Frozen pay hikes for state workers spark anger and confusion

DOVER — The educators, state troopers, lawyers and others set to receive regular pay increases in the upcoming fiscal year will have to wait at least a bit longer.

Every year, the state pays out millions in “step” increases — salary bumps given to certain professions, mostly teachers and those who have negotiated the increases through collective bargaining.

Beginning July 1, the start of the next fiscal year, Delaware will almost certainly be freezing those payments for perhaps the first time in state history.

Facing a crunch after COVID-19 sparked a projected revenue dip of $619 million over two years and with only a few weeks to spare, the budget-writing Joint Finance Committee voted June 4 to freeze steps. The committee also killed a 2 percent pay raise for all state employees proposed by the governor in the winter.

The steps can be added back in full at some point over the next year if revenues climb enough. Should the forecast for December 2020 or March, April, May or June 2021 total at least $50 million more than this June’s prediction (which will be made this week by a state panel), it would trigger a provision calling for the General Assembly to meet for a vote on reinstating the steps. In that event, the step increases would be paid in full — in other words, retroactive to July 1, 2020.

State employees who retire during the fiscal year would also receive the full benefit from the increase.

If revenues do not reach the $50 million threshold, JFC will presumably have the same discussion again next spring, according to Controller General Mike Morton.

Union frustration

It’s not clear when, if ever, legislators last withheld step increases. Even during the low of the Great Recession, when legislators had to close a gap of around $850 million, steps were still funded, and a spokesman for the Office of Management and Budget did not recall such a move occurring during his 33 years with the agency.

June 4’s vote followed weeks of discussions between the committee’s two co-chairs, top budget officials and union officials, including representatives from Fraternal Order of Police Lodge 10: Probation and Parole, the Delaware State Troopers Association, the American Federation of State, County & Municipal Employees Council 81, the Delaware State Education Association and the Correctional Officers Association of Delaware. Some of those union representatives are now upset, feeling they were lied to.

Correctional Officers Association of Delaware President Geoff Klopp said budget officials and the JFC chairs acted like “they were doing us a favor by having a conversation with us.” He said the union requested JFC fund steps for its members partially in recognition of the challenges they’ve faced since an inmate uprising at the James T. Vaughn Correctional Center in February 2017.

Todd Mumford, president of the probation and parole officers’ union, sounded a similar note, citing the difficulty and uncertainty over the past few months thanks to coronavirus. His members understood the state’s position and were willing to work with budget officials but still hoped to get something, he said.

While steps are contractually required for several positions, those contracts contain language allowing the state to put off payments if it cannot afford to make them. Though Delaware actually had a sizable chunk of extra revenue to work with just before the virus hit, the outbreak and lockdown wiped it all out. Given that, probation and parole officers were fine with negotiating rather than suing to force the state to fully open its books through a lawsuit, Mr. Mumford said.

It would cost about $13.4 million to fully fund steps, with about $11.5 million of that total being earmarked for educators. It’s unclear exactly how many people are set to receive them in the upcoming fiscal year, as not every position that gets steps sees the benefits annually.

Probation and parole officers alone could be covered for just over $300,000 — “chump change,” as Mr. Mumford put it.

“That tells me it’s not about the money, it’s not truly about the money. I think it’s about optics,” he said, calling it a “bad look” to be raising pay for some when one in seven Delaware workers were out of a job in April.

State response

But to others, the notion of doling out raises only to some in such dire economic times smacks of unfairness to the majority of workers.

“There is no way that the other state employees whose union members said they would forgo steps would agree that it’s fair that just one group got steps and the rest didn’t,” JFC co-chairman Rep. Quinn Johnson said.

He pointed to disability service providers as one group paid at lower-than-needed rates, questioning how it would be fair to hand out steps while ignoring the cries of DSPs.

Any union that feels the committee vote is unfair is more than welcome to “sell it to the public,” the Middletown Democrat said.

The process of deciding how to trim more than $450 million from the governor’s January recommendations was painful, Rep. Johnson said.
Attempts to reach the committee’s other co-chairman, Sen. Harris McDowell, a Wilmington Democrat, were unsuccessful last week.

Office of Management and Budget spokesman Bert Scoglietti said the committee “made the difficult decision to treat all employees fairly and freeze steps and scheduled increases in collective bargaining contracts,” emphasizing “there are no pay cuts, no furloughs, no layoffs and no increases in health insurance costs contemplated as part of this budget,” unlike during the Great Recession.

Sen. Dave Lawson, perhaps the committee’s biggest budget hawk, agreed the committee could not fairly give bonuses to some and not others at this point.

“There’s a need to keep that from going back on the taxpayers,” the Marydel Republican said. “The last budget crunch we had we supposedly cut $200 million and we put it back on the backs of the public (with) higher fees and taxes.”

Misinformation?

But Tom Brackin, president of the Delaware State Troopers Association, said he believes some members of JFC were misinformed and wrongly told the unions were onboard with freezing steps.

“The biggest story here is that I’m not sure the committee had the full breadth of the information before they took their vote on freezing step increases and those things that some of us have within our collective bargaining agreement,” he said.

Committee member Rep. Ruth Briggs King, a Georgetown Republican, agreed, saying lawmakers did not know everything they should have when they voted.

“The Joint Finance did not run as well as it would have had we been able to have a full committee like we usually do,” she said, referring to the fact the 12-member group met with at least one member participating virtually and with those in the room social distancing.

During the discussion on the vote on June 4, Rep. Stephanie T. Bolden, a Wilmington Democrat, asked whether the unions were fine with halting step increases. Controller General Mike Morton answered yes, explaining the intent is to put off the payments but still make employees “whole” at some point.

After some further clarification about what the decision would mean, the committee voted 12-0 to freeze steps. Members then unanimously approved the provision that would reinstate them should the state reach the revenue trigger.

Rep. Briggs King said she approved the freeze thinking the affected employees were fine with it, but was told otherwise by several union representatives a few hours after the vote.

“I felt at that point that I had been misled in my decision process and I think a couple of my other colleagues seem to be feeling the same way,” she said.

She’s hopeful JFC, which will meet at least once more before the fiscal year ends, can reinstate the step raises.

Some other legislators agreed they would be open to putting the increases back in place in the next two weeks — but only if there’s a sizable revenue jump first.

At any rate, officials believe the state should hit the $50 million trigger at some point over the next year. At that point, the step-obligated employees would receive a nice payday.

And should Delaware fall short of the threshold in fiscal year 2021 and have to put off payments a little longer?

Well, then the state likely would have bigger concerns than the steps, since a failure to reach the trigger would probably indicate at least a faltering economic recovery.

“If that doesn’t happen, we’re in deep doo-doo,” American Federation of State, County & Municipal Employees Council 81 Executive Director Mike Begatto said.