Already reeling from legislation that will require state workers to pay thousands of dollars more each year toward their pensions and healthcare coverage, union leaders fear that Gov. Chris Christie will be the first governor in state history to unilaterally impose contract terms on their members.
They have cause for concern.
Contracts for some 48,000 state employees expire at midnight on June 30 -- the same deadline as the state budget. Negotiations got off to a late start in March, and have been on hold while Christie and the legislature pushed through healthcare premium increases that the unions wanted to negotiate at the bargaining table. While contract negotiations have gone past the deadline before, the talks that finally get underway will pit a Republican governor against union leaders infuriated by his end run around the collective bargaining process. Agreement won’t be easy.
If contract talks hit an impasse, Christie could choose to exercise the executive power granted by New Jersey's 1968 public employee collective bargaining law and impose a contract settlement. This would not only be the first time a governor has ever done so, but also one of the relatively few times that imposition powers have been used since passage of the law.
Still, if Christie does invoke the imposition option, it will not come as a complete surprise.
Senate President Stephen Sweeney (D-Gloucester) confirmed that he and state government union leaders had discussed inserting a "non-imposition clause" in his pension and health benefits bill as part of last-ditch efforts to reach a compromise on the controversial legislation.
But talks between Sweeney and Assembly Speaker Sheila Oliver (D-Essex) and the state's union leaders broke down without an agreement last week, and Sweeney and Oliver moved ahead with the legislation without the non-imposition clause. Sweeney said he added a sunset provision restoring public employee union rights to negotiate over healthcare issues in four years instead.
With union activists hissing from the balcony, a coalition of Senate Democrats from South Jersey, Essex and Hudson counties joined with Christie’s Republicans to approve the Sweeney bill Monday and a similar coalition is expected to follow suit in the Assembly tomorrow, sending the bill to Christie to be signed into law.
Bob Masters, director of the Communications Workers of America (CWA) District 1, the largest state workers unions, and Hetty Rosenstein, the CWA’s state director, both expressed worry that Christie would simply impose the contract terms he wants after this legislation is passed.
Christie has not included any additional money in next year’s budget for employee pay hikes. In fact, his most recent contract proposal was for state workers to take a 3.5 percent pay cut, Rosenstein said. Further, Christie proposed restoration of contract imposition powers for school boards in their negotiations with teachers unions as one of the measures in his property tax toolkit.
"This governor has showed no interest in collective bargaining," Master said. "Christie said from the start he that he didn’t want to negotiate over healthcare costs, he wanted to do it legislatively, and once Senator Sweeney introduced his legislation, he had no incentive to negotiate. Is he going to negotiate now? Really?"
It isn’t just that the state will miss its contract deadline for the first time since 1995, but the fact that negotiations have barely begun. Christie’s negotiators from the state Office of Employee Relations did not meet with union leaders for the first time until March 11 -- months later than contract talks usually start. The state is currently negotiating with the CWA, American Federation of State, County and Municipal Employees and the International Federation of Professional and Technical Employees
Responding to public -- and Democratic -- support for Christie’s demands that public employees pay 30 percent of their health premium costs, the CWA immediately came in with a proposal designed to achieve $230 million in healthcare savings over a three-year contract by increasing their members' share of their health premiums to an estimated 13.5 percent by 2013. The CWA proposal would have added about $210 a month to the cost of family coverage, compared with the $475 Christie was seeking, and the CWA offered to bring all of the other state government unions together to negotiate jointly with the state on healthcare.
Christie, however, flatly rejected the union plan, saying, "Their offer stinks. It doesn’t save any money." The governor said he preferred to set higher public employee contributions to healthcare premiums through legislation, which would apply to county and local government employees, including teachers, police and firefighters, and not just state workers.
"We were told by Christie that healthcare would not be a negotiated item -- it would be done through legislation," said Sherryl Gordon, executive director of New Jersey’s AFSCME Council. "His assumption was that the legislature would comply, and unfortunately, it looks like he was right."
Sweeney, an Ironworkers Union official who has been the leading legislative proponent of increasing public employee contributions to pension and health benefits since 2005, obliged Christie by introducing his pension and healthcare legislation. Sweeney’s bill phases in higher healthcare premiums over a four-year period on a sliding scale under which employees making less than $25,000 pay 3 percent of their health premium costs, while those making over $100,000 pay 35 percent. To the surprise of legislators, Treasury Department officials disclosed last week that the bill would save the state government just $10 million in its first year -- far less than the $300 million in savings Christie had included in his budget. Nevertheless, Christie agreed with Sweeney and Oliver to support the plan.
While Sweeney’s legislation was being developed and moved through the legislature, union negotiators met eight times with Christie’s bargaining team, and they were told repeatedly that the governor would not discuss healthcare, even after the union filed unfair labor charges with the state Public Employment Relations Commission in May, said Adam Liebtag, president of CWA Local 1036, whose 8,000 members include staffers from the state Environmental Protection, Health and Agriculture departments.
