Employee contracts eyed for tax relief

By GARRY RAYNO

New Hampshire Union Leader Staff

Friday, Dec. 26, 2008

link:

http://www.unionleader.com/article.aspx?headline=Employee+contracts+eyed+for+tax+relief&articleId=72b5de7f-dc39-4856-a342-d94e6694dcda

MANCHESTER * Gov. John Lynch wants state employees to forgo a contractual raise. The Bedford School Board recently asked teachers to reopen their contract.

Rumblings in other cities and towns about renegotiating contracts are heard as local officials attempt to keep expenses down and taxpayer revolts to a minimum.

The economic meltdown is on Main Street.

State and local governments are facing a financial crisis like they haven't seen since the late 1980s and early 1990s, when revenues were in free fall, the five largest banks in the state failed and many buildings along Elm Street in Manchester were owned by the Federal Deposit Insurance Corporation.

This month, Lynch publicly asked the State Employees Association to defer a scheduled 5.5 percent raise, saying, "Our nation is facing an unprecedented economic downturn with serious ramifications for our state budget."

Lynch called his proposed deferral of the state pay raise "reasonable and responsible."

Lynch wants the concession to help close an estimated $75 million budget shortfall as a result of a $250 million revenue deficit.

To date, the state employees union has been reluctant to go along with the governor, saying there are other ways to reduce expenses besides forgoing the 5.5 percent raise. Instead, the union suggests a four-day work week among other ways to reduce costs.

Union officials also said it would be difficult to take all the necessary votes to reopen the contract and agree to a wage freeze by the end of the 2009 fiscal year, June 30.

New Hampshire Municipal Association general counsel Maura Carroll said that while she has not heard of any communities asking public employees to reopen contracts, everyone is watching the SEA to see what the union does.

She said many communities currently negotiating contracts must address increasing costs resulting from new laws. She cited as an example a law under which provisions of an expired contract are maintained until a new agreement is in place.

Another law significantly increases retirement costs for communities that allow employees to collect large payouts for unused vacation or sick time to increase their benefits, Carroll said.

"People are really struggling with what it is they can afford at this point and how to keep the budget process moving along," Carroll said.

"It's very difficult for everybody right now at all levels of government and into the private sector."

The Bedford School Board asked the teachers union to reopen a three-year contract that is in its second year, but school administrators doubt the union will go along with the request.

Superintendent Tim Mayes said the board this week reduced the proposed budget to less than what the default budget would be.

Other boards, including the Raymond School Board and the Londonderry Town Council, have taken similar actions.

The Goffstown School Board proposed a budget that would be less than the default budget, only to have the budget committee cut an additional

$1.3 million.

This month, the Newport School Board approved a proposed budget that would be the same amount as the current-year default budget, resulting in the elimination of 10 teaching and six paraprofessional positions.

New Hampshire AFL-CIO President Mark MacKenzie said that while he has not heard of specific unions being asked to reopen contracts, "that does not surprise me at all . . . There are probably a slew of those waiting in the wings. As the pressure increases, that's going to be an option they're going to look at."

Laura Hainey, state president of the American Federation of Teachers, said no community has asked her union members to renegotiate a contract, leading her to believe her organization has negotiated some reasonable pacts.

Some of the open contracts have been settled and some have not, Hainey

noted.

"It is tough going. Everyone knows we're in hard economic times, and people aren't expecting huge raises," she said.

Mike Roche, president of the union that represents Manchester Water Works employees, doesn't believe Manchester will try to renegotiate existing contracts.

"I don't see that happening here," Roche said, although he noted the upcoming fiscal year, which is the last in the current contract, has the highest raise for employees.

If other communities are trying to reopen contracts, Manchester might not be immune, Roche said, though he knows of no other time the city had ever asked to renegotiate.

Ted Comstock, executive director of the New Hampshire School Boards Association, said he had heard that some communities are asking not only teachers but also police and fire unions to renegotiate.

"We are encouraging our members to explore every feasible options they have to maintain services at the current level," Comstock said. "Schools are a labor-rich environment at a significant cost, and our boards are doing everything they can to control those costs.

"Generally, one of the dilemmas school boards have is to . . . ask unions to renegotiate wage increases. But if they refuse, the only realistic alternative is to look at layoffs, which is not a happy prospect for anyone," Comstock said.