Layoffs could cost Vt. $2.4M
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By LOUIS PORTER VERMONT PRESS BUREAU - Published: July 7, 2009
MONTPELIER — The administration of Gov. James Douglas risks losing as much as $2.4 million of federal money through the recent layoffs of state workers, according to the union that represents many of those employees.
The process of eliminating positions for about 123 workers over the last month would save about $6 million a year, according to the union. But the fact that the federal government pays as much as three-quarters of the combined salaries for those workers means the process could be counter-productive and cost the state needed federal money, according to the Vermont State Employees Association.
Not necessarily, according to James Reardon, who as Commissioner of Finance and Management is the administration's top budget writer. Federal money that is not used by the state for payroll can, in many if not all cases, be used for other purposes in state government, Reardon said.
"Most of those federal funds will be able to be redirected to support programs and services," he said. "Most of those federal funds will not be lost."
The union points to a list of positions that are partially funded with federal money. Included is a district director for health services, whose job is nearly entirely funded with federal money, according to VSEA's information. Also on the list is an adult protective services worker who is largely federally supported.
If the administration is using that federal money for programs instead of payroll it has not done a very good job of showing that to the union or lawmakers, said Conor Casey, a lobbyist for the VSEA.
"If indeed it can be diverted to other programs, it should have been reflected as a surplus in another area," he said. "At the very least they are not being transparent about this."
And any attempt to use the money elsewhere will probably require state money to be added, as well, which is not shown in any of the budget documents or memos about the layoffs, Casey said.
"You are obviously eliminating services because people are services," he said.
State Sen. Doug Racine, D-Chittenden, objected to some cuts during the lawmaking session on similar grounds and said he was disappointed in the approach taken by the administration.
"Sending money back to Washington is a reverse stimulus package," Racine, a candidate for governor, said in a statement. "Rather than saving jobs and investing in our state's economic recovery, cutting positions funded with federal money becomes a missed opportunity at a time when Vermonters need every opportunity they can get."
But Reardon said the administration has tried to work with the union to get an agreement on a set of concessions that would have reduced or eliminated the need for the current round of layoffs.
"We never wanted to be in this place," he said. "The union did not provide us with any viable options for sustainable savings. We were really forced to do a reduction in force."
And the Legislature — by passing a budget that included more than $13 million in personnel savings — left the administration to solve the question of how to reach that target, Reardon said.
"Quite frankly, the Legislature was not all that helpful," he said.
But the Legislature's job is to set and oversee policy — and policy is being changed simply by the number of layoffs that are taking place or being considered, Casey said.
"They are definitely getting into policy," he said.
In addition, an early retirement incentive program and possible reductions in contracts for government work provide ways to save the money without laying off state workers paid, in part, with federal funds, he said.
louis.porter@rutlandherald.com
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