Previous governors had always negotiated healthcare issues as part of state worker contracts. Republican Governor Christine Todd Whitman took until September 1995 to settle a state worker contract that required union concessions on healthcare. Democratic Governor Jon Corzine in 2007 negotiated the contract provision that required state workers to pay 1.5 percent of the cost of their healthcare premiums.
Governors also have won significant concessions at the bargaining table. Corzine reopened contract negotiations with the unions in 2009 after the Great Recession sent state revenues plummeting, and won agreement from the unions to defer a 4 percent pay increase for 18 months and to take 10 unpaid furlough days that amounted to another 2 percent pay cut (the workers would be paid for seven of those days upon retirement) in exchange for a no-layoff clause.
Christie told town hall audiences this spring that he was anxious to go head to head with the unions in collective bargaining. "Let me out of my cage, let me at 'em," he said repeatedly. There is no word when contract talks with the state’s unions would resume nor did administration officials respond to requests for comment on the contract imposition powers that governors and mayors hold under the 1968 collective bargaining law.
It is quite likely that Christie and the state government's labor unions will hit the contract impasse that could trigger such an action by the governor.
Despite going the legislative route for higher employee healthcare contributions, the $10 million in budget savings Christie achieved is $290 million less than he anticipated, and one way to get that savings back would be with a wage cut. Whether Christie’s demand for a 3.5 percent state worker pay cut is his real goal or just a negotiating ploy, one source close to the negotiations earlier this spring had said it was unlikely that the governor would offer state workers any increase in the first two years of the contract. Even if he did offer a token wage increase in the third and fourth years, that would not come close to making up for the increase in employee pension and healthcare contributions.
A hardball offer by Christie would be difficult for union leaders to accept or get their members to accept. State workers are already angry over how much the Sweeney bill will cost them -- an estimated $6,058 by the fourth year for an employee making $65,000. It would be political suicide for union leaders to compromise with Christie on such a contract proposal, state government union leaders said privately, recalling how six out of eight local CWA presidents lost their posts to challengers after supporting an unpopular concession-laden contract negotiated in the 1990's.
Christie has no incentive to compromise either. Christie has become the darling of Republican conservatives nationally and has been urged by delegations from Iowa and South Carolina to run for president in 2012 on the basis of his anti-union attacks that have gone viral on YouTube. Nothing he does in contract negotiations can lessen the desire of the state’s public employee unions to oust him from office in 2013.
If Christie does decide to use his imposition powers, it would be the first time a New Jersey governor has ever done so, and one of the relatively few times that imposition powers have been used since passage of the 1968 public employee collective bargaining law.
Bill Dressel, executive director of the New Jersey State League of Municipalities, could not recall a single instance in which a municipal government had used its imposition powers to unilaterally set contract terms for its municipal employees. Perhaps one of the reasons mayors apparently haven’t used the clause is that the imposition power does not apply to uniformed personnel such as police and firefighters, whose contracts are governed by binding arbitration; public safety contracts are the biggest part of municipal salary budgets.
Frank Belluscio, director of communications for the New Jersey School Boards Association, said imposition powers were used by school boards 11 times from 1968 to 2003, when Governor Jim McGreevey and his Democratic-controlled legislature repealed the provision for school boards.
The repeal followed a bitter Middletown teachers strike in Monmouth County in 2001 that was blamed partly on bad blood caused by the school board’s imposition of contract terms in 1998. Teachers, like state workers, do not have a legal right to strike, and hundreds of Middletown teachers were jailed for their illegal walkout. "The NJEA sold the legislature on the idea that imposition was a mistake and that it led to strikes," Belluscio said. "But there were 205 teacher strikes of one sort of another from 1968 to 2003 and only seven of those occurred in districts that had imposed contracts."
Christie made restoration of contract imposition powers for school boards one of the 33 bills in his vaunted property tax toolkit. Sen. Joseph Kyrillos (R-Monmouth), a Middletown resident and one of Christie’s closest legislative advisers, introduced the bill, which has not yet come out of committee in either house of the legislature.
"A large number of states give the right of imposition to public employers, and it does change the balance of power in negotiations," Belluscio said. However, he noted that the school imposition process was very tightly controlled through the Public Employment Relations Commission, with fact-finding processes required before any contract could be imposed. "Even after a settlement is imposed, the parties are required to stay at the table to negotiate under the assumption that they could eventually reach a compromise."
PERC , the state agency that rules on disputes between public employers and their employees, would presumably be the agency of first appeal in any dispute over contract imposition.
PERC’s role has not been without controversy in recent months, however. Last December, Christie’s new appointee as PERC chair, R. Kelly Hatfield, forced out Ira Mintz, who had served as PERC’s counsel since 1985. Hatfield, a microbiologist with no labor or legal background, had worked on Christie’s campaign and had served on the Summit municipal council and school board.
Christie currently has a working majority on PERC that he could presumably rely upon to back a decision on contract imposition.