Tuesday, June 16, 2009
Workers Sue Over 'Wage Tax'
By Dan Boyd
Journal Capitol Bureau
Unions representing 66,000 New Mexico teachers and public employees sued Monday to block a looming increase in their pension plan contributions, calling it a legislative "wage tax."
Claiming that the July 1 increase unfairly balances the state budget using worker payroll deductions, union leaders held a news conference in front of the Bernalillo County Courthouse in Downtown Albuquerque before going inside with their lawsuit.
"We believe it's not right that the employees of the state of New Mexico should have to bear the burden of a general budget shortfall," said Shane Youtz, an attorney representing the unions.
The lawsuit claims employee pension contribution increases which apply to state workers earning more than $20,000 annually are illegal because they single out public employees and threaten the fiscal soundness of retirement funds overseen by the Public Employees Retirement Association and the Educational Retirement Board.
Lawmakers, who approved the measure during this year's legislative session, have said most state government workers are faring better than their private sector counterparts.
"State employees and educators have to
realize the Legislature is trying to save (them from) layoffs," said Rep. Henry "Kiki" Saavedra, D-Albuquerque, the measure's sponsor and the chairman of the House Appropriations and Finance Committee.
Pension contribution hikes, which will last for two years, were crafted to save the state more than $80 million. A 1.5 percent employee contribution increase will be offset by a matching decrease in the state's contribution.
The effect of the change varies by pay scale, but a state agency employee earning the average state salary of about $42,000 per year will take home $24 less per paycheck.
Starting next year, newly hired public employees in New Mexico will be able to retire with full benefits at any age after working for 30 years. The current time span is 25 years.
The unions claim there are other ways legislators could have plugged a $450 million gap in the state's nearly $6 billion budget, such as revamping the state's corporate income tax reporting requirements.
Support for the lawsuit among union members was overwhelming, said Arcy Baca, president of American Federation of State, County and Municipal Employees Local 477.
"When it starts affecting pocketbooks, you've got to stand together," Baca said
If an injunction is issued, the state will be responsible for coming up with the $80 million, Youtz said.
Although he acknowledged the salaries and jobs of public employees could be at risk if the Legislature is forced to revise the state budget, Youtz said such cuts wouldn't be "necessary" or "appropriate."
The New Mexico Legislature is controlled by Democrats, who have historically been more sympathetic to labor unions than Republicans. The lawsuit, however, appears to reflect a breaking point between union members and state lawmakers.
Unions involved in the suit include AFSCME, the American Federation of Teachers, the National Education Association, the Communications Workers of America and the International Union of Operating Engineers.