Ohio vote repealing collective bargaining reforms will backfire on unions

by BOB WILLIAMS | November 16, 2011

On November 8, voters in Ohio overwhelmingly repealed the collective bargaining reforms that were passed by the Legislature earlier this year.  Labor hailed the vote as a great victory for unions.  Repealing this reform, however, is bad news for both government employees and taxpayers.  Reality is not negotiable.  The election results do not change the fact that public employers in Ohio cannot continue to fund salary and benefit increases as they have in the past.

Ohio voters sent a decidedly mixed message when you look at results from all elections in Ohio last week.  In addition to repealing the collective bargaining reforms, voters also sent a strong message that public employees salaries and benefits were unsustainable by rejecting many of the levies necessary to pay for the wages and benefits won by government employees through collective bargaining. Voters rejected seventy-eight percent of the school levies!  Thus, voters voted to support public unions and collective bargaining but voted against the taxes to pay for the contracts!

Due to the gimmicks state and local governments use in their accounting, taxpayers and lawmakers are unaware of the full, unfunded liability of pensions and retiree health care benefits.  A recent State Budget Solutions study which presented the states' complete debt story by taking into account pension liabilities and other public obligations found that Ohio has a total budget gap of $3,000,000, 000 and a total debt of $240,236,606, 000.  Only four states have greater total debt.  Given this staggering debt, government employee salaries and benefits in Ohio are unsustainable.

Without reforms similar to those repealed on election day, thousands of state and local employees and teachers will be laid off over the next few years because of the rising cost of government employees salaries and benefits and the fact that taxpayers are unwilling to have their taxes raised. Labor supporters in favor of repealing the collective bargaining reform argued that if the reforms went into effect, government employers would lay off employees.  In fact, the reforms would have saved government jobs.  Now cities, counties, and school district will have little option other than laying off employees.

In order to avoid these layoffs of government employees, the legislature should pass portions of the repealed law that the public clearly supports, including the requirement that government employees pay at least 15 percent of their health care costs.  Lawmakers should also pass legislation requiring public employees to contribute a minimum of 10 percent of their salary toward their pension and establishing a merit-based pay system.  Should the legislature fail to take such necessary action, the Buckeye State will face the painful choices required when a cost of government employees salaries and benefits continue to rise and revenue does not increase.

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