Shared Sacrifices

Public Employees Embrace More than $1 Billion in Concessions Over Three-Years

TC BROWN

October 2011 Collective Bargaining Yields Deep Concessions During Global Recession The global recession hit Ohio harder than many other states, leaving its elected leaders to employ a series of budget actions that have included cuts, adding new revenue from expanded gambling, allowing vacancies to go unfilled and the raiding of rotary accounts and a tobacco cessation fund. In the past decade, all workers in Ohio have lost more ground on hourly wages compared to any other state.1 Persistent unemployment has been accompanied by slow growth in the production of goods and services, banks tightening lending standards and rising prices for gasoline. The 2007-09 recession remains the most severe business cycle downturn in the post-war period, and despite some improvement, sluggish growth has been the recent norm and is forecast for the near future.2 With Ohios unemployment hovering just above 9 percent, the misery is widespread, creating a major impact on the wages and benefits for Ohios public-sector workers and on the bottom lines of state and local governments. Public-sector union members responded to Ohios economic crisis by agreeing to freeze their wages, take unpaid days off, increase their contributions for health care insurance and pensions, and boost productivity to compensate for jobs lost through attrition.

Amy Hanauer and staff, The State of Working Ohio 2011, Policy Matters Ohio, September 2011 2 Timothy Keen, Monthly Financial Report, Ohio Office of Budget and Management, Sept. 12, 2011.
1

These sweeping sacrifices were forged through collective bargaining negotiations between labor and management. Many workers agreed to put less money in their pockets at a time they were being asked to pay more for food, gas, medical care and other household expenses. In fact, the states median per-household income has plummeted to a 27-year low, and Ohioans living in poverty is at its highest rate in three decades.3 Despite warnings that collective bargaining would lead to out-of-control costs, even some who voted against the 1983 law conceded that it has worked surprisingly well. For instance, from 1978 through 1980, in the three years preceding the collective bargaining law, public employees struck 183 times. For perspective, in fiscal years 2008 and 2009 there were five public-sector strikes and no strikes in 2010 or 2011.4 As Ive watched it evolve, I think it is far better than some of the alternatives we looked at at the time, Republican Jim Petro said during the 25th anniversary of the implementation of the collective bargaining law, according to video tape of his remarks. I believe in our public sector bargaining law and I think it has done well to serve the interest of the state. 5 Petro, appointed by Gov. John Kasich as chancellor for the Ohio Board of Regents, was a state legislator when the law was passed. He joined every other GOP lawmaker in voting against the measure. While he has conceded that the law is working well, he also said he did not regret voting against it. A Surge of Compromises Ohio has no central collection of data on worker concessions achieved through collective bargaining. Protecting Ohio Protectors, an organization of Ohios safety forces, commissioned this study to attempt to quantify the amount of the concessions and the impact they have had on state and local governments. Research gathered from cooperating associations, news accounts, public records and collective bargaining contracts reveals that workers have saved their employers and taxpayers a substantial amount of money.
Bill Bush, Median Income in Ohio Hits 27-year Low, The Columbus Dispatch, Sept. 14, 2011 4 State Employment Relations Board Annual Report 2009, Page 8; 2010, Page 11 and 2011, Page 9 5 Jim Petro, video marking 25th anniversary of implementation of collective bargaining in Ohio, April 4, 2009
3

Among the findings: Public union workers have saved taxpayers $1,059,881,500 billion through collective bargaining concessions since 2008.

Teachers and support staff accepted wage freezes in more than 90 percent of collective bargaining agreements this year concessions not tallied in this report because they are not yet available. Last year, at least 65 percent of public employee contracts included at least 1 year of wage freezes, some furlough days, reduced compensation, rollovers or economic re-openers. Some of the lowest-paid public employees non-teaching personnel such as custodians have gone up to eight years without a pay increase in exchange for stable health care costs. A Warren police officer blames cuts in safety forces for the injuries he sustained while rescuing people from a burning building in which one person died. More than two-thirds of all teachers contracts increased employee insurance premium contributions or significantly changed their health plans, with the savings often used to improve educational opportunities for students. More than 93 percent of public workers already pay for their own pension contribution, with no pick-up from their employers. On average, county and state employees pay more than 15 percent for their health care plans.

