Douglas administration wants to reduce labor expenses by $7 million

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(Host) The Douglas administration has unveiled a proposal to cut spending in the new state budget by $28 million.

The biggest part of the savings would come from reducing labor costs, which could mean layoffs. And that’s another major battle between the administration and the state employees union.

VPR’s Bob Kinzel reports.

(Kinzel) The administration’s plan implements a small budget cut in many departments of state government, it uses federal money to offset state funds in a number of health care programs, and it calls for an additional $7.4 million in labor cost reductions.

Administration Secretary Neale Lunderville told members of the Legislature’s Joint Fiscal Committee that he hopes to reach this budget target without laying off several hundred additional state employees.

(Lunderville) "In fact, a big part of this proposal does rely on finding additional labor savings this year. We will aggressively seek an agreement with the state employees union to avoid that contingency. That is our last resort."

(Kinzel) Jes Kraus is the head of the Vermont state employees union. He says he’s very disappointed by the plan and he doesn’t think the administration is sincerely interested in finding alternatives to more layoffs.

(Kraus) "This is really déjà vu from last spring. You know, the administration said that it would like to avoid layoffs. Ironically, what we offered the administration last time…would have saved all 123 positions that we eliminated, people that were laid off in June. But the administration at every turn has said no to every proposal the VSEA has put forward. The thing that is most concerning to our members has always been no layoffs. But the Administration has never, ever been willing to agree to that."

(Kinzel) Meanwhile State Auditor Tom Salmon is floating a plan to comprehensively study the long term employment needs of the state. The proposal would freeze the number of state employees, consider pay reductions and reallocate some workers to high priority areas of state government:

(Salmon) "There won’t be any pink slips between now and three years from now. You can give the agencies and departments that comfort. There may be some cuts, salaries and benefits. There may be a change in how much we contribute to our health insurance. There may be functional pieces that have to be modified. But you need to stabilize the workforce."

(Kinzel) The Douglas administration and lawmakers could be headed to a legal challenge over this issue.  The new state budget requires the governor to seek legislative approval if he wants to lay off more than 1 percent of the state’s workforce – or roughly 80 employees.

But the governor says the provision is unconstitutional and he could choose to ignore the mandate. If that happens, the issue may have to be settled in court.

For VPR News, I’m Bob Kinzel in Montpelier

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