Public employees brace themselves against deeper budget cuts

With sharp axes looming over several state and local budgets this year, the nation's largest public-employee union is worried. ``Times are hard,'' says Iris J. Lav, assistant public policy director of the union, the American Federation of State County and Municipal Employees, or AFSCME. ``The truth is it's tough bargaining this year.''

The full impact of the squeeze, which is concentrated in the nation's midsection, is not yet clear. Some states in the region are prospering, while at least three others -- Montana, Wyoming, and Texas -- are trying to convince state employees to forego their 1987 cost-of-living raises. A few Oklahoma state agencies plan to send employees home without pay for several days a year to meet budget cuts of up to 16.5 percent.

``The pressure is growing,'' acknowledges Linda Lampkin, AFSCME's research director. ``We call it the Midwest Malaise.''

``I think state employees . . . are going to be facing concessions'' in some hard-hit states, adds Karen Benker of the National Association of State Budget Officers. A National League of Cities survey of 660 cities and towns also found that just over half of them expected to end their budget year in the red.

Outside of this region, AFSCME workers are not under the same pressure. In Philadelphia more than 15,000 of them began a strike early Tuesday, asking for a 16 percent wage increase and limits on outside contracting.

It is still too early to tell whether budget pressures in the nation's midsection will erode the 1.1 million AFSCME membership or that of other public-employee unions, union officials say. But by late last week, while AFSCME celebrated its 50th anniversary in Chicago, some union members were casting worried glances northward to the union's birthplace, Wisconsin.

County-run nursing homes there are coming under pressure to become cost effective or else face closing down. Budget pressures and changes in funding formulas have played a role. But ``the real issue is the changing needs of the people we serve,'' says Lynn Haanen, staff member in the governor's office and a former supervisor in Dane County, which closed one of its nursing homes. Other counties are looking at selling the nursing homes or getting private contractors to run them -- a heavy blow to the unionized workers.

Proponents of the move to close or privatize the nursing homes argue that scarce local tax dollars would be better spent elsewhere, since some of the facilities are old and underutilized and private nursing homes can take up the slack. The union and other opponents counter that the quality of care for patients would deteriorate with less-skilled workers. A private nursing home might pay a little over half the $15,000 a year that an AFSCME worker could make in the county-run homes, according to the union.

The idea of privatizing government services has broad appeal, as local governments look to trim costs in everything from food service to trash collection. The Tennessee corrections department will accept bids later this year to have a private firm run its new medium-security work camp in Carter County. AFSCME, which contends that contractors are not inherently more cost-effective, is offering to work with local governments to fashion creative alternatives. Cases of cooperation have occurred in states such as Ohio and New York. But looming budget crunches in the nation's midsection may make compromise more difficult.

``It's causing many governments to look for desperate solutions,'' says AFSCME's Ms. Lav.

``The nursing homes [in Wisconsin] are at the point of the fight right now,'' adds Bob Lyons, executive director of AFSCME Council 40 in Wisconsin. ``But when you think about it, there are very few public services that couldn't come under the same attack.''