Rendell notifies unions of possible layoffs
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HARRISBURG -- One state union leader is predicting a "brutal" budget from Gov. Ed Rendell next week. And such fears may be coming true, as Mr. Rendell has notified unions that as many as 2,000 state workers could be laid off in a month.
Layoffs might be reduced or avoided if unions relinquish pay raises that are part of negotiated contracts, but labor leaders say it is unlikely their members would agree to that. Workers are due for 3 percent raises July 1.
"We feel betrayed by this governor," said Kathy Jellison, president of the Service Employees International Union, which represents 10,000 state workers in human services jobs. "We bargained in good faith for those wages."
Ms. Jellison and members of the major unions -- The American Federation of State, County and Municipal Employees, which represents 45,000 state workers, and the United Food and Commercial Workers, which represents workers at state liquor stores -- met with the Rendell administration Tuesday.
They say they understand that the state is facing a $2.3 billion shortfall, but say there are other ways to address it.
In a memo to union members this week, Ms. Jellison said "to expect that the governor's budget address (Wednesday) will be brutal."
David Fillman, head of Pennsylvania AFSCME, said one possibility for relief would be to dig deeper into the state's $750 million rainy day fund. Mr. Rendell already is planning to use half of that fund. The Legislature also could give up its $200 million surplus that it holds in reserve in case of a budget impasse in which the governor refuses to release funds, he said.
The Legislature also could increase revenue, for example, by adding a tax on cigars and smokeless tobacco, an idea Mr. Rendell supports.
Union leaders say the state could save millions by eliminating outside contracts for things like computer services and doing them in-house. Mr. Fillman said much of that work could be done with existing staff.
Rendell spokesman Chuck Ardo said the administration is considering a number of options and that furloughs are part of a broader discussion about resolving the state's worsening fiscal crisis.
One compromise still on the table is a plan to furlough all 75,000 state workers for a day or two at a time.
"If we do rolling furloughs, you spread the pain around. Everyone loses a couple days pay versus 2,000 permanent layoffs," Mr. Fillman said.
Mr. Ardo said that remains a possibility. He expects the governor to release more details Wednesday when he delivers his annual budget address. Drastic steps may be necessary, he said, with the 2008-09 deficit expected to reach at least $2.3 billion.
"In this economy we are under the same pressures as private employers, but we have less discretion than many other employers because we are obligated to provide services. The government can't decide to just fold up its tent," Mr. Ardo said.
Business leaders, meanwhile, were in Harrisburg yesterday to urge lawmakers not to balance the budget on their backs by increasing business taxes, which they said would make the state less competitive and cost jobs in the private sector.
"Don't raise taxes in a recession -- it's advice akin to 'don't light a match in a propane plant,'" said David Taylor, director of the Pennsylvania Manufacturers Association.
He cautioned Mr. Rendell and lawmakers against repeating what he viewed as a mistake in 1991, when the state raised $3 billion in new taxes to correct a $1 billion budget shortfall. That hurt businesses for years, Mr. Taylor said.
Republicans are largely opposed to tax increases this budget cycle, but they don't want to consider layoffs, either.
There are plenty of cuts that can be made before furloughs or tax increases should be considered, said House GOP spokesman Steve Miskin.
Among them, he said, is a requirement for students to pass competency exams before graduating high school. Those exams are expected to cost the state $54 million to create and administer over the next two years, he said.
"The governor is talking about laying off people, but he's still moving ahead with this new program that educators say they don't want," he said. "It's unconscionable."
Democrats, too, consider layoffs a last resort.
"Our commitment is to avoid that. We value our state employees, and our goal in this recession is to get people back to work, certainly not to take jobs away," said state Rep. Jennifer Mann, secretary of the Democratic caucus.
"There is a finite universe of options" for balancing the budget, said Ms. Mann, D-Lehigh. "Maybe the answer isn't reducing jobs, but moving people away from programs that don't work and into programs that do work."
Sen. Jeff Piccola, R-Dauphin, whose district includes thousands of state employees, said it's far too soon for the governor to be talking about layoffs.
"Clearly, we have a big problem on our hands, but for him to throw out numbers [of layoffs] at this time, it's putting unnecessary fear into people," he said. "It doesn't make any sense to scare people, but it's vintage Rendell."
First Published January 29, 2009 12:00 am
