…Adding… The governor’s complete contract offer can be read by clicking here.

* The war of words continues…

Dear Colleagues,

As you know, on three separate occasions our CMS labor relations team negotiated and signed a Tolling Agreement with AFSCME leadership. The Tolling Agreement provided for a process, agreed to by AFSCME, that allows the parties to either agree that impasse in negotiations has been reached or, in the event one party does not agree, allows either party to ask the Illinois Labor Relations Board to decide if the parties are at an impasse-that is, the Labor Board would decide whether further negotiations between the parties would be worthwhile. On January 15, 2016, after weeks of no meaningful progress at the bargaining table, the Governor asked the Illinois Labor Relations Board to determine whether we are at an impasse in collective bargaining negotiations with AFSCME. In the weeks since, work in the State of Illinois has continued as usual. The Governor and the labor relations team at CMS are committed to respecting the Labor Board process, and we appreciate that members of AFSCME want to do the same.

There has, however, been a great deal of incorrect information circulated about our negotiation and proposals. We know that, in recent days, AFSCME has been conducting “informational sessions,” but we question how productive those sessions can be if AFSCME does not provide accurate information.

We cannot sit idly by without correcting the incorrect information being provided to AFSCME bargaining unit employees and the public. We have asked AFSCME to let you vote on our proposals, but we believe you must have accurate information to make a fully informed decision. As the State’s lead negotiator who sat across the table from Roberta Lynch and Mike Newman for the past year and explained the State’s proposals, I would like to take this opportunity to correct numerous incorrect statements. That information is enclosed.

Further, I believe that employees should not be satisfied with summaries and that they deserve a full picture. It is my understanding that AFSCME has failed to provide you with the State’s full proposal. I believe that is counter-productive. You should be able to read the State’s proposal in full, and determine for yourselves whether the State’s offer, which is substantially similar to those accepted by seventeen other unions, is fair and reasonable, particularly in light of the State’s fiscal condition. I am enclosing with this letter the actual language of the 2015-2019 collective bargaining agreement as proposed by the State in its last, best and final offer. That document shows all the changes proposed by the State from the contract that expired on June 30, 2015. You can now evaluate for yourselves the State’s complete proposal.

We have asked AFSCME to let you vote this proposal up or down. We hope you will ask AFSCME’s leadership to allow you to take such a vote. Seventeen other unions ratified similar terms and conditions by wide margins-often over 80% of state employees in those unions approved-and we think if provided a fair vote, this proposal will be approved as well. Thank you for giving it your consideration.

John Terranova
Deputy Director
CMS Office of Labor Relations

* And here’s his fact check…

Fact Check - Correcting Misinformation

Myth: The State’s proposal would give Illinois state workers the worst health insurance coverage in the nation.

Fact: False. In fact, we’re not even close. With retiree coverage included, Illinois pays nearly 3/4 of the total cost of coverage for its workers. In comparison, Indiana pays less than 45% of the total cost of coverage. Paying 100% of retiree premiums is a huge benefit to our workers-if current employees were responsible for those retiree healthcare premiums, they would need to be putting away $947/month now to cover that future benefit! Even if we only look at coverage for active employees-where the State is proposing to pay 60% of costs-the State’s proposal is still better than many other States and on par with the private sector.

Myth: The State’s current healthcare plans aren’t actually Platinum or luxury.

Fact: The average actuarial plan value (what federal regulations and insurance companies use to assess how rich a health plan is) for the State’s current plans is 92%. This means that out of every dollar in healthcare expenses, the insurance plan covers 92 cents and the employee pays 8 cents in deductibles, co-pays, and other such expenses. “Platinum” under the Affordable Care Act is defined as plans that are between 88 % and 92%. Platinum is the highest level under the Affordable Care Act-above Gold, Silver, and Bronze. And as mentioned, the State’s average plan value is 92%-the high end of Platinum.

Moreover, to be clear: under the State’s proposal, employees will have the option to continue this rich coverage at higher premiums, should they so choose. Alternatively, employees would have the option to have less-rich coverage and maintain current premiums. Employees will not have to both pay higher premiums and receive less-rich coverage.

Myth: The State’s proposal would wipe out all job security rights.

Fact: The State’s offer does not eliminate these rights. Layoffs would still happen in reverse seniority order. Employees would still have the opportunity to “bump” less senior individuals in the same position and qualifications. Employees would also still have the opportunity to transfer to other vacancies for which they are qualified.

