Current Biennium $59 million is the additional cost of the contract in FY 2012-13.

This cost reflects the cost of the January 2013 2% salary adjustment, the projected January 2013 increase in the employer’s share of insurance – as well as the cost of authorized eligible steps occurring within the current biennium. Agency budgets for FY 2012-13 were initially developed assuming additional costs of $46 million related only to potential projected insurance increases and steps. The proposed settlement reflects a $13 million increase above the amount that state agencies had planned to absorb with the current budget - prior to legislative operating budget cuts enacted in the 2011 session. No additional funding was provided to agencies for increases in FY 2012-13 for the additional costs of the proposed contracts. Next Biennium The cost of the proposed contracts on the next biennium (FY2014-15) is estimated to be $174 million. A significant portion of the increase is the result of annualizing the FY 2013 mid-year increases, for each of the succeeding years FY 2014 and FY2015. There is no budget in place for FY 2014-15. MMB’s forecast planning estimates do not include additional funding in individual agencies’ budgets for the cost of the contract. By law, the budget base for FY 2014-15 is FY 2013 appropriations carried forward. In other words, the $171 million cost of the current contract’s mid-year increases for salaries and employers insurance, as well as eligible progression increases, will have to be absorbed within agencies’ base budget plans for FY 2014 and 2015 without additional resources – similar to the way they were instructed to prepare budgets two years ago.

Estimated Cost of the AFSCME and MAPE Proposed Contracts
Current Biennium FY 2012 FY 2013
($ in thousands)

Next Biennium FY 2014 FY 2015

Proposed Contract Progression Employers Ins. 8.9% Jan 13 Salary Adjustment 2 % Jan 13 "Rollup" (FICA, Retire, etc.) Total Cost by Year Biennial Cost

6,377 0 0 831

19,133 14,829 13,452 4,257

25,510 29,658 26,904 5,078 $87,150

25,510 29,658 26,904 5,078 $87,150 $174,300

7,208 $51,661 $58,869