Gov. Corzine and the largest New Jersey state employees' union reached an agreement yesterday that will delay a scheduled raise for 18 months and require 10 unpaid furlough days, including one that took place last month.
In exchange, employees represented by the Communications Workers of America will be protected from layoffs through 2010 and will face no more furloughs until their contract expires on June 30, 2011.
Furloughed workers will also get up to seven paid leave days in later fiscal years. Those days could be cashed out - at future pay levels - if workers do not use them by the time they leave government service.
The administration originally considered 14 furlough days.
Corzine said the mid-contract concessions, which must be ratified by local CWA chapters, will save from $300 million to $400 million in the current budget and the one that begins July 1, helping balance the spending plans amid dwindling tax revenue.
"The agreement averts layoffs in this time of a deep national economic crisis and allows the state to continue to provide, with minimal disruption, the vital public services the people of New Jersey depend on," Corzine said in a statement.
The pact pushes a 3.5-percent pay bump scheduled for July 1 onto the 2010-11 budget, which will now have two raises instead of one. The move is one of several steps by Corzine, facing a dire economy and a re-election battle this fall, that will save money now without reducing long-term costs.
The administration did not answer questions yesterday about how much of the current savings come from the delayed raise that will be paid in later years.
Republican critics said the layoff and furlough protections would limit the cost-cutting options for Corzine or his successor after November's election. The winner is expected to face a multibillion-dollar deficit as many one-time budget fixes expire.
"Trailing in the polls, [Corzine] has made it virtually impossible for another governor to successfully cut the state's workforce to lower costs for taxpayers," said Assembly Minority Leader Alex DeCroce (R., Morris). "Corzine has imposed much hardship on New Jersey's middle class but continues to coddle public-employee unions."
Corzine's Republican opponent, Christopher J. Christie, has said he would lay off state workers to cut spending, but now would have to wait if he wins.
Gov. Rendell also is seeking furloughs, along with 500 to 800 layoffs, to balance his state's budget. Without furloughs, he has said, he will lay off even more employees.
The New Jersey deal also may help the CWA pick up a benefit, or bargaining chip, heading into its next contract. As part of the agreement, the Friday after Thanksgiving will be an unpaid furlough day in 2009 and restored as a paid holiday in 2010.
In exchange, the CWA will give up Lincoln's Birthday as a holiday in 2011, but that day was slated to come off the books the next year anyway, reducing the holidays to 12.
If the restored day-after-Thanksgiving perk remains in place, unions' paid holidays will stay at 13.
Progress on the deal this week averted a potentially embarrassing labor protest planned outside Corzine's first campaign event Tuesday. The event featured Vice President Biden, who touted himself that night as a labor ally. Unions called off their demonstration as the deal neared, although Corzine said the threat did not change the course of negotiations.
CWA leaders praised the deal, saying it protects jobs and the raises in their original contract while also helping the state.
"Given the realities of the current economic crisis, and soaring levels of unemployment, our two top priorities in these negotiations were the protection of all of our members' jobs and preserving the integrity of the collective bargaining agreement," said Chris Shelton, CWA's regional vice president. "We achieved those goals."
The July 1 raise will now come in January 2011. A 3.5- percent raise scheduled for July 2010 remains in place.
Pensions will be calculated as if the raise had been given as first scheduled.
Without a furlough deal, Corzine had said he would have imposed thousands of layoffs to save the same amount of money. That would have disrupted state services and the work force, he said.
Instead, there will now be nine more furlough days. The day after Thanksgiving in 2009 and Lincoln's Birthday in 2010 will be two. The other seven will be scheduled individually, which will prevent the department-wide closures seen in May.
If any governor imposes layoffs before 2011, every worker will immediately get the delayed 3.5 percent raise. Any furloughs beyond the 10 in the deal would be paid.
According to the CWA, the state also has rescinded its plan to close 17 schools and two programs that serve children with disabilities, at-risk youths, pregnant teenagers and teenage parents.
The schools, operated by the Department of Children and Families, include a Burlington campus in Mount Holly and sites in Cherry Hill and Gloucester.
Although closing the schools was expected to save the state $4 million per year, DCF Commissioner Kimberly Ricketts previously said the decision to close the schools was made for policy, not financial, reasons.
Parents, teachers and staff criticized the decision, however. Parents worried their children would be unable to find suitable alternatives.
The schools serve about 560 students statewide and employ 400 full-time state workers and 100 part-time workers, according to DCF.
The seven "paid leave bank" days will be accumulated by workers as the furloughs go forward. Those days cannot be used until after the end of the 2009-10 budget, placing the burden of additional days off or payouts for unused days on future spending plans.