Ohioans by a 61 percent majority rejected a statewide ballot measure written to help state agencies balance their budgets and avoid excessive tax increases by giving them more flexible bargaining rights on worker pay and benefits. On the same ballot, 78 percent of voters rejected county and local tax levies meant to ease budget shortfalls.
Ohio and its municipalities must now hike taxes or lay off workers to pay “the ever-rising compensation costs of government workers. Ohio’s fiscal crisis will only get worse,” said Matt Mayer, president of the Columbus-based Buckeye Institute. Voters failed to connect the two issues, he said.
Issue 2 would have reduced taxpayer costs, Mayer said, by requiring all state employees to pay up to 15 percent of the cost of their health benefits and put 10 percent of their salaries toward their pensions. The measure did not set salary levels, but would have ended automatic pay raises based on longevity.
Unions Invested Big
Unions campaigned heavily to collect the petitions necessary to put these provisions on the ballot in November after state legislators passed them within Senate Bill 5.
Unions including the National Education Association and the Ohio Education Association spent $30 million to defeat the measure, while supporters of the law spent approximately $7.5 million.
Issue 2 would also have extended Ohio’s ban on strikes by public safety workers to all public employees.
Unlike Wisconsin’s law limiting collective bargaining, enacted earlier this year, the Ohio law included police officers and firefighters instead of limiting its provisions to teachers and other non-emergency state workers. Third-party arbitrators for managing labor disputes would have been replaced by elected leaders required to hold public hearings.
‘Politically Courageous’ Reforms
The reforms Ohio’s legislators and Gov. John Kasich (R) adopted are a giant step in the right direction to ease public school budgets, said Terry Moe, a Hoover Institution senior fellow.
“The reforms SB 5 would have brought are politically courageous and go against the public employee unions. But reforms in school budgets shouldn’t be about jobs,” he said. They should be “first and foremost about children.”
The reform’s defeat means school boards have two choices: raise taxes or lay off staff, said Seth Morgan, policy director for Americans for Prosperity Ohio. Raising taxes isn’t an option, he said, because voters shot down increases and “Ohio families are just taxed out.”
“When you worry about your future and feeding your family, you aren’t inclined to let government take more out of your paycheck,” he said.
Dangerous Fiscal Condition
Ohio’s 614 school districts report a collective deficit of $7.6 billion by 2015 and project 96 percent of all revenue must go to compensation packages.
With Issue 2 defeated, school boards “will have now have to convince homeowners to raise taxes on themselves by $8 billion, have to reduce staff compensation packages, or cut programs and staff,” Mayer said.
“Ohio already provides generous revenues to the schools,” he said. “It’s time school boards realign compensation packages to reflect those generous revenues.”
‘Power Struggle’ with Unions
“It’s a sad reality that Ohio and all states are in a power struggle with teacher’s unions,” said Moe. “The average teacher certainly cares about kids and about having quality schools,” but legislators and school boards must “struggle with unions because unions are not in business to do what is right for students or to ensure quality schools.”
Instead, unions fight for their self-interest by increasing membership and protecting members’ jobs, Moe said. They concern themselves with job perks for adults such as wages, benefits, and work rules, because this ensures union members’ longevity.
“All these are decisions that should be made on the basis of what is best for children, but are not,” Moe said.
Taxpayers and legislators should “demand fiscal accountability and encourage boards to negotiate more reasonable compensation packages,” Mayer said.
“State legislators are ultimately responsible for what happens in schools. They should stand up for children instead of responding to special interests of the people who have jobs in the schools,” said Moe.