A sample review of concessions in a half dozen Ohio cities shows that employees and safety forces have saved their towns nearly $10 million since 2008.6

In addition, collective bargaining contracts often contain provisions that directly benefit communities, according to a just-released report by Policy Matters Ohio, a non-profit research organization focused on the states economic policies. The group provided examples: safety officers negotiating for provisions that speed response times; teachers

See Appendix A

negotiating for more effective discipline or more enrichment classes; and nurses negotiating for better staffing ratios, which improves patient care. Theres been a lot of emphasis on how collective bargaining might affect compensation or job security, and there are many reasons why those elements strengthen public services, said Amy Hanauer, Policy Matters executive director. This report finds that unions often negotiate for provisions that more directly benefit Ohio communities.7 By far, the largest pool of concessions identified in this report came from public education unions, who are estimated to have saved school districts at least $700 million for the 2010-11 (fiscal) school year. These projections were calculated by the Ohio Education Association (OEA) using the financial forecasts produced by every school district in the state and made available on the Ohio Department of Educations website. The projected savings are based on the difference between what school districts estimated they would spend on employee salaries and benefits and what was actually spent. The $700 million figure was reached after removing the salaries and benefits of school administrators and adjusting for school district staff reductions. The OEA used this approach because nearly every school district in the state negotiates salaries and benefits with their teachers and support staff. Therefore, the savings reported by the districts are a direct result of economic sacrifices made by unionized school employees at the bargaining table in order to help districts balance their budgets and save jobs. 8 It should be noted that the $700 million in savings occurred prior to Senate Bill 5 and before the steep cuts in school funding were made in the new state budget. Future savings will be much higher once the impact of bargaining concessions made during the most recent round of contract negotiations are factored into districts financial forecasts. These forecasts will now reflect that well over 90 percent of new collective bargaining agreements include employee pay freezes and reductions and increased employee costs for medical benefits. Furthermore, workers for the state of Ohio in a 2010-11-budget agreement accepted reduced pay or wage freezes, furlough days without pay, and increased costs for health care, saving the state $350 million over three years.

Amy Hanauer, Collective Bargaining Contracts Contain Many Provisions to Benefit Communities: Report Finds that Nurses, Teachers, Safety Officers Negotiate to Protect Ohioans, Policy Matters Ohio, Oct. 10, 2011 8 See Appendix B
7

These compromises did not just begin. Contracts provided by individual organizations show some concessions dating back nearly a decade. For example, Salem City School custodians, cafeteria workers and other non-teaching employees had gone 8 years without a wage increase. The starting wage for a Salem City School custodian and cafeteria worker is $9.92 and $7.81 an hour respectively.9 Classified workers at Leetonia Exempted Village Schools, with an average starting wage of $10.99 an hour, have gone six years without a pay raise. Since 2007, the school district has lost one principal, nine teachers and several classified positions. Additionally, all employees took a pay freeze for a predicted 5-year savings of more than $2.5 million through 2012.10 Workers employed by the Austintown Local Schools, where entry-level jobs start at $10.34 an hour, have gone four years without a wage hike.
11

Educators, too, have shared the burdens, even though the average income of all Ohioans increased twice as fast as those of schoolteachers in the five years leading up to the recession.12 For instance, since 2004 and through 2012, teachers in Jefferson Township Local School District (Montgomery County), whose salaries start at $27,305, bypassed a wage increase for 7 of those 9 years. In the Youngstown City Schools, where teachers salaries start at $29,589, educators gave up increases from 2007 through the 2010 school year.13 Meanwhile, teachers in Martins Ferry City Schools (Belmont County) agreed to cut their wages by 5 percent for the 2011 school year after they had already agreed to freeze their pay the previous two years. Starting salary for teachers was $26,236 in the 2011 school year.14

Master Agreement between Ohio Association of Public School Employees Local #215 and Salem City School District Board of Education, Effective July 1, 2010 through June 30, 2013. 10 Kevin Howell, Leetonia Tries Again With School Levy, The Salem News, April 26, 2010 11 Christine Keeling, Austintown Board OKs Contract, the Youngstown Vindicator, June 30, 2011 12 Average teacher salary data: Ohio Department of Education - Interactive Local Report Card; Average income data come from the Ohio Department of Taxation - Tax Data Series 13 Ohio Association of Education (OEA), Internal Analysis 14 Leigh Ann Towne, "Martin's Ferry teachers vote to take 5 percent pay cut", The State Journal, March 2, 2010.
9

