On August 30, Secretary of Administration Sharon Minnich announced the details of a new three-year labor agreement between the Wolf Administration and the American Federation of State, County, and Municipal Employees (AFSCME).
In previous years, details of an agreement would rarely, if ever, be released until after it was approved by both parties. However, with the passage of Senate Bill 644 (now Act 15), the commonwealth must provide the Independent Fiscal Office with the details and costs of state collective bargaining agreements before they’re ratified. The change allows the IFO to offer an independent assessment and gives Pennsylvanians a chance to review the contracts before they are stuck with the bill.
According to an Office of Administration (OA) press release, the major provisions of the AFSCME contract include a change to the rules governing public employee healthcare and a 7.25 percent wage increase over three years. However, this increase is understated. Over the three year contract, employees will experience five wage increases, boosting the average pay for an AFSCME employee by 12.31 percent.
OA puts the total cost of AFSCME’s contract at $292.4 million or $97.5 million annually. The total cost would have been higher if the Wolf Administration did not negotiate healthcare concessions with AFSCME. This change saved taxpayers $13.6 million, according to OA estimates.
If the deal is approved, lawmakers will need to figure out how to pay for the additional costs mandated by the contracts. Pennsylvania is already facing a $264 million deficit this year and will likely need to make significant policy changes to balance the budget next year. Adding nearly $100 million in labor costs annually will make lawmakers’ jobs even harder.
Anticipating this problem, Rep. Garth Everett introduced HB 2289, which empowers the legislature to either approve or disapprove of state collective bargaining agreements. The bill would provide a much needed check on the collective bargaining process, which generally operates outside public view and involves government unions negotiating with the same officials they help elect to office.
Rep. Everett’s legislation and a requirement to post school district teacher contracts before they’re ratified—Senate Bill 645, would further enhance transparency and oversight of the bargaining process.