By PHIL DRAKE | Montana Watchdog
HELENA — A subcommittee consisting of members from two state panels on Thursday recommended their full committees consider a proposal from the governor’s office that he said would bring reform to the state’s ailing pension systems.
The motion was not to be taken as an endorsement of Gov. Brian Schweitzer’s proposal, but only meant the Legislative Finance (LFC) and the State Administration and Veteran’s Affairs Interim (SAVA) committees should determine if it has merit and drafted into a bill for the 2013 legislative session.
The meeting was the first of two pension forums some of the lawmakers attended Thursday, as they met that afternoon with representatives from the Laura and John Arnold Foundation and the Pew Charitable Trusts to discuss approaches to achieving pension reform.
Rep. Galen Hollenbaugh, D-Helena, made two separate motions to move bills to help the state’s two largest pension plans out of the committees and on to the subcommittees.
Rep. Steve Gibson, R-East Helena, said there was no problem to make a recommendation that the bill be moved to the committees. “There’s going to be a lot more questions,” he said.
In April, Schweitzer said he would propose legislation to remedy problems with Montana’s $3.9 billion in unfunded pension liabilities, saying it could be achieved without tax increases and give the system a surplus by 2021. Some estimates, such as those provided by State Budget Solutions, put the unfunded liabilities at $10.5 billion.
He Schweitzer said he would use revenues to pay off liabilities and dip into record revenues from state lands raised through sales of natural resources such as coal, oil and timber sales.
For the Teachers’ Retirement System, he proposed taking $25 million from the state land guarantee account from natural resource development, a $14.7 million one-time only contribution from the employer and a 1 percent increased employee contribution and benefit change.
For the Public Employees Retirement System, he proposed an $18.1 million state contribution and more local government contribution, a 1 percent increase employer and employee contribution.
Officials said the employee contributions would increase under the plan to 7.9 percent for the PERS and 8.15 percent for the TRS.
State Budget Director Dan Villa told the subcommittee Thursday that Schweitzer’s proposal was the “only viable solution to public pension problems.” He warned the lawmakers against switching to a defined contribution plan, in which the employee would pay more, instead of the existing defined benefit plan. He said West Virginia went to a defined contribution plan and switched back to defined benefit.
“Defined contributions may fulfill a political agenda, but it does not fix the financial problems,” Villa said.
Diane Fladmo, representing the MEA-MFT, which with 18,000 members is the state’s largest labor union, said her organization “strongly” supported the governor’s plan.
She said compared to many states, Montana had good economic news.
“I think we need a Montana solution,” she said. “I think the governor’s plan is that solution.”
Tom Schneider, representing the Montana Public Employees Association, said he stood before the PERS board shortly after the governor unveiled his plan, and supported it “wholeheartedly.”
“We need to do something, even if it’s wrong we need to do something,” he said.
Villa said the plan also called for local governments to pick up more of the financial burdens, adding he has not received feedback from any, adding only that Billings asked questions. He said a 1 percent burden would add $138,000 to Yellowstone County’s $92 million budget and $161,000 to Great Falls $97 million budget.
Villa said an assertion that increasing property taxes was the only way for local governments to fill the gap is “false at best.”
“That’s just not the case,” he said, adding there were a “multitude of solutions.”
COMMENTARY By CHUCK DENOWH | Coalition to Protect Montana Jobs
Do unions really represent workers anymore?
With declining interest in union participation, not to mention the increased polarization in union politics, one has to wonder if the labor movement lost its way.
It’s no secret that organized labor is not popular these days. Union membership has steadily declined for years and has hit an all-time low: 11.8 percent of the workforce in 2011.
Compare that with the apex of union participation in the 1950s when 1 in 3 workers belonged to a union.
But those numbers don’t tell the entire story. Today, more than half of union members are government workers, complemented by an upward trend in public-sector union membership. Union participation in the private sector however, is moving in the opposite direction with less than 7 percent of the workforce.