Teachers and staff in the Lakota School District (Butler County) agreed to a three-year contract with a pay freeze and health care concessions that are expected to save the district $2 million.15 These sacrifices are helping to improve public education. In Hilliard, all public employees gave up pay raises and a majority of teachers and classified employees waived step raises, and they will pay more for health care. That will save the district $9.6 million over the next three years. The savings will allow Hilliard to reinstate its elementary gifted program and bring back fall sports for middle-school students.16 This truly is leadership by example, Dale McVey, superintendent of Hilliard City Schools, told the press. At a time when our community is hurting financially, our staff members stepped up in the true spirit of sacrifice and did what was necessary to be part of the solution.17 The most current and complete information for collective bargaining concessions covers state of Ohio workers from 2009 through 2011, and it shows that public employees saved the state about $350 million over the three-year cycle. Those savings included pay reductions, furlough days and health insurance changes negotiated in collective bargaining such as higher co-pays and out-of-pocket maximums, a monthly spousal surcharge, a dependent eligibility audit, and other items. The figure reflects a $40 million to $45 million reimbursement, paid recently to the employees for personal days they agreed to give up in order to balance the state budget.18 Fate of Ohios Collective Bargaining Law up to Voters Today, Ohio is in the midst of a robust debate over the states 28-yearold law granting collective bargaining rights to firefighters, police officers, teachers, nurses and other public employees to negotiate for their wages, benefits, safety equipment and staffing levels. The Ohio General Assembly recently passed and Gov. Kasich signed Senate Bill 5, legislation that places strict limits on the rights of public
Michael D. Clark, "Lakota board OKs pay-freeze contract", Cincinnati Enquirer, May 24, 2011. 16 Charlie Boss, Hilliard School Unions Concessions Save $9.6M, The Columbus Dispatch, June 4, 2011 17 Bert Liebendorfer, Pay Freezes Amount to $9.6 Million in District Savings, Hilliard Northwest News, June 8, 2011. 18 Julie Carr Smyth, State This Month Will Reimburse Workers for Personal Days They Give Up, Associated Press, Aug. 11, 2011.
15

employees to collectively bargain. This new law has the potential to impact 11 million Ohioans who pay taxes to operate 3,700 government jurisdictions across the state, with a combined annual state and local government payroll of $29.7 billion.19 The new law, among other things, prohibits strikes. It takes away the binding arbitration that is used to settle labor differences for firefighters and police officers and instead allows a government body to implement its own last contract offer. Though supporters of SB 5 argue that binding arbitration should be eliminated, statistics show that since 2008, an outside arbitrator resolved fewer than 2 percent of contract negotiations. Furthermore, both sides have an equal amount of wins in 20 binding arbitrations since 2008.20 The new law would also limit employer contributions toward health care benefits and remove an employers ability to cover part or all of an employees pension contribution. It institutes merit pay for most government employees and teachers, eliminates step increases, expands the list of unfair labor practices that an employer may commit and increases the list of subjects that are inappropriate for collective bargaining, including minimum staffing levels for on-duty safety forces.21 Supporters say the pension and health care changes are necessary to give state and local governments tools they need to balance their budgets and protect taxpayers from out-of-control wages and benefits. Opponents say the history of concessions during economic downturns shows that those tools already exist and are working. They argue that local communities financial turmoil has more to do with Gov. Kasichs deep cuts to the local government fund included in the current two-year budget, and his decision to eliminate the estate tax, which sent about $230 million annually to local governments.22 Republican Bay Village Mayor Deborah Sutherland said the state budget went from hurtful to devastating as it worked its way through the General Assembly. I think the budget speaks for itself, Sutherland told

Laura A. Bischoff, Stakes High for Both Sides in SB5 Battle, Dayton Daily News, September 18, 2011. 20 James Nash, GOP targets contract settlers: But binding arbitration often favors government and alternative is unclear, Columbus Dispatch, January 23, 2011. 21 Julie A. Rishel and staff, Act Summary, AM. Sub S.B. 5, Final Analysis, Ohio Legislative Service Commission, March 2011 22 Joe Guillen, Estate tax repeal among 18 bills Ohio House GOP introduces to advance agenda, The Plain Dealer, January 11, 2011
19

