Collective Problem Solving
March 21, 2011 3:26 PM
With state budget cuts looming for 2012, Madison faces one of the most challenging city budgets in recent memory. Our public employee unions and our non-represented employees are helping us meet those challenges.
Last week, led by AFSCME, several of our unions offered to reopen their contracts to help Madison weather the budget storms coming. All told, the 9 contracts that were ratified by union memberships last week will save the city $5.3 million next year alone. These unions agreed to pay half of their pension contributions starting next year, to reduce their already modest scheduled salary increase by a third and start phasing in a contribution to their health insurance premiums. In return, we extended their contracts to March, 2014, which is as long as is allowed by state law.
We also hope that this will allow us to avoid layoffs and the resulting cuts in city services.
If you add similar contributions from non-represented employees the savings for next year's city budget will probably exceed $7.5 million. This will solve somewhere between a quarter and one-half of the budget hole projected for next year.
Some have expressed concerns that employees are getting wage increases at all in this environment, but consider this. There have been no wage increases for two years during which inflation will probably have run around 4% or more. The 2% wage increase set for the end of this year will account for less than half of the buying power lost during the previous 24 months. And the pension contributions will amount to about 5.8% of wages. So, those who say that our employees aren't shouldering their share of the burden probably don't know that.
The new contracts, set to be approved by the Common Council tomorrow night, show how a good working relationship between management and labor and collective bargaining can help solve problems.