public employees shared sacrifice report

8/3/2019 Public Employees Shared Sacrifice Report

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Shared SacrificesPublic Employees Embrace More than $1 Billion in Concessions

Over Three-YearsTC BROWN

October 2011

Collective Bargaining Yields Deep Concessions During GlobalRecession

The global recession hit Ohio harder than many other states, leaving itselected leaders to employ a series of budget actions that have includedcuts, adding new revenue from expanded gambling, allowing vacancies togo unfilled and the raiding of rotary accounts and a tobacco cessationfund.

In the past decade, all workers in Ohio have lost more ground on hourlywages compared to any other state. 1 Persistent unemployment has beenaccompanied 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 downturnin the post-war period, and despite some improvement, sluggish growthhas been the recent norm and is forecast for the near future. 2

With Ohios unemployment hovering just above 9 percent, the misery iswidespread, creating a major impact on the wages and benefits for Ohiospublic-sector workers and on the bottom lines of state and localgovernments.

Public-sector union members responded to Ohios economic crisis byagreeing to freeze their wages, take unpaid days off, increase theircontributions for health care insurance and pensions, and boostproductivity to compensate for jobs lost through attrition.

1 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.


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These sweeping sacrifices were forged through collective bargainingnegotiations between labor and management. Many workers agreed toput less money in their pockets at a time they were being asked to paymore 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-controlcosts, even some who voted against the 1983 law conceded that it hasworked surprisingly well. For instance, from 1978 through 1980, in thethree years preceding the collective bargaining law, public employeesstruck 183 times. For perspective, in fiscal years 2008 and 2009 therewere 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 thealternatives we looked at at the time, Republican Jim Petro said during

the 25th anniversary of the implementation of the collective bargaininglaw, according to video tape of his remarks. I believe in our public sectorbargaining law and I think it has done well to serve the interest of thestate. 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 everyother GOP lawmaker in voting against the measure. While he hasconceded that the law is working well, he also said he did not regretvoting against it.

A Surge of Compromises

Ohio has no central collection of data on worker concessions achievedthrough collective bargaining. Protecting Ohio Protectors, an organizationof Ohios safety forces, commissioned this study to attempt to quantifythe amount of the concessions and the impact they have had on state andlocal governments.

Research gathered from cooperating associations, news accounts, publicrecords and collective bargaining contracts reveals that workers havesaved their employers and taxpayers a substantial amount of money.

3 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 and2011, Page 9 5 Jim Petro, video marking 25 th anniversary of implementation of collective bargainingin Ohio, April 4, 2009


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Among the findings:

Public union workers have saved taxpayers $1,059,881,500 billionthrough collective bargaining concessions since 2008.

Teachers and support staff accepted wage freezes in more than 90percent of collective bargaining agreements this year concessionsnot tallied in this report because they are not yet available.

Last year, at least 65 percent of public employee contracts included atleast 1 year of wage freezes, some furlough days, reducedcompensation, rollovers or economic re-openers.

Some of the lowest-paid public employees non-teaching personnelsuch as custodians have gone up to eight years without a payincrease in exchange for stable health care costs.

A Warren police officer blames cuts in safety forces for the injuries hesustained while rescuing people from a burning building in which oneperson died.

More than two-thirds of all teachers contracts increased employeeinsurance premium contributions or significantly changed their healthplans, with the savings often used to improve educationalopportunities for students.

More than 93 percent of public workers already pay for their ownpension contribution, with no pick-up from their employers.

On average, county and state employees pay more than 15 percent fortheir health care plans.

A sample review of concessions in a half dozen Ohio cities shows thatemployees and safety forces have saved their towns nearly $10 millionsince 2008. 6

In addition, collective bargaining contracts often contain provisions thatdirectly benefit communities, according to a just-released report byPolicy Matters Ohio, a non-profit research organization focused on thestates economic policies. The group provided examples: safety officersnegotiating for provisions that speed response times; teachers

6 See Appendix A


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negotiating for more effective discipline or more enrichment classes; andnurses negotiating for better staffing ratios, which improves patient care.

