In theatrics, the current Ohio union battle is a poor man’s Wisconsin: fewer protesters, less media coverage, and more in-state Democratic senators (so far). But for public unions and taxpayers, the stakes are just as high.
Senate Bill 5, introduced earlier this month, would allow collective bargaining for wages, but not for pensions and health-care costs. It would require state and local public-sector employees to pay 15 percent of their health-care premiums, and to pay the employee contribution (which is currently covered by the government for some local employees) to their pension plans. It also would eliminate binding arbitration — a process that allows a mediator to impose a contract if the government and the unions can’t agree to one — and ban strikes. Unlike Wisconsin’s bill, Ohio’s legislation would impact public-safety employees, too.
“We need to be able to provide folks with the flexibility to be able to manage through this existing fiscal situation and put the budget in a position where it’s sustainable over time,” says Ohio Republican state senator Shannon Jones, sponsor of the bill. Jones cites the state’s deficit — $8 billion over the next two years — and points out that cities and counties are also facing fiscal woes.
Ohio public unions have harshly criticized the bill. Yesterday, when the state senate held a committee hearing on the bill, about 8,500 protesters came to the Ohio capitol.
Jones says she had expected resistance to the bill. “Change is hard. I certainly anticipated that there would be some pushback,” she remarks.
While the senate is overwhelmingly Republican (23–10), it’s unclear if enough of the Republicans are in favor of the current legislation that it will pass. It’s expected that today’s hearing, like yesterday’s, will focus on amendments to the bill. A committee vote could occur as early as today, and if it does, the Senate vote could happen this week.
Nevertheless, senate president Tom Niehuas tells National Review Online that he is confident the bill will ultimately pass the senate. He says that the assembly is “anxiously awaiting passage so they can take up this issue.”
Republican governor John Kasich estimates that passing the legislation could save state and local governments more than $1 billion a year.
“I’d like to pay [public employees] everything that I could, but you have to balance what people can afford in a community,” said Kasich during a press conference Sunday.
And while the contributions to health-care premiums and pension plans will help reduce costs, it’s the bans on most collective-bargaining powers, strikes, and binding arbitration that will give state and local officials the ability to balance budgets now and in the future.
In recent months, Kasich has been outspoken about the need to change the status quo on how public employees’ salaries and benefits are decided, saying that “binding arbitration is not acceptable.”
During testimony earlier this month on Senate Bill 5, Cincinnati council member Jeff Berding talked about how binding arbitration had allowed the city firefighters’ union, Local 48, to avoid pay and benefits cuts. “[The union was] certain that the fiscal emergency of the city would mean that management would ask for decreases and benefit reductions to reduce costs in the contract,” said Berding. So, despite the fact that Cincinnati was facing a $50 million deficit, the union asked for a 4 percent pay raise for its members and additional benefits.
The strategy worked. When the city and the union, unable to compromise, went to a “third-party fact finder,” the fact finder found the only way to split the difference between the two sides was to recommend that Cincinnati continue paying firefighters their current salaries and benefits. After all, as the union pointed out, there was nothing to prevent Cincinnati from hiking taxes in order to make up the deficit.
Cincinnati ultimately agreed to nix the proposed cuts, much to the union’s delight. “The city could appeal to binding arbitration — but the city administration is scared to death that we could lose and be required to pay [the unions’ requested] 4 percent increase, a result that other cash-strapped cities have been dealt by arbitrators,” said Berding. “You can see the cynical way they game the current collective-bargaining system with taxpayers’ money.”
While Cincinnati’s example highlights the need for banning binding arbitration, banning it alone wouldn’t be sufficient.
“In states that permit government workers to collectively bargain, the average yearly pay for state and local workers is $51,064 and $41,457, respectively. In contrast, in states that prohibit government workers from collectively bargaining, the average yearly pay for state and local workers is $46,025 (11 percent less) and $32,560 (27 percent less), respectively,” argued Matt Mayer, president of the Buckeye Institute, an Ohio think tank, during testimony earlier this month concerning Senate Bill 5. “Collective bargaining facilitates the explosion of government compensation costs and prohibits governments from making the painful, but necessary, decisions to rein in those costs.”
Senate Bill 5 is an audacious piece of legislation, sparing no unionized public employees and targeting long-established union practices. If it passes, how it impacts Ohio — and how Ohioans react to it — will affect union battles nationwide for a long time.
— Katrina Trinko is an NRO staff reporter.