The Plain Dealer. No other class of entities has taken it on the chin like municipalities.23 Supporters of SB 5 and Issue 2 suggest that public employees enjoy extravagant pensions and pay little of their own pension costs. But a recent Dayton Daily News story reported:24 Just 6.6 percent of 688,559 public employees in Ohio which includes 348,68325 union members have some or all of their pension contribution picked up by their employer, according to Ohios five public pension systems. The other 93.4 percent of public workers pay their entire pension contributions. Pension pickups are negotiated into union contracts, often in lieu of pay raises or other enhancements. And pickups are common in individually negotiated contracts for school district superintendents, city managers and other top managers. A 2011 survey by the State Employment Relations Board (SERB) of public sector health care costs shows that public workers pay on average 9.5 percent of the premium costs for a single plan and 10.7 percent for a family plan. Township and city employees pay the lowest percentage 4.9 percent and 7.7 percent, respectively while county and state employees pay more than 15 percent. The employee share crept up faster last year than the employer share, according to SERB.

In fact, employee premium contributions for single and family coverage rose 6.5 and 6.3 percent respectively. The vast majority of medical plans require employee contributions to the premiums. Employers paid 100 percent of premiums in only 16 percent of single medical plans and 12 percent of family medical coverage, a statistic basically unchanged from last year.26 Concessions and Concerns Mount For Government Workers

Aaron Marshall, Northeast Ohio Municipal Officials in Battle with Gov. John Kasich, The Plain Dealer, Aug. 31, 2011 24 Laura A. Bischoff, Stakes High for Both Sides in SB5 Battle, Dayton Daily News, September 18, 2011. 25 State Employment Relations Board Annual Report 2011, Page 10 26 19th Annual Report on the Cost of Health Insurance in Ohios Public Sector, State Employment Relations Board Research and Training Section, 2011
23

Despite the lack of a central collection site for all worker concessions, examples are abundant. The Ohio Education Association (OEA) conducted an analysis of contract settlements filed with the State Employment Relations Board (SERB) with an execution date between January 1, 2010 and December 2, 2010, and found that at least 65 percent of public employee contracts bargained in 2010 contained at least one year of wage freezes, furlough days, decreases in compensation, rollovers or economic re-openers. The Service Employees International Union (SEIU) District 1199 agreed to: freeze wages; take pay reductions of almost 5 percent; increase healthcare contributions; add unpaid furlough days; reduce sick leave and vacation time; eliminate step increases; and forgo cost of living allowances for three years. The three-year agreement for the Ohio Civil Service Employees Association (OCSEA) included a pay freeze, elimination of step increases for two years, increases for medical co-pays and out-ofpocket maximums and 10-day unpaid furloughs.

A sampling of local concessions include: Richland County Employees: 26 unpaid furlough days in 2010, plus the elimination of $2,000 employer contribution to employee health savings accounts. Marion County Engineer: Elimination of $4,000 contribution to employee health savings accounts. City of Toledo: Elimination of 3 percent pension pickup (equates to 3.5% loss in pay) and substantial increases in health insurance employee contributions). Savings: $500,000 Summit County Sheriff and Fiscal Office: 15 unpaid furlough days in 2010.27

In fact, safety forces across Ohio are committing to concessions. But coupled with extensive cuts in state aid to local government and reduced staffs, some fear that public safety could be jeopardized. In May, Cleveland laid off 81 police officers, 51 firefighters and 42 newly minted police cadets right after they took their oath to protect and serve.
American Federation of State, County and Municipal Employees (AFSCME) Ohio Council 8, Internal Analysis
27

To bolster ranks on the streets, the city removed some officers from trouble-plagued schools. Officials also took 12 fire department vehicles out of service on a rotating basis, which could occasionally create understaffing at firehouses.28 Doug Hippie, a Warren police officer, directly attributed burns and injuries he received while rescuing people from an intentionally set fire to reductions in safety force staff. Hippie beat the fire department to the scene, in part, he said, because of budget cuts that shut down a nearby fire substation. One victim died from injuries received in the fire.29 But nowhere was the public on edge more than in Mount Sterling, a village of about 1,800 in Madison County. In August, Mayor Charlie Neff stunned and frightened residents after he laid off the villages four emergency dispatchers and the entire police force, except for the chief, because of substantial cuts in state funding. Collective bargaining cannot be blamed for the budget troubles because the village is too small to allow its workers to bargain collectively. Mount Sterling has had a police department for more than a century.30 Last year, Mount Sterling police responded to more than 4,000 calls, including 400 criminal calls. Madison County sheriff deputies, the police chief and unpaid auxiliary officers were expected to take up the slack.31 The desperate situation prompted the citizenry to act. Local grocery store owner Scott Jewett hosted a fund-raiser and residents responded, handing over nearly $43,000 to the Village Council, most of which came from Jewett. The money was used to hire back six officers on a part-time basis.32 As it is elsewhere, taxpayers in Mount Sterling are being asked to approve a new levy to aid government. Mount Sterling voters will see a 0.5 percent income-tax initiative on the November ballot, which would boost the income tax to 1.5 percent.

