Avoid Budget Crises, Eliminate Collective Bargaining

(Michael Chamberlain/Nevada Business Coalition) – States throughout the country, including Nevada, are struggling with budget deficits, massive pension obligations for government workers and unaffordable personnel costs. While some legislators in the Silver State are attempting to compound the problem by expanding collective bargaining rights to state workers who currently do not have them, other states in the same predicament are moving to restrict or abolish collective bargaining to get a handle on out-of-control costs.

Legislators in Ohio are considering a bill that would severely limit, and in many cases prohibit, collective bargaining by public employees in that state. The governor of Wisconsin, Scott Walker, has proposed to, in the words of the New York Times, “cut benefits for public employees in the state and to take away most of their unions’ ability to bargain.” As Nevada and its cities and counties are facing budget shortfalls, Nevada lawmakers should study the Ohio and Wisconsin proposals and move toward abolishing collective bargaining by public employees.

Gov. Walker’s proposal for Wisconsin includes

limiting collective bargaining for most state and local government employees to the issue of wages (instead of an array of issues, like health coverage or vacations); requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now). 

In addition, the state will no longer collect dues on behalf of public employee unions and each union must win approval by a majority of its members each year or lose the right to represent them. Public employees could not be granted raises greater than the consumer price index unless the voters passed a referendum authorizing greater pay increases.

The Ohio legislation would abolish collective bargaining for employees working directly for the state and severely curtail it for other public employees. It would require that all advancements in wages for public employees, including teachers, be based upon merit. It removes salary from collective bargaining negotiations for many employees and mandates that all public employees contribute at least 20% of the cost of their health care benefits.

The Ohio bill removes seniority as the sole determining factor when governments are forced to lay off workers, replacing it with performance-based criteria. Even where it does allow collective bargaining, health care benefits and, in many cases such as with teachers, salary negotiations are not topics to be negotiated.

The legislation gives governmental entities much more flexibility, allowing them to terminate or re-open existing contracts for negotiation when under financial stress. It also forces proposals to be made public if an impasse is reached.

For many years there has been an incestuous relationship between public employee unions and politicians. Unions flex their political muscle during election cycles and then are able to negotiate with the very same politicians they helped to put in office. They use expanding resources resulting from more generous contracts to gain even greater political power. It is no wonder that officials who rely on public employee union support for their elections are reluctant to drive a hard bargain with those very same unions. This creates a vicious cycle in which the taxpayers, who are the ones footing the bill, have no representation.

Personnel costs constitute a significant portion of the budget for most government entities in Nevada. Abolishing collective bargaining on behalf of public employees, or severely limiting it with an eye toward abolition, as some states are currently considering, would be a tremendous step toward being able to rein in costs and avoid future budget crises.

(Michael Chamberlain is Executive Director of Nevada Business Coalition.)