Labor board moves ahead on Unit 5 complaint

SPRINGFIELD – A union’s allegations against Unit 5 over the outsourcing of the school district’s busing system are moving forward.

The American Federation of State, County and Municipal Employees Council 31, which represents about 200 bus drivers and monitors, filed an unfair labor practice charge in May with the Illinois Educational Labor Relations Board. On Friday, the IELRB’s executive director elevated that charge to the complaint stage, meaning AFSCME was able to present some evidence of its allegations, according to the IELRB.

The union accuses Unit 5 of violating two sections of the Illinois Educational Labor Relations Act, first by allegedly retaliating against drivers and monitors who opted to certify with AFSCME by outsourcing busing. AFSCME also claims Unit 5 was not bargaining in good faith, as it simultaneously weighed privatizing during contract talks with AFSCME.

Unit 5 denies those charges, and its school board decided last month to contract out busing to First Student, starting in the fall. Unit 5 officials say the three-year, $18.5 million contract with First Student will save taxpayers about $1.5 million.

Unit 5 and AFSCME will go before an administrative law judge in Springfield on Aug. 20-21 on the complaint.

AFSCME has also requested an injunction to stop First Student’s takeover. On Thursday, the IELRB will hear oral arguments on that issue at its 10 a.m. meeting in Springfield. The board could make a decision on the junction as soon as Thursday.

If it grants AFSCME’s request, the board would ask the Illinois attorney general’s office to pursue the injunction in McLean County court.

via Labor board moves ahead on Unit 5 complaint.

Minnesota Reportedly Close To New Contract Extension For Tubby Smith – SB Nation Minnesota

Orlando “Tubby” Smith

Minnesota’s Highest Paid Public Employee (editor’s note)

A new contract for Minnesota Golden Gophers head basketball coach Tubby Smith has been in the rumor mill for a good while now, and despite a short bunch of rumors that LSU was looking to swipe him away, the conversation is now back on an extension for Smith.

According to 1500ESPN, Minnesota’s new athletic director Norwood Teague appears to be confident that the two sides are very close to agreement on a new contract. Nothing is set in stone, especially since both sides seemed confident on the very same thing two months ago when Teague was first introduced as the new AD, but Teague is saying that negotiations are now ‘in the 11th hour’ despite the number of times that the negotiations have stalled so far:

“We’ve been in discussions with his agent (Ricky Lefft) and I know it’s pretty far down the road,” Teague said. “I think it’s in the 11th hour and you’ll hear more about it pretty soon, but I need to talk to the legal council before I talk about any specifics.”

Smith currently has two years remaining on his contract with the Gophers.

For more on the Minnesota Golden Gophers, check out The Daily Gopher. You can also learn more about college basketball around the nation at SB Nation’s College Basketball hub.

via Minnesota Reportedly Close To New Contract Extension For Tubby Smith – SB Nation Minnesota.

Fareed Zakaria: Time for Democrats to Face Facts on Public Pension Reform

Writing for Time magazine, Fareed Zakaria has made a solid argument for public sector pension reform. He makes no bones about who is at fault in what he labels “the single biggest threat to the U.S.’s fiscal health.”

[O]n the central issue of the [Wisconsin] recall–the costs of public-sector employees–the Democratic Party is wrong on the substance, clinging to its constituents rather than doing the right thing.

As he notes later in the piece, we’ve gotten where we are because of an unholy alliance between unions and politicians:

Public-sector unions, powerful forces in states and localities, ask for regular pay increases. Governors and mayors can dole out only so much in salary hikes because of requirements for balanced budgets or other constraints. So instead, they hand out generous increases to pension benefits, since those costs will hit the budget many years later, when current officials are themselves comfortably in retirement.

Zakaria is right about both the scale and the source of this problem. There is no path to sustainable state budgets apart from reductions to public sector pensions and, in many cases, health programs. The two elements of society which created this massive problem are the same elements which stand in the way of dealing with it: unions and their defenders in the Democratic Party.

Case in point: yesterday Paul Krugman published an attack on Mitt Romney for daring to say this week, “It’s time for us to cut back on government and help the American people.” As Krugman sees it, this is a demand for austerity at the state level which is leading to higher unemployment. What we should do is borrow more money at the federal level to pass out to struggling states:

America…has an easy way to reverse the job cuts that are killing the recovery: have the feds, who can borrow at historically low rates, provide aid that helps state and local governments weather the hard times. That, in essence, is what the president was proposing and Mr. Romney was deriding.

Reading Zakaria’s piece demonstrates why Krugman’s suggestion that we borrow our way through the problem is absurd. States are going broke because the cost of public pensions is crowding out everything else:

And the problem is growing. In California, total pension liabilities–the money the state is legally required to pay its public-sector retirees–are 30 times its annual budget deficit. Annual pension costs rose by 2,000% from 1999 to 2009. In Illinois, they are already 15% of general revenue and growing. Ohio’s pension liabilities are now 35% of the state’s entire GDP.