Tom Ott, Cleveland Police Department to Remove Officers From Troubled City Schools, The Plain Dealer, May 21, 2011 29 Karl Turner, Warren Cop Burned in Fire Asks Mayor to Resign, The Plain Dealer, July 9, 2009 30 Dean Narciso, After Wild Meeting, Mount Sterlings Police and Mayor Out, The Columbus Dispatch, Aug. 23, 2011 31 Gregg Rettig, Mt. Sterling Disbands Police Department, OCM News Service, Aug. 19, 2011 32 Holly Zachariah, Donations Mean Reprieve for Mount Sterling Police Force, The Columbus Dispatch, Sept. 28, 2011
28

Its not just small government entities under the fiscal gun. The need to close a $14 million hole in Hamilton Countys budget due to decreased local government funding from the state and reduced property tax values prompted dire predictions from county office holders this summer. Those included: The layoff of 100 deputies A partial shutdown of the crime lab and reduction in one quarter of the coroners staff The elimination of 50 criminal prosecutors The eventual end of the countys siren system33

Ohios safety forces, understanding the difficulties of todays economic realities, have stepped up to help where they can. In Wooster, members of the International Association of Firefighters (IAFF) Local 764 cited budget troubles as the reason to propose a contract extension to the city council that essentially froze their wages for four years. Relieved local officials called these public-spirited sacrifices generous, unselfish and bold. The move was described as a win-win for the city and the fire department. Council unanimously approved the contract.34 This was a no brainer, Greg Thompson, vice president of Local 764, told the press. Our thinking was we came together as a unit and this will be in the best interest of the citizens. This is a prime example of how well collective bargaining does work. Based on an expectation that firefighters would have received pay raises from 1-to-3 percent, plus benefits over that four-year period, the city will save at a minimum $152,000 and a maximum of $452,000.35 The city of Lancaster intends to layoff 13 firefighters this year, down from a projected 19 and earlier projections of 31, thanks to money built up from a 2005 income tax increase. The move keeps the city from violating a National Fire Protection Association Standard of having four firefighters per engine. Nonetheless, layoffs will force the closure of one engine house and the Fire Prevention Bureau.

Hamilton Co. Budget Plan Would Cut Deputies, Prosecutors, Cincinnati.com, Aug. 30, 2011 34 Steve Huszai, Wooster Firefighters OK Four-Year Wage Freeze, The Daily-Record, Sept. 7, 2011 35 Andrei Dordea, finance director, City of Wooster
33

Furthermore, Lancaster firefighters have saved the city more than $1 million by freezing wages and cutting benefits, despite having a solid contract that provided those benefits.36 Everyone is suffering in the current economy, and public employees cannot expect to be exempt from such a widespread recession, said K.J. Watts, past president of Local 291 of the International Association of Firefighters. The public as well as firefighters recognized a real decision that speaks to the core of what a firefighter is they care about the safety of their brethren as well as the citizens they serve, Watts said. The economy may not turn around anytime soon, but one thing is true, firefighters have stepped up in a tough time and did the right thing on many levels. Public Employees Give Back to Help Offset Extensive Cuts More than 51,000 people are projected to lose their jobs in the wake of the new state budget that made deep cuts to local government, school districts and higher education, according to a recent study by Innovation Ohio, a non-partisan think tank based in Columbus. Cuts to education over the current two-year budget will total $2.8 billion.37 The Ohio Association of School Business Officials (OASBO) has predicted that this financial pruning will create a crisis for many districts. We believe the reductions could threaten our sound education system and have a negative effect on the economy, OASBO members said in testimony to lawmakers about the budget.38 Small-town leaders across Ohio are anxious about actions out of Columbus that will cut funding to the local government fund by 50 percent and the removal of the estate tax starting in 2013, 80 percent of which went to local governments.39 Overall, local governments across the state are expected to lose more than $844 million. Included in this calculation are reductions to the Local Government Fund, the repeal of the estate tax, and cuts to tangible personal property and Kilowatt hour reimbursements.40

