How to make an extra $3 billion, the Illinois way

AFSCME – the largest government worker union in the state – may pull off one of the most insulting waiting games in state history. The payoff? More than $3 billion, courtesy of Illinois taxpayers.

Buried beneath the election chatter this week was a wonky labor ruling in a Springfield appellate court. But the issue at hand could wind up being more costly than almost anything else Illinoisans hear discussed on debate stages.

AFSCME – the largest government worker union in the state – may pull off one of the most insulting waiting games in state history. The payoff? More than $3 billion, courtesy of Illinois taxpayers.

This saga begins all the way back in December 2014.

That’s when then-Gov. Pat Quinn started negotiations for a new state worker contract with a somber tone. His administration set the stage by noting a $6.4 billion backlog in unpaid bills, a $1.6 billion budget deficit and $111 billion in unfunded pension liabilities.

AFSCME’s reply to the state?

Hike the income tax, then scrap the Illinois Constitution’s flat income tax protection and hike taxes some more. In other words, “rob Peter to pay me.”

One month later, Gov. Bruce Rauner took office. In part, he was elected because taxpayers were frustrated with the power balance in Springfield and wanted a more fiscally conservative voice at the bargaining table.

AFSCME knew they would not be facing a negotiator they helped elect, so their strategy was two-fold. The first tactic was to try to bargain with someone else, but efforts to remove Rauner from the negotiating table in the General Assembly fell short on multiple occasions.

The other option? Stall. AFSCME knew it could tie up any attempts at reform in court. Meanwhile, they could fund efforts to elect a new governor willing to play ball.

Before getting into specifics, it’s important to know Illinois state workers are not to blame for any of this. It’s also important to know what those state workers receive.

For one, they are the highest paid state workers in the nation after adjusting for cost of living. Second, they receive platinum-level health insurance at a bronze-level price. And third, many state workers receive overtime pay after a 37.5-hour work week. That’s not to mention pension benefits that are far out of line with anything one can expect in the private sector.

None of this is necessarily bad in isolation. Public-sector workers should expect decent pay and benefits. But AFSCME worker incomes grew 5 times faster than Illinois private-sector incomes from 2005-2014. In the face of a sputtering state economy where taxpayers are already shouldering an enormous tax burden, there must be a compromise.

We all can’t work for the state.

The Rauner administration introduced its first AFSCME contract proposal in February 2015. It and subsequent offers avoided widespread layoffs, preserved extremely generous disciplinary procedures, sick time, and holiday policies, and instituted a temporary wage freeze. It also would have increased employees’ contributions to their health care costs and not paid out overtime until employees clocked 40 hours.

AFSCME countered with wild demands, including wage increases of 11.5 to 29 percent by 2019, platinum-level health insurance at little cost to workers, and a work week with overtime for workers after just 37.5 hours.

The state estimated AFSCME’s demands would cost an additional $3 billion compared with what Rauner proposed.

The old AFSCME contract expired June 30, 2015.

By September, the state and AFSCME were on their third tolling (or temporary) agreement, which included language assuring they would continue meeting in good faith until both sides declared an impasse or the Illinois Labor Relations Board ruled both sides were at impasse.

After more than 20 bargaining sessions and 67 days of negotiations, nothing was moving.

The state declared an impasse on Jan. 8, 2016. And after much back and forth, the Illinois Labor Relations Board finally issued an impasse decision in November 2016, which meant Rauner could finally move to implement the state’s last, best offer.

But rather than obey the ruling, AFSCME filed a lawsuit in their home turf of St. Clair County, declaring the board’s ruling illegitimate.

Days turned into months turned into years of appeals. And on Oct. 23, 2018, the Fourth District Appellate Court ruled in AFSCME’s favor. Of course, there will be more appeals as the clock keeps ticking.

So, will the four-year stalling gamble pay off for AFSCME?

The answer will become clear soon enough. And taxpayers will be on the hook for the winnings.