Sunday, April 3, 2011

SB5 Signed Into Law - Referendum Vote Likely

In the several years I have been involved in matters of local government, and in particular of our School District, no issue has before arisen which polarizes people more than the legislation known as "Senate Bill 5."  It is so divisive that I wonder if it will be possible for me to express my thoughts without inviting the kind of emotionally-charged, mean-spirited vitriol one sees is so many public forums - notably the online forums such as Topix, which allows anonymous and unmoderated comments. 

Just yesterday I made a comment on a friend's Facebook note about SB5, and almost immediately received a reply from someone who said they wanted to know where I work so that they could organize a boycott in order to hurt my income. I told him I was retired and a full-time volunteer at my church and our local school district, and asked which he wanted to boycott first...

So while I invite debate and discussion in this blog, I do moderate the comments, and do not tolerate those which contain personal attacks or language I wouldn't want a student to read. If you want that kind of blog to comment in, start your own.

I think the first step is for everyone to climb down from their high-horses and agree that what we're talking about is how we go about negotiating the compensation and other terms of employment for people who work for our government. In return for the services provided to all of us by these government employees, the people of a community agree to pay taxes of various forms which are used to grant compensation and benefits to the public employees.

The trick is finding balance - in particular balancing an economic equation that looks something like this:

Cost of Services = Value of Services as Perceived by Taxpayers

The idea is that if the taxpayers perceive a service to have value, such as plowing the streets when it snows, they will be willing to pay some amount of taxes to have that service performed. But that's not the end of the conversation. The government has to find a way to have the snow plowed for a cost the taxpayers are willing to fund. The government can hire independent contractors, or decide to buy snowplows and hire people to drive them. If the government decides to hire workers, the workers have to be willing to agree to do the job for what the government offers to pay them.

If the workers want to be paid more than the taxpayers are willing to fund, the process of negotiation will continue - and the workers will perhaps offer to work for less and the taxpayers will perhaps agree to pay more - or the decision can be made to not offer the service after all.

What happens after some time goes by and the workers decide they want a pay increase?  A new negotiation takes place. The workers want to drive up the Cost of Services in the equation above, and the taxpayers have to decide if the Value of the Services as Perceived are such that they are willing to pay more to keep it going. There is no one correct answer for this situation. Either the workers and the taxpayers will agree to a mutually acceptable cost, or the service will be terminated.

But over time, this negotiation process has been handed off to third-parties, and the direct relationship between the government worker and the taxpayer has faded into the background, to the point that it has become an abstraction - or even invisible.

So let's be clear on these two truths:
  1. Every dollar of compensation and benefits that flows to a government worker comes out of a taxpayers's pocket.
  2. Government services are not free, especially those which are delivered by humans - and  most of them are. If citizens want a rich and expansive set of government services to be provided to them, they have to be willing to pay the taxes necessary to hire and sustain the workers who perform them. If the taxpayers aren't willing to pay what the workers demand, then the taxpayers have to be willing to live without the service.
We Americans have become all mixed up about rights, responsibilities, privileges and obligations. We struggle as to which (and whose!) moral and religious beliefs should be encoded into governmental law, and enforced by our justice system.

The idea of our democratic system is that these struggles can be resolved by means of debate and compromise. But for this to work, we need to share an underlying desire to remain a community that accepts and abides by the compromise.

I grew up in a little community in a river valley in West Virginia. When you live in that part of the world, bridges are pretty important. To get to the grocery store across the river, which I could see from my front porch, one had to drive a mile upstream to the bridge, and then a mile back downstream to the store. Everyone who wanted to cross the river had to use that bridge, else drive five miles upstream or nine miles downstream to the next closest bridges.

Our bridge was one car wide. That meant that you had to wait until the bridge cleared of traffic coming in the opposite direction before you could cross. Lots of people used that bridge, especially in the morning and evening when people were traveling to and from their jobs in the city. It could be quite easy for a long line of cars going in one direction to completely tie up the bridge for a good while, denying the folks going in the opposite direction a chance to cross.

But I never saw that happen. Two or three cars might go in one direction together, but the next car in line would stop, and give the folks going in the other direction a chance. There's a good reason why it worked that way - the folks coming the other direction were probably friends or family, and the consideration they showed each other when crossing the bridge was the kind one shows to a friend. So when someone charged the bridge with their horn blazing, it might be a neighbor in trouble, but was more likely some jerk outsider who had no ties to our community.

I wish the negotiations with government employees would work more like the way the folks of my hometown figured out how to share the one-lane bridge. In fact, let's quit talking about government workers in general and talk specifically about the teachers in Hilliard City Schools.