Theres been a lot of emphasis on how collective bargaining might affectcompensation or job security, and there are many reasons why those

elements strengthen public services, said Amy Hanauer, Policy Mattersexecutive director. This report finds that unions often negotiate forprovisions that more directly benefit Ohio communities. 7

By far, the largest pool of concessions identified in this report came frompublic education unions, who are estimated to have saved school districtsat least $700 million for the 2010-11 (fiscal) school year. Theseprojections were calculated by the Ohio Education Association (OEA)using the financial forecasts produced by every school district in the stateand made available on the Ohio Department of Educations website. Theprojected savings are based on the difference between what school

districts estimated they would spend on employee salaries and benefitsand what was actually spent. The $700 million figure was reached afterremoving the salaries and benefits of school administrators and adjustingfor school district staff reductions. The OEA used this approach becausenearly every school district in the state negotiates salaries and benefitswith their teachers and support staff. Therefore, the savings reported bythe districts are a direct result of economic sacrifices made by unionizedschool employees at the bargaining table in order to help districtsbalance their budgets and save jobs. 8

It should be noted that the $700 million in savings occurred prior toSenate Bill 5 and before the steep cuts in school funding were made inthe new state budget. Future savings will be much higher once the impactof bargaining concessions made during the most recent round of contractnegotiations are factored into districts financial forecasts. Theseforecasts will now reflect that well over 90 percent of new collectivebargaining agreements include employee pay freezes and reductions andincreased employee costs for medical benefits.

Furthermore, workers for the state of Ohio in a 2010-11-budgetagreement accepted reduced pay or wage freezes, furlough days withoutpay, and increased costs for health care, saving the state $350 millionover three years.

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


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These compromises did not just begin. Contracts provided by individualorganizations show some concessions dating back nearly a decade.

For example, Salem City School custodians, cafeteria workers and othernon-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 averagestarting 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 andseveral classified positions. Additionally, all employees took a pay freezefor 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 averageincome of all Ohioans increased twice as fast as those of schoolteachersin the five years leading up to the recession. 12

For instance, since 2004 and through 2012, teachers in JeffersonTownship Local School District (Montgomery County), whose salaries startat $27,305, bypassed a wage increase for 7 of those 9 years. In theYoungstown 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 theyhad already agreed to freeze their pay the previous two years. Startingsalary for teachers was $26,236 in the 2011 school year. 14

9 Master Agreement between Ohio Association of Public School Employees Local #215and Salem City School District Board of Education, Effective July 1, 2010 through June30, 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, June30, 2011 12 Average teacher salary data: Ohio Department of Education - Interactive Local ReportCard; Average income data come from the Ohio Department of Taxation - Tax DataSeries 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.


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Teachers and staff in the Lakota School District (Butler County) agreed toa three-year contract with a pay freeze and health care concessions thatare 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 paymore for health care. That will save the district $9.6 million over the nextthree years. The savings will allow Hilliard to reinstate its elementarygifted 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 ishurting 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 bargainingconcessions covers state of Ohio workers from 2009 through 2011, andit shows that public employees saved the state about $350 million overthe three-year cycle. Those savings included pay reductions, furloughdays and health insurance changes negotiated in collective bargaining such as higher co-pays and out-of-pocket maximums, a monthly spousalsurcharge, a dependent eligibility audit, and other items. The figurereflects a $40 million to $45 million reimbursement, paid recently to theemployees for personal days they agreed to give up in order to balancethe 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-year-old law granting collective bargaining rights to firefighters, policeofficers, teachers, nurses and other public employees to negotiate fortheir 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

15 Michael D. Clark, "Lakota board OKs pay-freeze contract", Cincinnati Enquirer, May24, 2011.16 Charlie Boss, Hilliard School Unions Concessions Save $9.6M, The ColumbusDispatch, June 4, 2011 17 Bert Liebendorfer, Pay Freezes Amount to $9.6 Million in District Savings, HilliardNorthwest News, June 8, 2011.18 Julie Carr Smyth, State This Month Will Reimburse Workers for Personal Days TheyGive Up, Associated Press, Aug. 11, 2011.


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employees to collectively bargain. This new law has the potential toimpact 11 million Ohioans who pay taxes to operate 3,700 government

jurisdictions across the state, with a combined annual state and localgovernment payroll of $29.7 billion. 19

The new law, among other things, prohibits strikes. It takes away thebinding arbitration that is used to settle labor differences for firefightersand police officers and instead allows a government body to implementits own last contract offer.

