SB 5: A qualified endorsement

Let me begin by stating that I am a twenty-year state employee in Ohio. The State has been very good to me over the years, and I am grateful for the salary and benefits I have received. Some of those benefits do not exist in the private sector; including four extra paid holidays, longer vacation leave, and one of the last defined benefit pension plans out there. On the other hand, there is currently no opportunity for a state employee to be recognized for merit. In private enterprise, effective employees can easily be promoted or given bonuses. Neither is possible within state government. The only way a classified (non-managerial) state employee can receive a promotion is to take a competitive examination for an open position. In some job classifications, an employee may have to wait several years before such an opportunity arises. Since I was not a state employee prior to 1982, I cannot say to what extent these benefits have been due to collective bargaining.

Reaction to state efforts to abolish public employee collective bargaining has been strong and swift. On Thursday, some 13,000 state employees demonstrated at the Wisconsin state capitol in protest against their bill, and they occupied the state capitol overnight. Here in Columbus, about 2,000 state employees demonstrated during last Thursday and 5,000 today against Senate Bill 5 (SB 5), introduced by Sen. Shannon Jones (R-Springboro).

State employees have some justification for feeling that the General Assembly has laid recent budget crises on their backs. Salaries were cut by 3% in the current union contract (2009-2012). The State compensated through "cost saving days," which effectively give each employee two extra weeks of vacation. On the other hand, we need money to live, just like everyone else.

State employees are not responsible for the $8-$10 billion deficit, and eliminating all of our jobs would not resolve it. However, the problem is so serious that the Governor and the General Assembly have to look at all possible opportunities to cut. Raising taxes is not an option in Ohio. Our taxes are already very high by national standards, and clearly raise a barrier to economic growth. The 800-pound gorilla in the State budget is matching funds to the federal Medicaid program; but the only way the State can cut significantly in this area is to radically redesign, or even abolish, Medicaid – a sudden move that on the short term would be cruel to those who depend on it. Ohio state legislators might look into the proposal made by Florida State Senator Joe Negron to replace the federal Medicaid program with one that is much smaller and, if a waiver is not granted by the federal Department of Health and Human Services, unsupported by federal funds. While holding the promise of substantial efficiencies, such a proposal is likely to be politically dicey, even for Republicans.

I do not like unions. They are expensive (1½% of gross salary for dues or "fair share fee" doesn't sound like much, but experienced or highly-paid employees can easily fork over more than $1,000 a year). I disagree with most of the political positions taken by the union, and I find that relatively few employees actually use the grievance process. Unions also tend to create unnecessary tensions between employees and their managers. There are two union benefits extended to all employees that have worked well (and efficiently) for us: the benefits trust, which manages our dental and vision coverage (and some other optional insurance), and the Education Trust, which provides money for college education and training. However, the Education Trust has proven easy to abuse for non-job related training.

I have two problems with the bill: First, the bill calls for the Department of Administrative Services to define "merit based pay." While the Department of Administrative Services is clearly experienced on State personnel matters, it potentially opens a gap between the legislators' understanding of "merit based" and the Department's understanding of the same term. Merit based needs to be defined within the act, so everyone is on the same page, and so employees and the public can comment on that definition before it is imposed. Secondly, the State needs to think through the issue of employee training.

If the State uses this occasion to neglect training altogether – a common temptation in hard times – it will do itself, as well as its employees, a great disservice.  Particularly in information technology, when state employees are inadequately trained in current technologies, the State will be tempted to hire contractors at $150 per hour, when it could have had State employees doing the same work for less than half that, including all benefits. In recent years, the State has tended to under-budget by leaning on the Education Trust to finance any needed job-related training. The State should learn from the experience of large private corporations to develop a usable just-in-time training model.

I should note here that the bill does provide for a grievance procedure using a State Personnel Board of Review, so workers will not be completely thrown to the wolves when problems arise. In addition, classified state and local employees will continue to enjoy civil service protection from political pressure. This should allay concerns for those with bad workplace situations. While I have been blessed with good supervisors, there is plenty of anecdotal evidence that petty tyrants are all too common in state government.

SB 5 does not address pension reform, but it is true that some public employees (principally in law enforcement) have had the State furnish up to 24% of their salaries for pensions in addition to the percentage withdrawn from employee salary. (Private enterprise typically handles pensions by offering a matching contribution up to about 3% of an employee's salary for deferred compensation. For employees under the Ohio Public Employees Retirement System, the State pays 14% of employee salary, with the employee contributing another 10%.  Under HB 69, the State's contribution would decrease to the same amount as the employee contribution (10% for most employees). The pension includes a partial payment for medical insurance in retirement, the remainder to be covered by the retiree out of pocket).

Bottom line: the State employment system under collective bargaining is not fiscally sustainable, just as the automobile and steel industries were unable to maintain their union contracts. State employees are not giving up any "rights" that the great majority of workers in the State of Ohio would recognize. We are giving up a few privileges – privileges that the taxpayers of this state can no longer afford to support.  I favor SB 5 because it is necessary, even though it will work against my short-term personal interest. However, I would like to see the General Assembly add the safeguards mentioned here to provide employee growth opportunities and to offer a minimal level of protection from managerial favoritism.