Jim Siegel and Alan Johnson, Officials Praise Limits on Unions, The Columbus Dispatch, Feb. 16, 2011 37 See Appendix C 38 The Ohio Association of School Business Officials, Senate Testimony, June 2, 2011. 39 Howard Wilkinson, "Ohioans embrace new reality", Cincinnati Enquirer, June 2, 2011. 40 State of Ohio, Main Operating Budget, House Bill 153, 129 th General Assembly
36

Every local has a story. Madison County will lose nearly $2 million from these cuts and are projected to lose 25 public sector jobs over the biennium. The five school districts in the county are projected to lose $7.5 million in cuts and 104 full-time staff.41 Small towns are feeling the squeeze. North Ridgeville Republican Mayor Dave Gillock said: They are just mixing so many issues together. It makes me really nervous in trying to balance my budget. What it amounts to is the state shoving it all down to the local level.42 Major Impacts Ahead for Ohios Schools Officials in Ohios 612 school districts have projected budget losses of $2.8 billion and more than 12,563 teaching and 12,455 non-teaching jobs could be lost.43 Teachers are responding to these major losses in revenue by committing to record amounts of givebacks, with a goal of continuing to provide a quality education to students. For instance: More than 90 percent of the teachers and some support staffs bargaining agreements in 2011 included wage freezes, with the majority involving multiple-years.44 In the past three years, a record number of teacher associations agreed to pay freezes.45 The average wage settlement for teachers in 2010 that did receive a pay raise was under 1 percent.46 More than two-thirds of all teachers contracts increased employee insurance premium contributions or added structural changes to health plans, including higher deductibles and co-payments.47

Ibid Aaron Marshall, Northeast Ohio Municipal Officials in Battle with Gov. John Kasich, The Plain Dealer, Aug. 31, 2011 43 The Ohio Association of School Business Officials, Senate Testimony, June 2, 2011; and Innovation Ohio, Direct Job Loss from cuts in the Kasich Jobs Budget, April, 7, 2011 44 Ohio Association of Education (OEA), Internal Analysis of newspaper reports and collective bargaining agreements filed with OEA and the SERB 45 Ibid. 46 State Employee Relations Board (SERB), State Employment Relations Board Annual Wage Settlement Report, 2010 47 Ohio Association of Education (OEA), Internal Survey of field staff.
41 42

More than half of the 125 contracts negotiated by the Ohio Association of Public School Employees (OAPSE) included no pay increases, and one-third of those contracts included healthcare concessions.48

In many cases, as school districts eliminated positions and cut jobs, teachers and their support staff agreed to tighten their own belts, freezing their pay for multiple years and paying more out of pocket for their health care insurance. Accepting a general pay freeze costs a new teacher about $30,000 in career and retirement earnings. A base and step freeze drives up lost earnings to nearly $60,000.49 These employee concessions have not gone unnoticed and have been especially appreciated by distressed, but grateful managers. In the Canfield Local School district, 29 employees lost their jobs, while teachers agreed to a three-year pay freeze along with school secretaries, cafeteria workers and custodial staff. While these shared sacrifices will save the district $1.9 million, they were not enough to halt the elimination of some services. 50 High school busing was ended even as the district reduced the number of bus stops for younger students. Administrators in Canfield also dropped fourth-year foreign language programs and some history classes and increased class sizes. More pruning could be in the works. Even with the cuts that weve just taken care of, we still dont know what cuts may come in the future, Dante Zambrini, Canfields superintendent, told the press. Supporters of SB5 may argue that the new law is prompting unions to act, but some, like teachers in the Perry Local School District, have gone above and beyond the dictates of the new law. Teachers agreed to a wage freeze through June 2014 and will contribute 20 percent toward health and dental care, 5 percent more than the SB5 requirement. That will save the district $3.7 million.

