a move that has shocked unions across Illinois, Gov. Pat Quinn terminated the state’s contract with the American Federation of State, County and Municipal Employees Council 31, the state’s largest public employee union, on Nov. 20.

The union had been in contract negotiations with the state since its contract expired in June, but failure to resolve issues regarding retirement benefits and health care for union members have delayed the two parties

from reaching an agreement, according to Anders Lindall, public affairs director of AFSCME Council 31.

“In 40 years of collective bargaining, Pat Quinn is the first and only Illinois governor to terminate a union contract,” said AFSCME Council 31 Executive Director Henry Bayer in a Nov. 20 statement. “His action will lower employee morale, provoke instability in the workplace and make settling a contract more difficult.”

According to Lindall, the fallout is the result of a flawed negotiation process.

Lindall said the contract was terminated because the state’s public pension system faces an $85 billion deficit and a backlog of $8 billion in unpaid bills. He added that the state tried to cut state workers’ wages and force them to pay more for members health insurance, which is why AFSCME is fighting for better benefits.

Lindall said the contract termination would not have an immediate impact on union workers’ pay or benefits and would not cause a government shutdown, but he noted that failure to reach a deal would eventually begin to affect union members if a contract is not reached by 2013.

However, Abdon Pallasch, Quinn’s assistant budget director, said a deal could not have been reached due in part to restrictions on state spending. Pallasch said Quinn reduced state spending in 2008 to record-low levels, which is why AFSCME requests for retirement benefits and health care for union members could not be accommodated.

“The state has made significant efforts to compromise,” Pallasch said. “We had extended the contract three times, and taxpayers can’t afford pay increases for AFSCME.”

Despite the state’s contract offers, AFSCME has yet to offer up its own contract revisions, Pallasch said. The union has not recognized the severity of the financial crisis gripping Illinois, he added, and the contract must include affordable increases in today’s tough economic times, causing negotiations to be slow and lengthy.

News of the terminated contract led members of multiple teachers unions, including the Illinois Education Association, the Chicago Teachers Union and the Illinois Federation of Teachers, to announce their support for AFSCME and urge Quinn’s administration to resume collective bargaining.

“Things get settled when people go to the negotiating table and come up with a fair agreement,” said Charles McBarron, communications director for IEA. “One side trying to get the upper hand on the other is not something that we agree with.”