Myth: If I have a major medical issue under the new insurance, there is no limit on what I could pay. I could go bankrupt!

Fact: The Affordable Care Act has an annual out-of-pocket maximum of $6,850 for an individual. While that’s a lot of money, it prevents people from being financially ruined due to a medical issue. You can go here to fact-check this for yourself: http://obamacarefacts.com/
health-insurance/out-of-pocket-maximum. The bottom line is no matter what coverage level employees select, there will be strict limits on how much each employee is going to be asked to pay in any given year.

Myth: Merit pay is just political pay.

Fact: Politics has nothing to do with it. In fact, the State would prohibit any Governor’s staff and appointees from being eligible for performance bonuses. The State has also proposed working with all unions to find fair, objective standards to measure performance. The program that’s now in place for Teamsters will give half of all their members a bonus. While we guaranteed that a minimum of 25% of members would receive a performance bonus (the same guarantee that we made in the Teamsters contract), that percentage is the floor, not the ceiling. In developing the program, the number could go up, just as it did for the Teamsters. And the total bonus payout would remain the same regardless of how many people receive a bonus, so the State doesn’t gain anything financially by giving it to fewer employees.

Myth: The Labor Board is biased in favor of the Administration.

Fact: A majority of the Labor Board was originally appointed by Governor Pat Quinn. Governor Rauner reappointed two individuals Governor Quinn had previously appointed or re-appointed. Significantly, all members of the Labor Board appointed or re-appointed since 2015 were confirmed by a supermajority-Democrat Senate. Furthermore, the Chairman of the Board is, hardly an “enemy” of AFSCME. For many years he was responsible for negotiating collective bargaining agreements on behalf of the State, including many of the prior state contracts that AFSCME now praises. Most importantly, both AFSCME and the Administration voluntarily signed a legally binding tolling agreement providing for the Labor Board to resolve any dispute over whether the parties are at impasse. For AFSCME to preemptively impugn the integrity of the Labor Board is puzzling.

AFSCME complains that “in a recent case regarding an issue related to contract negotiations, the Board hastily rushed a decision and completely upheld the Administration’s position.” Although AFSCME did not identify the case, we believe it must be referring to an FAQ on the State’s website, which can be found at http://www.illinois.gov/EmployeeFAQs. In that FAQ, the State responded that, during a strike, the State can charge striking workers the full cost of their health insurance. AFSCME filed an unfair labor practice charge. After carefully considering the parties’ written submissions, the Board’s Executive Director dismissed the complaint and acknowledged the State’s longstanding policy to charge striking workers for the full cost of their insurance. The well-reasoned decision was upheld on appeal to the full Board. That AFSCME brought and lost a baseless charge is no reason to doubt that the Board gives a fair consideration to every case before it. For AFSCME to suggest otherwise is regrettable, let alone begging the question why AFSCME would voluntarily enter into an agreement to submit the impasse dispute to such a tribunal.

Myth: The Governor is “now seeking to impose on state employees” his contract.

Fact: Under the terms of the tolling agreement, it is up to the Labor Board’s to decide if the parties are at an impasse and whether the State may implement its last, best and final offer. It is critical to mention that the last offer made by the State to AFSCME is substantially similar to the agreements signed by 17 other unions. These agreements were ratified in many cases by over 80% of state employees in those unions. This is not a radical or extreme contract as AFSCME has portrayed, but one that is fair, reasonable, and overwhelming accepted by several thousand State employees already.

By submitting this dispute to the Labor Board, the Governor did nothing more than invoke the very process to which both parties voluntarily agreed.

What the Governor is seeking, and AFSCME is refusing, is for AFSCME to submit the Governor’s actual proposal to employees for a vote. What better way is there to determine whether the proposal is deemed fair and reasonable by the very people whose work will be governed by that proposed contract?

Myth: The Teamsters’ agreements provide “far more generous health insurance terms.”

Fact: Comparing Teamsters’ health insurance to AFSCME’s is like comparing apples and platypuses. AFSCME employees’ health insurance is provided by the State, where the State charges premiums. Teamsters’ health insurance is provided by Teamsters’ own health and welfare funds. The State contributes to those funds but does not get to decide the level of coverage or premiums. It is entirely out of the State’s control. Teamsters can provide the bare minimum coverage under the Affordable Care Act or they can provide more. Either way, the State plays no role.