Ohio Association of Public School Employees (OAPSE), Internal Review Ohio Education Association, Deconstructing the Single Salary Schedule, OEA Bargaining Advisory, July 2010 50 Canfield Schools Cut $1.9 Million Out of Budget, 33 WYTV.com, June 30, 2011.
48 49

Thats a long-term savings and an investment in the future of our district, Perry Superintendent John Richard told the press. Thats a savings that is realized by the taxpayers as well.51 Even as public workers give wage concessions, some school superintendents are collecting generous wage and benefit packages. Central Ohio superintendents are paid between $135,000 and $349,000, with Dublin Superintendent David Axner benefitting the most. Taxpayers spent about $349,000 on Axner last year, of which $182,157 was his base salary. The school board agreed to contribute annually to an annuity, his pension and Medicare. Like many superintendents, his contract also provides allowances for travel, communications and other expenses, such as membership fees and costs for professional organizations. Membership fees to professional organizations and contributions to pensions and Medicare are typically covered by districts. Many superintendents have district-paid annuities for retirement or their childs college savings. They can also be rewarded for staying with the district, meeting goals or attaining a doctorate.52 Collective Bargaining Brief Historical Context There is certainly precedent for the current acrimonious debate between opponents and supporters of SB 5. Before Ohio allowed public sector bargaining, relations between workers and managers were dominated by intense conflict. The Ferguson Act, passed in 1947, regulated public labor, banning public employee strikes and providing for the dismissal of strikers. Under the law, any striker who was rehired was severely punished: Strikers would receive no pay increase for one year and would be on probation for two years. That same year, the Ohio Supreme Court barred municipalities from entering into union contracts. Justices also ruled that local governments could not allow workers to have voluntary deductions taken from their paychecks. The tide began to turn in the late 1950s. Voters solidly rejected a rightto-work initiative that would have prevented the adoption of contracts requiring union membership as an employment condition. And the

51 52

Erin Psutay, Perry Teachers OK New Contract, CantonRep.com, June 28, 2011. Charlie Boss, Whats A School CEO Worth; Columbus Dispatch, September 5, 2011.

legislature sanctioned the paycheck deduction of dues for public employees. In the 1960s, all of Ohios major cities, ignoring the earlier Supreme Court ruling, had signed contracts with the American Federation of State, County and Municipal Employees (AFSCME). For the most part, the Ferguson Act was not invoked. In 1975, the Supreme Court granted school boards the right to bargain with their employees. The court also said that these contracts were legally enforceable. In 1975 and again in 1977, Republican Gov. James A. Rhodes vetoed Democratic-led collective bargaining legislation. Despite the Ferguson Acts severe penalties, between 1978 and 1980, public employees went on strike 183 times. Illegal strikes by safety forces crippled several major cities. One notable strike occurred in Cincinnati in 1979. After eight police officers were killed in the line of duty in five years four of the deaths occurring in a 10-month span more than 600 officers took part in a 24-hour strike to protest the citys failure to provide upgraded safety equipment and firearms. Similar job actions occurred around the state, including another major strike in 1979 when police and firefighters walked off the job in Toledo. For awhile, lawlessness ruled, residents toted shotguns and the city erupted into flames, literally. It was events such as these that provided the impetus for reforms. After Democrats took control of both the governors office and legislature in 1983, lawmakers on a party-line vote passed a collective bargaining law, which Gov. Richard F. Celeste signed.53 Conclusion The collective bargaining law has been a successful tool that essentially eliminated much of the conflict the state saw three decades ago between public-sector unions and government managers. When the economy is good, public employees have made modest gains through contract negotiations. When times are tougher, public employees have been willing to make concessions to preserve jobs, maintain programs and services and help their employers balance budgets.

William Hershey, Ohios 64-year-old war over public unions rekindled, Dayton Daily News, February 26, 2011.
53

These financially-shared sacrifices, reached through collective bargaining, have clearly helped government employers and school districts, and in the long run, taxpayers, save extraordinary amounts of money, a fact not lost on management. Lancaster Mayor David S. Smith, a Republican, publicly said as much, and more, when he praised the collective bargaining process in his Congressional testimony in March 2010 for the Public Safety Employer Employee Cooperation Act of 2009. The city was saddled with major operating budget deficits that were addressed through the collective bargaining process. I hope that my testimony has shown that collective bargaining is not something that should be feared by those not familiar with it, Smith said. Collective bargaining is working in Lancaster, Ohio, and it reflects the cooperation and dedication that the administration and the safety forces know is necessary to serve the city. 54 About This Report TC Brown compiled this report in September and October 2011. Brown organized and generated the report by collecting information and statistics provided by public-sector unions, by gathering data from news stories, through Internet research, reviewing contracts and from conducting interviews. Brown, a former Ohio journalist, is now a freelance writer, editor, investigator, multimedia/social media producer, and consultant. Among other work, Brown was hired in 2011 by a private contractor working for the state to help write and edit an annual report for Ohios Medicaid program. It is scheduled for publication this year.

