Governor Wants to Reduce Iowa State Workers’ Contract Perks

Published January 15, 2013

Want a job that fully covers health insurance premiums? How about one that pays more money if you work a later shift? And provides stipends for clothes and shoes? And what about work that gives pay raises of as much as 15 percent even as other companies slash jobs and salaries?

Welcome to Iowa!

The state has long offered its state workers perks it says are essential in attracting top-quality job candidates. But critics say the incentives come at too great a cost to taxpayers and strain already squeezed budgets. They say the perks are unsupportable in a lean economy.

For instance, state employees receive as much as $50,000 in moving costs if they are relocated 25 or more miles from their home.

Calls for Concessions

State and union officials are negotiating a new contract. Gov. Terry Branstad (R) has called for substantial concessions to reduce state spending. Under the current contract:

  • The state fully covers the cost of individuals’ health premiums, while employees pay just 15 percent of the cost of a family plan. The plan doesn’t include a deductible and charges $15 for a standard doctor visit. The plan has a $250 out-of-pocket maximum for prescriptions under a single plan, while the family plan’s limit is $500. Copayments range from $5 for generics to $30 for name-brand drugs that aren’t preferred by the insurance company.
  • Workers who are laid off temporarily continue to receive state-funded health insurance and accrue sick and vacation time as if they were still on the clock. Employees can eventually cash out a portion of their leave time.
  • Staff returning from leaves of absence and new employees are credited the average number of overtime hours worked by others in their work group. The hours can either be used as comp time or be paid out.
  • Employees who are on-call receive 10 percent of their hourly salary for each hour they are on stand-by.
  • State workers are entitled to as much as three hours of paid time off to vote in a general election.
  • Employees who work a shift in which four or more hours fall between 6 p.m. and midnight receive an extra 60 cents an hour. Those who work four or more hours between midnight and 6 a.m. get 65 cents added to their hourly wages.
  • Workers who are reassigned to a position at least 25 miles away from their home receive a moving stipend of as much as $50,000. The money can be used to market their current home, pay closing and inspection costs, settle outstanding leases, and travel associated with the move. Employees also can use up to 80 hours of paid time to move, close on a sale, or conduct other “incidental activities.”

Since taking office, Branstad has pledged to reduce government spending by 15 percent, partly by eliminating automatic pay raises and requiring workers to make contributions toward their medical and dental insurance. His administration is also pushing for the state’s largest union to give Iowa officials more say in the size of government and its workforce, according to Branstad’s initial proposal to the union.

Reversing Prior Policy

Leon Shearer, the governor’s advisor on labor and management issues, is leading negotiations for a new contract that would take effect next fiscal year. Branstad’s push for concessions provides a stark contrast to three years ago, when then-Gov. Chet Culver (D) signed off on the union’s initial proposal after losing his reelection bid.

Brian Jennings, spokesman for Iowa AFSCME, and Shearer did not return requests for comment. Representatives from AFSCME’s national office directed comment to Jennings.

Culver’s unusual move afforded state employees salary increases ranging from 1 percent to as much as 15 percent, depending on where they were on the pay scale. It also extended the state’s commitment to fully fund insurance premiums for single workers. Dick Oshlo, director of the Department of Management at the time, estimated the two-year deal would cost Iowans $70.4 million.

Sheena Dooley ([email protected]) reports for Reprinted with permission.