On November 8, Ohioans will vote to approve or reject Senate Bill 5, Gov. John Kasich’s public-sector-union reform. The law, enacted earlier this year but put to a referendum thanks to the efforts of organized labor, is vital to the fiscal health of the state’s municipal governments, and it should remain on the books. Turnout will be major factor, so fiscally conservative Ohio voters owe it to their cause to head to the polls on Election Day.
Senate Bill 5 is broadly similar to the collective-bargaining reforms enacted by Gov. Scott Walker in Wisconsin. While the law allows collective bargaining on many issues — exceptions include health insurance, pensions, and staffing levels — local governments can impose a contract unilaterally if negotiations falter. Unions can no longer charge “fair share” fees to workers who choose not to join. Also, government workers are required to pay 15 percent of their health-care costs and contribute 10 percent of their salaries toward their pensions.
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In short, Senate Bill 5 limits the ability of government workers to negotiate higher salaries, and it cuts their total compensation by requiring them to contribute more to their benefits. Both of these effects should be celebrated.
As even pro-labor Democrats once understood, it’s not “negotiating” when a union sits down with a public official it helped elect to decide how much of the taxpayers’ money it gets. And government-employee unions are a huge factor in Ohio politics. According to the 1851 Center for Constitutional Law, an Ohio think tank, four of the top six donors to legislators and legislative candidates in the state are public-sector unions — and these donations come from dues that are automatically deducted from employees’ paychecks. Few workers realize they can demand refunds for the portion of their dues that is used for political purposes — a problem addressed by another Senate Bill 5 measure, which would require unions to get workers’ written consent before giving dues money to political-action committees.
Cutting compensation for public employees is also a good move. Of course, there is an intense debate unfolding over whether public-sector employees are paid more than their private-sector counterparts — a debate that will never see a definitive resolution, because the methodology is so subjective. Nonetheless, one sophisticated estimate, that of Andrew Biggs and Jason Richwine of the American Enterprise Institute, suggests that public employees in Ohio are overpaid by as much as 43 percent. Simpler measures point in the same direction: Nationwide, for example, public-school teachers are paid considerably more than private-school teachers, despite having essentially the same job.
Why not put Biggs and Richwine’s estimate to the test? If the unions are to be believed — and public employees are, if anything, underpaid already — Senate Bill 5’s compensation cuts will create a shortage of public employees, and Ohio governments will have to raise wages regardless of how much power the unions have. While this would impose short-term hardship on Ohio’s governments and their employees, it would prove that, by and large, public-sector workers provide a good value relative to their compensation. The similar estimates Biggs and Richwine have arrived at for other jurisdictions would be immediately discredited.
By contrast, if Biggs and Richwine are correct, Ohio governments will have no problem hiring at the lower compensation level — and they’ll save some much-needed money. Ohio’s pension system has a liability of $171 billion, only 66 percent of which is funded, according to the Pew Center on the States. (A healthy funding number is 80 percent.) In addition, Ohio is liable for $43 billion in retiree health-care costs, only 33 percent of which is funded.
If it works as predicted by Biggs and Richwine — and we expect it to — Senate Bill 5 is a crucial step toward fixing this problem in Ohio and a model for addressing similar issues elsewhere. Ohio voters should opt to keep Senate Bill 5 when they take to the polls November 8.
I have to wonder about the mental stability and/or intelligence of taxpayers who favor repealing a law intended to protect them from union officials who have been picking their pockets for years. These folks must truly believe there is a money tree growing somewhere in Ohio that will provide the funds to pay the cost of legacy benefits for public employees the state can no longer afford. What's really insane is that so many - if polls are to be believed - are willing to pay so much for so few. Or do they expect federal taxpayers to bailout the state whenever bankruptcy threatens, which is what President Obama suggested the other day when he explained how wealthy Americans who pay more federal taxes can fund 400,000 public sector jobs. If the citizens of Ohio are unwilling to face reality and vote to surrender to union power and influence, they will get what they deserve - higher taxes and fewer services - and their children won't be better educated and no one will be safer.
"What were they thinking?" is the perfect question to ask in this situation, but the answer to that question is disappointing. They weren't. Unfortunately, there are people living in Ohio and elsewhere around the country who believe basic economic principles change when the government is involved. They don't - and neither do the consequences of ignoring those principles. For instance, bad things happen when you ignore the principle that says to stop spending when there is no more money to spend.
The good news for Ohio is that there are still intelligent, reasonable people living there - like you - who understand that the right solution is rarely the easy solution. Hopefully, there will come a time when folks like you will have more influence on your neighbors than union bosses who play the political game to secure wealth and power for themselves and care nothing for those who will suffer the consequences.
