Like school teachers, the territory's health care workers, police and other unionized government employees facing contract negotiations can expect the administration to make giving up a part of their retroactive pay a condition of any wage-increase package for the coming fiscal year and beyond.
That was the message Gov. Charles W. Turnbull sent in a Government House press release distributed Tuesday night responding to Monday's vote by local members of the American Federation of Teachers to reject the contract negotiated by their union representatives and the administration.
Invoking "the children," federal government agencies and the territory's standing in international financial markets, Turnbull said the "forgiveness" of a portion of the government's retroactive debt to workers "has to be a part of any discussion about wage increases. This applies to every union negotiation in which we will be taking part."
A main bone of contention for the teachers in the three-year contract they voted down, 361 to 289, was the provision for the AFT "to release the Virgin Islands government from 50 percent of any and all claims to retroactive monies due and owing" the union membership.
The release quoted the governor as saying the "forgiveness of retroactive wages is part and parcel of a comprehensive strategy of debt management and reduction that the government is pursuing in keeping with the five-year economic recovery plan."
The governor's Economic Recovery Task Force notes in the Five-Year Operating and Strategic Financial Plan it submitted to Turnbull in May that its interim report last December had recommended that negotiations with unions be based on two objectives – reaching agreement on step increases and then "implementing the step increases to obtain 100 percent forgiveness of the retroactive obligation."
The plan states that Turnbull in his Jan. 11 State of the Territory address "further endorsed this approach with the caveat that implementation of the step increases must be tied to a revenue source that will sustain the long-term affordability of the government to pay."
The five-year plan places the total of retroactive wages owed through the current fiscal year at nearly $272 million, with about $112 million of that amount owed AFT members.
Turnbull called on the teachers to reconsider the agreement they rejected Monday. The contract called for dropping "half of the owed retroactive wages in exchange for wage increases totaling almost $9 million," the release stated. Acknowledging the teachers' "legitimate claim" to the retroactive pay, the governor said, "I am asking them to look at the larger picture – the dire financial crisis."
He pointed out that the government is asking others to forgive its debts too – $127 million owed the Federal Emergency Management Agency from Hurricanes Hugo and Marilyn and $10 million owed the U.S. Bureau of Prisons for incarcerating V.I. felons on the mainland.
The release cited the Memorandum of Understanding that Turnbull signed with U.S. Interior Secretary Bruce Babbitt pledging "to improve fiscal accountability by reducing our overall debt, operating under a balanced budget and stemming the growing structural deficit."
It also quoted the governor as saying the territory's debt burden "hampers its ability to float bonds or even borrow money… Unchecked, this debt will consume the matching fund, leaving no money to address major capital improvements."
Last weekend, Central Labor Council president Luis "Tito" Morales called on the unions to shut down the government to protest belt-tightening proposals in Turnbull's fiscal year 2001 budget, including 50-50 contributions by employees and the government for health insurance and retirement benefits, as well as to protest if teachers were to get raises before other union members.
One of the most outspoken union leaders, Naomi Joseph, president of the St. Croix Police Benevolent Association, said the PBA rejected the idea. She had urged the teachers to approve the contract negotiated on their behalf.
Classes for the 2000-01 school year were scheduled to have started Monday, but Education Commissioner Ruby Simmonds earlier this month pushed the start date back to Sept. 11.
