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Union chief seeks early retirement aid from state

Wednesday, November 18, 2009

DES MOINES, Iowa (AP) -- The head of Iowa's largest state worker union said Tuesday that he'll push for early retirement incentives to encourage thousands of workers to leave state government and help cut costs amid continuing budget problems.

Danny Homan, president of Council 61 of the American Federation of State, County and Municipal Employees, said in an interview with The Associated Press that up to 2,700 workers are eligible to retire and might do so if the state helps pay their health insurance premiums.

"There are a lot of folks hanging around because they can't afford health insurance," Homan said. "If we can come up with a plan that can help them in the health insurance end of it, maybe you'll actually see some folks who will say, 'I'm going to retire.'"

On Thursday, AFSCME members begin voting on concessions agreed to by union leaders designed to reduce layoffs. Among the concessions: five unpaid furlough days for workers and suspension of state contributions to the employee deferred compensation program, which is similar to a 401(k) plan.

The deal would save the state more than $26 million and would preserve 479 jobs.

The AFSCME has about 9,000 dues-paying members eligible to vote on the concessions but represents 20,000 state workers.

Homan said he had no idea how the vote will turn out.

Big drops in tax revenues left a shortfall of more than $500 million in the current fiscal year and up to $1 billion in the budget year that begins July 1.

Homan said an early retirement offer could help the state deal with future budget difficulties.

"I believe there will be more pain coming down the road," said Homan. "I don't know how Iowa will continue to balance its budget without more cuts."

The governor and House Speaker Pat Murphy welcomed his proposal.

Troy Price, a spokesman for Democratic Gov. Chet Culver, issued a statement saying Culver "intends to offer an early retirement option to meet the needs and desires of these employees while helping the state achieve its budget goals."

And Murphy, D-Dubuque, said he's willing to consider an early retirement incentive package.

"If we can save some money by doing that, I think it's something we could legitimately look at," said Murphy.

Homan said his union wants to help find solutions.

"The reality of it is fiscal year 2011 is going to be a tough year," said Homan. "We hope the governor and the Legislature can come together and come up with an early retirement plan that will allow the 2,700 people we know ... to retire."

Those are workers who meet the criterion known as "the rule of 88," or a combination of age plus years worked needed to qualify for retirement benefits. Many employees keep working even after meeting that requirement because their health insurance costs would rise sharply if they retired.

Homan said such a program is the only alternative to more job cuts.

"I think it's imperative for us to be involved in that conversation," said Homan. "If we don't, we're going to be sitting in the same boat we're sitting in this year."

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