As the Alaska Legislature continues to debate the operating and capital budgets, the State of Alaska is engaged in ongoing negotiations with the General Government Unit, the largest collective bargaining unit representing over 10,000 state employees.
The GGU has some mega-sized demands that will be cost drivers that the Alaska Legislature will need to fund, if these demands are met even halfway. The total cost for the three major components of union demands is over $800 million.
With the current agreement set to expire on June 30, 2025, the parties have met 20 times since Oct. 30, with the most recent meeting on April 14.
To date, the State and GGU have tentatively agreed on 16 of the 42 contract articles. These agreements largely maintain existing language without changes, aligning with other collective bargaining agreements and incurring no additional costs to the State.
However, big financial demands from the union are still on the table.
The union’s proposed increases to the State’s health insurance contributions alone are estimated at over $234.9 million over three years. The demand is for a 38% increase in year one, 36% in year two, and 42% in year three.
Notably, the State has no representation on the Health Trust Board, which recently approved employee contribution hikes of $50 for Plan A (17% increase), $25 for Plan B (18%), $5 for Plan C (14%), and $5 for Plan D (12.5%).
The union’s three highest-cost proposals include a 12% inflation adjustment that would cost the State $316.7 million, a 10.5% market adjustment at $277.1 million, and cost-of-living increases tied to inflation starting July 1, 2027.
Additionally, the union has put forward over 50 other cost drivers, including additional leave, mandated salary study provisions, daily overtime, premium pay for working on days off, paid leave for new employees to attend union activities, and retention pay.
In contrast, the State has proposed more modest cost-of-living increases based on the Consumer Price Index for Urban Alaska (CPI-U), offering 1.25% in the first year, 2.5% in the second, and an estimated 2.5% in the third. The State also seeks flexibility to supplement the workforce during emergencies and to limit feasibility studies for cost-saving outsourcing initiatives.
All monetary terms in a successor agreement require legislative approval, with the State conducting a “costing out” analysis to compare expenses against the current contract over the proposed three-year term. As negotiations continue, the outcome will have significant implications for state employees and taxpayers alike.
With the deadline approaching, the gap between proposals suggests difficult negotiations in coming weeks.
The Legislature is currently debating both the capital and operating budgets, with legislators adding hundreds of millions of dollars to the already unfunded budget, and cutting Alaskans’ Permanent Fund dividends to pay for the extra spending.
