Kitzhaber sells out taxpayers to pay off union backers

by Dan Lucas

During last year’s gubernatorial race, the two public employee unions, SEIU and AFSCME, endorsed John Kitzhaber and contributed $750,000 to his campaign.

Unlike the education unions who backed Bill Bradbury in the primary, AFSCME endorsed John Kitzhaber in the primary. SEIU remained neutral during the primary, but endorsed Kitzhaber during the general election.

As governor, the same John Kitzhaber who was so heavily supported by these public employee unions was then tasked with renegotiating their contracts; an inherent conflict-of-interest. Not surprisingly, the public employee unions made out much better than the taxpayers did.

Unions’ Investment in Kitzhaber Paying Off

Kitzhaber recently renegotiated the contracts for SEIU and AFSCME, and the result was three permanent pay raises for the unions, continued gold-plated health care coverage, and no change to the 6% PERS employee pickup.

The public employee unions’ gold-plated health care coverage includes medical plans with no deductibles, and coverage for dental, vision and life insurance.

The small victories for taxpayers were a continuation of temporary furlough days and the requirement for state public employee union members to start paying up to 5% of their health insurance.

And 5% isn’t very much. 5% is half of what Washington state workers pay, less than a third of what California state workers pay, and one-fifth of what families in the private sector are paying. (see chart)

Even after factoring out the furlough days and 5% health insurance, Kitzhaber’s agreements will still result in a net increase of over 3.5% in pay for the average SEIU & AFSCME worker in the current budget. And pay isn’t the only payroll cost that taxpayers will be bearing. PERS retirement costs are expected to increase by almost 15% in the next four years, and health benefits for state workers are expected to increase by over 25% in the next three years – and 95% of that will be paid for by the state.

Note: unlike SEIU & AFSCME, most teachers and other school employees have already been paying for part of their health insurance and they have plans which include deductibles.

Kitzhaber’s Campaign Promises

During last year’s campaign, Keli Carender wrote that “Bloomberg Business Week reports that Oregon’s Democratic candidate for Governor, John Kitzhaber, is promising to get tough on public employee compensation if he is elected.”

Based on the concern that Kitzhaber was “fully supported by the public employee unions”, Carender also relayed this concern: “How can taxpayers be sure that Kitzhaber won’t betray them in order to satisfy his union base when push comes to shove?” How, indeed?

Recommendations from Governor Kulongoski

Before he left office, Governor Kulongoski issued his Governor’s Reset Cabinet Report on how to provide Oregon’s core services in an increasingly challenging fiscal environment. The report concluded “that the state will face a decade of deficits if it tries to sustain the type and scope of services it now provides. Business-as-usual budgets will no longer suffice.”

The biggest reason for the projected increase in spending was identified as:

 “Payroll cost increases, as higher PERS rates take effect, salary freezes and furloughs end, and adjustments are anticipated in pay and health benefits”

In looking at what could be done, the report noted that “Approximately three of every four dollars that the state spends from its general fund ends up in a paycheck and in payments for benefits that accompany a paycheck.”

The report also noted “We found that compensation for state employees is now in alignment with that of comparable jobs in the larger labor market, but future increases in compensation are expected to exceed increases in the private sector.”

The report went on to provide a number of recommendations for controlling payroll costs. One example recommendation for controlling health benefit costs was to “Establish deductibles and co-payments in line with industry standards” for health insurance, and another example recommendation for controlling payroll costs was to reduce the 6% PERS payments to the Individual Account Program to 3% or lesser amounts.

Conclusion

  • Over the last 4 years, the private sector has lost 110,000 jobs while the number of state employees has grown by 6,400.
  • Oregon’s unemployment rate remains way too high: 9.4%.
  • 187,000 Oregonians are still out of work – double the number out of work 4 years ago.
  • 780,000 Oregonians are on food stamps. That’s 1 in 5 Oregonians on food stamps.
  • Governor Kitzhaber hasn’t followed his predecessor’s recommendations to avoid a decade of deficits.

The governor should have demonstrated to Oregon employers, Oregon investors and Oregon taxpayers that Oregon is serious about controlling state spending and that public employee unions will begin paying their fair share.

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Posted by at 05:00 | Posted in State Budget | 28 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    That the union and governor didn’t balk at furlough days is kind of telling.  This and a lack of public protest over state office shutdown days means to me we really don’t need or want as much state government service as budgeted.  I think the number of furlough days could be increased sharply to fifty per year from current five to 10 days.  Many state workers don’t mind these days; eventhough unpaid they don’t have to make the routine slog to and from work, and they still get the same great healthcare coverage.

    So, I think the GOP should push for more furlough days as a means of testing for further efficiency gains in state government services.

    • guest

      People that comment that don’t know what they are talking about disgust me.  We do have deductibles! If not, please tell me where that check I’ve been writing is going too!??!  AND, to say that state workers would be happy to stay at home instead of “slog” to work is just disrespectul.  They work hard to support their families and get nothing but grief in return.

  • 3H

    “… public employee unions will begin paying their fair share.”

    The unions don’t pay anything – they are not employed by the state.  Public employees, however, would.  But, that would be putting a human face on the issue, wouldn’t it?

  • Reper

    This does not make sense.   Kitzhaber had many battles with the unions and it was all front page news — especially the OEA.  No one in Session got everything they wanted, Kitzhaber was praised by both sides for being more even than the past.   Unions got something and taxpayers got something from the session.   What more can you expect in a recession.

