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This is the first of five in-depth stories about how Senate Bill 5 affects Ohioans.
COLUMBUS — As the multimillion dollar Senate Bill 5 campaigns ramp up, Ohioans will be bombarded with claims and counterclaims, pleas and appeals, and images and sound bites delivered in 30-second TV ads. Voters can expect robo-calls and glossy literature about what the collective bargaining reforms could do for Ohio or could do to public employees.
Business leaders and Republicans say that Senate Bill 5 contains reasonable reforms such as requiring workers to pay their entire pension contribution and at least 15 percent of their health care premiums, and switching to pay based on merit similar to pay structures for private workers.
Union leaders warn that the bill so dramatically curtails worker rights that collective bargaining will become “collective begging,” public workers will likely see pay cuts, workplace safety will be compromised and Ohio could return to the days of labor unrest when illegal strikes were commonplace.
Spokespeople for both sides are making their final arguments.
“We are going to focus on what the bill will do to local communities. It is unfair, unsafe and it hurts middle class families,” said Melissa Fazekas, spokeswoman for We Are Ohio, the campaign to defeat Senate Bill 5.
“This is arguably a once-in-a lifetime opportunity to deliver some very reasonable, but fundamental, reforms that could significantly improve Ohio’s economy. It is a course correction,” said Jason Mauk, spokesman for Building a Better Ohio, the campaign in favor of Senate Bill 5.
“This will be a very close election. The polling indicates that people are supportive of reforming Ohio’s government employment policies. This is something we have not done in nearly 30 years,” Mauk said.
One thing is certain: Senate Bill 5 is far-reaching. If enacted by voters, it will impact more than 180,000 schoolteachers and another 123,000 school district workers, 30,000 cops and firefighters, 57,000 state workers and more than 300,000 general government employees. The combined state and local government payroll totals $29.7 billion a year. The new law has the potential to impact 11 million Ohioans who pay taxes to operate 3,700 different government jurisdictions across the state.
Senate Bill 5 limits collective bargaining to wages, hours and terms of employment as well as personal safety equipment.
If passed, it would also:
• Ban strikes;
• Allow management to impose its last offer as a three-year contract if both sides reach impasse;
• Require workers to pay all of their pension contribution and at least 15 percent of their health care premiums;
• Switch to a merit pay system for most government employees;
• Limit leave time for vacation and illness and caps how much time may be banked by workers;
• Restore management rights over issues such as shifts, work assignments, transfers, promotions and layoffs; and eliminates seniority as the sole factor in deciding who gets laid off.
Supporters of Senate Bill 5 say these tools will allow cities, school districts, counties and other local jurisdictions to manage their personnel costs, operate more efficiently and save taxpayer money.
Exactly how much money could be saved is subject to how far elected bodies push to make changes once current contracts expire. Savings also depend on how merit pay provisions would be implemented by management.
For example, would the Dayton City Commission impose pay cuts on workers? Would principals in Kettering schools be lenient in how they evaluate classroom teachers and determine that a large number deserved hefty merit-pay bonuses? Would Montgomery County tell its employees that they must use all their sick and vacation time in the calendar year in which it was accrued so that they wouldn’t be able to bank unused time?
“Local governments and state government need to have the fortitude to use these tools,” said Chris Kershner, vice president of the Dayton Area Chamber of Commerce, which endorsed Senate Bill 5.
Dan Kaman of the Ohio Department of Administrative Services estimates that the state could save $216.9 million a year if it eliminated step increases and longevity pay and bumped up the percentage of health care costs that workers pay. Local governments could save $1.1 billion a year by taking advantage of the same tools, he wrote in an analysis released during earlier legislative debate about SB 5.
Ohio Gov. John Kasich is among a handful of closely watched freshmen Republican governors across the nation who took on public employee unions this year.
Kasich sent his fundraiser and other staff to Building a Better Ohio and the governor is helping raise campaign cash to try to save Senate Bill 5.
“The vote is a referendum — literally — on Senate Bill 5, but because the governor supported the bill, it can also partly a referendum on the governor’s approach to policy change at the state level,” said University of Akron political scientist John Green.
A loss on Senate Bill 5 would hurt Kasich’s political profile but “a victory would be positive for the governor in terms of national ambitions, and it could help him eventually obtain national office — elected or appointed,” Green said.
The referendum will also be a test of union power, which has been waning in the private sector but remains steady in the public sector.
The percentage of unionized private sector workers dropped from 20.1 percent in 1980 to 6.1 percent in 2010, according to researchers Barry Hirsch and David Macpherson. But in the same time period, the percentage of public sector unionized workers increased from 35.9 to 36.2 percent.
Green said public unions are the most vital part of organized labor, so curtailment of the ability to bargain would be a negative for organized labor. A loss on Senate Bill 5 would reduce union influence at the bargaining table and in politics, he said.
