Shutdowns, Furloughs, Deferred Compensation and the Price of Doin' Business

In the ongoing dispute over state-government shutdown days, as frequently occurs in public-sector union negotiations in Rhode Island, labor representatives are claiming they have a plan that will save just as much money as the plan put forth by government officials. Scott MacKay from WRNI's On Politics blog reports…

Union representatives now say publicly that they have offered Carcieri a way to save money -- using furlough days rather than a state shutdown. This was the path followed by then-Gov. Bruce Sundlun during the 1991 banking crisis, the last time the state had such a deep deficit. Under the furlough option, state employees could count the unpaid furlough days toward retirement benefits or as unpaid vacation days. Michael Downey, head of Council 94 of AFSCME, said the unions offered those terms to Carcieri but that he rejected them.

The Sundlun plan was actually a deferred compensation plan, where state employees worked unpaid days and chose amongst various options for getting paid for them later. The New York Times provided a brief summary of the details…

Eight more one-day furloughs had been planned, but on Friday the unions agreed to Mr. Sundlun's pay-deferral proposal, similar to an idea whose rejection by labor in February led to the shutdowns.

Under the agreement, the workers will forgo pay for eight days from now through June 30, the end of the fiscal year, and will give up pay for 19 days in the fiscal year beginning July 1. They will be able to regain the days as vacation time, in a lump-sum payment or as extra paid personal days off when they retire or quit.

The Times story isn't clear if this was a straight one-to-one trade of hours worked for deferred compensation collected -- that would seem to be the reasonable thing, but we don't always find our way to reasonableness here in Rhode Island. Still, it is possible that such a plan could be structured in a way that truly saved money in a current budget year, allowing state government to cut somewhere else in future years, in order to pay for the deferred compensation.

However, a Tom Mooney story from the Providence Journal on the same subject made it clear that Governor Sundlun didn't get his deferred compensation deal without having to pay a little vig to the unions, in the form of some additional compensation for two shutdown days that occurred, before an agreement was reached…

In the two shutdowns that were held - March 8 and 18 - employees did not get paid. But Sundlun, who's pay will also be deferred, suspended further shutdowns and started new negotiations with union presidents....

The unions also agreed not to seek compensation for the two previous shutdowns, and in exchange the state granted one additional day of paid leave.

With all of the possibilities that are available, in order to evaluate the reasonableness of a union alternative to the government shutdown plan, the public needs to know if the unions are asking for something extra in return for agreeing to some sort of deferred but more flexible compensation option and if so, how much. If the answer is truly "none", maybe something can be worked out.

Finally, another question worth asking based on the Mooney article, is whether this attiude expressed by a 1991 state union leader...

"I'm disappointed," said Joann Orsi, president of a Council 94 affiliate, Local 2870 in the Department of Health. "There are no benefits for state employees in that plan."

Orsi said she would have rather seen Sundlun lay off more of the state's 16,300 unionized workers "in the proper order" of seniority, rather than have her members have their pay deferred.

...is still at-all present amongst Rhode Island's current state-employee union leadership.