Thin and Bear It

Larry Young has worked on Northeast Kingdom roads for 38 years, and in his experience, they've never been in worse condition. At a March 18 “speak-out” in the Statehouse cafeteria, the 61-year-old senior maintenance worker for the Agency of Transportation [1] praised the dedication of his crew before several dozen lawmakers. Just last month, he noted, when storms dumped several feet of snow in the midst of a flu outbreak in their ranks, drivers showed up to plow the roads, even though many of them were sick.

Still, Young said, it’s been hard lately for him and other VTrans workers to take much pride in their work. Some jobs just don’t get done, he said, because his district doesn’t have the people or the money to do them.

“The people in maintenance are ashamed of the roads the people of Vermont are traveling. It’s an embarrassment to ’em!” Young said. “If they cut services more, our question to the legislature is, what roads don’t you want plowed?”

The road ahead doesn’t look much smoother for Vermont’s state workers. Last November, Gov. Jim Douglas announced plans to eliminate 400 government jobs in the next two years, beginning with 150 cuts by the end of June. The administration now claims that all frontline, “24/7” jobs — that is, uniformed corrections officers, state police, social workers, state hospital employees and other public-safety personnel — will be protected. And, there are no plans to lay off current employees or invoke a hiring freeze.

All the cuts — or “right-sizing,” as the administration calls it — will be accomplished by attrition; that is, by allowing the 700 or so government positions that are sure to become vacant through separation and retirement to remain that way. “We don’t want to lay anyone off,” Linda McIntire, the state’s deputy secretary of administration, maintains. “We just want to start bending the curve by strategically not filling vacated positions.”

McIntire says the cuts can be absorbed through technological innovations, job consolidations and by streamlining government functions. Thus far, however, the administration’s strategy has identified only 13 of the 150 initial jobs to be eliminated, and none of the 250 positions that are headed for the chopping block next year. And, while McIntire insists there will be no direct impact on essential public services, neither she nor anyone else can say which state departments and agencies will be most affected.

Indeed, a lack of essential details about Douglas’ proposal has left state lawmakers groping in the dark. And, the Vermont State Employees’ Association [2] (VSEA), which represents the state’s 8000 employees, is pressing for a clearer picture.

VSEA has already acquiesced on the initial 150 jobs, though it’s drawn a line in the sand on the remaining 250. Instead, the union has offered its own plan for saving the state $2.9 million in the 2009 budget — a figure it says is roughly the value of the endangered jobs.

But that offer was dead on arrival in the governor’s office. And, it’s left the union challenging Douglas’ motive for targeting a specific number of jobs instead of a savings in dollars. “This governor fundamentally wants to go into the November election with the Republican mantra of ‘I’ve created smaller government,’” asserts Annie Noonan, VSEA’s director. “This is, in essence, a body count.”

And not just any body count, as several lawmakers have remarked, but a body count that exacts its greatest toll on VSEA, by replacing permanent union workers with non-union temps, private contractors and outsourcing arrangements.

“I really do believe that there’s a systematic effort in this administration to undermine the union,” House Assistant Majority Leader Floyd Nease (D-Johnson) said last week in a hearing of the House Government Operations Committee, “and they go at it in all kinds of ways all the time.”

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The state of Vermont’s full-time work-force has grown 20.7 percent since 1998, according to David Herlihy, Vermont’s commissioner of human resources. Meanwhile, the state’s population has increased by only 5.1 percent. “I think that’s a pretty good indicator,” Herlihy reasoned, “that it’s time to step back and say, ‘Do we have the right size government workforce for what this population can afford?’”

At the current rate, according to Linda McIntire, the state’s labor costs will double in just a few years’ time. With the largest bubble of baby-boomer employees approaching retirement age, Vermont now has what she calls a “once-in-a-generation opportunity” to reduce the size of state government.

But the governor’s “right-sizing” calculus doesn’t include any plan to reduce the roughly $132 million per year the state spends on temporary workers and private or “personal service” contractors. This “hidden workforce,” as Noonan of the VSEA calls it, is a serious bone of contention for state employees.

In fact, Vermont’s temporary workforce has grown roughly 25 percent, to 1934 employees in 2007, since 1998, according to state figures. During the same time period, salaries for temporary workers more than doubled — from $5.9 million to $12.2 million.

As Noonan told the House Government Operations committee last week, “If there’s a place for cutting classified state employees, then there’s also a place for applying the same shared pain for public service contracts and temps.”

The state first began checking the growth of its temporary workforce in 1991, when the number of temps climbed to an all-time high of more than 3000. In response, the legislature passed a bill in 1993, signed by then-Gov. Howard Dean, setting out new standards for the employment of seasonal, emergency, part-time and contingent workers. As a result, the number of temporary workers fell to 1248 and remained steady for the next few years.

As the size of its regular workforce stabilized, however, the state began to outsource more government functions to private contractors. According to state figures, spending on personal service contracts during the Douglas era has fluctuated, from a high of about $316 million in 2002 to a low of about $148 million in 2005. Last year, the number crept back up to about $221 million.

But, as VSEA points out, it’s nearly impossible to calculate the state’s overall budget for personal service contracts: According to data VSEA obtained from the state via an open-records request, many of the contracts in the state’s database have a “maximum amount” of $999,999,999 — in effect, an open-ended placeholder that shrouds the actual cost budgeted for that contract.