Senate Bill 5 would take away the biggest hammer public unions have: the threat of a strike. It also could choke off considerable amounts of cash and political activity.
Senate Bill 5 would ban worker donations going directly to union political action committees without express written consent of the employee and it would ban imposing “fair share” fees on non-members.
Currently, workers who don’t want to join a union can be forced to pay “fair share” fees that amount to their share of the contract negotiation and maintenance costs. This change alone would cut off $3.8 million a year that flows from 6,000 fair share payers to state employee unions.
The ranks of the union membership might thin too. Faced with paying more for health care and losing longevity pay, more government workers may leave the union and its required dues payments, particularly since they won’t face fair share fees either.
Business groups are lining up behind Senate Bill 5. It is endorsed by:
•The Ohio Chamber of Commerce, local chambers in Dayton, Cincinnati, Columbus and Cleveland;
• The National Federation of Independent Businesses - Ohio;
• The Ohio Farm Bureau;
• The Ohio Manufacturers Association.
The bill will help local governments curb costs, maintain services, keep quality employees on the job, they said.
Chris Kershner of the Dayton chamber, said Senate Bill 5, although it deals with public sector unions, is a good first step toward changing Ohio’s reputation as a union-heavy state.
“Unions are unions. Anything we can do to change our union-heavy reputation can only help benefit economic development initiatives in the future,” said Kershner.
Pension and health care costs
Ending “pension pickups” for government workers and making them pay at least 15 percent of their health care premiums are shaping up to be central selling points for those who want to keep Senate Bill 5. Polls show these two tenets of the legislation are supported by voters and Building a Better Ohio made these topics the focus of its second statewide television ad that started running Friday.
“There are a lot of unions in this state, private sector unions, who have figured out a way to work with management. The issue here, really, is with public unions right now. And if you talk privately with the private unions they will tell you that the public unions just don’t get it. They just don’t get it. This day of not paying for health care or paying for pensions, that day is coming to an end. Regardless of Senate Bill 5, it’s coming to an end. People can’t afford this stuff,” said Gov. Kasich.
But data show that a small percentage of government workers get their pension contribution picked up by their employer and none are receiving free health care coverage.
A 2011 survey by the State Employment Relations Board of public sector health care costs shows that public workers pay on average 9.5 percent of the premium costs for a single plan and 10.7 percent for a family plan. Township and city employees pay the lowest percentage — 4.9 percent and 7.7 percent, respectively — while county and state employees pay more than 15 percent. The employee share crept up faster last year than the employer share, the SERB report said.
The U.S. Department of Labor Bureau of Labor Statistics reported in March that private sector employers paid on average $2.12 an hour toward employee health care coverage compared with $4.72 an hour state and local government employers paid toward worker health insurance.
While pension pickups aren’t uncommon, they are by no means universal.
Roughly 6.6 percent of 688,559 public employees in Ohio have some or all of their pension contribution picked up by their employer, according to Ohio’s five public pension systems. The other 93.4 percent of public workers pay their entire pension contribution.
Pension pickups are negotiated into union contracts, often in lieu of pay raises or other enhancements. And pickups are common in individually negotiated contracts for school district superintendents, city managers and other top managers.
Moraine City Manager David Hicks said recognizing the city’s financial hardships, Moraine’s 121 full-time employees agreed 18 months ago to take a 10 percent pay cut and concessions on health care. In exchange for being paid for 36 hours a week, some non-public safety workers are getting their pension contribution picked up, he said.
“We have great employees. I wish we could give them all raises, even just 1 percent. We have great staff,” said Hicks, a Moraine employee since 1975. “I wish our circumstances were different but we had a 50 percent drop in our income tax revenues.”
Fazekas said banning pickups just takes away an option now available to management and labor at the local level. “And it’s just such a small percentage anyhow,” she said.
Ending the pension pickups would have no impact on the fiscal health of the pension systems. Essentially, the systems don’t care if the money comes from the employee or employer, just as long as the full contribution is made.
Generally, public employees contribute 10 percent of their earnings toward their pension while their employer — state or local government jurisdictions — contribute between 14 percent to 26.5 percent of payroll to the pensions.
Other than pension pickups, retirement benefits are currently not subject to collective bargaining agreements. Instead, they are prescribed by state law.
Safety forces
During the legislative debate over Senate Bill 5, public safety unions convinced Republican lawmakers to amend the bill to say that they will still have the right to bargain for personal safety equipment, such as bullet proof vests for cops or man-down alarms used by firefighters and prison guards.
But the amendment doesn’t preserve the right to bargain for staffing minimums.
The city of Dayton and the firefighters union have been arguing for more than decade over the “four-man-on-a-truck rule.” To adhere to the union contract, the city staffs each fire apparatus with four firefighters, every hour of every day. If a firefighter calls in sick or is on vacation, someone else is paid overtime to cover the shift.