Though supporters of SB 5 argue that binding arbitration should beeliminated, statistics show that since 2008, an outside arbitrator resolvedfewer than 2 percent of contract negotiations. Furthermore, both sideshave 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 anemployees pension contribution. It institutes merit pay for mostgovernment employees and teachers, eliminates step increases, expandsthe list of unfair labor practices that an employer may commit andincreases the list of subjects that are inappropriate for collectivebargaining, including minimum staffing levels for on-duty safety forces. 21

Supporters say the pension and health care changes are necessary to givestate and local governments tools they need to balance their budgets andprotect taxpayers from out-of-control wages and benefits.

Opponents say the history of concessions during economic downturnsshows that those tools already exist and are working. They argue thatlocal communities financial turmoil has more to do with Gov. Kasichsdeep cuts to the local government fund included in the current two-yearbudget, 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 budgetwent from hurtful to devastating as it worked its way through theGeneral Assembly. I think the budget speaks for itself, Sutherland told

19 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 favorsgovernment 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 LegislativeService Commission, March 2011 22 Joe Guillen, Estate tax repeal among 18 bills Ohio House GOP introduces to advanceagenda, The Plain Dealer, January 11, 2011


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The Plain Dealer. No other class of entities has taken it on the chin likemunicipalities. 23

Supporters of SB 5 and Issue 2 suggest that public employees enjoyextravagant 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

348,683 25 union members have some or all of their pensioncontribution picked up by their employer, according to Ohios fivepublic pension systems. The other 93.4 percent of public workers paytheir entire pension contributions.

Pension pickups are negotiated into union contracts, often in lieu of pay raises or other enhancements. And pickups are common inindividually 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 onaverage 9.5 percent of the premium costs for a single plan and 10.7percent for a family plan. Township and city employees pay the lowestpercentage 4.9 percent and 7.7 percent, respectively whilecounty and state employees pay more than 15 percent. The employeeshare crept up faster last year than the employer share, according toSERB.

In fact, employee premium contributions for single and family coveragerose 6.5 and 6.3 percent respectively. The vast majority of medical plansrequire employee contributions to the premiums. Employers paid 100percent of premiums in only 16 percent of single medical plans and 12percent of family medical coverage, a statistic basically unchanged fromlast year. 26

Concessions and Concerns Mount For Government Workers

23 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 19 th Annual Report on the Cost of Health Insurance in Ohios Public Sector, StateEmployment Relations Board Research and Training Section, 2011


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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 RelationsBoard (SERB) with an execution date between January 1, 2010 and

December 2, 2010, and found that at least 65 percent of publicemployee contracts bargained in 2010 contained at least one yearof wage freezes, furlough days, decreases in compensation,rollovers or economic re-openers.

The Service Employees International Union (SEIU) District 1199agreed 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; andforgo cost of living allowances for three years.

The three-year agreement for the Ohio Civil Service EmployeesAssociation (OCSEA) included a pay freeze, elimination of stepincreases for two years, increases for medical co-pays and out-of-pocket maximums and 10-day unpaid furloughs.

A sampling of local concessions include:

Richland County Employees: 26 unpaid furlough days in 2010, plusthe elimination of $2,000 employer contribution to employee healthsavings accounts.

Marion County Engineer: Elimination of $4,000 contribution toemployee health savings accounts.

City of Toledo: Elimination of 3 percent pension pickup (equates to3.5% loss in pay) and substantial increases in health insuranceemployee contributions). Savings: $500,000

Summit County Sheriff and Fiscal Office: 15 unpaid furlough days in2010. 27

In fact, safety forces across Ohio are committing to concessions. Butcoupled with extensive cuts in state aid to local government and reducedstaffs, some fear that public safety could be jeopardized.

In May, Cleveland laid off 81 police officers, 51 firefighters and 42 newlyminted police cadets right after they took their oath to protect and serve.

27 American Federation of State, County and Municipal Employees (AFSCME) OhioCouncil 8, Internal Analysis


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To bolster ranks on the streets, the city removed some officers fromtrouble-plagued schools. Officials also took 12 fire department vehiclesout of service on a rotating basis, which could occasionally createunderstaffing at firehouses. 28

Doug Hippie, a Warren police officer, directly attributed burns andinjuries he received while rescuing people from an intentionally set fire toreductions in safety force staff. Hippie beat the fire department to thescene, in part, he said, because of budget cuts that shut down a nearbyfire substation. One victim died from injuries received in the fire. 29

But nowhere was the public on edge more than in Mount Sterling, avillage of about 1,800 in Madison County.

