State government job cuts challenge AFSCME

By BILL STEINBACHER-KEMP

Illinois continues to cope with sluggish revenues from the economic slowdown at a time when strains on the state budget, such as soaring Medicaid costs, compound the existing fiscal woes. Given this grim outlook, it is no surprise that the budget hammer this legislative session fell directly on the heads of more than a thousand state employees.

"This year was the absolute worst in memory," says Steve Culen, American Federation of State, County and Municipal Employees (AFSCME) Council 31 executive director. During the past four months, many of the approximately 45,000 state workers represented by AFSCME, the state's largest public employee union, received their pink slips (see box). Union stalwarts, expecting Democratic legislators to protect jobs, were disappointed when House Speaker Michael J. Madigan (D-30, Chicago) unveiled a budget last spring that proposed cutting programs and state jobs above and beyond the budget offered by Republican Gov. Jim Edgar.

Prospects for better days are dim. During the past two legislative sessions, AFSCME has proposed raising revenues to fund services and protect jobs, but the strong distaste for tax increases in the legislature leaves AFSCME and other public employee unions with little hope. In addition, Edgar spokesperson Mike Lawrence says the administration remains committed to curbing the growth in the state's work force. During the gubernatorial campaign, Edgar pledged to end his four-year term with a state employee headcount no greater than the day he took office. "The governor thinks government has grown too much," says Lawrence. "He's going to hold the line on employment." Two years later, the economic downturn has made Edgar's pledge more concrete. "There's no question the fiscal crisis has made downsizing more intense," says Lawrence.

This year stands in contrast to more than a decade of AFSCME growth. While its AFL-CIO counterparts in the steel and automobile industries lost membership, AFSCME had enjoyed relative prosperity for over a decade. (See "The rise of AFSCME as public employee union with clout," Illinois Issues, March 1991, pages 19-22.) Spurred by the passage of collective bargaining legislation for Illinois public employees in 1983, Council 31 membership rolls ballooned during the past decade, increasing from 26,000 in 1980 to 69,500 by 1990. More than 38,000 of the current 70,000 Council 31 members are state government employees, with the remainder working at state universities and on the local and county government level.

Council 31 acts as an umbrella for the 220 AFSCME locals across the state. In addition, approximately 7,000 state workers are represented by AFSCME Council 2000, which is the only AFSCME local in Illinois not under the Council 31 umbrella. Local 2000, also known as the Illinois Union of Social Service Employees, represents bargaining unit workers at the Department of Public Aid. No other labor union can match AFSCME's size and influence on the state level. Combined, Council 31 and Local 2000 represent almost 45,000 state workers. In comparison, the International Brotherhood of Teamsters represents about 3,000 state employees, and the Illinois Nurses Association about 1,400. The Illinois State Employees Association bargains for about 1,300 employees working for the attorney general, secretary of state, treasurer and comptroller.

In June 1991, AFSCME signed a generous four-year contract with the state following negotiations during Edgar's first six months in office. The contract expires in June 1994, and Culen says it's far too premature to speculate on the impact of the layoffs on contract negotiations.

The state's severe fiscal problems presented a bleak budget picture for fiscal year 1993. In April, Gov. Edgar proposed an austere budget that entailed eliminating about 1,900 positions and cutting agency budgets, on average, by 12 percent. Faced with sagging revenues from a recessionary economy, the governor called for increases in the tobacco and liquor taxes to balance the budget. He also proposed cutting the share of the income tax surcharge dedicated to local governments. Prodded by Madigan, the rejected Edgar's tobacco and liquor tax proposals as well as the plan to cut funds to local governments. To balance his budget with its lower revenues for state government, Madigan called for additional spending cuts in state agencies: $360 million on top of the $700 million proposed by Edgar. Those cuts meant that the Chicago Democrat would have eliminated more positions than Edgar, including 1,500 in the Department of Mental Health and Developmental Disabilities (DMHDD).

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Madigan's doomsday budget stunned AFSCME officials. "This session we faced a very ironic situation," says Roberta Lynch, AFSCME Council 31's public policy director. "The Republicans in the House proposed a better budget than the governor or Madigan." Guided by House Minority Leader Lee A. Daniels, (R-46, Elmhurst), House Republicans crafted a budget that included restoring some of the cuts made in DMHDD and the Department of Children and Family Services (DCFS).

