Raises Ordered for State Workers

State May Need To Pay $20 Million

SANTA FE — About 11,000 state employees covered by union agreements would get retroactive pay raises totaling as much as $20 million under a Court of Appeals ruling that said the administration of Gov. Bill Richardson improperly shortchanged them.

Upholding the rulings of separate arbitrators and a district judge, the court said the workers received smaller raises than they had negotiated in collective bargaining agreements for the 2008-09 fiscal year.

A spokesman for Gov. Susanna Martinez, who took office Jan. 1, 2011, said the state will appeal.

The affected employees — about half the state workforce — are classified employees covered by collective bargaining agreements, both union members and non-members who pay “fair share” fees for their representation. Classified employees are those hired under state personnel rules rather than political appointments.

The separate grievances were brought by the two unions representing state workers, the American Federation of State, County and Municipal Employees, and the Communications Workers of America.

While their collective bargaining agreements called for raises ranging from 3 percent to 5.5 percent, according to the court, the state implemented a flat, 2.9 percent salary increase effective July 1, 2008, for all classified employees, whether or not they were covered by union contracts.

Arbitrators in 2009 ruled in favor of the unions, and they were affirmed by a state District Court. The state then went to the Court of Appeals, which ruled 2-1 on Wednesday.

If the Court of Appeals ruling were to stand, the employees would be entitled to back pay to July 2008 as well as

ongoing pay increases.

AFSCME lawyer Shane Youtz said the ongoing pay increases would be the difference between the 2.9 percent the employees received and whatever they were entitled to under the bargaining agreements, which basically provided the biggest boosts to those at the bottom of the pay scale.

There were no estimates immediately available of how much employees would average in back pay, or how much the ruling would cost the state in the future.

Darnell said in a statement that the projected $20 million “poses a significant impact to the budget and could reduce anticipated funding increases in education, health care and other areas.”

One-time expenditures are often paid from the state’s reserve balances, and Senate Finance Committee Chairman John Arthur Smith, D-Deming, said Friday that was a likely source if the Legislature is ultimately required to make retroactive payments of $20 million.

Under state law, raises negotiated by unions are subject to appropriations from the Legislature.

Lawmakers appropriated $12.8 million for pay increases in 2008-09. It would have taken $8 million to pay unionized workers the increases required under the contracts and nearly $16 million to extend those raises to all classified employees, including those not represented by unions.

The Court of Appeals, agreeing with arbitrators, said the state was obligated to provide the bargained-for increases to union-covered workers first, then use whatever was left for salary increases for other workers.

Judge Cynthia Fry wrote the opinion and Judge Jonathan Sutin concurred. The dissenter was Judge J. Miles Hanisee, a Martinez appointee.

“It appears to me to be contrary to public policy for eligible state employees to be awarded substantially differing income increases for the performance of parallel public services, when that determination is based upon union representation and not upon merit,” Hanisee wrote.

Richardson signed legislation reviving collective bargaining for public employees.