Governor's Cuts Announced

Scott's picture

This morning Governor Kulongoski announced several steps he is taking to reduce our burgeoning budget deficit. Prior to the public announcement, this information was communicated to executive management, presumably statewide.

For those who haven't heard, here's a brief rundown of the cuts:

  • Reduce his own salary by 5%
  • Pay freeze for state executives and managers
    • No step increases
    • No COLA
  • Canceling the June 2008 pay step added for management
  • Recoup the money from any managers who were already granted the additional step
  • Unpaid furlough days, including for his own staff

In addition, the step increase for represented staff that was granted in the 2007-2009 contract is, "on the bargaining table." He also plans to veto attempts to tap the two state reserves for this budget cycle--which ends on June 30, 2009.

It is important to note that the cuts imposed are not for represented staff. For represented staff, we are in the midst of attempting to bargain new contracts. It seems certain that we will be asked to make similar sacrifices. Probably even more.

That the governor would start with such steps for management is, in my memory, unprecedented. It speaks to the truly dire straits we all realize we are in. More information will be forthcoming tomorrow morning with the update to the state quarterly economic and revenue forecast.

Scott's picture

Re: Governor's Cuts Announced

Some additional information regarding the Executive and Management cuts also shows that they will, as expected, also be applied to represented employees. I just wonder what additional "twist" they're going to throw in to make sure we get to shoulder more of the burden? It may not happen this biennium, but I can see it coming up in the bargaining.

I was also reminded that the Governor's 5% pay cut is coming in the form of a donation. Does that mean he gets to take a tax deduction for the money he donates?

Scott's picture

Re: Governor's Cuts Announced

The current information gives us a clearer picture of what we'll be getting. What does that mean?

  • Furlough of 1-4 days based on salary range
    • SR 19 or less, 1 day (1.2% pay cut)
    • SR 20-32, 2 days (2.3% pay cut)
    • SR 33-37, 3 days (3.5% pay cut)
    • SR 38+, 4 days (4.7% pay cut)
  • SR 33+ can opt to take the pay cut but still work all of the days
  • Leave accrual and health insurance contributions won't be affected
  • PERS is affected
  • Furlough day schedules will be up to the agencies due to the short time frame
  • They've cited the ORS that apply right up front
  • No step increases
  • Rolling back the additional step added for management in 2008
  • There's no exceptions
  • 24/7 facilities will be manned under control of the agencies

A few things to expect:

  • Lots of SR 33+ employees will be asked to "work-for-free" by volunteering to take the pay cut
  • While they don't know what will happen with furloughs for 2009-11, is there any reason to expect that they won't start by simply multiplying the listed levels by 3 for each year? There's 1-4 furlough days for 4 months. Over the next biennium you would have 6 days, 12 days, 18 days, or 24 days, depending on your Salary Range.
  • Our only remaining "benefit", health insurance, is likely to be an even bigger target this bargaining period than before. Imagine taking an average 2.925% pay cut and then being asked to pay 50% of your health insurance? For family plans, that will probably run you around $600/month (for full-time employees). That's quite a pay reduction.
  • The state is all lawyered-up and expecting a fight.
  • No 10th step added at the end of June. Not that anyone could get it with no step increases.
  • Look for management to find creative ways to make things up for the favored-few. There's no exceptions to furlough days, so that money has to be made up some other way.