During the spring legislative session, AFSCME staged numerous events to protest the proposed budget cuts. Offices in the Capitol and Stratton Building were overrun with stacks of mail from angry AFSCME members who sent an estimated 45,000 orange postcards to the Democratic leadership and chairmen of the appropriations committees. AFSCME locals staged call-in days when members deluged key legislators with hundreds of phone calls. On June 10, 2000 Department of Corrections employees at 29 prisons staged an informational picket. And three months later, DCFS employees held protests statewide from Chicago to the southern Illinois community of Marion. AFSCME contends DCFS caseworkers are handling caseloads three times the mandated level. In Chicago, caseworkers symbolically handed over listings of their caseloads to state officials and the governor. And in Peoria, DCFS employees donned raincoats and carried umbrellas to symbolize a "dark day for children." Although the legislature increased the DCFS budget $70 million from the past fiscal year, lawmakers did not appropriate money for additional caseworkers.

Layoffs and cuts at state agencies Information as of October 28, 1992. • Department of Mental Health and Developmental Disabilities. Under the fiscal 1993 budget, 12 state centers and the Illinois State Psychiatric Institute face reductions in funding and patient levels, cutbacks that will cost an estimated 1,085 staff positions, although some of those are expected to be lost through attrition. Specific layoffs will be announced in January, March and May. The agency will eliminate the jobs as it transfers more than 600 patients from state-run facilities into intermediate care facilities, which are funded but not operated by the state. AFSCME officials call the budget cutbacks and the ongoing deinstitutionalization of the patient population a devastating two-pronged assault on the agency's work force. • Department of Children and Family Services. An estimated 180 bargaining unit positions are slated to be eliminated in this beleaguered agency, which is struggling to meet the terms of a landmark consent decree to provide better services for the more than 29,000 children under its care. Director Susan Suter resigned in August, partly in frustration over the lack of funds to implement the decree. Union officials say the agency is in crisis, and reductions in staffing will compound the agency's monumental problems. The department laid off 155 down-state employees — about half of whom held management positions — on October 27, with Cook County layoffs set to be announced later. AFSCME had tried to halt the layoffs through a temporary restraining order but learned the judge was unlikely to grant the order. In an out-of-court settlement with DCFS, the union called for expedited arbitration to settle disputes over those layoffs. The disputed issues were to be put before an independent arbitrator by December 31. In addition to the expedited arbitration, DCFS agreed to halt the layoffs for 11 employees who were denied their rights to bump into other jobs. • Department of Commerce and Community Affairs. The work force at this former high-flying agency was slashed by one-third. According to agency spokesperson Marshall Rosenthal, 201 employees, 65 holding bargaining unit positions, were laid off. Many workers received their pink slips Wednesday, July 15, which was dubbed "Black Wednesday" by employees. The General Assembly slashed the agency's share of general revenue funds from $93 million in fiscal year 1992 to the current $27.6 million, a whopping 70 percent cut. • Department of Public Aid. Since fiscal year 1993 began, this department has laid off 150 employees, with an additional 322 cuts expected. Agency spokesperson Pat Hogan said that while he wasn't sure of the exact merit compensation/bargaining unit breakdown of total employees to be laid off, approximately 77 percent will be bargaining unit positions. • Department of Corrections. The issue for prison guards and the agency's support staff is not jobs. Instead, the lean budget delayed the opening of five correctional facilities at a time when union officials decry the "tremendous overcrowding and understaffing" in correctional facilities. The state's prison system is operating at about 150 percent over its designed capacity, according to agency spokesperson Nic Howell. Under the governor's original budget, the 950-bed Big Muddy Correctional Center in Franklin County was scheduled to open November 1. The new facility is now slated to open March 1, 1993, because of further cuts in the agency's budget. An additional 950 beds at a work release center in Chicago and four work camps were originally scheduled to open in staggered months between November and June. Now all facilities will open in June. • Other agencies. Few areas of state government escaped the budget ax. For example, 25 employees represented by AFSCME were laid off in August by the Department of Public Health. In August, the Department of Central Management Services (CMS) eliminated 17 positions, 15 by shutting down its purchasing unit. Most employees were able to shift to positions elsewhere within the agency, and only two workers represented by AFSCME were laid off, according to CMS spokesperson Helen Adorjan. Still, the union suffered a net loss of bargaining unit positions. Bill Steinbacher-Kemp

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Threatened with layoffs, individual AFSCME locals lobbied Springfield and their own communities to restore state funding. AFSCME Local 141, representing workers at the Clyde L. Choate Mental Health and Developmental Center in Anna, mobilized against the proposed 38 layoffs slated for the center. "We contacted the city council, chamber of commerce and the county board," says Vickie Miller, Local 141 president. Letters protesting the cuts were mailed to the governor's office and to local and state legislators. "We're a potent lobbying force," says Culen. "One thing we try to do is keep [members] politically active and up to date on the issues." AFSCME credits its intensive lobbying efforts for restoring approximately $200 million in proposed budget reductions from the Madigan budget, such as in the Department of Corrections where cuts were scaled back from $58 million to $18 million.

