In the 2010 mid-term elections, Republican John Kasich won the governorship and promised to balance the state’s budget by reining in the state’s spending on salaries and benefits for public sector union employees. To accomplish this, the Ohio legislature pass Senate Bill 5. However, an effort is on the ballot to repeal the law, and Ohio voters will get a chance to keep or scrap the law on Tuesday, November 8th, 2011.

Here’s what Ohio’s Issue 2 is all about:

Issue 2 makes some very fair and common sense requests of our government employees to give local communities the flexibility they need to get taxes and spending under control, while providing the essential services that we rely on.

• It allows an employee’s job performance to be considered when determining compensation, rather than just awarding automatic pay increases based only on an employee’s length of service.
• It asks that government employees pay at least 15 percent of the cost of their health insurance premium.  That’s less than half of what private sector workers are currently paying.
• It requires that government health care benefits apply equally to all government employees, whether they work in management or non-management positions.  No special favors.
• It asks our government employees to pay their own share of a generous pension contribution, rather than forcing taxpayers to pay both the employee and employer shares.
• It keeps union bosses from protecting bad teachers and stops the outdated practice of laying off good teachers first just because they haven’t served long enough.
• Finally, it preserves collective bargaining for government employees, but it also returns some basic control of our schools and services to the taxpayers who fund them, not the union bosses who thrive on their mismanagement.

Even under the reforms of State Issue 2, Ohio’s government employees will still receive better pay, better health care and better retirement benefits, on average, than the vast majority of Ohioans who work in the private sector.

There are a number of myths going around about Issue 2, and it’s important to set the record straight, so I’ll do that below.

Myths and truths about Ohio State Issue 2

Here’s a common myth:

State Issue 2 would “cut salaries and benefits.”

The truth:

Issue 2 would not cut salaries or benefits for any government employee. Employees would simply be asked to pay a modest share of their benefits, just like employees in the private sector do. For health care coverage, they would pay at least 15% of their overall plan. (Many local government employees currently pay less than 9% of their health care premium, while the average private sector worker pays upwards of 30%.) In addition, employees would be required to pay their personal share of a retirement plan (only 10%), rather than asking taxpayers to pay that share. That’s not too much to ask at a time when many private sector workers get no retirement benefit at all. Finally, Issue 2 requires that benefits apply equally to all public employees, so no one gets special treatment.

And another common myth:

State Issue 2 will eliminate government employee pensions.

The truth:

Government employees will still get a very generous pension benefit – an annual payment that averages their three highest annual salaries. That’s a pretty nice deal, when many private sector workers get no retirement benefit at all. State Issue 2 only ends a practice where some government union contracts require taxpayers to pick up the tab for BOTH the employer AND employee shares of a required pension contribution. In this economy, it’s simply not right to ask struggling taxpayers to foot the bill so government employees can get a free retirement. Issue 2 simply says government employees should pay their required share (10 percent) and taxpayers will contribute the employer share (14 percent).

Another myth:

State Issue 2 will cut teacher salaries.

The truth:

That’s one of the scare tactics government unions are using to turn people against these reforms. Nothing in Issue 2 determines salary levels. It only ends the practice of handing out automatic pay raises, or “step” increases, and longevity pay – or bonuses just for holding the job for a certain period of time. Issue 2 also asks that performance be added as a factor in teacher compensation, a goal President Barack Obama set out in his national education policy in 2009.

And another myth:

State Issue 2 will cost jobs

The truth:

Just the opposite is true. Ohio’s state and local tax burden ranks among the top third in the nation. As a result, companies large and small have left our state in pursuit of better tax incentives elsewhere, taking hundreds of thousands of jobs with them. If Ohio hopes to compete for new job growth, we have to make our state a more affordable place to live, work and do business. That starts with getting the cost of government under control so we can direct more of our limited resources into economic development, community revitalization and better schools.

More myths are corrected on this page.

Newspaper endorsements

So far, Issue 2 has been endorsed by several Ohio newspapers, including the biggest ones.

The Cleveland Plain Dealer:

The fiscal picture of local governments and school districts, especially, will improve as they are able to right-size their work forces and their expenditures on services. That will happen over time, not overnight, as new contracts are established.

Repeal SB 5, though, and it’s going to be awfully hard for local governments to manage their payrolls without resorting to larger-scale layoffs than would otherwise be necessary. And local governments will continue to be hamstrung by anti-merit seniority rules that lead to worker complacency and protect dead weight and time-servers.

Voting YES on Issue 2 will prevent layoffs by keeping public sector wages and benefits in line with what the private sector can afford to pay.

The Columbus Dispatch:

Despite the insistence of opponents, the effort to reform Ohio’s out-of-balance collective-bargaining law is not an expression of disrespect for or dissatisfaction with Ohio teachers, police officers, firefighters and other government employees. It is a much-needed attempt to restore control over public spending to the public officials elected to exercise that control.

It does not assert that public employees are worth less than the compensation they’re receiving, only that the compensation has grown faster than the public’s ability to pay for it.

[…]With more ability to control the escalation of salary and benefit costs, governments won’t be forced as often to impose layoffs, and might be able to afford to keep even more police and firefighters on the streets.

Again, no one is saying that public sector workers don’t matter – the question is whether we can afford to give them better wages and benefits than the private sector workers who are their customers and their employers. Public sector workers work for the public, and the public can only afford to pay so much.

Conclusion

Government employees are paid 43% more than private sector employees, in salary and benefits:

I think that people who care about the long-term prosperity of Ohio should vote “YES” on Issue 2 to make public and private salaries and benefits MORE EQUAL. Ohio is facing enormous economic pressure from the global recession, and everyone has to make sacrifices. Now is not the time for public sector workers to insist on higher wages and benefits, especially when the private sector workers who pay their salaries don’t make as much money, nor do they get the pensions, nor do they get the better job security. Ohio voters can certainly go back and renegotiate union salaries and benefits when Ohio is out of the recession.

Click here to learn more about Ohio Issue 2.