The question is why are workers reluctant to join the labor unions that were once so popular? Unions point to a number of economic factors, like globalization. But another factor that has led to union-membership decline is the increasing polarization of union politics.
A recent exposé by the Wall Street Journal revealed that union spending in politics over the last decade was four times greater than previously reported. If state and local political involvement is included, unions spent a whopping $4.4 billion on political activity in just 10 years—only $1.1 billion of that was reported to the Federal Elections Commission.
For Democrats, political spending by unions is incredibly important. According to the Center for Responsive Politics, over 90 percent of union spending goes to Democrats. Contrast that with business political spending, which is roughly even for Democrats and Republicans.
The implication is that for Democrats, unions are one of the most important sources of campaign cash. Over the years, the symbiotic relationship between Big Labor and Democratic candidates has led unions to drift further and further to the left on issues—and become ever more shrill in their political rhetoric.
That has become increasingly off-putting to union members. In recent elections, union households have voted around 40 percent for Republican candidates. Simultaneously, they watch their union dues go to candidates they don’t support and their leaders espouse liberal political views they don’t agree with.
So what is Big Labor to do to maintain a membership base when their own actions have turned off their rank-and-file?
For the Obama administration, the answer has been to upend the rules that have governed union organizing for decades. Obama’s National Labor Relations Board has been systematically dismantling the rules that protect both workers and employers with the single-minded objective to make it easier for unions to add members—even workers who’d rather have nothing to do with unions.
Allowing union-organizing elections to occur in as little as seven days, the NLRB has instituted “ambush” elections, thereby blocking any meaningful opposition to organize against them. Of course, this creates a situation where workers have little chance to make a fully-informed decision.
The NLRB is also proposing to force employers to hand over private worker information, like home addresses and telephone numbers, so union organizers can contact workers at home. This highly sensitive info would be handed over whether the workers want it to or not.
But, the latest NLRB rule—derisively dubbed the “micro-union” rule—would upset generations of union organizing practice by allowing multiple collective bargaining units or micro-unions in a single workplace.
They would also allow unions to cherry-pick the workers they want and leave others out. The micro-union rule is bad for workers because it will inevitably lead to division in the workplace between different groups of workers, and it’s bad for employers who will now have to negotiate with numerous union groups.
These latest attempts by the NLRB to change the rules on union organizing aren’t designed to improve the lot of workers, and they aren’t going to help create jobs. These new rules are designed to perpetuate the Big Labor money machine that Democrats have come to rely on for their electoral success.
The irony is that the harder Big Labor plunges into politics, the less American workers want to have anything to do with them.
Chuck Denowh is the spokesman for the Coalition to Protect Montana Jobs, an organization focused on protecting Montana jobs and supporting workers and small businesses. He can be reached at firstname.lastname@example.org.
The Livingston City Commission Tuesday night gave preliminary approval to a union contract with Public Works employees that calls for increased health care stipends but no wage raises for fiscal year 2013.
The commission had little discussion on the matter. Commissioners voted 3-0 to give tentative approval to the agreement and instructed city administrators to bring it back to the commission for formal approval at a future meeting. Commissioners Bill Spannring and James Bennett were absent.
The American Federation of State, County and Municipal Employees union represents about 30 nonmanagement workers in the Public Works Department.
Under the agreement, union workers will receive a 9 percent increase in their monthly health stipend. The increase amounts to an extra $55 per month for each worker.
AFSCME representatives originally requested an 18 percent increase in the health stipend and a 3 percent increase in wages but later agreed to the lower amounts the commission is now considering, City Manager Ed Meece told the commission.
In other matters, the commission also agreed to a contract with Montana Rail Link to ship glass collected for recycling.
The rail company will take some of Livingston’s glass and ship it to a brewery in Colorado that will buy the glass. City administrators estimate the current amount of glass it has stockpiled would earn Livingston about $4,000 once shipping costs are paid.