We can’t borrow our way through the “hard times” precisely because, unless significant changes are made to public pensions, the hard times will never end. But as Zakaria suggested, most Democrats are more interested in scoring political points than in doing the right thing.

via Fareed Zakaria: Time for Democrats to Face Facts on Public Pension Reform.

Local lawmakers: No pension reform until fall

NORMAL – Not everyone thinks this will be the summer for pension reform in Illinois.

State Rep. Keith Sommer, R-Morton, and state Sen. Shane Cultra, R-Onarga, both said this week they think a vote from the General Assembly on pension reform will come after the general election in November.

Cultra said he doesn’t think House Speaker Mike Madigan or Senate President John Cullerton want to expose members to the controversial packages yet.

“You’ve got to look at who their constituency is. Pension reform hurts their constituents, people who support them,” Cultra said. “I don’t think it’s realistic to think that that’s going to happen.”

Cultra said this is the latest a veto session has been held during his 10 years in office. Sommer said for that reason, he thinks the lame duck session will tackle anything it wants.

“If it were just addressing those bills that were vetoed, it would be pretty easy because we’ve already talked about them and debated them,” Sommer said. “But, when these new topics come up, or a topic that’s supposedly dead comes up, it makes you very leery of what can happen.”

Sommer said he thinks leaders are too concerned with the possibility of losing seats in November. He also said it’s a contract negotiation year for the unions, which he said will have a major impact on health care for retirees.

Gov. Pat Quinn will soon be meeting with legislative leaders on pension reform proposals. Lawmakers couldn’t get enough support for bills in the last days of the spring session. The two points of contention come over cost of living adjustments and whether to make downstate and suburban Chicago schools take over the cost of employee pensions.

The state’s pension systems are currently underfunded by $83 billion.

via Local lawmakers: No pension reform until fall.

COMMUNITY COLUMNIST — The heavy weight of public-sector union benefits – Holland, MI – The Holland Sentinel

Holland —

Second in a series

Union membership in America peaked in 1954, with membership rates topping 35 percent of all workers. By 2010, that percentage had dropped to a mere 11.4 percent. We’re at roughly half of the average level of union membership across Europe. More significant, however, is the changing face of unionization.

In a recent New York Times analysis, Steven Greenberg notes that in 2010, private sector union membership stood at 7.1 million, or 6.9 percent. Public sector union membership stood at 7.6 million, or 36.2 percent of public workers. Clearly, both in raw numbers and percentages, union membership is increasingly characterized by public sector employees. This poses particular challenges for adjusting to what seems like a global tidal wave of economic upheaval.

Increasingly, “unsustainable” seems to be invading our financial lexicon. Consider the plight of our neighbors to the north in Muskegon Heights. In a community wracked by poverty and unemployment, their school system had dug itself

into a $12 million hole with virtually no prospect of paying its way out of it. Reluctantly, the school board acquiesced to the appointment of an emergency financial manager. The outcome is a recommendation to dissolve the existing public school district and replace it with a charter school system.

The implications are clear. Existing labor contracts, including the heavyweight benefits of health care and pensions, have become unsustainable. The only hope of salvaging this school system seems to lie in chucking the present one, along with all current employees, and starting from scratch.

Detroit’s school system, mired in deficits and debt, is also running under emergency financial management. In a decade, enrollment has dropped from 167,000 to 85,000. Graduation rates barely top 50 percent. Tax bases are declining. Business as usual had become unsustainable. Detroit city fought the appointment of an emergency manager, despite some $13 billion in long-term debt and nary a clue as to how it can be paid off. They did, however, concede to the appointment of a nine-member financial advisory board to monitor city finances and work with the city on financial restructuring. Present structures are unsustainable.

It’s tempting to pin the tail of unsustainability on public unions, but they represent only one side of a bargaining table. We seem to have suffered in many cases a managerial shortsightedness that believed whatever was conceded at the bargaining table would be covered by unbridled growth yielding ever increasing tax revenues. MLive recently blogged that one in four faculty members at Grand Rapids Community College earns more than $100,000, compared to just one in 17 at Grand Valley. The debate rages about whether they are worth it, but the ultimate question is whether or not it is sustainable.  read more…

via COMMUNITY COLUMNIST — The heavy weight of public-sector union benefits – Holland, MI – The Holland Sentinel.

Minneapolis police officer jailed after Andover bar fight – TwinCities.com

Minneapolis police Sgt. David Clifford was jailed Sunday, June 17, 2012, on suspicion of assault after a fight at Tanners Station bar in Andover. (Courtesy of Anoka County sheriff’s office)

The executive officer of the Minneapolis Police SWAT Unit was booked into Anoka County Jail on Sunday, June 17, after a fight at an Andover bar the night before, county officials said.

Sgt. David Clifford turned himself in after a fight with a Ramsey man at Tanners Station bar after 7 p.m. Saturday, said Anoka County detective Mike Schantzen. The Ramsey man, who has not been identified, was taken to Mercy Hospital in Coon Rapids on Sunday, Schantzen said. His condition was unavailable.

