California portends bad news for public-sector unions

While most of the nation’s attention was focused on Wisconsin’s recall elections, other local governments were taking important steps toward breaking free of public-sector unions, as well. Scott Walker’s victory shows us that, despite all the noise, unions are in decline in traditionally Democrat-leaning Midwestern states. But, in some ways, two local elections in California may portend even bigger things for the reformists.

When you’re looking for public-sector union carnage, there is no better place than California, a solidly Democratic state where pension-plan funding for government employees is more than $500 billion in the red. Gov. Jerry Brown’s tepid 12-point pension reform plan hasn’t gone anywhere in the state legislature, but  two of the state’s — and country’s — biggest cities dealt unions major setbacks Tuesday.

In San Diego, payments into the public-employee retirement fund went from $43 million to $231.2 million — or 20 percent of city’s general fund – in little over a decade. So it’s not surprising that two reform proposals easily won over voters.

Proposition A prohibits San Diego from using union-only “Project Labor Agreements” – which force the city to accept prevailing union wages and health care coverage — to be instituted on municipal construction contracts, opening up competitive bidding and saving the city millions. Voters approved the measure, even though California’s Brown recently signed a bill that would deny any state construction funds to a city that bans union friendly agreements.

Proposition B will reform city pensions plans by moving all city employers (except for police officers) from defined benefit plans to an effective 401(k) akin to those in the private sector. It also calls for initiating a five-year freeze on the portion of union salaries used to calculate future pension payouts. At last count, around 70 percent of voters supported Proposition B.

It is estimated that the plan would save the city nearly $1 billion over 30 years.

Not surprisingly, unions — champions of “democracy” — launched a legal challenge against Proposition B even before any San Diegan had an opportunity to vote on the matter. Courts ruled that the measure could be litigated after the election, so expect it to be tied up in courts for a while.

Then there is the case of San Jose, where pension payments jumped from $73 million in 2001 to $245 million, or 27 percent of the general fund budget.

It’s also a city where Democrats solidly outnumber Republicans.  Yet, a Democrat Mayor, Chuck Reed, and an 8-3 Democrat majority in the city council championed a reform labor measure. Reed claimed it was his “No. 1 priority because it’s the biggest problem we face. It’s a problem that threatens to our ability to remain a city and provide services to our people.”

In this city, police and firefighters are given lavish retirement plans that should be the envy of public-employees everywhere.  “Our police and firefighters will earn more in retirement than they did when they were working,”  Reed once explained.

As in San Diego, pension reform passed easily here.

Measure B institutes a program that makes the current beneficiary pay up to 16 percent of their salaries to extend their retirement plan or, surrender that plan and move to one that provides benefits in line with the private sector. It also limits retirement benefits for future hires by requiring them to pay half the cost of a pension, it also suspends pension raises for up to five years when the city declares a fiscal crisis and it will discontinue “bonus” pension checks for retirees, among other things.

Yolanda Cruz, president of the Municipal Employees’ Federation, the city’s largest union, said that the passage was “an unfortunate way to spend taxpayer money fighting it in court because we will definitely take it there. Taxpayer money would be better used getting services back.”

Unions may know a lot about the unfortunate spending of taxpayer money, but though all these initiatives will end up in courtrooms — so much for “Power to the People!” — the mood of voters is unmistakable.

via California portends bad news for public-sector unions.

Madison Politiscope: What does Scott Walker’s win mean for unions?

What does Gov. Scott Walker’s victory in Tuesday’s recall election mean for the future of politics in Wisconsin?

Some argue the loss will energize Republicans and demoralize the Democratic base, giving the GOP an advantage here in November when President Obama seeks reelection. Others suggest the massive effort to register voters in Dane and Milwaukee counties for Barrett was not in vain; it could help the Obama effort later on.

But perhaps an even more important question to ask is what Walker’s victory means for the future of organized labor in Wisconsin and America.

The now-infamous quote from Diane Hendricks, CEO of ABC Supply in Beloit and a major Walker contributor, sums up Democrats’ fears.

“Any chance we’ll ever get to be a completely red state and deal with these unions – and become a right-to-work,” Hendricks asked Walker in a videotaped conversation in January 2011, only weeks before his proposal to strip most public workers of almost all collective bargaining rights sparked massive protests and six recall elections against state senators.

Right-to-work laws, which currently exist in 23 states (mostly in the south and west), bar employers from entering into contracts with unions that require employees to join the union. So, even though the union is bargaining on their behalf, employees are not required to pay dues.