Livingston typically pulverizes its glass at its city chops facility on Bennett Street, Meece said. But sometimes due to tight staffing from vacations or other matters, the city gets behind on pulverizing and the glass piles up, he said.
Being able to ship glass to Colorado and earn a profit from doing so gives the city an option for dealing with excess material, Meece said. In the future, the city could consider sending more — or all — of its glass to Colorado if it means the material will be recycled while allowing Livingston to earn money from the commodity, city leaders said.
The one-year contract would give Bozeman’s 400 teachers a 2 percent raise in base pay and a 188-day work year, Steve Johnson, assistant superintendent for business, and Tami Phillippi, Bozeman Education Association union president, said Wednesday.
The two sides had scheduled three days this week for consensus negotiations, which in past years involved dozens of administrators and teachers attending day-long meetings.
But this year, when three leaders from each side sat down to organize the talks, Johnson said, “We decided we’re not that far apart.”
With everything else going on – including school elections and choosing a new superintendent – it seemed unnecessary to use everybody’s time on negotiations when the two sides were already close, he added.
“It’s a good thing when the School District and Association are thinking along the same lines,” Phillippi said.
“It really speaks highly of the trust built up by the consensus process and our ability to resolve issues,” Johnson said.
Denise Hayman, School Board chair, said the two sides held three pre-negotiation meetings, each about an hour or 90 minutes long, and it was evident an agreement could be reached without long meetings.
“It’s a sign of a district working well,” Hayman said. “I’m very pleased.”
Phillippi said the tentative agreement was explained to teachers Tuesday after school and early Wednesday morning at Bozeman High, and it seemed to be received positively. Teachers are voting electronically until Friday afternoon.
If teachers ratify the agreement, it would go to the School Board for approval at the Monday night meeting.
The agreement would raise starting teachers’ pay to $36,225 and the top-level pay to $69,188 for teachers with 18 years experience, a master’s degree and 105 education credits, Johnson said.
The total cost to the school district would be a 3 percent increase or about $680,000, he said. That’s because teachers move up the pay scale as they gain experience and education credits.
Phillippi said in the past two years, teachers received base-pay increases of 0.93 percent and zero.
Even after voters approved a $235,000 tax levy in Tuesday’s election to help run the elementary schools next year, the Bozeman School District is expecting a budget shortfall. However, Johnson said he expects to be able to make enough one-time changes to balance the budget.
“We’re not anticipating major cuts,” Johnson said.
It helps that more veteran teachers are retiring this year, he said. And thanks to federal stimulus funds being available in previous years, some money is still left from the transition funds for opening Hyalite School and from a private donation to hire teaching coaches. The technology fund may also be used to cover tech staff salaries.
In addition, Johnson said, the teachers’ contract would eliminate the voluntary career option plan, which offered an incentive to teachers who retired early.
Negotiators for the district were Johnson, personnel director Pat Strauss and Hayman. For the union they were Phillippi and high school teachers Jerry Reisig and George Gebhardt.
The Belgrade School Board will hold a special meeting at 7 p.m. today to discuss proposed changes to the teachers’ union contract.
Chairman Lance Voegele said the meeting would be the first chance for the entire board to see the tentative negotiated changes, which include changes in the pay matrix but not significant pay raises. The board is scheduled to vote on the contract May 14.
Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades?
That is what will happen in many — maybe all — states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.
Bill Zettler owns a small business that — like all others — must make sure income is more than expenses or it goes under and he and all the employees lose their jobs.
One of the biggest — and getting bigger — challenges he faces is paying taxes. They are expenses that create no new jobs and provide zero benefits to buy equipment, expand markets, develop resources or produce anything for him, employees or customers.
About 10 years ago when a neighbor told him he retired from teaching at 58 with $120,000 a year income, cost-of-living increases and health insurance, Zettler thought that was great and might be good for his employees.
GRAND FORKS, N.D. – American Crystal Sugar has agreed to a contract with union workers at a subsidiary in Montana but remains at a standoff with union workers in North Dakota, Minnesota and Iowa.