Business leaders know Ohio's future depends upon a vibrant economy. Growing Ohio's economy depends upon creating a competitive climate for retaining and recruiting business, which means lower taxes, reasonable government regulations, and a 21st century workforce.
Ohio's state and local tax burden is one of the highest in the country. An uncompetitive tax climate causes companies to move their investment to lower cost states and take thousands of jobs with them. To succeed, Ohio must become a more affordable place to do business.
Local communities across Ohio now spend as much as 80 percent of their budgets on labor costs. Tax revenues have not kept pace with increasing labor and other costs, resulting in more demands for levies and higher taxes. For example, Washington County total revenue declined by $1.5 million from 2009 to 2010. SB 5 gives Ohio's state and local governments the ability to manage workforce costs.
One of the roles of the local chamber of commerce is to help our members learn more about specific legislative actions that impact businesses. The 300+ page legislation, which was signed into law March 31 but put on hold until after the results of the Nov. 8 election, is filled with details that will have a significant impact on public employers and public employees.
Issue 2 is a referendum-driven vote on SB5. A "yes" vote for Issue 2 allows SB 5 to take effect. A "no" vote repeals the legislation.
Here are some of the key provisions of SB 5:
It does not eliminate collective bargaining on wages or working conditions for public workers; those still will be bargained during labor contract negotiations. It does reduce the number of employment issues collectively bargained. For example, firefighters, police officers, teachers and other government workers will still be able to form unions and bargain collectively over wages, but not benefits and workplace conditions.
Government employees are asked to contribute 10 percent to their publicly funded retirement plan. Also, they are asked to pay at least 15 percent of their health insurance cost. That's less than half of what the average Ohioan who works in the private sector pays. It should also be noted that some of our county's school systems already require that the teachers pay a portion of their health care costs; this establishes a minimum level for all public sector employees. Furthermore, health care benefits provided to management employees to be the same as those provided to other employees.
The changes in health care alone are huge money savers for taxpayers; the total impact of SB5 for Ohio was projected to be more than $1.3 billion last year had it been in place. Closer to home, Marietta City Schools would save $1.03 million, according to projections from the Ohio Department of Administrative Services.
SB 5 requires performance-based pay for most public employees, including teachers in our public school systems. Salary schedules and annual increases for length of service are eliminated. For example, teachers' raises will be awarded upon merit rather than longevity, based, in part, on an evaluation policy to be developed by the State Board of Education by April 30, 2012.
If cuts are necessary, length of service cannot be used solely to make decisions regarding layoffs. That means that the younger teachers will not always be the first eliminated.
SB 5 changes vacation and sick leave, and limits how many unused days can be rolled over into subsequent years. It reduces sick leave accrual from 4.6 hours to 3.1 hours per two-week pay period and caps vacation leave for employees with 19 or more years of experience at 7.7 hours per two-week pay period. It limits paid annual holidays to 12, vacation to six weeks before 20 years of service and three paid personal days. It caps the final payout to 50 percent of accumulated sick leave with a maximum of 1,000 hours. There was no cap before. In other words, employees will have to use their holiday, vacation, sick and personal days or lose them.
One important item to point out is that Senate Bill 5 affects only public employee unions on the state and local levels and will have no effect on private unions. Based on 2009 statistics, there were 3,375 public employees in Washington County, not all of whom are in unions. There are over 28,400 employees in the private sector, some in unions, some not. In Ohio, there are 359,500 government workers out of 5.5 million total employment.
To read the bill, the ballot issue and find out more from those supporting and opposing Issue 2, try this link to the Ohio secretary of state website. www.sos.state.oh.us/sos/upload/ballotboard/2011/2-certifiedsummary.pdf
Charlotte Keim, CCEO-AP, is president of the Marietta Area Chamber of Commerce, The Riverview Building, 100 Front St., Suite 200, Marietta. Chamber Viewpoint appears every other Monday on Opinion.