In August, Mayor Charlie Neff stunned and frightened residents after helaid 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 becausethe village is too small to allow its workers to bargain collectively. MountSterling 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 policechief and unpaid auxiliary officers were expected to take up the slack. 31

The desperate situation prompted the citizenry to act. Local grocery storeowner Scott Jewett hosted a fund-raiser and residents responded,handing over nearly $43,000 to the Village Council, most of which camefrom Jewett. The money was used to hire back six officers on a part-timebasis. 32

As it is elsewhere, taxpayers in Mount Sterling are being asked to approvea new levy to aid government. Mount Sterling voters will see a 0.5 percentincome-tax initiative on the November ballot, which would boost theincome tax to 1.5 percent.

28Tom Ott, Cleveland Police Department to Remove Officers From Troubled CitySchools, The Plain Dealer, May 21, 2011

29 Karl Turner, Warren Cop Burned in Fire Asks Mayor to Resign, The Plain Dealer, July9, 2009 30 Dean Narciso, After Wild Meeting, Mount Sterlings Police and Mayor Out, TheColumbus 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, TheColumbus Dispatch, Sept. 28, 2011


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Its not just small government entities under the fiscal gun. The need toclose a $14 million hole in Hamilton Countys budget due to decreasedlocal government funding from the state and reduced property tax valuesprompted dire predictions from county office holders this summer. Thoseincluded:

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 system 33

Ohios safety forces, understanding the difficulties of todays economicrealities, have stepped up to help where they can. In Wooster, membersof the International Association of Firefighters (IAFF) Local 764 citedbudget 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 cityand the fire department. Council unanimously approved the contract. 34

This was a no brainer, Greg Thompson, vice president of Local 764, toldthe press. Our thinking was we came together as a unit and this will bein the best interest of the citizens. This is a prime example of how wellcollective bargaining does work.

Based on an expectation that firefighters would have received pay raisesfrom 1-to-3 percent, plus benefits over that four-year period, the citywill 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 froma projected 19 and earlier projections of 31, thanks to money built upfrom a 2005 income tax increase. The move keeps the city from violatinga National Fire Protection Association Standard of having four firefightersper engine. Nonetheless, layoffs will force the closure of one enginehouse and the Fire Prevention Bureau.

33 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


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Furthermore, Lancaster firefighters have saved the city more than $1million by freezing wages and cutting benefits, despite having a solidcontract 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 speaksto the core of what a firefighter is they care about the safety of theirbrethren as well as the citizens they serve, Watts said. The economymay not turn around anytime soon, but one thing is true, firefightershave 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, schooldistricts and higher education, according to a recent study by InnovationOhio, a non-partisan think tank based in Columbus.

Cuts to education over the current two-year budget will total $2.8billion. 37 The Ohio Association of School Business Officials (OASBO) haspredicted that this financial pruning will create a crisis for manydistricts. We believe the reductions could threaten our sound educationsystem and have a negative effect on the economy, OASBO memberssaid 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 50percent 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 morethan $844 million. Included in this calculation are reductions to the LocalGovernment Fund, the repeal of the estate tax, and cuts to tangiblepersonal property and Kilowatt hour reimbursements. 40

36 Jim Siegel and Alan Johnson, Officials Praise Limits on Unions, The ColumbusDispatch, 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


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Every local has a story. Madison County will lose nearly $2 million fromthese cuts and are projected to lose 25 public sector jobs over thebiennium. 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 MayorDave Gillock said: They are just mixing so many issues together. Itmakes me really nervous in trying to balance my budget. What it amountsto 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 committingto record amounts of givebacks, with a goal of continuing to provide aquality education to students. For instance:

More than 90 percent of the teachers and some support staffsbargaining agreements in 2011 included wage freezes, with themajority involving multiple-years. 44

In the past three years, a record number of teacher associationsagreed to pay freezes. 45

The average wage settlement for teachers in 2010 that did receive apay raise was under 1 percent. 46

More than two-thirds of all teachers contracts increased employeeinsurance premium contributions or added structural changes tohealth plans, including higher deductibles and co-payments. 47

41 Ibid 42 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 andcollective bargaining agreements filed with OEA and the SERB 45 Ibid. 46 State Employee Relations Board (SERB), State Employment Relations Board AnnualWage Settlement Report, 2010 47 Ohio Association of Education (OEA), Internal Survey of field staff.