The most that can be said in comparing Teamsters and AFSCME for health insurance is that, unlike AFSCME’s demand for a guarantee of Platinum coverage at Silver prices, Teamsters received no such guarantee from the State. What Teamsters get is entirely up to Teamsters’ own funds. This is similar to the point AFSCME makes about the trade unions with whom the Governor signed twelve separate collective bargaining agreements. AFSCME claims the distinguishing feature is that the trades’ agreements do not include a wage freeze. But what AFSCME fails to mention is the trades get compensated on a wholly different metric, known as the prevailing wage. That wage is determined through a certification process administered by the Department of Labor and is not guaranteed to increase during the course of the contract. In fact, the prevailing wage could go down over the life of the contract. So, there too, while AFSCME is demanding guaranteed wage increases through general and step increases every year of the contract, other unions have received no such guarantees.

As against seventeen other unions that have ratified the State’s offer by wide margins, AFSCME stands alone in demanding guaranteed wage increases and luxury health insurance coverage at what could be characterized as garage sale prices.

Myth: Only union workers are being asked to sacrifice due to the financial circumstances in the State.

Fact: Everyone is making sacrifices. Non-union employees are also on the State’s health insurance and will be subject to any premium increases or plan changes. This includes the Governor’s staff and the labor relations people who made this proposal. It’s also worth noting that non-union employees haven’t received an across-the-board wage increase in ten years. Cherry-picking salaries of some in the Governor’s office-without noting that the Governor’s office payroll is less now than it was during his predecessor-is as uninformative as focusing on the compensation of AFSCME’s top executives.

Fact is, our employees tell us all the time, as Teamsters and other unions told us during bargaining, that they are ready to be part of the solution, not the problem. They recognize that state employees in Illinois make more than their counterparts in other Midwestern States. For example, Illinois state workers made, on average, over $20,000 more per year in 2014 than state workers in Indiana or Missouri. In absolute dollars, Illinois state worker pay was third-highest. The two higher-paying States, California and New Jersey, have significantly higher costs of living. After adjusting for cost of living, Illinois workers are the highest paid in the country. The Governor is proud of our state workers and has never proposed to cut their salaries. He only asked for true shared sacrifice as we, all of us, together right our State’s fiscal ship.

Myth: The Administration does not accurately report what is said at the bargaining table.

Fact: Here’s what AFSCME’s Executive Director Roberta Lynch said during bargaining: “People who came up with this [merit pay proposal] ought to go to f**king prison . . . fact that you want to give measly 25% to some who are doing the job already . . . 75% of people not doing their best - that’s a f**king lie. I think it’s an insult to every single person who works for the State of Illinois.”

Here’s how AFSCME interprets the above quote: “it wasn’t fair to leave out 75% of employees from getting a bonus, given the difficult jobs that employees do-and that whoever came up with that idea should try going and actually working in a prison so they’d know how hard the job is.”

We appreciate that AFSCME’s Executive Director regrets her choice of words when she reads those words on paper. Nonetheless, she does not get to rewrite the history of negotiations based on what she wishes she has said.

Myth: SB1229, the arbitration bill that AFSCME unsuccessfully lobbied last summer and fall, was an opportunity to resolve outstanding contract disputes in a fair and rational manner.

Fact: Make no mistake about it, SB1229 was AFSCME’s attempt to rewrite the State’s labor laws as they have existed for over thirty years to saddle the State’s taxpayers with a multi-billion dollar cost of AFSCME’s unreasonable contract proposal that it knew, under the existing laws, it could never get the State to agree to at the bargaining table. Outstanding contract disputes-like the current dispute between the parties as to whether they are at an impasse-already have a fair and rational forum, which is the Labor Board, a process to which both sides voluntarily agreed. SB1229, or the new HB580–another version of the same failed bill, which would strip the Governor of his constitutional authority–is as unaffordable and damaging now as it was then. Several other Unions have already negotiated agreements with the State under the existing labor laws. Why must the rules be rewritten to give AFSCME what it wants and the State’s taxpayers cannot afford?

We now know that AFSCME is urging its members to support HB580, to once more ask to strip this Governor-and only this Governor-of his authority to negotiate with employees. This is as clear a signal as any that AFSCME is not interested in negotiating. AFSCME is not interested in defending its unaffordable proposals. AFSCME is only interested in imposing its will through an unelected, unaccountable arbitrator. This is bad faith in spades, and why the matter is now before the Labor Board.