The Douglas Administration and the Vermont State Employees Union failed to reach agreement on a cost-savings plan last night. As a result, the state will begin the process of laying off 200 to 300 unionized workers. Some number of unfilled positions will also be eliminated in an effort by the administration to save $7.4 million in the current fiscal year (2010). It had appeared the two sides were close to a resolution over the weekend following the state’s decision not to ask for actual pay cuts. Instead, both sides were using a combination of furlough days, unpaid holidays and the elimination of a wellness plan. However, the state, led by Administration Secretary Lunderville, insisted that the union had to pledge to find payroll savings for fiscal 2011 and 2012. The union did not want to tie its hands before a new, two-year contract was negotiated for those subsequent years.The last minute negotiations involved the union taking four unpaid furlough days, three unpaid holidays and using the medical plan surplus to achieve the $7.4 million. In past years, the surplus has been given back to the workers by the governor as a kind of “healthy” bonus at the end of the year. The union also offered to give up the wellness plan, dental insurance and tuition reimbursement going forward, which would save the state $5 million a year.While the state questioned whether those moves would save even that much, Lunderville has stated that the administration was looking for more on the order of $16.1 million savings in 2011 and $21.9 million in 2012. While he pledged not to undertake any more layoffs this year if the state and union reached a deal, he said a request by the union to guarantee no layoffs in 2011 and 2012 was out of the question. So, while a general agreement seemed to be reached over 2010, the deal broke down over future years.“VSEA made a new offer to the Douglas Administration with the hope of saving 200-300 jobs in 2010,” said VSEA Director Jes Kraus in a written statement. “The proposal was a significant compromise that addressed the Administration’s sustainability concerns without infringing on the collective bargaining process for the upcoming contract.”In regards to the Legislature’s effort to mediate, he said, “Rather than risk a neutral third party siding against them, the Administration is trying to circumvent the process for settling contract disputes. This is contrary to what the Joint Fiscal Committee had requested.”For their part, Speaker of the House Shap Smith and Senate President Pro Tem Peter Shumlin issued this statement on Tuesday: “We are disappointed that the Administration and the Vermont State Employees Association were unable to come to an agreement in the state labor negotiations.”While we were pleased that the two parties followed the Joint Fiscal Committee’s directive and identified $7.4 million worth of savings in FY10, it is unfortunate that the negotiations broke down over long term savings that could instead be realized in the bargaining process. We are gravely concerned that the impending layoffs of up to 300 state employees could have a devastating effect on state services. We will work with the Union and the Administration to lessen the impact that these layoffs could have on Vermonters.” Source: VSEA. Senator Shumlin’s office. 9.22.2009.