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Labor unions representing more than 6,000 city employees reached a détente with Portland City Council offices the night before the body was set to vote on a controversial plan to reduce employee health insurance benefits.
At issue: Maintaining employees’ current health benefits is expected to cost the city $16 million more than it did last year, a cost increase the city didn’t learn about until February. City bureaus had only factored in a 5% cost increase over last year in their proposed budgets, leaving a multimillion-dollar gulf between what the city had budgeted and what it actually had to pay to maintain current benefits.
That left labor unions and city officials warring over whether the city should absorb that added cost or unions should agree to reduce health benefits.
It wasn’t until 7 pm last Tuesday evening, the night before an April 24 City Council vote on benefits cuts, that the unions and City Council offices, led by the office of Commissioner Carmen Rubio, struck a deal to kick the can down the road for one calendar year. The labor unions agreed to charge their members an additional $25 a month for their benefits packages, contributing $1.8 million toward the city’s increased costs to keep benefits unchanged. (The Portland Police Association, which represents rank-and-file police officers, also agreed to shave off $200,000 in benefits from its health insurance packages.)
The city agreed to eat the majority of the cost increase for the upcoming fiscal year to keep employees’ benefits. However, the unions and the city will have to bargain down the overall cost of the health benefits over the next year—sure to be a contentious issue.
Save for the Portland Police Association, the unions that represent the vast majority of city employees do not have health benefits enshrined in their labor contracts with the city. That weakens, at least on paper, the unions’ leverage to make demands of the City Council when it comes to the health insurance plans offered by the city. However, irritating labor unions is a dangerous game—and the City Council, especially the three members running for mayor, are unlikely to take that risk.