Education and Labor Committee, http://www.youtube.com/watch?v=kyGYXanmyOU&feature=youtu.be, March 10, 2010

54

APPENDIX A A sample review of concessions in a half dozen Ohio cities shows that employees and safety forces have saved their towns nearly $10 million since 2008. Mahoning County sheriffs deputies $3 million55 FOP Units 2, 46 and 48 $3.54 million56 Darke County sheriffs deputies/Fairborn and Huber Heights police $509,00057 Highland and Clinton County sheriffs deputies/Forest Park and Greenfield police $177,50058 North Olmsted police $429,00059 Lancaster firefighters $1.3 million60 City of Toledo $500,00061 Wooster Firefighters $152,00062 Marion police $ $274,00063

Total Appendix A $ 9,881,500

Adam Ferrise, Pay Raises Draw Fire in Mahoning, Tribune Chronicle, Feb. 4, 2011 Fraternal Order of Police/Ohio Labor Council Inc., Internal Review 57 Ibid 58 Ibid 59 Ibid 60 Jim Siegel and Alan Johnson, Officials Praise Limits on Unions, The Columbus Dispatch, Feb. 16, 2011 61 American Federation of State, County and Municipal Employees (AFSCME) Ohio Council 8, Internal Analysis 62 Andrei Dordea, finance director, City of Wooster 63 John Jarvis, "Marion City Council to Consider FOP Concessions," The Marion Star, April 27, 2011
55 56

APPENDIX B State law requires public school districts to develop and submit to the Ohio Department of Education a five-year financial forecast. These forecasts are prepared and filed with ODE twice annually, no later than May 31 and October 31. The chief financial officer of each school district prepares the forecast, which must be approved by the local school board. Variable economic conditions and fluctuations in district staffing levels play an important role in the accuracy of the estimates. Collective bargaining also has a considerable effect on districts financial projections. An OEA analysis of these forecasts shows that collective bargaining responds in a timely manner to local and state economic conditions. The OEAs projections for the 2010-11 school year for 610, K-12 school districts (excluding the island districts and College Corner) were based on the October 2008 five-year projections from Ohios school districts. Those early mandated projections were compared to what the districts reported for FY2011 on their May 2011 five-year forecasts. It should be noted that once concessions from negotiations for the 201112 school year are fully reported in October 2012, the aggregate concession number of more than $700 million could increase sharply.64

OEA research staff, The Impact of Collective Bargaining on School District Finances, September 2011
64

Appendix C

Revenue Category State GRF K-12 State GRF Rollback State General Services State special revenue State Lottery Profits TPP/ PUTPP Replacement Subtotal State

FY11 $6,264 $1,051 $32 $51 $711 $1,241 $9,350

FY12 $6,453 $1,086 $42 $55 $718 $756 $9,110 $0 $101 $2,209 $2,310 $55 $718 $756 $7,896 FY11 to FY13 -$439 -$1,220

FY13 $6,533 $1,095 $42 $55 $681 $505 $8,911 $0 $40 $1,971 $2,011 $55 $681 $505 $7,698 Total Loss -$679 -$2,140

Federal SFSF Foundation $457 Stimulus nonfoundation Federal other Subtotal Federal State special revenue Lottery Revenue Distribution $482 $2,291 $3,230 $51 $711 $1,241 $8,299 FY11 to FY12 State Only Change Federal Only Change -$240 -$920

Total Change

-$1,160

-$1,659

-$2,820

FY11 to FY12 FY12 to FY13

-$1,160 -$498

On June 2, 2011, The Ohio Association of School Board Officials testified in front of the Senate Finance Committee on HB 153, the state budget, which was in front of the committee at the time. Their testimony included two charts that have been recreated below that outline the cuts to state funding for education in the budget and the total amounts of cuts over the biennium.65 Note: Numbers rounded to nearest million. Columns may not add due to rounding.

65

The Ohio Association of School Business Officials, Senate Testimony, June 2, 2011