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More than half of the 125 contracts negotiated by the OhioAssociation of Public School Employees (OAPSE) included no payincreases, and one-third of those contracts included healthcareconcessions. 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 fortheir health care insurance.

Accepting a general pay freeze costs a new teacher about $30,000 incareer and retirement earnings. A base and step freeze drives up lostearnings 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, whileteachers agreed to a three-year pay freeze along with school secretaries,cafeteria workers and custodial staff. While these shared sacrifices willsave the district $1.9 million, they were not enough to halt theelimination 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 droppedfourth-year foreign language programs and some history classes andincreased class sizes. More pruning could be in the works.

Even with the cuts that weve just taken care of, we still dont know whatcuts 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 goneabove and beyond the dictates of the new law. Teachers agreed to a wagefreeze through June 2014 and will contribute 20 percent toward healthand dental care, 5 percent more than the SB5 requirement. That will savethe district $3.7 million.

48 Ohio Association of Public School Employees (OAPSE), Internal Review49 Ohio Education Association, Deconstructing the Single Salary Schedule, OEABargaining Advisory, July 2010 50 Canfield Schools Cut $1.9 Million Out of Budget, 33 WYTV.com, June 30, 2011.


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Thats a long-term savings and an investment in the future of ourdistrict, Perry Superintendent John Richard told the press. Thats asavings 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. Taxpayersspent about $349,000 on Axner last year, of which $182,157 was hisbase salary. The school board agreed to contribute annually to anannuity, his pension and Medicare. Like many superintendents, hiscontract also provides allowances for travel, communications and otherexpenses, such as membership fees and costs for professionalorganizations.

Membership fees to professional organizations and contributions to

pensions and Medicare are typically covered by districts. Manysuperintendents have district-paid annuities for retirement or theirchilds college savings. They can also be rewarded for staying with thedistrict, meeting goals or attaining a doctorate. 52

Collective Bargaining Brief Historical Context

There is certainly precedent for the current acrimonious debate betweenopponents and supporters of SB 5.

Before Ohio allowed public sector bargaining, relations between workersand managers were dominated by intense conflict. The Ferguson Act,passed in 1947, regulated public labor, banning public employee strikesand providing for the dismissal of strikers. Under the law, any striker whowas rehired was severely punished: Strikers would receive no pay increasefor one year and would be on probation for two years.

That same year, the Ohio Supreme Court barred municipalities fromentering into union contracts. Justices also ruled that local governmentscould not allow workers to have voluntary deductions taken from theirpaychecks.

The tide began to turn in the late 1950s. Voters solidly rejected a right-to-work initiative that would have prevented the adoption of contractsrequiring union membership as an employment condition. And the

51 Erin Psutay, Perry Teachers OK New Contract, CantonRep.com, June 28, 2011. 52 Charlie Boss, Whats A School CEO Worth; Columbus Dispatch, September 5, 2011.


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legislature sanctioned the paycheck deduction of dues for publicemployees.

In the 1960s, all of Ohios major cities, ignoring the earlier SupremeCourt ruling, had signed contracts with the American Federation of State,

County and Municipal Employees (AFSCME). For the most part, theFerguson Act was not invoked.

In 1975, the Supreme Court granted school boards the right to bargainwith their employees. The court also said that these contracts were legallyenforceable. 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 forcescrippled several major cities. One notable strike occurred in Cincinnati in

1979. After eight police officers were killed in the line of duty in fiveyears four of the deaths occurring in a 10-month span more than 600officers took part in a 24-hour strike to protest the citys failure toprovide upgraded safety equipment and firearms.

Similar job actions occurred around the state, including another majorstrike in 1979 when police and firefighters walked off the job in Toledo.For awhile, lawlessness ruled, residents toted shotguns and the cityerupted into flames, literally. It was events such as these that providedthe impetus for reforms.

After Democrats took control of both the governors office and legislaturein 1983, lawmakers on a party-line vote passed a collectivebargaining law, which Gov. Richard F. Celeste signed. 53

Conclusion

The collective bargaining law has been a successful tool that essentiallyeliminated much of the conflict the state saw three decades ago betweenpublic-sector unions and government managers.

