Department of Management: New AFSCME Contract Saves Iowa $94 million Print
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Written by Office of the Governor of Iowa   
Friday, 08 March 2013 15:26

(Des Moines) – Today, the Department of Management released the following information related to cost avoidance the State of Iowa obtained by entering into aggressive, professional negotiations with AFSCME.

 

Key elements of new state contract with the AFSCME bargaining unit:

 

1.       0% across-the-board (ATB) raise for FY 14 and 0% ATB for FY 15

2.       Annual STEP increases for FY 14 and FY 15 included

3.       No change in health insurance

 

Total cost of new AFSCME contract for FY 14 and FY 15:

General Fund:                   $56 million

All State Funds:                 $107 million

 

Key elements of Governor Culver’s AFSCME contract for FY 12 and FY 13:

 

1.       2.5% ATB raise for FY 12 and 2.5% ATB for FY 13

2.       Annual STEP increases for FY 12 and FY 13 included

3.       No change in health insurance

 

Total cost of Culver AFSCME contract (if applied to our current workforce):

 

General Fund:                   $104 million

All State Funds:                 $202 million

 

Savings to State of Iowa resulting from new AFSCME contract:

General Fund:                   $48 million

All State Funds:                 $94 million

 

According to available data, the FY 14 -15 AFSCME contract represents the first time since the inception of public sector collective bargaining in Iowa that the State has successfully negotiated no across the board pay increases in both years of a contract. Clearly, Iowa taxpayers have benefitted from having a seat at the table during the collective bargaining process with Iowa public sector unions.

 


The State’s Position in Arbitration:

The State and ASFSCME agreed on 0% ATB raise for by FY 14 and FY 15.

 

The State and AFSCME agreed on annual STEP increases for FY 14 and FY 15.

 

The State and AFSCME reached an impasse on health insurance.  The arbitrator ruled in favor of the AFSCME position regarding health insurance.

The State’s final offer on health insurance was a 20% employee contribution for all health plans. Employees would have the opportunity to earn a credit of $90 per month towards their share of the health insurance premium by participating in a wellness program.

 

The State’s final offer on health insurance still exceeded the average of other states when the wellness premium incentive is included.  In comparing Iowa’s wage and benefits using data provided by the National Compensation Association of State Governments:

  • The employer-paid value of the State of Iowa’s status quo health insurance benefit is ranked first when compared to other states.
  • The average base pay of State of Iowa employees is 33% above the base pay of other state government employees.
  • The average total compensation (wages and benefits) of State of Iowa employees is 27.5% higher than the total compensation of other state government employees.

 

Had the arbitrator ruled in favor of the State’s offer regarding health benefits, the State had estimated additional cost avoidance of approximately $45 million over the 2 years of the contract.

 

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