Gov. Rick Snyder applauded today's Michigan Civil Service Commission approval of contracts for fiscal year 2013 with all the unions representing state employees.
The contracts, recently ratified by the five unions, call for a 1 percent pay raise for state workers in October 2012. In addition, lump-sum payments will be made in 2012 and 2013 that equal 1 percent increases but they will not be added to the ongoing base pay for workers. Employees will begin paying 20 percent of the state health plan insurance coverage costs beginning in 2012.
"I'm pleased that the collective bargaining process was successful and that we've come together to find a shared solution that will help build a stronger Michigan," Snyder said. "I respect the hard work that is consistently done by our dedicated state employees, and I appreciate that union leaders joined with us to address the long-term health care liability faced by the state. We will continue working collaboratively to move Michigan forward."
The contracts cover employees in the Service Employees International Union (SEIU), International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Michigan State Employees Association (MSEA), American Federation of State, County and Municipal Employees (AFSCME), and the Michigan Corrections Organization (MCO). These unions represent nearly 33,000 employees out of a state work force of 50,000.
The total number of state employees has declined by more than 10,000 in the last decade, but health care and other benefit costs increased dramatically. In fiscal year 2000, the average fringe benefit cost for a state employee was $15,756. By fiscal year 2010, the fringe benefit cost soared to $33,057. The state will spend over $1 billion in health plan premiums for active and retiree health care this year alone.
"I thank the unions for working with us to help address our fiscal realities," said State Budget Director John Nixon. "We have a talented work force in state government, working hard each day to serve the citizens, and we have taken important steps in addressing the long-term health care liability to keep our state in balance and on solid financial footing."
The Civil Service Commission has authority over state employee health plan premium sharing, an item that was appropriately bargained for fiscal year 2013 along with the pay increases. Today's action by the commission does not impact the current fiscal year, which means union employees will still be required to take four unpaid furlough days.