AFSCME's influence, of course, results from more than letter-writing campaigns. The union's political action committee is among the 20 largest in Illinois, and it ranks second to the Illinois Education Association among labor PACs, according to Kent D. Redfield, associate director of the Illinois Legislative Studies Center in the Institute for Public Affairs at Sangamon State University. In the 1990 election cycle, AFSCME doled out $68,500 in contributions to House Democratic incumbents and challengers, $13,500 of that sum to Madigan and his House leadership PACs. The union channeled an additional $28,000 to Senate Democrats.

AFSCME leaders and the rank-and-file are careful to cast the funding debate in terms of adequate care for the state's needy rather than one of jobs for state workers. Union officials argue that the budget cuts will disproportionately affect the state's disadvantaged, including abused children under DCFS care, patients at state mental health facilities and public aid recipients. In September, AFSCME released a scathing report of the proposed DMHDD cuts titled "Tragedy in the Making." The report contended that the agency fails miserably to reintegrate mentally ill patients from state-run centers into intermediate care settings and that the budget cuts would only exacerbate the problem.

Culen says the overcrowded prison system is a powder keg and likened further reductions in staffing levels to a lit match. In the Department of Corrections, two employees and twelve inmates have been murdered since 1988. "It's one thing for a politician to say, 'We're cutting waste.' But where's the waste in the Department of Corrections?" he asks. "Where's the waste at Mental Health? At DCFS?" Culen maintains that the legislature's cuts were irresponsible. "I'm a taxpayer too, and I want my tax dollars spent wisely. But I also want state services and programs adequately funded."

AFSCME officials do not ignore the pain incurred from large-scale layoffs in this recessionary economy. The union's No. 1 priority remains job protection. The Springfield area is weathering state layoffs on a scale comparable to factory shutdowns. In July, one Springfield City Council member said that the pending layoffs shattered the belief that the white-collar community of 105,000 was immune to the recession. "We don't want to see anybody lose a job in this economy," states Lynch.

The Madigan-crafted budget is described in the harshest of terms by AFSCME officials. "The Republicans beat us up, and then the Democrats piled on," says Culen, a battle-tested veteran of Statehouse budget fights who has led Council 31 for 13 years. "We're very disturbed that the Democratic party, which has traditionally allied itself with the labor movement, out-'republicaned' the Republicans," he says. Not so, says Steve Brown, press secretary for the House Democrats. He says the state's fiscal crisis forced House leaders to make necessary, albeit painful, cuts in personnel and social services. "I don't think Madigan relishes anyone being laid off, but there wasn't really an option," he says. "Ours was a budget in line with revenues."

Culen speculates that the Madigan budget was designed to boost Democratic claims that the GOP was the true tax-and-spend party in Illinois. Incumbent Democrats facing uphill challenges in Republican-leaning districts could tout their party's fiscal conservatism while campaigning for the November election. Democrats in several suburban swing districts, including Andrew J. McGann (D-29, Chicago) in the new 36th District and Terry A. Steczo (D-78, Oak Forest) in the new 35th District, wooed so-called Reagan Democrats with talk of "holding the line on taxes" and making "tough choices." Says Lynch: "The Democratic party under Mike Madigan is only interested in power and maintaining power." Agreeing with AFSCME's political analysis, state Rep. Michael D. Curran (D-99, Springfield) says that the pain to state workers overshadows any temporary political gain made by Democrats in the voting booth. But Brown downplays talk of hardball politics. He says the Madigan budget was a carefully crafted, responsible spending plan. "It had nothing to do with politics," he says, contending that the budget was consistent with Madigan's philosophy of fiscal conservatism.

AFSCME must also contend with Edgar's willingness to look toward the private sector to perform state services. Contracting state services out to the private sector, so-called privatization, translates into fewer jobs for state employees. "The governor's view is to look more and more to the private sector," says Lawrence. "He has always believed government alone cannot solve problems." For example, DCFS is preparing to contract out cases this fiscal year rather than provide direct services.

During the legislative session, Madigan railed against the layer of middle management in state government. Madigan said his proposed work force reductions would target what he called "non-essential" middle managers. But the Chicago Democrat was unable to cut middle managers without enadangering the jobs of bargaining unit employees because an agency's personnel budget is lumped together in one appropriation. AFSCME backed legislation in the spring session to subdivide appropriations for personnel into categories that would enable legislators to cut management positions while protecting union jobs. The measure was included in the omnibus appropriations bill, but it was removed during the waning days of the legislative session. Brown says it's likely House Democrats will revive the issue in the 1993 legislative session. Meanwhile, Curran says AFSCME and other unions have sustained a disproportionate share of the layoffs. "The unions have taken an unfair portion of the burden," he says.

