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Iowa High Court Orders State To Pay Raises

March 25, 1992 GMT

DES MOINES, Iowa (AP) _ Pay increases bargained by unionized state employees are ″binding obligations″ that must be paid, regardless of the state’s claims of poverty, the Iowa Supreme Court ruled Wednesday.

″It would lead to untenable results if a government, after having contracted for needed things, did not have to pay for them,″ a unanimous court said.

The decision could cost the state up to $150 million and lead to layoffs or new taxes.

The state and the major state worker unions went to binding arbitration over a new contract last year. An arbitrator ruled in favor of the unions’ demand for raises, but Gov. Terry Branstad vetoed funding.

Branstad said the state was broke and couldn’t afford the raises.

Gubernatorial spokesman Richard Vohs said Branstad was still studying the 16-page decision.

″This represents a critical budget problem,″ Vohs said. ″There are really only two sources to pay for this - layoffs or furloughs or more tax revenues. We are disappointed.″

Branstad last summer fired more than 1,200 state workers because of projected budget deficits. He had said as many as 3,000 more would be laid off if he lost the lawsuit. There were about 44,000 state workers before last summer’s layoffs.

The unions that filed the lawsuit represent about 20,000 state workers. They see the pay increases as costing well under $40 million; Branstad has said all state workers would have to get the increase and has set the cost at more than $150 million.

After the court’s ruling, the American Federation of State, County and Municipal Employees sent a letter to Branstad demanding that he fully fund the pay raises or resign as governor.

The court said it would intervene again only if the governor and the Legislature don’t come up with the money.

″We trust, owing to the goodwill and respect for the rule of law on the part of the governor and the legislators, such a point will not be reached in this dispute,″ said the court, in a decision written by Justice K. David Harris.

The arbitrator awarded a 3 percent raise on July 1, 1991, an additional 2 percent on Jan. 1, 1992, an additional 4 percent on July 1, 1992, and a one- time payment of $400 to each worker in December 1992. The arbitrator also agreed to continue a series of annual 5 percent wage increases awarded to all but veteran workers as they advance in seniority, making total raises of 9 percent to 19 percent over the life of the contract.

The average salary of all state workers is about $27,000.