ANNAPOLIS – Gov. Parris N. Glendening’s executive order granting state employees the right to bargain collectively may cost state taxpayers between $13 million to $20 million in the next fiscal year, lawmakers were told this week.
Analysts from the Department of Fiscal Services advised the House Appropriations Committee Tuesday that costs associated with the order could go even higher.
The estimate reflects projected in salary and some benefits for the 40,000 affected employees, who comprise more than half the state’s work force. What is not included are salaries and benefits for more than 6,000 contractual workers who may also come under the order.
However, the Glendening administration cautioned against accepting any estimates so early in the process.
“It’s difficult to put the exact cost on what any of these programs cost. It may wind up costing less,” said Ray Feldmann, a spokesman for the governor.
Feldmann added that any additional costs would have to be approved by the Legislature, which could nullify any agreement simply by not funding it.
The Fiscal Services estimate was based on studies done in conjunction with collective bargaining legislation introduced by Glendening during the 1996 General Assembly session. The governor issued his controversial executive order after the bill died in House and Senate committees.
Analyst Julie Bean said the studies showed that states with collective bargaining faced annual salary increases of 1 percent to 1.5 percent more than the increases in states without collective bargaining. The department made its estimates for Maryland by applying those percentages to the $1.3 billion the state will spend this fiscal in salaries and key benefits for affected employees.
Should roughly 6,100 contractual employees come under Glendening’s order, the state could pay an additional $2 million in salaries attributable to collective bargaining, according to the Fiscal Services estimate.
But there could be costs beyond these, the analysts said.
Glendening’s order divides state employees into nine bargaining units, each of which will elect its own union representatives.
Fiscal Services representatives told the Appropriations Committee that since each of these units may negotiate separately for benefits, including health and retirement, the final cost of implementing the order could not be determined.
The state now pays $192.7 million for its employees’ health care benefits, a figure augmented by a $32.7 million contribution from state workers. Fiscal Services estimates that extending full health benefits to contractual workers, meanwhile, would cost the state another $29.6 million.
Other benefits, like retirement and vacation/leave practices, fall outside Glendening’s order because they are mandated by law — meaning the executive branch is not required to negotiate them.
Fiscal Services estimated that, in addition to any salary and benefit costs, the direct administrative costs of collective bargaining would run $350,700 for this year and $608,500 in fiscal 1998.
Bean told the committee the department was forced to estimate these costs because the administration had provide no information regarding the direct costs of implementation.
This surprised Del. Howard Rawlings, the Baltimore Democrat who chairs the committee. Referring pointedly to the governor’s office, Rawlings said he had called Tuesday’s hearing because “some interesting things happened on the second floor of the Statehouse” since the end of the legislative session.
But during testimony before the committee, Eugene Conti, secretary of the Department of Labor, Licensing and Regulation, said he did not expect the order to produce any costs that cannot be covered by the current budget.
“I don’t expect any additional funding to be required. There have been no additional funds, no additional costs and no additional staff has been hired for this process,” Conti said. -30-