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Unions balk at state furlough

01:00 AM EST on Saturday, January 19, 2008

By Steve Peoples

Journal State House Bureau

PROVIDENCE — One day after Governor Carcieri announced plans to force Rhode Island’s 15,000 state employees to take off several unpaid workdays, labor-union leaders yesterday questioned whether the governor has the authority to enact the cost-cutting measure.

“If it’s forced upon us, I believe we will end up in court,” said Dennis Grilli, executive director of the largest state employees union, Council 94, the American Federation of State, County & Municipal Employees.

Further, the state’s court system, the attorney general’s office and the legislature — which largely blocked Carcieri’s furlough plans last year — refused to immediately endorse the governor’s proposal. But they did not rule it out.

“I know that is always a tool to save money and I am not going to discard that right away,” said House Majority Leader Gordon D. Fox, D-Providence.

Carcieri released a deficit-avoidance plan Thursday that would save $14.8 million by requiring all state employees — including himself — to take off six unpaid workdays by the end of June. The cuts amount to 6 percent of the workers’ salaries over the remaining fiscal year.

The furloughs — which could be taken at different times, allowing state government to stay open, are among several provisions aimed at closing a $151-million current-year budget hole in less than six months. The plan also cuts $12.5 million in state aid to cities and towns and saves $4 million by eliminating health care for 2,000 immigrant children.

The proposals represent the beginning of what will be among the most difficult legislative sessions since the credit-union crisis of the early 1990s. The governor expects to release his 2008-09 budget in the coming weeks, one that must close a deficit projected as high as $450 million.

Carcieri met privately labor leaders for more than an hour yesterday, an attempt to convince unions to voluntarily agree to his plan. But the Republican governor indicated he would go to the Democrat-dominated General Assembly to force the furloughs on state employees if necessary.

Carcieri’s chief budget officer, Rosemary Booth Gallogly, suggested earlier in the week that the administration may have “another alternative if there were a fiscal crisis.”

A provision in Rhode Island law gives the governor emergency power to suspend law during “disaster emergencies.”

Asked yesterday specifically whether the state’s current fiscal situation constitutes a “disaster emergency,” Carcieri responded: “That’s the technicality, you know, the lawyers have to work their way through … It possibly could, but I don’t really think that that’s where we’re going to get to at this point, so we’re just going to let it go. We’re going to try to resolve this talking and we’ll take it from there.”

Later in the day, Carcieri’s spokesman, Jeff Neal, clarified the governor’s position: “Governor Carcieri has not considered the use of any extraordinary authority he may or may not possess to deal with the state’s budget crisis. In fact, we haven’t even investigated whether any such authority exists.”

The heads of state agencies outside the governor’s direct control, such as the lieutenant governor, the secretary of state and attorney general’s office, said yesterday they would consider the furlough plan. Only the treasurer’s office committed to the plan.

Attorney General Patrick C. Lynch “does find it frustrating, though, that our office has managed its budget very tightly, yet is getting hit with an across-the-board, one-size-fits-all reduction, particularly when so much of our budget depends on personnel costs,” said spokesman Michael J. Healey. “It will be a huge challenge to continue to provide the level of service that our office has provided to Rhode Islanders.”

HISTORICALLY, Rhode Island governors have had mixed success with furloughs.

Last year, Carcieri backed off plans to shut down government for several days after opposition from labor unions and other branches of government. Former Gov. Bruce Sundlun was partially blocked by the courts after ordering state government closed for 10 days in 1991. Government was ultimately closed for three days, and further savings were achieved through a payment-deferral plan.

Yesterday, labor leaders said they were open to negotiations, but they all said the governor has no legal authority to impose the furloughs unilaterally.

“Quite frankly, we don’t even know if the General Assembly would have the power to do that ... Essentially it’s a pay cut,” said George Nee, secretary-treasurer of the AFL-CIO. “We believe that people’s wages, benefits and working conditions are subject to collective bargaining and can’t be changed unilaterally.”

He continued: “I think the facts are there that the state is in a very serious fiscal crisis. I don’t think there’s any question. I think the employees have always stepped up to the plate. They’ve already suffered a disproportionate amount of the cuts that have taken place by the layoffs.”

Even while seeking the furloughs, Carcieri hasn’t backed away from a workforce-reduction plan aimed at laying off 583 state employees. Layoff notices have been issued to roughly one-quarter of those targeted so far.

Robert A. Walsh Jr., executive director of the National Education Association in Rhode Island, criticized the governor for not addressing two tax provisions that favor high earners.

Rhode Island could generate $19.5 million next year by moving the capital-gains tax from its current rate to 5 percent, according to the state division of taxation, which notes that 83 percent of those who pay the tax earn more than $200,000.

Similarly, the flat tax favors high earners and will cost the state $21.5 million during the 2008 tax year, according to the division of taxation.

“It’s crazy to tell some of the top earners in Rhode Island, people making millions of dollars a year, that they don’t have to share in this burden,” Walsh said.

Carcieri, meanwhile, said that unions should support “a climate where people are coming here, building businesses and staying here.”

“The notion that somehow I’m going to tax somebody else and get away with isn’t going to happen,” he said.

speoples@projo.com

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