For the third time in a row, binding arbitration was needed to finalize a two-year contract for state workers covered by Iowa’s largest labor union. For the first time in decades, workers covered by American Federation of State, County and Municipal Employees (AFSCME) will pay a small amount toward their health insurance premiums, but not nearly as large a share as Governor Terry Branstad wanted them to contribute.

On the other hand, the arbitrator accepted the state’s final offer on salary increases for the roughly 40,000 public employees covered by AFSCME Iowa Council 61. Details are after the jump.

As usual, salaries and health insurance provisions were the main sticking points in the latest negotiations between the Branstad administration and AFSCME. Radio Iowa’s Pat Curtis reported on the starting points for each side in November:

Danny Homan , president of the American Federation of State, County and Municipal Employees (AFSCME) Council 61, requested an 8 percent increase in salaries over a two-year period.

“Our proposal was 2 percent (pay raises) every six months, starting January 1, 2015, and keeping the current health insurance contract language,” Homan said. Janet Phipps, director of the state Department of Administrative Services, is leading the state’s negotiating team, which is proposing a 2-percent increase in salaries over the next two fiscal years.

“The state is proposing a one-percent across-the-board pay increase for each of the (fiscal) years, beginning on July 1, 2015 and July 1, 2016,” Phipps told leaders of AFSCME Iowa Council 61 on Monday. The current contract has the state paying for 100-percent of the health insurance provided to state employees represented by AFSCME.

Phipps is suggesting those employees help cover a portion of their health care costs in the new contract. “The state is proposing that the state pay 80 percent…and the employee contribute 20 percent,” Phipps said.

During the talks that began in November 2012, Branstad also asked for AFSCME members to contribute a significant amount toward their health insurance premiums, but the final contract didn’t change health benefits at all.

By February of this year, both sides had moved a bit on salaries and benefits, but contract talks went to binding arbitration, because the state and the union were unable to strike a deal before the deadline. Rod Boshart reported on AFSCME’s final offer:

Homan said AFSCME agreed to modify its wage proposal to a 2 percent raise July 1, 1 percent on Jan. 1, 2016, 2 percent on July 1, 2016, and 1 percent on Jan. 1, 2017. The state’s final offer called for a 2.5 percent raise on July 1, 2.25 percent on July 1, 2016, and 1.25 percent on Jan. 1, 2017, and called for a redesigned health insurance plan that would have most union members paying a share of their monthly insurance premiums with a wellness rebate if they enrolled in health maintenance programs.

The governor also gave a little ground, agreeing to slightly higher wage hikes and asking public employees to pay 10 percent of their health insurance premiums in fiscal year 2016, rising to and 15 percent of premiums the following fiscal year. Those insurance payments would mean a significantly smaller increase in total compensation compared to a contract providing wage hikes without major changes to health benefits.

Each side got something from arbitrator Curt Behrens’ final decision, but union leaders were a lot happier than the governor was with the compromise. Rod Boshart reported for the Cedar Rapids Gazette,

In making his ruling, the arbitrator accepted the union’s position to resolve the impasse on health benefits and he awarded the state’s final offer of wages that called for a 2.5 percent raise on July 1, 2.25 percent on July 1, 2016, and 1.25 percent on Jan. 1, 2017. Some state workers also will be eligible for annual step increases of 4.5 percent under the new contract.

Jimmy Centers, Gov. Terry Branstad’s communications director, said the arbitrator’s decision to rule in favor of the union’s final health insurance offer “cost the Iowa taxpayers an additional $24 million” in comparison to the state’s position.

“Gov. Branstad and Lt. Gov. (Kim) Reynolds are disappointed in the decision. Though the majority of Iowa taxpayers are picking up a portion of their own health care, they are still picking up a vast majority of the tab for AFSCME employees’ health care,” Centers said in a prepared statement.

“It is notable that the union has finally agreed, for the first time in Iowa, to pay something – anything – toward their health care,” Centers added. “This contribution, though modest, is a step in the right direction, especially considering what other state employees and Iowans in the private sector contribute for their health care.”

Employees covered by AFSCME will pay $20 per month toward health insurance. That is less than most private sector workers pay, but salaries for state workers in many fields are lower than what people with similar credentials earn in the private sector.

AFSCME’s press release of March 14 included reaction from Homan:

“Arbitrator Behrens’ award found that AFSCME Iowa Council 61’s final offer on health insurance to be the most reasonable. As a result of this arbitration award, all employees covered by the State Master Contract and Judicial Branch Contract will pay a minimum $20 per month for an employee health insurance premium, which was the Union’s final offer to the State.

“We are pleased that the arbitrator found in our favor on health insurance. We believe the process worked in such a way as to appropriately balance the interests of state employees and state government.

“Today’s arbitration award shows that Iowa’s current collective bargaining process works.

“On the issue of wages, the arbitrator found in favor of the State. While we had hoped the arbitrator would find in our favor on wages, we respect the arbitrator’s decision.

“With this fair decision, AFSCME members are pleased that we will be able to look forward and focus on providing public services to Iowans.

“Again the system worked by splitting the decision between the union and state positions. Iowa law worked well and provided a fair decision as it always does.”

A bill pending in the Iowa House would significantly reduce collective bargaining power for public employees. The Republican-controlled House will likely approve that legislation, but it will die in the Democratic controlled state Senate.

Any relevant comments are welcome in this thread.