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CHICAGO, July 29 (Reuters) - The state of Illinois and its biggest labor union on Wednesday extended for two-months an agreement preventing strikes or lockouts while contract negotiations continue.
Republican Governor Bruce Rauner also vetoed a bill sought by public employee labor unions that would send collective bargaining disputes to binding arbitration.
The current one-month agreement between Illinois and the American Federation of State, County and Municipal Employees Council 31 ends on Friday, while the union's contract with the state expired on June 30. The extension, until Sept. 30, eases another pressure point on Illinois, where Rauner and Democrats who control the legislature have been unable to agree on a budget for the fiscal year that began July 1.
"This temporary extension underscores our union's commitment to reaching a fair agreement with no disruption to state services, and gives us the ability to keep working toward an agreement in the weeks to come," AFSCME said in a statement.
But the union, which represents 38,000 state workers, said it continues to rebuff the governor's "extreme demands that would undermine public services, strip the rights of public service workers, reduce access to healthcare and make it impossible to keep pace with the rising cost of living."
The union also called on Rauner to stop his reported soliciting of retired state workers and others to possibly fill in for union members, while renewing its push for the arbitration bill.
In his veto message, Rauner said the bill is unconstitutional and would "cede major financial decisions to unelected, unaccountable arbitrators."
"This legislation is bad policy and would derail our efforts to honestly balance the state's budget and enact meaningful government reforms," he said.
The governor added that AFSCME's contract demands would cost the cash-strapped state $1.6 billion more for salaries and pensions.
While the budget battle continues, state workers continue to be paid as the result of a court order. The governor last month vetoed most of a $36 billion budget passed by Democrats, only accepting a bill to fund primary and secondary schools to ensure they will open on time. (Reporting By Karen Pierog; Editing by Steve Orlofsky)