Thousands of Washington State Workers Left Behind After Budget Error and Failed Contract Deal.

More than 5,000 public employees in Washington state will not see the 3% pay increase that most other state workers will receive this July, a hard blow that stems from both a $28.5 million budget oversight and the collapse of contract negotiations with a key union.

For the affected employees, including those working in community colleges and various state agencies, the result is the same: no raise, no updated contract, and little clarity on what comes next.

A Costly Miscalculation

The trouble began with a budgeting mistake. According to the Office of Financial Management (OFM), the state’s 2023–2025 budget mistakenly included duplicated funds meant for salary adjustments at community and technical colleges.

Placeholder dollars were never removed after final figures were approved, effectively inflating the budget by tens of millions of dollars.

Now, the state wants that money back.

But college officials say the funds have already been spent, used to cover operational costs, salaries, and program expenses. Reclaiming the $28.5 million would be devastating, they argue, leading to cuts, layoffs, and hiring freezes.

Union Workers Say “No Deal”

At the same time, nearly 5,000 state government and community college employees represented by the Washington Public Employees Association (WPEA) rejected a proposed two-year contract that included a 5% total wage increase 3% of it set to take effect this July.

Union members said the offer simply wasn’t good enough. With inflation outpacing wages and years of salary stagnation behind them, many demanded a 30% raise instead calling the proposal “out of touch” with the economic reality of public service workers.

Because the contract was voted down, employees covered by the WPEA’s general government and higher education bargaining units will not receive the 3% raise in July, unless a new agreement is reached soon.

Legal and Policy Implications

Labor law experts say the situation illustrates two vulnerabilities: budget mismanagement and broken trust in the collective bargaining process. The overlap between financial planning errors and rejected union deals could have ripple effects, both legally and politically.

“It’s rare to see both a fiscal and contractual breakdown at the same time,” said an employment law professor at the University of Washington.

“If left unresolved, this could lead to legal challenges and possibly set precedent for how similar disputes are handled in the future.”

Some lawmakers have already called for emergency funding measures to shield colleges from the effects of the budget error. Meanwhile, the WPEA has said it’s open to returning to the bargaining table, but with firmer demands.

The Human Cost

For workers caught in the middle, frustration is growing. Many had budgeted their lives around the expected raise, only to learn some via internal memos, that the money wouldn’t be coming.

In recent years, rising inflation has intensified demands for more substantial wage increases. In 2023, Washington’s inflation rate reached approximately 6.5%, placing immense pressure on unions to secure cost-of-living adjustments that reflect the realities of the state’s high cost of living, particularly in urban centers like Seattle and Olympia.

The Washington Public Employees Association (WPEA), a union affiliated with the United Food and Commercial Workers (UFCW), has represented state employees since 1963.

When members reject a proposed contract, as happened in this case, state law requires them to continue working under the terms of their previous agreement. That means wages remain stagnant until a new contract is successfully ratified.

Legal analysts point out that if a resolution isn’t reached soon, the situation could escalate into formal grievances, unfair labor practice complaints, or even legislative intervention.

The episode has already sparked wider concerns about fiscal oversight and the state’s responsibility to honor labor agreements, particularly in sectors where staffing shortages and burnout are already critical.

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