Republicans like right-to-work laws because they weaken unions. With fewer dues-paying members, unions are typically weaker at the bargaining table (allowing the company more power) and they have less money to spend to support political candidates, most of whom are Democrats.

Although Walker has not proposed right-to-work legislation, his near-elimination of collective bargaining in the public sector means that some of the largest and most important unions in the state are no longer automatically deducting millions of dollars worth of dues from their members.

“Act 10 is a pretty effective tool at preventing unions to organize,” says Mary Bell, the head of the Wisconsin Education Association Council, the largest labor union in the state, which laid off 40 percent of its staff in response to a drastic drop in dues last year. “It’s been exceedingly difficult to do the work of the union with fewer people”

Will right-to-work come next? The governor, who sponsored unsuccessful right-to-work legislation as a state legislator, refused to state a position on the issue throughout the campaign, insisting that it would not come up in the near future.

“Republicans are going to be emboldened and their corporate backers are going to want further return on their investment,” says state Rep. Kelda Roys, D-Madison, who sees right-to-work and other pro-business policies as a likely result of Walker’s victory.  read more…

via Madison Politiscope: What does Scott Walker’s win mean for unions?.

FreedomWorks for America Congratulates Scott Walker on an Epic Wisconsin Recall Victory | Mesh Press

WASHINGTON, June 5, 2012 (Meshpress) – FreedomWorks for America activists and taxpayers celebrated Wisconsin Governor Scott Walker’s hard-earned recall election victory last night, which was launched by Wisconsin Democrats in response to Walker’s bold fiscal conservative public sector union reform. The reform bans collective bargaining for public employees (outside of law enforcement and fire-fighting) and allows for the payment of union dues to be voluntary.

“Governor Walker’s recall victory marks a monumental shift in the relationship between public sector unions and the Democratic Party,” commented FreedomWorks for America’s Campaign Manager Josh Eboch. “With union membership plummeting by the thousands thanks to Governor Walker’s voluntary due-payment policy, the Democratic Party can no longer rely on compulsory union money to win elections and cater to the corrupt special interests of union bosses.”

“We hope this victory will empower the Governors in other states who have been too timid to tackle serious reform on issues like collective bargaining and school choice. Scott Walker in Wisconsin is a lesson to Governors nationwide that if he can take on the entrenched public sector union political machine and prevail, so can they. Members of FreedomWorks for America and fiscal conservative voters around the country will support these reform leaders and make sure they get rewarded at the ballot box.”

Eboch continued, “Governor Walker’s recall battle in Wisconsin is without a doubt a litmus test for the presidential general election in November, and a tribute to a larger national political shift towards greater economic freedom and individual choice. The Walker reforms are working. Statewide property taxes have fallen, the reforms have saved taxpayers more than $1 billion so far, and 73% of employers in the state have predicted moderate to good growth at their companies. With the national unemployment rate at 8.2 percent and CBO predictions that the federal debt will double in 15 years, the President should be taking notes from Governor Walker.”

FreedomWorks for America activists were involved in the fight to protect Governor Walker’s reforms since day one, setting up 18 distribution centers across the state to circulate materials through their local networks. Over 5,000 yard signs, 3,500 bumper magnets, and 50,000 door hangers have been distributed to the homes of voters across the state to-date.

FreedomWorks for America organized the demand for materials on the micro-site,www.WalkerForJobs.com, where activists could request boxes of additional voter education materials and view several pro-Walker web videos.

via FreedomWorks for America Congratulates Scott Walker on an Epic Wisconsin Recall Victory | Mesh Press.

Walker’s Victory Bad News for Labor – But will that mean it’s bad for Democrats, too?

(NEWSER) – Wisconsin Gov. Scott Walker’s victory in a fierce recall battle is a costly blow to labor that will likely have major repercussions across the nation, notes the Wall Street Journal. Inspired by Walker’s ability to withstand a challenge to his labor changes cutting collective bargaining rights for most public workers, other legislators may now be emboldened to press for anti-union measures such as “right to work” laws, further decreasing the number of dues-paying union members and diluting labor’s political clout. And what’s bad for labor is generally regarded as bad for Democrats.

