General Assembly Surprise - Longevity Pay Preserved in Budget
Wednesday, June 29, 2011
Contrary to what has been widely reported, state workers are actually keeping their annual longevity bonuses in the House version of the state budget, GoLocalProv has learned.
The budget actually adds the longevity pay an employee received before the budget takes effect—around July 1—to their base pay. The employee would continue to receive that annual bonus for as long as he or she remained a state worker, Larry Berman, spokesman for House Speaker Gordon Fox confirmed yesterday. (Read the budget article.)
Only future hires and new hires with less than five years of experience would never receive any longevity pay under the House budget.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST‘Hardly dramatic reforms’
Previously, the Rhode Island Statewide Coalition had praised the House for the changes it made to longevity pay. But, yesterday RISC told GoLocalProv that the House actually achieved very little.
A RISC official said that the changes are “hardly dramatic reforms” because they apply to only new hires. “Taxpayers need to be aware that this state budget is not making the dent in longevity bonuses that was portrayed, and the reality is the unions’ generous benefit system, including longevity pay, has not lost much ground at all this year,” said RISC Executive Director Harriet Lloyd.
The public confusion over exactly what the General Assembly did last week when it changed longevity pay stems from how it is calculated.
Starting at five years, state employees receive annual longevity bonuses equal to 5 percent of their salaries. About every five years after that, the annual rate at which they receive longevity is increased: it rises to 10 percent at 11 years, 15 percent at 15 years, 17.5 percent at 20 years, and 20 percent at 25 years, according to Thomas Mullaney, the State Budget Officer.
What the House budget does is put a freeze on future increases, according to Berman. So if you were at the 5 percent rate, you would continue to receive 5 percent annual longevity bonuses. But once you hit the 11-year mark, you would stay at 5 percent, instead of moving up to 10 percent annual longevity bonuses. “If you’ve gotten 5 percent increases, they’re not taking that away,” Berman told GoLocalProv. (Click here to read an official summary, scroll down to PDF Page 25.)
Starting on July 1, state workers will still receive a 3 percent pay raise.
‘Extremely overhyped’
On the House floor, speakers on either side of the debate over longevity pay last Friday cast the issue as a defining showdown between unions and budget-cutters. Now, some wonder whether there really was that much to fight about. “I think it was overhyped—extremely over-hyped,” said state Rep Doreen Costa, R-North Kingstown. But, she added: “Right now, we’ll take anything we can get.”
“To me it was smoke and mirrors,” said state Rep Karen MacBeth, D-Cumberland. “Is that really what the House wanted to do? And, is this as big a reform as they were saying it was?”
There’s one more wrinkle: the changes contained in the budget do not take effect for union workers until their current contracts with the state expire. The means that the 11,350 workers who are in one of the 18 state labor unions would continue to see not only their annual longevity bonuses, but increases in those bonuses until their contracts expire.
Those workers not in a union—3,074 at the latest count—would be directly impacted starting in fiscal year 2012. That means those workers would not receive any increases in the rate at which their longevity bonuses are calculated after July 1. But, like everyone else, they would keep whatever annual bonus they had before that.
Because the change is delayed for union workers, the House is not expecting any savings in the first year. In the second year, an estimated $4 million will be saved from denying increases in the rate of longevity pay, according to House budget records.
“I think indeed it has been overstated because it is a small baby step in the right direction of cutting unaffordable and unnecessary compensation perks,” said Lisa Blais, spokeswoman for the state Tea Party.
She said many in the public assumed the House had done more because lawmakers had failed to provide key details to the public. She also blamed the media, saying local journalists have historically left out key details in reporting on labor contracts. “What this is is a perfect example of two transparency issues in Rhode Island,” Blais said.
Lawmakers: Still a major reform
But most state reps interviewed yesterday told GoLocalProv that the changes in longevity pay were nonetheless dramatic reform. “Today, right now, it might not look that way, but going down the road it is a major step,” said Rep Raymond Gallison, D-Bristol, and a member of the House Finance Committee.
Gallison said the Finance Committee sought to make structural changes to the budget. Longevity pay is one expense that is causing the budget to increase, according to Gallison. Freezing longevity now, he said, averts future spending spikes.
“The fact that they’ve eliminated any further accumulation … that’s a significant step in of itself,” said Larry Ehrhardt, R-North Kingstown. “While it does not have much impact in 2012 … the impact of that gets greater and greater going forward.”
In about 25 years, he said, state workers will be retiring with approximately 20 percent less pay than they otherwise would have received.
House Minority Leader Brian Newberry also applauded the move, saying it would make contracts more transparent by including longevity with base pay. That way, he said it would be easier for the public to know how much of a pay increase state employees are receiving in future contracts. “To me the biggest thing with getting rid of the longevity bonuses is it makes it harder to hide the true costs of contracts,” he said.
On the Senate side, Sen. Ed O’Neill, a member of the Senate Finance Committee, also came to the defense of the changes to longevity pay. He called attention to the fact that starting immediately there won’t be any longevity pay for non-union workers.
Union president: ‘Slap in the face’
The fact that current longevity payments will continue was small consolation yesterday to J. Michael Downey, President of AFSCME Council 94, which represents the largest number of state workers. “I think it’s a slap in the face to collective bargaining in Rhode Island and I would hope that the Senate would at least give the parties a chance to negotiate changes in the contract, rather than legislate them,” Downey said. (Downey is pictured at right.)
He added: “We’ve stepped up to the plate before. It never came up as an issue until late Friday night.”
While current workers with five or more years on the job are keeping the bonuses, Downey said the new budget breaks promises that were made to all workers, who he said took lower wages with the expectation that they would be coupled with longevity bonuses.
Greg Pare, spokesman for Senate President Teresa Paiva Weed, yesterday did not respond to a request for comment in time for publication. The Senate is scheduled to vote on the budget today.
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.
Related Articles
- House Budget: Democrats Set ‘Pathetically’ Low Standards
- Young Republicans Blast House Budget
- House Budget: How Does It Cut the Deficit?
- House Budget: The Rich Win Again
- House Budget: Winners And Losers
- Mixed Reviews On House Budget Proposal
- House Budget Cuts Would Have Big Impacts in RI
- NEW: Chafee ‘Disappointed’ in House Budget
- House Budget Disappointing for All
- NEW: Taxpayer Group Praises House Budget
- House Budget Unveiled
- Veterans Protest House Budget Cuts
