(The Center Square) – Washington Gov. Jay Inslee has agreed to more than $412 million in raises and lump sum payments for unionized state and non-state employees.
A general wage increase of 3.25% will take place on July 1, 2022, for workers who were employed as of July 1 of this year. Graduated lump sums will also be paid out, with workers currently making less money receiving a larger amount.
“Our improved economic and revenue forecast allows us to address compensation needs and recognize the hard work and commitment our employees have shown during the pandemic,” reads a memo from the state’s Office of Financial Management. “In light of these circumstances, we agreed to reopen our 2021-2023 contracts for the limited purpose of bargaining over compensation.”
There has been no word yet on whether non-union employees will see a raise.
Jason Mercier, director of the Center for Government Reform at the Washington Policy Center, said he thinks the state’s improved economy should also lead to tax cuts.
“With a balanced budget, billions in reserve and $3.6 billion in unanticipated revenue growth, it is clear there is plenty of budget capacity to provide these union pay raises while also finally cutting the state sales tax,” he said.
Mercier said every 0.1% reduction in the sales tax — currently at 6.5% — would provide approximately $306 million in tax relief.
“Let’s say they decrease it 0.2%, so that’s a little over $600 million,” Mercier explained. “Add that to the $400 million in raises and the state still has $2.5 billion more in revenue than they originally assumed.”
Mercier noted that many states around the country have cut taxes as the economy continues to rebound from the coronavirus pandemic, including nearby Oregon, Idaho and California.
“Now that the governor has agreed $412.2 million in mid-budget cycle union pay raises, one of the main questions for the 2022 Legislative Session will be whether taxpayers will also be provided a long overdue tax cut,” Mercier said. “Failing to provide that tax relief will mean that government union employees will be the only ones to see the benefits of the state’s record revenue growth that is coming in above and beyond what is needed for the current budget.”
Mercier also noted it is unusual to renegotiate a contract mid-cycle.
The Washington Federation of State Employees, which represents some 47,000 state employees, had asked to reopen the contract in August, right around the time Inslee put in place a mandate that all state employees must be fully vaccinated by Oct. 18.
The union sued, but eventually approved a contract amendment that gave all members an additional personal day in 2022.
“The timing is interesting,” Mercier said. “Whether they are related, I’ll leave that up to you.”
Mercier also noted that state law gives the governor sole authority in negotiating contracts with state employee unions and those contracts cannot be changed by legislators while setting the budget.