Governor Kasich has been saying since SB 5 was introduced that it is necessary to pass collective bargaining reform in order to give local government and school districts the “flexibility” they need to handle their costs, especially since his budget is planning to slash spending for schools and may all but eliminate the State Local Government Fund. Put aside for a moment that means SB 5 is being presented as a solution to a future budget problem of Governor Kasich’s own making, how far does SB 5 actually go in helping with local governments and schools in managing their costs?
Well, this Sunday, the Columbus Dispatch calculated how what has been cited as the two biggest areas of savings—pension and health insurance costs—would save central Ohio governments and schools money under SB 5.
The Dispatch ran the story with a headline touting $74 million in savings. A more accurate headline would be:
SB 5 not likely to save central Ohio taxpayers much money in reduced health care and pension benefits.
Just look at their chart! Neither Columbus State or The Ohio State University is expected to save any, any, not one penny, in savings in these areas under SB 5!
In fact, only four out of the twenty-one government entities surveyed is projected to see savings at or above 1% of the total budget under these two provisions. And buried in the Dispatch’s article is an acknowledgement that many of these “savings” under SB 5 are entirely illusory:
Even if Senate Bill 5 took effect, the city might not see the pension savings because unions would seek higher pay to offset losing the benefit, said Jim Gilbert, president of the city’s police union. The city agreed to pay employees’ share of pensions instead of raising pay in past years, he said, so it’s only fair that the city offer more pay if state law strips away officers’ pension benefit.
In South-Western schools, the district picks up the pension contributions for about 100 administrators, worth a total of about $1million. The perk is something that administrators have negotiated little by little for the past 15 years, mostly instead of larger pay raises, said Treasurer Hugh Garside.
What the district will do with any pension savings as a result of Senate Bill 5 hasn’t been discussed, Garside said.
"That’s a decision the district will have to make," he said, but returning some of the money to salaries "would be an option."
We’ve already address this issue before in our report about the Ohio Department of Administrative Services’ flawed analysis of SB 5 (so flawed that not a single Republican Senator referenced its claims in debating SB 5.)
But let’s assume, as the Dispatch and DAS have, the improbable, nearly impossible economic assumption that these health care costs and rollback pension costs aren’t offset in higher wages. That means for over 80% of these entities they’ll see savings of less than 1% of their budget. However, Kasich’s budget is rumored to seek nearly 20% of their current state funding levels (maybe worse for local governments dependent on the State Local Government Fund).
So even if you evaluate SB 5 as Kasich says it should be viewed—as a tool to help these entities deal with his anticipated budget cuts—SB 5 is doomed to fail. For over 80% of these entities, SB 5 is like a squirt gun to fight a raging wildfire. For Columbus State and OSU, it’s nothing at all.
So how is SB 5 nothing more than political retribution by the Republicans against the unions again?!?
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