McKee, state employee unions strike a deal on new 3-year contracts, $60M in raises this year

Gov. Dan McKee's administration has struck a deal with the largest unions representing state workers on new three-year contracts that include raises averaging 4% each year.

The deal is with Rhode Island Council 94; American Federation of State, County, and Municipal Employees (AFSCME) and the Coalition, a group of labor organizations representing other state employees and covers the pay periods from July 1 through June 30, 2027, according to a Department of Administration news release. It is subject to approval of union members.

The boost in wages, should workers approve them, are estimated to cost $60.4 million in the current budget year, $111.2 million next year and $150.8 in the final year of the deal, according to state Department of Administration spokesman Cassius Shuman.

Of that, a little more than half of that total cost -- $34.7 million, $63.9 million and $86.7 million in the three years respectively -- would be paid out of the state unrestricted "general fund."

The state hopes to save a little more than $4 million of that increased cost through health care changes in the deal.

What changes in the new contract?

The agreement calls for a 5% pay hike in the year that started July 1, a 4% hike the second year and 3% hike the third year.

And the deal boosts the amount of vacation time for state employees who have worked fewer than 10 years.

“Amid a labor shortage in key areas and inflation, we must remain competitive with both the public and private sector as we continue to find new and better ways to deliver services to Rhode Islanders,” McKee said in the news release. “These agreements strike a fair balance to help support our critical workforce, to address rising prescription and medical costs, and to standardize our operations."

In exchange for the raises, the state got an agreement for implementation of a "prescription drug cost management program for certain specialty drugs," which the administration expects will save $3.3 million.

The unions also agreed to a "virtual musculoskeletal program that offers personalized care for members experiencing joint and muscle pain," that the state hope will save $1.2 million.

How will the state pay for the raises?

The first year of the new deal overlaps the state's 2024-2025 fiscal year, which the General Assembly just passed a budget for in June.

The budget did not set aside money for state worker raises.

How does McKee intend to pay for the $34.7 million in new spending this year?

"The Office of Management and Budget will be working closely with the agencies in their annual budget processes to address any financial impacts of the contracts, should they be ratified," Shuman answered in an email. "Additionally, the State is already taking proactive measures to reduce Fiscal Year 2025 spending that are outlined in a memo that OMB issued last month. "

Anticipating a future budget crunch, the McKee administration last month ordered state agencies to tighten their belts by avoiding all but essential discretionary spending and subjecting new hires to an extra level of review.

McKee has enjoyed a good relationship and strong political support from organized labor since he took over as governor from Gina Raimondo in 2021.

If approved, the new contracts would extend beyond the next Rhode Island gubernatorial elections in 2026.

Council 94 is Rhode Island’s largest public employee union, representing around 4,000 active state workers, of which 3,500 would be covered by the new contracts.

"This tentative agreement provides our members with fair and equitable raises and ensures the continued provision of high-quality state services that the citizens of Rhode Island demand and deserve," Michael McDonald, state vice president of the union said. "Our negotiating committee appreciates the thoughtful dialogue that occurred with Governor McKee’s administration.”

The Coalition represents unions including: "the Laborers’ International Union of North America, the professional unit of the Rhode Island Brotherhood of Correctional Officers, several local units of the Service Employees’ International Union, several local units of the National Education Association, the R.I. Federation of Teachers and Health Professionals, the United Nurses and Allied Health Professionals, the National Association of Government Employees, the Rhode Island Probation and Parole Association, as well as other unions representing state employees in various departments and at the colleges."

Rhode Island state troopers and correctional officers are not part of the agreement, Shuman said.

This article originally appeared on The Providence Journal: McKee, state employee unions strike a deal on new 3-year contracts, $60M in raises this year