Public sector union PACS have donated $4.7 million to congressional candidates so far this year, with about 90% of that going to Democrats, according to the Center for Responsive Politics. Republicans control legislatures and governorships in 24 states, and that’s where further changes in worker rights will most likely occur, notes the Journal. But the Wisconsin vote didn’t necessarily reveal crystal clear support for Walker’s anti-union policies—or Republicans. Exit polls revealed that 18% of Walker supporters favored President Obama, reports the New York Times, and a majority of voters said they believe recalls are only appropriate for incumbents accused of misconduct, not simply because their policies are unpopular.

via Walker’s Victory Bad News for Labor – But will that mean it’s bad for Democrats, too?.

Mayor vows veto on health benefits – Toledo Blade

A clear victory for legislation to extend health-care benefits to the domestic partners of city employees unexpectedly crashed Tuesday after Toledo Mayor Mike Bell threatened to veto an ordinance for which he spent more than a month lobbying.

The mayor’s surprise turnaround came after City Council voted to amend his original proposal to include a clause allowing Toledo’s main firefighters’ union to reopen negotiations on its health-care contract with the city.

The vote to amend came despite vigorous opposition from city law director Adam Loukx, who said the amendment went beyond council’s authority under city law.

Local 92, which represents more than 500 firefighters, operates its own health-care fund and could become financially stretched by the extension of coverage to domestic partners, councilman D. Michael Collins argued. Eight of 12 councilmen agreed with him and voted to allow renegotiation of what the city pays per employee into the union’s health-care fund.

“I believe it’s only fair,” Mr. Collins said. He chided the administration for not telling the union during contract negotiations this year that it was considering the extension of benefits to domestic partners. “They should have known that there was going to be a policy change.”

Council then approved the domestic partner legislation, 9-3. Councilmen George Sarantou, Rob Ludeman, and Tom Waniewski voted against it.

They needn’t have bothered.

Shortly after the ordinance passed, an agitated Mayor Bell sat down at the council bench and told them he would veto the entire thing.

“It’s totally illegal,” the mayor said after announcing his decision. “They changed the subject matter from what it was supposed to be.”

The mayor accused some members of council of using the amendment as a stalling technique, and suggested the vote had more to do with currying the favor of union interests than supporting equal rights for city workers. He said he would reintroduce the original ordinance for council’s next meeting on June 19.

The veto threat threw up a wave of frustration among City Council members, who have debated the legislation for weeks. Lindsay Webb and council President Joe McNamara said they couldn’t understand why the mayor didn’t just line-item veto the part of the ordinance he didn’t like.

“I’m disappointed that the mayor would choose to throw the baby out with the bath water,” Ms. Webb said.

Mr. Collins, who frequently clashes with Mr. Bell, accused the mayor of taking a dismissive attitude toward the union’s concerns.

“I’m not going to support a piece of legislation that promotes disparity for the fire-fighting population of this city,” the councilman said.

Local 92 Vice President Dan Desmond said he agrees his union should be given a chance to renegotiate with the city. Currently, the union receives $916 per member, per month from the city to cover health-care costs. If more people become eligible for health insurance under the domestic partner policy, the union could face a funding shortfall, Mr. Desmond said.

“I think it’s a good ordinance, it just needs to be paid for,” he said.

Other unions could jump on the bandwagon, though their members are insured directly through the city.

Dan Wagner, president of the Toledo Police Patrolman’s Association, said the domestic partner legislation implies a change to the union’s contract language, an alteration that shouldn’t be made without TPPA’s approval.

“It should be a negotiated matter,” he said, adding that he supports the benefit extension.

Also Tuesday, council unanimously approved legislation that imposes fees on Internet “sweepstakes” cafes in the city; cafe owners will be required to pay a $5,000 operating fee annually, along with $200 per machine.

Councilman Collins, who sponsored the legislation, had originally sought a $7,000 operating fee and $350 per computer, but reduced the amount after negotiating with an attorney representing local cafe owners. Mr. Collins said he still expects the fees to generate about $500,000 a year for the city, which he hopes will be used to bolster the rainy-day fund. The first license fees are due by the end of September.

Joe Rigali, who owns Kings Internet Cafe in South Toledo, said he still feels the fees are a bit steep but are “as fair as it’s going to be.” He expects the new law to cost him $13,000 a year.

Council also unanimously voted to modify the municipal code, letting the administration take a more streamlined approach to overgrown grass in Toledo. Instead of posting notices on the doors of individual properties, the city will run two consecutive notices in area newspapers advising residents to cut overgrown lawns within five days or face stiff fines and fees.

Council also voted in favor of a new labor contract with AFSCME Local 2058, a union representing about 200 supervisors across various city departments. The contract, which reduces the city’s pension contributions and increases employee health-care premiums, will save the city $1.4 million over three years, deputy mayor Steve Herwat said.

via Mayor vows veto on health benefits – Toledo Blade.