In 1998, a blue-ribbon commission created to examine the “inappropriate” use of private labor recommended restricting the number of temporary employees on the state payroll at any given time. The commission also recommended that the state track the number and amount of private contracts and provide the public with access to the information via a state-run website.

Nearly a decade later, however, lawmakers are still having a difficult time getting accurate figures on the state’s contracting practices. At last week’s House Gov Ops Committee hearing, Herlihy couldn’t say how much Vermont spent last year on personal service contracts. Some contracts cover multiple years, he explained, while others don’t necessarily reflect the amount initially budgeted. Some contracts cover statutorily mandated expenses, such as financial fees paid on the state teacher’s retirement plan, and can’t be easily scaled back.

“If it was as simple as waving a wand and saying, ‘We’re going to reduce that number by 4 percent,’ as the union suggests, we’d do that,” Herlihy said. “But I don’t think that’s realistic.”

Herlihy, whose office is overseeing the job cuts, said the idea that the Douglas administration is using temporary workers and private contractors in a backdoor effort to eliminate state jobs “couldn’t be further from the truth.” Virtually all the work done by temps and contract labor is short-term or seasonal, the administration contends: road flaggers on summer construction projects, temporary staffers for Vermont’s state parks and food-service workers employed during the legislative session.

Other contracts cover work that’s highly specialized, such as helicopter pilots for biological moose surveys and marketing firms that produce information for the public. Still others provide services the state must outsource — legal counsel and financial auditing, for example. Some of the state’s largest contracts are for services that would otherwise require a major expansion of state government, such as its contract with Corrections Corporation of America [3], which houses Vermont’s out-of-state inmate population, and Prison Health Services, which provides medical care.

But VSEA members argue that some of the outsourcing is unnecessary, more expensive or both. Terry Lefebvre, a 36-year veteran of state government, is a financial resources consultant for the Vermont Department of Health. Her office, Children With Special Health Needs [4], has contracts with two private pediatricians, a nutritionist and a physical therapist. Based on her calculations using the state’s pay grades, Vermont could save taxpayers about a quarter-million dollars annually by hiring full-time state employees for those four positions alone.

There are other perils associated with outsourcing, points out Dave Bellini, a community service team leader with the Vermont Department of Corrections [5] who supervises road crews out of Burlington’s probation office. He notes that when a position similar to his own opened up recently in St. Albans, the state hired someone outside of the department. “That position is going to be replaced with a temp with zero corrections experience. Nothing!” Bellini complained. “This guy is going to be a walking lawsuit.”

Administration officials acknowledge that private contractors sometimes perform the same jobs as state employees, and are sometimes paid more for the same work. Sometimes it’s less: Sending an inmate out of state for a year costs Vermont taxpayers $23,000, or about half what it would to cost to house him in Vermont, noted Corrections Commissioner Robert Hofmann. Herlihy also offered several examples of jobs that were traditionally awarded to the lowest bidder, including certain custodial work and nurse case managers for workers’ compensation, that are now done by state employees.

“We’re not feathering anyone’s nest,” Herlihy insisted.

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Last week, as members of the House Government Operations Committee scratched their heads and wrestled with the numbers laid out before them, several representatives were clearly exasperated by the administration’s inability to paint a clearer picture on Vermont’s use of private contractors.

“I don’t mean to be a bulldog about this,” said Rep. Chris Pearson (P-Burlington). “I just want some information that makes sense! As the committee that oversees this it really does feel like there’s a willful attempt to keep us in the dark.”

Rep. Ken Atkins (D-Winooski) said, “the cloudy, nebulous stuff” the administration provided the committee made it difficult for him to make an informed decision about the proposed personnel cuts. “I’m worse off today than I was yesterday,” Atkins said as the hearing adjourned.

Even the committee’s chair, Donna Sweaney (D-Windsor), couldn’t say whether Vermont’s use of temps and private contractors has increased or decreased in the last decade. “It’s been very difficult for us to get that information,” she admitted, “because of the way it’s tracked.”

The Douglas camp says it’s agreed to review the executive branch’s use of temps and outside contracts — if the legislature and the judiciary will do the same. That proposal, the administration’s McIntire says, has gone nowhere in the Statehouse. She noted that the state could purchase an automated procurement system that tracks personal service contracts on a monthly or even weekly basis — at an additional cost of $3 million.

One thing the Douglas administration has not offered to do, Noonan and VSEA say, is back up its assertion that the state’s workforce needs all this “right-sizing.” Noonan points out that some of the recent job growth is due to the new prison that opened in Springfield, which put an additional 160 jobs on the corrections department’s payroll. Likewise, since 1998, the judiciary has created a number of courts to handle environmental, drug and mental-health cases — services that, according to VSEA, Vermonters believe are vital to protecting the interests of taxpayers while saving them money in the long run.

The union is calling for a public dialogue to determine which services Vermonters are willing to live without before the governor proposes any more job reductions. As Noonan points out, a federal audit last year found that the Department for Children and Families [6] wasn’t adequately serving the needs of its clients. Nevertheless, the administration’s plan is slashing 36 positions from DCF this year alone.

“We’re talking about a pretty significant wipeout here,” Noonan says. “If that’s the case, this administration needs to stop saying that there will be no impact to public services. That’s just a lie.”