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Creative Approach to Budget Woes Spares New Jersey State Jobs
With New Jersey facing the largest budget deficit in its history, the 40,000 CWA members working in state government had reason to fear the worst earlier this year.
After all, layoffs had become commonplace during Republican Gov. Christie Whitman’s two terms — eight years of financial mismanagement that led to the $6 billion shortfall and put corporate interests ahead of working families at every turn.
But using what CWA leaders in New Jersey have called creativity, compassion and common sense, Democratic Gov. Jim McGreevey — elected last November — is handling the financial crisis without laying off employees.
Instead, state workers with enough years of service were offered early retirement. More than 5,600, twice what McGreevey expected, are taking advantage of it. Further, a corporate tax bill passed by the legislature in June will add $1.8 billion a year to state coffers, none of it from workers’ pockets.
“The most important thing was that the governor worked with us to try to find a solution that met our members’ needs,” Local 1034 President Carla Katz said. “We’d always said no layoffs, and even though he knew it might be difficult for him politically, he stayed with that program. From our members’ perspective, this is a giant change in attitude from the Whitman administration.”
In addition to Katz’s local, which has the largest number of state workers — about 9,500 — CWA Locals 1031, 1032, 1033, 1037, 1039 and 1040 represent workers throughout New Jersey state government.
It’s not clear yet how many CWA members are opting for early retirement. Employees were offered up to nine months to leave their jobs, staggering the retirements so state agencies wouldn’t lose so many years of collective experience and institutional memory all at once.
Local 1040 President Carolyn Wade said even early retirement is traumatic for some workers and will have an effect on already short-staffed public agencies. But like Katz and other CWA leaders, she said it’s a far cry from the damage that Whitman did.
“Without the early retirement bill, we would have been laid off, and we’ve lived through that for eight years,” Wade said. “There was no creative problem solving. They just put the ax to our necks.”
Prior to McGreevy’s new corporate tax law, New Jersey tax law had allowed more than 75 percent of the corporations in the state, including 30 of the 50 largest employers, to pay only a $200 annual tax. The new law raises the minimum tax to $500 and makes other adjustments.
CWA campaigned hard for the tax bill, even running TV advertisements to urge lawmakers to support it. Members of state employee locals held rallies and “lobby days” at the state capitol.
The AFL-CIO Executive Council, noting grim financial pictures in many states, praised McGreevey’s tax plan. “Gov. McGreevey put working families first,” union leaders said in a statement. “Bucking national trends against progressive taxation, the governor eliminated a billion dollars in corporate tax loopholes as part of his administration’s plan to resolve the unprecedented budget deficit.”
Still, the debt Whitman left is so large that state agencies, for now, will only be able to hire workers for 30 percent of the positions lost to early retirement. Hetty Rosenstein, president of Local 1037, said CWA will serve as a watchdog when it comes to which jobs are filled.
“One concern is that critical services can be jeopardized if there isn’t appropriate staff,” said Rosenstein, whose local includes human services workers and employees at the state police laboratory. “The other concern is that we have to watch very carefully to make sure where positions do get filled, that they are direct-care positions and not bureaucrats’ positions.”
Losing workers to early retirement isn’t just hard on state agencies. CWA locals, too, are losing some of their most active, long-term members. Local presidents are encouraging retirees to stay involved, while reigniting organizing efforts to bring new members to the union. “We’ve got our work cut out for us,” Wade said.
Jim Marketti, president of Local 1032, is losing about 5 percent of his members, who work in transportation, information technology and public television. Because of federal funding for some of the jobs, the agencies his local represents will likely have more than 30 percent of the positions restored.
One fear Marketti’s members had under Whitman — layoffs due to privatization of state services — has been all but put to rest under the new governor.
“With McGreevey, we have entrée that we’ve never had before,” Marketti said. “We can talk to him about problems, and privatization was one of the biggest issues for our local. Now we’ve got pretty much unanimous consent among the various commissioners and department heads that privatization has gone too far.”
CWA leaders don’t expect they’ll always agree with McGreevey and are prepared, as always, to put up a fight if job security, health care or other matters critical to workers are on the table. But they say the blame for the underlying problems lies with Whitman.
“Christie Whitman left this state in bad shape,” Marketti said. “She was here in the state a week ago saying McGreevey should stop whining and play the cards she dealt him. What she didn’t point out is that she dealt them from the bottom of the deck.”