The union sees it as a safety issue for both firefighters and the public they serve. The city sees it as an expensive and often unnecessary.
“Fire staffing is everything. If you don’t have enough people on scene quickly, it is not safe,” said David Wright, a Dayton Fire Department captain and legislative agent for the Firefighters Local 136.
Senate Bill 5 bars unions from bargaining for minimum staffing rules, which Wright says is short-sighted and could lead to unsafe conditions.
During recent negotiations, Dayton Fire Chief Herbert Redden said the union was offered a choice: maintain the four-man crew and accept the brown-out of one engine if staffing was not available, or accept a three-man crew on short-staffed days with no brown-outs. He said union representatives chose the four-man crew.
Redden’s biggest challenge is staffing. The city hasn’t hired new firefighters since 2008 because of a legal dispute over Dayton’s civil service testing. On top of that, many long-time firefighters are retiring. The city has addressed the staff shortage by hiring lower-paid civilian EMTs and spending $1 million in overtime last year.
Redden does not see that figure going down, whether three-man crews or four-man crews.
If SB5 is defeated, Redden predicted it would make negotiations between union and management more difficult. With SB5, “you have built a wall between labor-represented people and the city.”
Building a Better Ohio, the campaign fighting to enact Senate Bill 5, rebutted the idea that jobs will become unsafe and noted that the legislation specifically says safety equipment is subject to bargaining and there is nothing to bar cops and firefighters from discussing staffing with administrators.
And Building a Better Ohio’s first ad featured former Toledo firefighter and now Toledo Mayor Mike Bell, who tells the audience that Senate Bill 5 will help cities manage their costs.
In the Wisconsin battle over collective bargaining, police and fire forces were exempted from the legislative changes but no so in Ohio. Rank and file cops and firefighters turned out for anti-Senate Bill 5 rallies in huge numbers and they helped collect the 1.3 million signatures from Ohioans to put the bill up for a referendum vote.
Politically speaking, police officers and firefighters tend to vote Republican and they tend to engender good will from the public.
Merit pay for teachers and others
Senate Bill 5 would switch to performance-based pay for most public employees instead of step increases and longevity pay that compensates workers for being in a job longer and it would require managers to consider factors other than seniority when deciding layoffs.
A Quinnipiac University poll shows that Ohio voters support a merit pay system — 56 percent to 35 percent. But the poll showed voters are leery of eliminating seniority as the sole factor when determining layoffs: 45 percent support it and 49 percent oppose.
Senate Bill 5 would require school districts to base teacher compensation on student test scores, annual evaluations and credentials and qualifications.
Even if voters defeat Senate Bill 5 in November, the teacher pay changes will live on because lawmakers inserted them into the state budget bill that passed in June.
Plus, roughly half of the state’s 613 school districts are participating in the federal Race to the Top program, which includes some merit pay system for teachers.
Right now, teacher pay is based on years of service and credentials. Everyone gets a pay raise, cut or freeze according to the bargaining contract, regardless of how well each teacher’s students do in the classroom or how well the teacher communicates with parents and colleagues.
Mauk of Building a Better Ohio said Senate Bill 5 will keep the best teachers in the classroom by rewarding performance and eliminating layoffs that are currently based strictly on seniority, regardless of quality.
Many reforms, when it comes to evaluating and compensating teachers, are already in the works and may persist even if Senate Bill 5 doesn’t.
Ohio was awarded $400 million in federal Race to the Top dollars as part of a competition to upend the status quo in public classrooms.
A key piece of Ohio’s winning application was reworking teacher evaluation processes. Similar provisions also are in the state budget bill.
Changes have long been in the works in some districts. Christy Donnelly, superintendent of Vandalia-Butler City Schools, said her district has been reworking its evaluation process since 2008. Union members recently agreed to both a merit pay system and using student achievement as part of the evaluation process. This approach helps provide incentives and direction for how staff and the district needs to improve, Donnelly said. University of Akron’s John Green said it’s hard to judge turning points until many years after the fact but in the short run, the Senate Bill 5 battle looms large for both political parties and their allies. “Either way, the results are likely to have a big impact on the next two elections and public policy for the next several years,” Green said. “A defeat of Senate Bill 5 may well make the Republicans more cautious about their change agenda but a victory will support the change agenda and may even embolden the Republicans to try and do more.”
Hicks said Moraine employees recognized the city’s precarious finances and collectively agreed to pay and benefit cuts, absent Senate Bill 5. “There are certain elements of Senate Billl 5 that can be helpful, but it isn’t a magic bullet that will solve all the financial problems of Moraine and other cities across Ohio,” Hicks said.
Staff writers Christopher Magan and Doug Page contributed to this report. Tell us what you think about this story? Email us at ashoemaker@daytondailynews.com.
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