When the economy is good, public employees have made modest gainsthrough contract negotiations. When times are tougher, public employeeshave been willing to make concessions to preserve jobs, maintainprograms and services and help their employers balance budgets.

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


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These financially-shared sacrifices, reached through collectivebargaining, have clearly helped government employers and schooldistricts, 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, andmore, when he praised the collective bargaining process in hisCongressional testimony in March 2010 for the Public Safety EmployerEmployee Cooperation Act of 2009. The city was saddled with majoroperating budget deficits that were addressed through the collectivebargaining process.

I hope that my testimony has shown that collective bargaining is notsomething that should be feared by those not familiar with it, Smithsaid. Collective bargaining is working in Lancaster, Ohio, and it reflectsthe 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. Brownorganized and generated the report by collecting information andstatistics provided by public-sector unions, by gathering data from newsstories, through Internet research, reviewing contracts and fromconducting interviews.

Brown, a former Ohio journalist, is now a freelance writer, editor,investigator, multimedia/social media producer, and consultant. Amongother work, Brown was hired in 2011 by a private contractor working forthe state to help write and edit an annual report for Ohios Medicaidprogram. It is scheduled for publication this year.

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


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APPENDIX AA sample review of concessions in a half dozen Ohio cities shows thatemployees and safety forces have saved their towns nearly $10 millionsince 2008.

Mahoning County sheriffs deputies $3 million 55

FOP Units 2, 46 and 48 $3.54 million 56

Darke County sheriffs deputies/Fairborn and Huber Heights police $509,000 57

Highland and Clinton County sheriffs deputies/Forest Park andGreenfield police $177,500 58

North Olmsted police $429,000 59

Lancaster firefighters $1.3 million 60

City of Toledo $500,000 61

Wooster Firefighters $152,000 62

Marion police $ $274,000 63

Total Appendix A $ 9,881,500

55 Adam Ferrise, Pay Raises Draw Fire in Mahoning, Tribune Chronicle, Feb. 4, 2011 56 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 ColumbusDispatch, Feb. 16, 2011 61 American Federation of State, County and Municipal Employees (AFSCME) OhioCouncil 8, Internal Analysis 62 Andrei Dordea, finance director, City of Wooster 63 John Jarvis, "Marion City Council to Consider FOP Concessions," The Marion Star, April27, 2011


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APPENDIX B

State law requires public school districts to develop and submit to theOhio Department of Education a five-year financial forecast. Theseforecasts are prepared and filed with ODE twice annually, no later thanMay 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 economicconditions and fluctuations in district staffing levels play an importantrole in the accuracy of the estimates.

Collective bargaining also has a considerable effect on districts financialprojections. An OEA analysis of these forecasts shows that collectivebargaining responds in a timely manner to local and state economicconditions.

The OEAs projections for the 2010-11 school year for 610, K-12 schooldistricts (excluding the island districts and College Corner) were based onthe October 2008 five-year projections from Ohios school districts.Those early mandated projections were compared to what the districtsreported for FY2011 on their May 2011 five-year forecasts.

It should be noted that once concessions from negotiations for the 2011-12 school year are fully reported in October 2012, the aggregateconcession number of more than $700 million could increase sharply. 64

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


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Appendix C

Revenue Category FY11 FY12 FY13

State GRF K-12 $6,264 $6,453 $6,533

State GRF Rollback $1,051 $1,086 $1,095

State General Services $32 $42 $42

State special revenue $51 $55 $55

State Lottery Profits $711 $718 $681

TPP/ PUTPPReplacement

$1,241 $756 $505

Subtotal State $9,350 $9,110 $8,911

Federal SFSF Foundation $457 $0 $0

Stimulus non-foundation

$482 $101 $40

Federal other $2,291 $2,209 $1,971

Subtotal Federal $3,230 $2,310 $2,011

State special revenue $51 $55 $55

Lottery $711 $718 $681

Revenue Distribution $1,241 $756 $505

$8,299 $7,896 $7,698

FY11 to FY12 FY11 to FY13 Total Loss

State Only Change -$240 -$439 -$679

Federal Only Change -$920 -$1,220 -$2,140


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

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

Total Change -$1,160 -$1,659 -$2,820

FY11 to FY12 -$1,160

FY12 to FY13 -$498

public employees shared sacrifice report

Documents