After all, layoffs had become commonplace during Republican Gov. Christie Whitman’s two terms — eight years of financial mismanagement that led to the $6 billion shortfall and put corporate interests ahead of working families at every turn.
But using what CWA leaders in New Jersey have called creativity, compassion and common sense, Democratic Gov. Jim McGreevey — elected last November — is handling the financial crisis without laying off employees.
Instead, state workers with enough years of service were offered early retirement. More than 5,600, twice what McGreevey expected, are taking advantage of it. Further, a corporate tax bill passed by the legislature in June will add $1.8 billion a year to state coffers, none of it from workers’ pockets.
“The most important thing was that the governor worked with us to try to find a solution that met our members’ needs,” Local 1034 President Carla Katz said. “We’d always said no layoffs, and even though he knew it might be difficult for him politically, he stayed with that program. From our members’ perspective, this is a giant change in attitude from the Whitman administration.”
In addition to Katz’s local, which has the largest number of state workers — about 9,500 — CWA Locals 1031, 1032, 1033, 1037, 1039 and 1040 represent workers throughout New Jersey state government.
It’s not clear yet how many CWA members are opting for early retirement. Employees were offered up to nine months to leave their jobs, staggering the retirements so state agencies wouldn’t lose so many years of collective experience and institutional memory all at once.
Local 1040 President Carolyn Wade said even early retirement is traumatic for some workers and will have an effect on already short-staffed public agencies. But like Katz and other CWA leaders, she said it’s a far cry from the damage that Whitman did.
“Without the early retirement bill, we would have been laid off, and we’ve lived through that for eight years,” Wade said. “There was no creative problem solving. They just put the ax to our necks.”
Prior to McGreevy’s new corporate tax law, New Jersey tax law had allowed more than 75 percent of the corporations in the state, including 30 of the 50 largest employers, to pay only a $200 annual tax. The new law raises the minimum tax to $500 and makes other adjustments.
CWA campaigned hard for the tax bill, even running TV advertisements to urge lawmakers to support it. Members of state employee locals held rallies and “lobby days” at the state capitol.
The AFL-CIO Executive Council, noting grim financial pictures in many states, praised McGreevey’s tax plan. “Gov. McGreevey put working families first,” union leaders said in a statement. “Bucking national trends against progressive taxation, the governor eliminated a billion dollars in corporate tax loopholes as part of his administration’s plan to resolve the unprecedented budget deficit.”
Still, the debt Whitman left is so large that state agencies, for now, will only be able to hire workers for 30 percent of the positions lost to early retirement. Hetty Rosenstein, president of Local 1037, said CWA will serve as a watchdog when it comes to which jobs are filled.
“One concern is that critical services can be jeopardized if there isn’t appropriate staff,” said Rosenstein, whose local includes human services workers and employees at the state police laboratory. “The other concern is that we have to watch very carefully to make sure where positions do get filled, that they are direct-care positions and not bureaucrats’ positions.”
Losing workers to early retirement isn’t just hard on state agencies. CWA locals, too, are losing some of their most active, long-term members. Local presidents are encouraging retirees to stay involved, while reigniting organizing efforts to bring new members to the union. “We’ve got our work cut out for us,” Wade said.
Jim Marketti, president of Local 1032, is losing about 5 percent of his members, who work in transportation, information technology and public television. Because of federal funding for some of the jobs, the agencies his local represents will likely have more than 30 percent of the positions restored.
One fear Marketti’s members had under Whitman — layoffs due to privatization of state services — has been all but put to rest under the new governor.
“With McGreevey, we have entrée that we’ve never had before,” Marketti said. “We can talk to him about problems, and privatization was one of the biggest issues for our local. Now we’ve got pretty much unanimous consent among the various commissioners and department heads that privatization has gone too far.”
CWA leaders don’t expect they’ll always agree with McGreevey and are prepared, as always, to put up a fight if job security, health care or other matters critical to workers are on the table. But they say the blame for the underlying problems lies with Whitman.
“Christie Whitman left this state in bad shape,” Marketti said. “She was here in the state a week ago saying McGreevey should stop whining and play the cards she dealt him. What she didn’t point out is that she dealt them from the bottom of the deck.”