fair in the short-run and responsible for the long-run. It acknowledges the challenges ahead while avoiding layoffs in the near-term."
The details of the offer:
•Applying two furlough days in FY 10: $1.9 million
•Accepting five unpaid holidays in FY10: $3.7 million
•Using projected surplus in state medical plan: $1.7 million
•Eliminating tuition reimbursement: $0.1 million
Total: $7.4 million (all $GF)
Also, the administration will not seek additional layoffs if November consensus revenue forecast declines not more than $14 million. The administration retains rights to reduce workforce under normal stipulated conditions.
Both parties will agree to sustainable labor cost savings as part of their FY 2011 & FY 2012 agreements to produce $16.1 million and $21.9 million in savings, respectively.
Discussions between the administration and the VSEA are expected to continue throughout the next few weeks.