Many of these folks aren't just teachers, they're also friends and neighbors, members of our places of worship, and parents of swarming little soccer players and marching band members, just like the rest of us. As parents, we entrust them with our kids for 180 days per year. We trust them to be our partners in preparing our kids to be happy, productive and independent adults.

So how did we come to let this important relationship be defined by outsiders --- Outsiders more interested in blowing their horns as they barge their way across the bridge, as though the most important thing in the world is to be first across the bridge every time, even if that means making a person going the other way back up in fear of getting hurt?  The kind of Outsiders who don't give two licks whether their behavior has a lasting negative impact on the fabric of our community??

We all know that we have a School Board made up of five folks elected from our community to represent all of us in the governance of our school district. The teachers are represented by a local union called the Hilliard Education Association, and its officers are all teachers in our school district, elected by the teachers from their own ranks. One would like to think that the equation I proposed above...

Cost of Services = Value of Services as Perceived by Taxpayers

... is worked out by those School Board members and the officers of the Hilliard Education Association, both interested in striking a deal that makes our schools a great place of learning for the kids and a great place to work if you're a teacher, all within the bounds of mutually acceptable economics.

But it's not.

Each side brings in professional negotiators - OUTSIDERS - to do the hard work.  As outsiders, those negotiators are less interested in working out a deal that preserves the emotional fabric and economic sustainability of our community than they are proving that they are effective intimidators on behalf of their clients.

SB5 is this disease taken to the state government level. These matters which we should be able to work out in our community have been escalated to the next level of government, with each side hoping they have the votes to cram an unsustainable solution down the throats of the other.

Sometimes one side does gain that kind of power, and uses it like a dictator who doesn't have to worry about the next election. But there is a next election, and the more one-sided the legislation enacted during one party's time in the sun, the more likely it is that at the next election, the other party will regain power, and will in turn use it to seek not only revenge, but to preemptively weaken the other side for the next battle. SB5 isn't the first example of this - this strategy has been utilized by both sides for a long time.

We all get that that the State of Ohio has a budget problem.  The economy of our state has permanently changed, with tens of thousands of industrial jobs disappearing as the factories have shut down. When there is no business income, there is no personal income, and when there is no business or personal income, no taxes are paid to the state. That's the problem, and it won't be fixed overnight.

So the State of Ohio has less money to give the schools. Understood.  That means that each school district must figure out how to make do with less state funding. Maybe the people of the community are willing to make up a little of the gap with increased property taxes. Maybe the teachers are willing to make up the some of the gap with compensation concessions. It seems like calm heads motivated to find a solution could figure this out.

The premise of SB5 is that we can't.  SB5 says that the people of a community - parents, homeowners, teachers and business owners - need to bring bigger weapons into the room and solicit their own gangs of hired gunslingers to take on the fight for them.  And we'll all sit in the stands like fans at an OSU-Michigan game hurling insults at each other.

Except it won't be for fun. It will be vile and hurtful, with the intention being to inflict harm on the other team, like the guy I mentioned above who wanted to boycott my place of employment.

What do you say we forget that SB5 exists, and commit to working this out on our own?  We still have a chance to do so before it becomes law.


  1. Let's not forget about competition in the Cost/Value discussion. Governments are often criticized for a lack of competition. While this may be true on a microeconomic level, governments do compete on a macroeconomic level. As technology has made the world smaller, this competition has become fiercer and fierceer.

    Ohio is competing against Connecticut, Texas, Singapore, and Hong Kong for highly skilled members of the workforce.

    There have been many indications over the past decade that Ohio is losing this competition not only to other countries, but to other states. We are losing corporate and individual taxpayers at an alarming rate:

    Hilliard is competing against Dublin and Westerville for businesses and families as well. I believe the corporate park developments seen along Perimeter and Cleveland Ave. are good indicators that we are losing that competition as well.

    There are many factors that influence this competition, and taxes are but one. But taxes are one of the few factors over which governments have direct control. And it should be pointed out that Ohio and Hilliard have some of the highest tax burdens relative to their competitors, even if only marginally.

    I think one thing is safe to say: increasing our taxes is not going to improve our position. We must get more value out of the taxes we are currently paying.

    Please vote no on Issue 7.

  2. Frankly I wish Governor Kasich had simply done what Governor Daniels of Indiana did in 2005 when he took office -- decertify the public sector unions.

    He'd have effectively achieved the same result without all of the banality imposed by the SB5 discussion.

    While I whole-heartedly support the bill, and don't for a minute believe it's a "monstrosity", the fact that it is being used -- by both sides -- as yet another wedge to drive between members of the community, makes me incredibly sad.

