Governor Terry Branstad’s administration and labor unions representing public employees have virtually no chance of reaching agreement on a new two-year contract, judging from the proposal Branstad’s lead negotiator presented to the American Federation of State, County and Municipal Employees Council 61 on Friday.

I knew Branstad wouldn’t accept AFSCME’s opening offer of small raises across the board with no changes to the benefits package. The governor’s lead negotiator, Leon Shearer, responded by proposing significant cuts in total compensation: no salary increase for two years and significantly higher health insurance premiums and co-pays.

“Over the last decade I think your union and your leadership has done an outstanding job of negotiating on your behalf,” Shearer said. “You’ve got management rights that should have not been given to you but they were. You’ve got a health plan and a compensation plan that is the envy of the private sector and the contiguous states, and you negotiated it and you did a good job.

“On the other hand, in that past decade, I think management has not done its job to look out for the best interests of the state of Iowa and our challenge today on our behalf is to try to address some of these management rights issues and to address the alignment of our compensation with the comparative group,” he added. “And, I don’t for a minute think that it’s anything but a difficult task.”

Shearer then spelled out details calling for state employees to shoulder more of the cost for their health-related benefits, diminish or eliminate some workplace rules governing grievances, bumping and transfer rights, discipline and discharge issues, stop collecting dues for the union’s political action committee, delete four additional holidays for employees eligible for overtime, and increasing the state’s share of employee life insurance coverage.

Shearer said the proposed health-related changes were in line with recommendations of a consultant hired by the state Department of Administrative Services that identified a potential “cost avoidance” of $116 million if all state workers would pay 20 percent of their health insurance premiums. The study indicated that 88 percent of state workers currently do not contribute anything toward their health insurance premiums.

For many years, labor negotiators have traded lower salaries for more generous benefits packages. I understand that Branstad philosophically opposes those deals, but he can’t expect any union to agree to pay cuts (in real terms) for almost all its members while the state of Iowa has projected surpluses. Ask anyone who negotiates employment contracts: you offer higher salaries if you want to cut benefits, or you offer better benefits if you can’t afford to give raises.

Branstad believes state workers are overpaid, but a recent study on that topic was deeply flawed.

Representatives for AFSCME and the governor will now go through the motions of negotiating until January, when the process moves to mediation. I would be shocked if talks don’t end up in binding arbitration in February.

AFSCME Council 61 President Danny Homan blasted the governor’s offer as “an appalling slap in the face to state employees.” Speaking to Rod Boshart on Friday, Homan said he’d never seen an employer offer this kind of proposal and accused Branstad of “attacking basic union rights that have existed in this country for decades.” AFSCME posted this comparison of its opening offer to what Shearer presented:

A Comparison: AFSCME’s Initial Proposal and the State’s Initial Proposal

AFSCME Proposal on Wages:

1% on July 1, 2013

2% on July 1, 2014

4.5% Step Increases

State Proposal on Wages:

No raise for two years

No Step Increases

AFSCME Proposal on Health Insurance:

No changes proposed, current contract language.

State Proposal on Health Insurance:

All employees pay 20% of their health insurance premium

Eliminate Plan 3 Plus and Blue Advantage Plans

Raising out of pocket max

Blue Access $1500/$3000

Iowa Select $2500/$5000

Raising copay

To download a comparison specifically on health care, click on the link to the pdf at the bottom of this post. The pdf comes directly from the state’s proposal.

AFSCME Proposal on RX:

No changes proposed, current contract language.

State Proposal on RX:

Double Copays and adds a new, more expensive specialty tier

AFSCME Proposal on Dental:

No changes proposed, current contract language.

State Proposal on Dental:

Increased costs to the employee.

AFSCME Proposal on Discipline and Discharge:

No changes proposed, current contract language.

State Proposal on Discipline and Discharge:

Limiting rights in discipline and discharge.

AFSCME Proposal on Transfers:

No changes proposed, current contract language.

State Proposal on Transfers:

Requires an overall evaluation of meets expectations or higher to transfer.

Must not have received a disciplinary suspension within 12 months or a written reprimand within 6 months.

AFSCME Proposal on Layoff Procedure:

No changes proposed, current contract language.

State Proposal on Layoff Procedure:

Temps do not have to be laid off first.

Requires an overall evaluation of meets expectations or higher to bump.

Must not have received a disciplinary suspension within 12 months or a written reprimand within 6 months.

Take away your rights to a third bumping option of equal or lesser position.

AFSCME Proposal on Pilot Programs:

No changes proposed, current contract language.

State Proposal on Pilot Programs:

Delete all pilot programs:

Eliminate Straight 8s for Corrections nurses

Eliminate DOT Comp Time Accumulation

AFSCME Proposal on Memorandums of Understanding:

No changes proposed, current contract language.

State Proposal on Memorandums of Understanding:

Delete all Memorandums of Understanding:

Removes protection from contracting out

Removes ISP and Anamosa shift differential language