Cleveland teachers reject fact-finder report | WTAM – Local News – The BIG One – WTAM 1100

(Cleveland) – The Cleveland Teacher’s Union has rejected a fact-finders report on contract concessions by a whopping majority. The unofficial vote total shows 4,183 “No” votes and 119 “Yes”.

The Cleveland Teachers Union contract with the school district runs through 2013, however negotiations were reopened over salary issues. When the two sides couldn’t reach an agreement on wages, they went to fact-finding.

Under the fact-finder’s recommendations, which the Cleveland Municipal School District board has accepted, the school district would see a savings of $13.6 million.

Teachers’ base salaries are protected but CTU President David Quolke says there would have been a reduction in the number of days they’re paid, including:

– Elimination of three voluntary professional days, saving the district approximately $2.85 million

– Modification of the District’s proposal relative to reducing class size overage payments, saving the district approximately $368,000 in fiscal year 2014.

– Elimination of three mandatory professional development days, saving the district approximately $3.45 million.

– Elimination of six paid holidays, saving the district approximately $6.91 million.

Quolke tells Newsradio WTAM 1100 the teachers sent a strong message and put their faith in the union getting them a better contract. With the rejection, both sides go back to negotiations with a federal mediator. If an impasse then the union could proceed with a job action. Quolke says they’ll “cross that bridge when they come to it”.

Cleveland School CEO Eric Gordon says he’s disappointed in the vote. Gordon acknowledges that the teachers have made concessions, but he says the other unions have given more…1.8% compared to 5.6% to 6%. Gordon also says 74% of the district’s personnel costs are in the union teachers.

Despite the rejection of the fact-finder’s report, which Gordon called “brilliant”, he’s optimistic an agreement can be reached before the next school year starts in the fall.

But with the layoff of over 500 CTU members, the union also says concerns have been raised regarding how the district will staff schools.

via Cleveland teachers reject fact-finder report | WTAM – Local News – The BIG One – WTAM 1100.

North St. Paul-Maplewood-Oakdale teachers approve contract – TwinCities.com

The North St. Paul-Maplewood-Oakdale school district has a tentative agreement with its teachers union.

Teachers have signed off on the two-year deal, which gives them a 1 percent pay increase for this school year and a 1.15 percent pay increase for the 2012-13 year. That does not include raises already built into the contract for experience and continuing education.

District officials did not immediately release a copy of the contract Tuesday, June 5, but said it will cost the district an additional $5.9 million if approved by the school board. The district’s budget is expected to drop from about $156.6 million this year to $153.8 million next school year.

The board is expected to vote on the contract June 26.

“Obviously, we would have liked to settle a long time ago, but we’re happy we settled before school is out,” said Rory Sanders, head of the district’s teachers union. “We want to get this cloud of negotiations out of the way and get on with the important business ahead of us.”

Pay increases for the district’s teachers have been small in recent years.

In the last two-year contract, teachers got no cost-of-living raise in 2009-10 and a 1 percent increase in 2010-11. But it still cost the district an additional $4.2 million because of “steps and lane” increases and rising insurance costs.

North St. Paul-Maplewood-Oakdale teachers have been working without a contract for almost a year. Only 38 of 337 teacher contracts in Minnesota are still

unsettled, according to the statewide teachers union Education Minnesota.

via North St. Paul-Maplewood-Oakdale teachers approve contract – TwinCities.com.

Unit 5 outsources bus system, eyes $1.5M savings

NORMAL – For the first time in Unit 5’s history, when students get on a bus for the first day of school in August, their driver won’t be a school district employee.

Unit 5’s school board voted unanimously Tuesday night to hire First Student Inc. to take over student transportation, starting with the 2012-13 school year.

The vote – preceded by no new discussion by board members – caps a months-long march toward outsourcing, starting last fall with a pledge by district leaders to fix late-bus problems and other operational headaches made worse by Unit 5’s growing enrollment. That planning also coincided with Unit 5’s first-ever round of contract talks with its current bus drivers and monitors’ new union, AFSCME Council 31.

On Tuesday, Unit 5 leaders chose First Student’s proposal over AFSCME’s. Unit 5 officials say the three-year, $18.5 million contract with First Student will save taxpayers about $1.5 million, and is $4.2 million cheaper than AFSCME’s counterproposal.

via Unit 5 outsources bus system, eyes $1.5M savings.