    Paul, I wish we could solve these problems in the community, but a decade and a half of living in this district tells me that we don't have anyone, except yourself, in a position to drive the right conversation.

    No wonder so many people up and move out of Hilliard as soon as their kids finish High School ...

  3. So Paul - are you advocating negotiating a contract before the current contract expires? If so, how about BEFORE I cast my vote for the levy? I'd like to know exactly WHAT I am voting for. What I'd really like is a contract for more than 1 year with at least 2 freezes in it. A pipe dream? What do you think?

  4. Independently of this SB5 situation, the negotiation of a new contract will certainly begin before 12/31 of this year, when the one-year extension of the 2008-2010 contract expires.

    But yes, I advocate negotiating a new deal now before SB5 becomes law, primarily because I believe the unions are motivated to do so as well, precisely because they fear having SB5 stick and not be overturned by referendum in Nov.

    The SB5 opponents will almost certainly collect enough signatures to get the referendum on the ballot. As we get closer and closer to the Nov election, it will become clearer whether the referendum will lead to repeal of SB5. If repeal seems likely, the negotiating position of the School Board (on behalf of the voters) will weaken all the more the longer we wait.

    The contract negotiations between the unions and the school board are by design an adversarial process. There is no good guy and no bad guy - just two parties trying to get the best deal they can for their constituents. Being conscious of the environment plays into the process.

    For whatever reasons, there appears to be no interest on the part of the Administration or other Board members to try to craft a deal right now.

    Votes count, and elections matter. Remember that two Board seats are up for election this November.

  5. A quick note on the referendum. If SB5 is overturned by the voters (which I doubt), expect Kasich to issue an executive order decertifying the unions instead. In fact, I'd wage good money that will be used as leverage against the unions in any campaign.

    Meanwhile, we find out today that the OEA is considering imposing a mandatory $50 dues fee on all its members to help pay for the anti-SB5 campaign, and the Firefighter's Association (don't recall its name off-hand) is considering a $100 fee.

    Nothing like having a choice in where your money is spent...

  6. More on the above post:
    As the article points out, seems not every union member is in favor of this "contribution".

  7. Paul, I agree with you that it would be ideal if the Teachers Union and the BOE could negotiate a contract that would be fair and affordable to everyone involved. Unfortunately 95% of the time it doesn't work out that way when unions are involved. The only times unions are willing to concede in negotiations is when their backs are to the wall as they are now with SB5. The only reason there is a SB5 is because of aggressive union demands and weak compliant board members who cave in to those demands.

    In the Dayton area there have been number of school districts who have re-opened their contracts and have given sweetheart deals with their union counterparts to avoid the remedies of SB5 all the while praising the good deal the school district got. The only reason the unions sanctioned the sweetheart deals was they knew they would lose more when SB5 was signed into law. The real solution to the whole problem is to decertify the unions at the District level. This would allow the teachers to form their own local group to work the the BOE to achieve a comprise that would be in the best interests of the students, taxpayers and teachers.

  8. Getting a referendum on the ballot is a monumental task - the history of unions gathering signatures alone should tell us that. They like to think that every one of their members is going to automatically sign - not only is that not going to be the case but given the horrendous record of our citizenry even bothering to vote, this is no slam dunk by any means. And it seems that even should it make it to the ballot, and then pass, an Executive Order could stop that in it's tracks. I hope it doesn't come to that - SB5 is heavy handed enough without the governor taking that drastic step. But business as usual cannot be allowed to continue - fiscally, we simply can't afford it.
    I have a feeling we will be voting on a levy on that same ballot in November - after it fails one or two times prior to that. Should make for an interesting election here in Hilliard.

  9. Hillirdite:

    Admittedly the attempt by the education unions to put the Getting It Right for Ohio's Future bill on the ballot for referendum fell flat on its face, but that effort required 400,000 signatures on the petitions.

    This one requires half that, and involves all unionized public sector workers, not just the teachers and support staff. I have little doubt that they'll gather enough signatures.

    Which also means we up for a few months of incredibly polarized advertising full of partial truths, and perhaps some outright lies - by both sides of this debate.

    Why would any business want to move to Ohio with a war going on in the state government...

  10. Denis:

    Thanks for commenting. As you are someone who has owned and operated a large business, and has spent more time negotiating with unions than I ever will, I very much respect your opinion.

    I would agree that it is appropriate to trim back some of the advantages granted to unions over the past 30 years, including the "fair share," the certification rules, and for a time at least, the right to strike.

    But if we want a shot at lasting peace in our schools, we need to 'man up' and have the fortitude to be tough negotiators at the local level, and not use state law to bully the other side - the precise problem many of us have with the current body of labor law.

    Otherwise we might as well turn the governance of the school districts over to the State