Clifford was jailed on suspicion of first-degree and third-degree assault but hasn’t yet been charged, jail records show.

Witnesses told detectives that Clifford, who was off-duty at the time, approached the man for speaking loudly on his cellphone, Schantzen said. The men talked briefly, and then Clifford apparently hit the man in the head and left the bar, Schantzen said.

Clifford is a veteran of the U.S. Army who served in Kosovo and Iraq, according to an online biography. The bio says Clifford has participated in more than 350 SWAT operations.

via Minneapolis police officer jailed after Andover bar fight – TwinCities.com.

Winnebago County deputies OK pension reform | Appleton Post Crescent | postcrescent.com

OSHKOSH — A proposed contract with Winnebago County Deputies Association would give Sheriff’s Department deputies annual raises over the life of the contract while requiring them to contribute for the first time to their pensions and increase their health insurance contributions.

The Winnebago County Board will consider the contract, which retroactively runs from 2010 to 2015, when it meets at 6 p.m. Tuesday on the fourth floor of the courthouse, 415 Jackson St.

According to the terms of the agreement, Sheriff’s Department deputies this year will receive a 1.5 percent raise in June, another 1 percent in September and a 1 percent raise in October, at which time deputies also would be required to contribute 1 percent of their salary toward their pension. Deputies’ pay was frozen in 2010 and 2011.

Deputies would receive another 1 percent raise in 2013, and two 1 percent raises in 2014, at which time the deputies’ contribution to their pension would increase to 2 percent. In 2015, the contract’s final year, deputies would receive a 1 percent raise in January and be expected to contribute 3 percent of their salary toward their pension. A 1.5 percent raise would follow in July 2015.

County Executive Mark Harris said the contract is attractive to the county because it does not include retroactive pay raises for 2010 and 2011, and it also secures a steady increase in employee contributions to their pensions. He said the longer duration of the contract gives both the county and deputies certainty at a time when there is concern state legislators could make further changes to labor laws.

“There’s a little bit of a gamble to this for both parties,” Harris said. “A long-term contract will allow them to lock in a lower contribution toward their pension, coupled with modest raises. And from my perspective, I’m getting a pension contribution that might otherwise be hard to get. On the balance, the risks and rewards in the contract are fair to both parties.”

Winnebago County Deputies Association President Roger Peters did not immediately return messages left seeking comment.

Harris said the contract also puts the deputies’ health insurance premium payments at 15 percent of the total cost, with the potential for that to be reduced to 10 percent if the deputy and their spouse both complete annual health risk assessments.

According to the board resolution, the terms of the contract would increase the county’s wage and benefit costs by $219,640 in 2012, $136,484 in 2013, $70,465 in 2014 and $107,433 in 2015, or a total of $534,022 over the life of the six-year contract.

via Winnebago County deputies OK pension reform | Appleton Post Crescent | postcrescent.com.

IRS Pension Snag: San Jose Joins Orange County? | PublicCEO

Originally posted at http://www.calpensions.com

A key part of a pension reform approved by San Jose voters last week needs IRS approval, similar to an Orange County pension reform held up for three years while waiting for IRS approval.

The problem is a U.S. Internal Revenue Service rule in 2006 that could deny the usual tax-deferred status if an individual public employee chooses a retirement plan with a lower benefit.

Giving current employees the option of choosing a lower pension plan, or paying more to keep the current plan, is a key part of an agreement Orange County negotiated with employees in 2009 as well as Measure B approved by San Jose voters last week.

After talks with the IRS stalled, Orange County got U.S. Rep. Loretta Sanchez, D-Santa Ana, with Republican co-authors to introduce legislation last September giving tax-deferred status to optional public pension plans with lower benefits.

Mayor Chuck Reed said a U.S. Conference of Mayors meeting in Orlando this week is expected to consider a resolution calling on the U.S. Treasury Department and Congress to give optional lower-benefit plans favorable tax treatment.

As state and local governments struggle with soaring pension costs that are diverting scarce funds from other programs, option advocates say employees should have a choice about the retirement benefits they earn in the future.

Pension amounts already earned would be protected. But employees would have the option of paying more each year to continue earning their current pensions or choose to pay less each year and earn a lower retirement benefit.

“You might ask, why would they do that?” Orange County Supervisor Bill Campbell told a two-house legislative committee on pension reform during a hearing in April.

Campbell said that in 2005 Orange County employees wanted to boost their pensions to one of the highest levels, 2.75 percent of final pay for each year served at age 55. (By way of contrast, teachers get 2 percent at age 60.)

“We said we can’t afford to pay any more than the current plan,” Campbell said of the bargaining position of the county supervisors. “The union members took over the obligation for all of the increased cost assessed with moving to 2.75 at 55.”

As the economy declined and pension fund investments nationwide fell far short of their earning targets, the annual Orange County required contributions went up. Employee rates that had been 7 to 11 percent of pay became 11 to 15 percent.  read more…

via IRS Pension Snag: San Jose Joins Orange County? | PublicCEO.