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For union leaders, there's hope that the new General Assembly convening in January will be more open to the needs of state employees. From AFSCME's perspective, what could a more sympathetic legislature do to right perceived wrongs? The bottom line for union leaders: Raise revenues to prevent budget cutbacks and layoffs. Thus enter the dreaded "T" word.

Last January, AFSCME released a report titled "A More Humane Approach" outlining alternatives to the proposed Draconian budget cuts. Anchoring the controversial plan was a proposal to repeal the sales tax exemptions for manufacturing equipment and farm machinery. The plan was dead on arrival since it ran counter to powerful interest groups such as the Illinois Farm Bureau and Illinois Manufacturers' Association. The farm and manufacturing equipment exemptions total almost $120 million in "lost revenue" annually, according to AFSCME. Other components of the doomed plan included restoring the inheritance and gift taxes repealed in the early 1980s, and raising alcohol and cigarette taxes to levels comparable to national averages. All totalled, the various proposals translated into $780 million in new revenue, enough dollars to restore state programs and jobs.

With an election looming, lawmakers demonstrated no propensity to raise taxes during the spring legislative session. Edgar's no-new-taxes pledge during the gubernatorial campaign and Democratic fears of the tax-and-spend albatross created a hostile climate for tax increase proposals. State Rep. Karen Hasara (R-100, Springfield) says the odds of the legislature's seriously considering tax increases during the upcoming session — even for alcohol and cigarettes — are slim to none. Steve Brown of the House Democrats agrees with Hasara. "There's absolutely no sentiment in either party to support tax increases of any kind," he says. But Rep. Curran says the ongoing fiscal crisis will force legislators to reconsider their stubborn positions. "As more and more problems creep up, some measures will eventually have to be passed." For example, Curran supports a tax on video gambling, a pastime currently popular in hundreds of bars and taverns across the state. According to Curran's estimates, such a tax could raise $190 million in its first year. "An awful lot of state jobs would be saved if we raised $190 million," he says.

However quixotic last session's AFSCME tax plan appeared to Statehouse observers, it was relatively modest compared to the revolutionary overhaul of the state's tax structure crafted by AFSCME in 1991. The union's so-called FAIR (Fair and Adequate Illinois Revenue) plan proposed raising $800 million in new revenue through permanent increases in the state's income taxes. The union called for a hike in the personal income tax rate from the current 3 percent to 3.9 percent, triggering an increase in the corporate income tax rate to 6.2 percent. To offset the cost to working and middle-class taxpayers (and many state workers represented by AFSCME), the sweeping plan also proposed boosting the state's personal exemption to $3,500 per person. AFSCME contended that the exemption would translate into an effective tax rate of 3.1 percent. To create progressive taxation on a flat-tax structure, the plan's architects also called for phasing out the exemption for upper-middle and high-income families. Despite seemingly overwhelming odds, Lynch says AFSCME will unveil a similar FAIR proposal for the 1993 legislative session.

Yet Edgar spokesperson Lawrence cautions that even an upswing in the economy and a resurgence in state revenues will not mean a return of programs and jobs lost to cutbacks. According to Lawrence, the state's current situation is analogous to the downsizing experienced by the private sector during the past decade. Faced with the deep recession of the early 1980s, many companies, especially in the manufacturing sector, reduced work force levels and invested in new technology to cut costs and improve productivity. "They did not bring people back once the economy improved," says Lawrence. "There's a lesson to be learned. Once you've gone through the pain, you're in better shape to deal with any problems or economic downturns in the future."

Union officials maintain that raising taxes is the only responsible alternative to continued cutbacks in DCFS, DMHDD and other agencies and programs. "It's a perfectly reasonable, realistic proposal," insists Lynch of the FAIR proposal. "It's not at all pie-in-the-sky." Culen says overhauling the state's income tax structure is long overdue: "Our plan is reasonable from a public policy standpoint, but from a political standpoint, it's not reasonable. It's the right thing and it's the good government thing. If legislators individually will not lead the way, we at AFSCME will. We're certainly not giving up on it."

The FAIR plan received endorsements from the Illinois AFL-CIO and the Illinois Federation of Teachers. Joining with labor unions to embrace the plan were liberal advocacy and civic groups, such as Illinois Public Action, the Public Welfare Coalition, the Chicago Coalition for the Homeless and the League of Women Voters. For beleaguered union officials, the successful coalition-building efforts among labor, advocacy and civic groups during the past two legislative sessions remains a rare bright spot in a grim landscape of budget cuts and layoffs. "More and more people and groups share our views and are concerned about what's going on," says Lynch. "We're bringing people together."

But will the newly elected General Assembly hear their collective plea? Culen is not optimistic. "Things might get even worse before they get better," he says.

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