MARYLAND PROFESSIONAL EMPLOYEES cuuncu AFT, AFL-CIO Locc118197 June 23, 2020 Kollner Executive Director Of?ce of Personnel Services and Bene?ts 301 W. Preston Street Baltimore, MD 21201 Dear Director, Kollner: As you know, the State of Maryland and the Maryland Professional Employees Council are parties to an MOU that is in effect from January 1, 2018 to December 31, 2020. The reopener clause in the MOU permits bargaining over economic issues for the next ?scal year, if negotiated in September. The State did not seek to reopen economic issues in September 2019, but MPEC did and negotiated a 2% COLA (and a $500 bonus contingent on revenues). The COLA is to go into effect January l, 2021. Therefore, having reached that agreement with the State, MPEC is now under no duty to negotiate over changes to economics for FY 2021, which you seek in your letter. Understanding the impact of on Maryland's economy, and on behalf of our members, who are dedicated and talented employees of the State government, we are willing to confer and put forth good faith solutions to the State?s economic challenges for your consideration and possible consensus. We understand the ?nancial projections for Maryland and local jurisdictions are concerning and will work collaboratively to help the State ?nd solutions to its ?nancial obstacles and obligations. If we reach consensus, we can enter into a side letter to our existing MOU and will work in good faith to implement the changes that are agreed upon. It is important to note that MPEC, in contrast to members of other State bargaining units, has received no step increases since 2016; our members? career progression has remained stagnant. Over the years, we have received signi?cantly lower COLA increases than other State units. Our members are skilled professionals who have chosen government service as a vocation; however, our members? ability to sacrifice their families? well-being to assist the State in its budget management is not without end. N, Charles St. Suite. 202. Baltimore. MD 31301. I Tel: (1110) 363-7171 I (-113) 75.0 43-10 1 mperhntaftorg On June 17, 2020, you forwarded the State's FY21 Budget Balancing ideas, and gave MPEC a deadline of one week to respond to ideas which will shape the structure of the State?s workforce for years to come. They are draconian, lack detail regarding each proposal?s ?scal impact and provide no protection for my bargaining unit members. Most concerning, they represent a recurring impact to our membership, despite the temporary nature of the COVID-19 economic impact. The Administration?s request for long-term, recurring structural changes to address the problems of a single, short-term occurrence is inherently unfair. ideas have been formulated without employee input and demonstrate little compassion for members of bargaining unit; we cannot allow the shield of the pandemic to be utilized as a sword to achieve collective bargaining changes that could never be reached at the table. We urge the Hogan administration to formulate and share an updated statement of revenue and expenses. We have not been provided evidence that the write-downs forecasted in April and May have materialized. The stock market has recovered much of its losses, and until the books are closed on FY20, we are uncertain that a signi?cant decline in income tax has materialized. We reiterate our request that existing revenues in State fund balances, the bene?ts reserve fund, the income tax reserve fund, the pay- go projects, and the rainy-day fund be fully accounted for and deployed before any action is taken to mandate workforce participation in addressing the Hogan administration?s budgetary shortfall. Fundamental fairness dictates that State employees? economic sacri?ces must be proportional to other State reductions. In the spirit of collaboration, and contingent on the State receiving no federal COVID relief support, I have prepared the following responses and suggestions: 1. On 7/1/20, reduce the number of State employee ?lled and vacant PINs. Response: MPEC will not agree to layoffs of its members, especially during a pandemic. During good economic times, our members work below their market value and signi?cantly lag behind their County government peers. During dif?cult times, we expect the State to recognize the value of its employees and protect their positions. Already short-staffed, with little workforce investment over the past six years, it is not in the State?s best interest to further deplete and demoralize our bargaining unit. We would support the reduction of vacant PINS, understanding the increased demand that will place on. our members. However, in return, the State must commit to no layoffs during FY21. 2. Eliminate salary increases negotiated and agreed to by the State for FY 21, individually cost of living adjustments and annual salary review increases. Response: Per our negotiated contract, step increases are frozen for the 4th consecutive year, a sacri?ce our members have already made. We do not agree with the elimination of a very modest COLA, representing a 2% FY21 cost to the Administration. Maryland will rebound from the impact and eventually be in a position to honor its contractual commitment; permanently forgoing a negotiated increase is premature. Additionally, Governor Hogan has repeatedly stated he is seeking economic assistance for Maryland, which may signi?cantly ease the State?s ?nancial outlook. Your request to permanently forgo wages does not provide a remedy to employees should the Governor be successful. MPEC suggests the State move the 2% COLA scheduled for January 1, 2021 to June 30, 2021, effectively negating any FY21 cost to the State. 3. Beginning on 7/1/20, all will be reduced by Response: MPEC rejects this idea; it is shortsighted and in?icts long?term economic distress on our members. There is no sound reason for asking our members, who already earn wages signi?cantly below the market, to fall further behind on a recurring basis. A quick survey of local government provides no example of employees committing to a long term 5% reduction in their salary scales; this request is unprecedented at the State level. A permanent reduction in state pay? scales for a one year to 18?month event is incongruent with sound ?scal policy and is grossly unfair to the employees we represent. During better economic times, other groups have been granted multiple steps and signi?cantly higher COLAs, while our workers have been asked to sacri?ce to achieve Governor Hogan?s budget priorities. In a time that many of our employees are the sole support for their families due to private sector layoffs, and in light of our below-market wages, we cannot permanently reduce our pay well beyond all projections of this current economic downturn. In a sign of good faith, we would recommend to our members that if a no?layoff commitment is made, employees earning under $100,000 take a two-day furlough, and those employees earning over $100,000 take a four-day furlough. However, our acceptance of such a proposal is contingent on this applying to all state employees. - 4. Beginning on 7/1/20, paid leave will no longer be treated as work time for the purpose of triggering overtime compensation. Response: DBM, despite our request for information, has never demonstrated any signi?cant savings related to this idea related to our members. DBM has unsuccessfully sought this concession in negotiations, earning other clauses for its removal from the table. Utilizing a pandemic to institute a long~term concession that was not obtained at the table does not constitute a good faith idea. We reject this change to our existing contract. 5. Beginning on 1/1/21, the State will no longer pay more than the negotiated health benefits premium percentages. The State will revert to contributing 80% of the premium charge for PPO plans, 85% of premium for the EPO plan, 85% of premium for the IHM plan, 80% for the prescription drug plan and 50% for the dental plan as agreed upon in the MOUs. Response: Ironically, the State wants to honor this section of the MOU as it seeks changes to other articles negotiated in good faith. While we believe the State is within its rights to comply with the contract, we would ask for a full accounting of the health insurance surplus. State employees have built this surplus through their contributions, and we believe any excess should be utilized to offset potential job loss or salary deterioration. 6. Early retirement. Response: We urge the State to examine the possibility of offering early retirement to employees with 20 years of service. These programs have proven successful in lowering long term salary costs. You have indicated in your messaging that should we not reach an agreement; the Administration will seek to implement the changes it has proffered unilaterally. In light of the short Window you have provided for our response, we urge Governor Hogan to not act in such a punitive fashion as we continue to work through a solution. Jurisdictions around the State have worked in good faith to reach consensus with their employees to balance local budgets; we are hopeful good faith discussions and not a ?unilateral action? will resolve the State?s concerns. Through bargaining history, you know we have always worked in good faith with the Administration. Provided a realistic time frame and genuine opportunity for collaboration, I am con?dent the collective bargaining units of the State can assist the Hogan Administration in its efforts to balance the budget. We look forward to your prompt response and are available at any time to discuss our ideas. Sincerely, (1 Jerry Smith, President