SANTA FE, N.M. (AP) -- Thousands of state workers are owed back pay totaling millions of dollars, New Mexico's highest court ruled Thursday in a victory for unions representing public employees.
The state Supreme Court affirmed a Court of Appeals decision that determined about 11,000 state workers are entitled to retroactive pay increases because former Gov. Bill Richardson's administration didn't follow union contracts in distributing money provided by the Legislature about five years ago.
Gov. Susana Martinez's administration estimated the ruling will cost the state at least $23 million for back pay, but there could be additional costs, including adjusted pension benefits for workers who have retired. Pensions are based on a worker's average salary.
Union lawyer Shane Youtz said the court's decision was a "testament of how clear-cut this case has been all along."
"The state entered into a legal agreement with its employees, and it owes them money," Youtz said in a statement.
Martinez spokesman Enrique Knell said the administration will determine how to make the payments but he warned that it could create problems if the money comes out of existing agency budgets.
No money was allocated in the state budget for this year or next year specifically for the back wages if the state lost the court fight. New Mexico has cash reserves that ultimately could be used for the payments, but the Legislature doesn't meet until January to approve tapping into the money.
Knell said in a statement that "an expenditure of this magnitude could mean reduced reserves or a strain on services provided by agencies." That comes on top of continued federal budget cuts, he said.
The court's ruling means a pay raise for about half of the state's classified workers, who are those hired through a merit-based civil service system rather than a political appointment. The amount of the pay will vary from worker to worker, depending on an individual's job and their experience with government.
At issue were raises for workers covered by collective bargaining agreements — both nonunion members and those paying union dues. Their contracts called for them to receive raises ranging from 3 percent to 5.5 percent, depending on experience. Instead, Richardson's administration used the money appropriated by the Legislature to give all classified workers — whether union or not — across-the-board pay hikes of 2.9 percent.
In upholding state district court and the appeals court rulings in the case, the Supreme Court said the state breached its contractual obligations.
"The effect of this action was to deprive those state employees covered by contract of sufficient funds to honor those contracts," the court said. "Instead, the state chose to provide increased wages to those employees not covered by contract who had no contractual rights at the expense of those state employees who had enforceable contractual rights."
The Communications Workers of America and the American Federation of State, County and Municipal Workers filed separate grievances challenging the state's pay distribution.
Not all of state government is covered by union contracts, and it varies from agency to agency. Among the agencies with union representation are the Corrections, Human Services, Transportation, and Public Education departments.