I will cast my yes vote on 11/8/11 for Issue 2 and 3 here in the Buckeye state! Gov. Kasich is doing a good job so far. He replaced union loving Strickland and could have taken the Obama approach and blame blame blame, but instead he went right to work and got legisation drafted that is proven to save our beloved state. Things are a litte nutty right now w/ the ads and the Pro-Union signs reading "We are Ohio." Public employee unions have put a huge rift between the private and public sectors. The ignorance of their rhetoric is nauseating. Instead of putting an ad on tv or radio with sound arguements on why you should vote against Issue 2, you see "Kasich hates teachers" type slogans. It's as if the unions who represent our public employees think we are children. But hey, all I can do is vote and keep my fingers crossed that there are enough Ohio voters that have just a bit of common sense when it comes to economics!
I have every confidence in Gov. Kasich's ability to do what is fiscally necessary while supporting the conservative agenda.
Developing and passing this law was the proper move. Look no further than Walker in WI for that proof, but if you must look further - notice Minnesota and how their earlier Govt shutdown boosted the state, or look to Cali where Brown has just announced huge pension cuts for public workers.
This is a problem plaguing Americans. If Ohioins decide they would like to continue to fund public union workers at the levels the union workers desire, so be it. This law was passed by the public as a whole. Since Ohio allows for this type of referendum, they are entitled to have it. Is it the same as recall elections in WI or State Supreme Court elections, or fleeing the State? Of course! But if a minority can change the will of the majority, it will be for a short time.
Mr. Kasich is a budget master. He guided our National spending in the 90's successfully. Now, if plan "A" is repealed, he will opt for plan "B" or "C" - it's just a matter of whether he confines the pain to the unions who propagated this vote, or if he has "everyone pay their fair share" and hike taxes. I don't believe he buys into that Leftist philosophy, and union workers will be laid-off so others union members can keep their standard of living. THAT really is a tight brotherhood!
Forget wanting the rich to pay their fair share. It is time the Union beneficiaries paid their fair share. For years they have been on the receiving end of untaxed medical benefits, but no one wants to talk about that.
Personally, I don't think that public sector employees should have collective bargaining rights so I see these measure as reserved. I was a negotiator representing management in the public sector. The problem is very simply that unions elect people to city councils who in turn undermine the efforts of management negotiators to represent the best interests of the city. However, limiting the scope of bargaining to exclude health insurance, pension benefits and staffing would help a great deal.
Yep, but a federal RICO prosecution, brought in the United States District Court for the District of DC, would help matters even more.
The basis of the prosecution is the willing disavowal of public interest in exchange for the confiscated dues payments of the rank-and-file. So, every single citizen of the nation is a victim, not least of which the union members whose union leaders ceased to care about anything beyond their own power almost at the inception of the organized labor movement.
"Few workers realize they can demand refunds for the portion of their dues that is used for political purposes"
I am not one of the few that realized this (if it is, in fact, true for me). I am a member of NY State's Teachers' Union (and NEA). Can I make this demand? Can someone PLEASE point me in the right direction and help me learn how?!?!?
I agree on the whole that public sector employees are overpaid - e.g., the clerk at the DMV who makes more than lower-level white collar workers elsewhere. But - and I have never seen this addressed - what about the positions in government which DO require a high skill level? For example, prosecutors at the state and local level. Law schools are graduating lawyers at such a prodigious rate that it would be possible, if we wanted to save money, to employ only those lawyers who are willing to work dirt cheap - and there are plenty of those. But do we really want them regularly getting their clocks cleaned by highly-paid retained defense attorneys? In my state at least, this is starting to happen, where talented public-spirited attorneys must make a choice between continuing to serve the public by putting bad guys away or earning enough money to provide a middle-class living (esp. college educations) for their families.
No one is demanding that government employees should "work dirt cheap", only that their compensation should be in line with that for comparable jobs in the private sector.
Here are some figures for prosecutors in my jurisdiction: Starting salary in 2000: $44,600 - today: 46,400, minus a $2400/yr increase in health insurance contributions - in other words, a net decrease in pay over the past 11 years. Experienced prosecutors (over 5 years): $59,000 in 2000 - today: $61,500, with the same $2400/yr increase in health insurance contributions, for a total net decrease in pay over 11 years. And now, prosecutors are being swept along in the general (and well-deserved, in most cases) mania over government salaries, and are facing a 10-20% pay cut. I know lawyers who will work for this kind of pay, but if you are a victim of crime they aren't the kind you want in court with you.
Contrary to most other public officials, attorneys in public service receive compensation that is upwards of 40% less than their private counterparts. That figure balloons well over 60% if we factor in the prospect of top law graduates eschewing corporate law opportunities at top law firms for which they'd be attractive and credentialed candidates.
Many states have responded to this -- and the feds as well -- by providing handsome loan forgiveness benefits, or payment of outstanding non-state student loan debt, upon completion of a minimum period of service -- usually close to ten years.
Even in that regard, it is a significant sacrifice to earn a salary considerably lower than private workers make, for anywhere approaching a decade.
But at least in my experience, that's a product of searching for government lawyers who are fully committed to what they do and not motivated by money.
It merely boggles my mind that this is not par for the course with other public officials, most of whom make 40% MORE than their counterparts in the private sector, and who are far less indebted with school loans than their agency's lawyers, who went to school for at least 5 years longer.