  • 3H

    “The report also noted “We found that compensation for state employees is now in alignment with that of comparable jobs in the larger labor market, but future increases in compensation are expected to exceed increases in the private sector.”

    So, this is a fair package, right?  Public employees are being compensated the same as comparable workers in the private sector, so everything should be fine.  Unless…  some feel that public workers should be paid less?

  • Kellylovelace

    Well done Dan.  Keep us informed. Thank you

  • Rupert in Springfield

    Obviously the governor has no idea why one gives an employee a raise.

    The sole reason to give a raise is to retain employees. That’s it. You don’t give a raise because you are a nice guy.

    When unemployment is at 9.4% and 20% of the state population is on food stamps the idea that you would give anyone a raise is absurd.

    I would suggest designating one large window to the street in every government work place as the “reality window”. I would tell the employees to ponder that one in ten who walk by is unemployed and one in five is on food stamps. Do you think we will have any problem replacing you? Do you think your skills at the DMV window, collecting building permit fees or data entry at the Department of Revenue are so difficult to replace?

    So no raise. But be of good cheer government employee – you have a job that pays more than most while demanding less. Where mistakes are par for the course and responsibility is an unknown concept.

    • the real valley person

      Yeah, that dumb governor of ours. What’s with that guy?

      How many people do you employ in your enterprise Rupert? Have you ever managed a multi-billion dollar enterprise? I didn’t think so. Do you see many large private enterprises lowering wages these days? Because I don’t. I wonder why Wallmart has not lowered its wages. they can certainly replace their staff no?  

      Unemployment is high, but that doesn’t mean talented employees do not have options. If they feel stuck, under appreciated, or sick of the situation they can look for work elsewhere while they are still employed. Its not like they have to quit first.

      Replacing employees has its own costs. It takes time to learn most jobs. And state government jobs as a rule take much higher training and education than the private sector. And who trains the new if you get rid of all the old?

      In addition, morale and productivity are linked. Employees in large institutions can slow down, sandbag, or just do less if they are less motivated. Firing out of civil service takes months to years, so there is little risk. Crack morale and you can end up with a lot of paid employees doing very little. And yes, even you would notice once your public power dimmed a bit, or you broke an axle in an unfilled pothole.

      If I’m an engineer or architect or doctor or lawyer or administrator working for the state, and you tell me to take a cut or face food stamps, I’m likely to smile back and say we’ll see about that.  

      As far as the clerk bashing goes, yes, we could replace lower skilled employees pretty easily. This is one reason workers in low to semi-skilled arenas unionize. To prevent the bosses from threatening to replace them with the next hungriest person standing in the unemployment line.  

      • Rupert in Springfield

        The most number of employees I have ever had was ten. I have a feeling thats probably more than you have ever had, that you were personally paying. ever. Please dont lecture me about employees, thanks.

        >Do you see many large private enterprises lowering wages these days? Because I don’t

        And I never argued for lowering wages.

        Sorry, if you are such an idiot you cant be bothered to read what you are responding to, there is no point in reading what you have to say.

        • the real valley person

          How many I have employed is not the point. I’ve worked for government, for mid size business, and for a larger business. I have an insiders view of how employee compensation works in a professional arena. You apparently do not, so maybe you should have  a bit less confidence in the advice you offer others.

          In short, I think a reality window would be a very good idea. For you.

    • 3H

      Rupert, Rupert, Rupert.

      “But be of good cheer government employee – you have a job that pays more than most while demanding less. Where mistakes are par for the course and responsibility is an unknown concept.”

      Back to this?  According to the report cited in the post, wages for public employees are aligned with private sector jobs.   Where do you get your information that public employees are paid more and do less work?  And, mistakes are par for the course?  LOL.. you really believe that public employees make more mistakes and don’t  get disciplined? 

      C’mon, admit it, it’s pure hyperbole based on nothing but your imagination. 

      Or, maybe it’s just another one of those “History is not part of the humanities” facts. 

      • Rupert in Springfield

        >Back to this?  According to the report cited in the post, wages for public employees are aligned with private sector jobs.

        Oh my God, you are back to this. Look, this lefty tactic of yours of trying to argue a point no one ever made is so tiring.

        Re read, or learn to read, pick one, I said public employees make more than most, which they do.

        Now, if you are going to try and argue that public employees do not make more than the average wage in Oregon, I will mop up the floor with you.

        >Where do you get your information that public employees are paid more and do less work?

        From the fact that public employees are just about the only salaried employees I am aware of who get overtime. I know plenty of salaried public employees who get it. Haven’t met too many private sector salaried employees who do.

        IDIOT ALERT – THE WORD SALARIED IS IMPORTANT HERE – DON’T GET TRICKED INTO DOING A FLOOR MOP IMPRESSION IF YOU RESPOND OMITTING IT – END OF IDIOT ALERT

        >And, mistakes are par for the course?  LOL.. you really believe that
        public employees make more mistakes and don’t  get disciplined? 

        Of course. Public employees are more heavily unionized than private sector. If you are going to try to argue it is as easy to discipline a union as a non union worker, good luck with that one.

        In fact our current governor is famous for this

        Two words – Jane Cease.

        After her outright negligence, she not only wasn’t disciplined, she got a promotion! From who? John Kitzhaber. His reason at the time for not disciplining her  “Jane Cease is a personal friend of the governors”

        Please, I doubt you could even convince most liberals that government employees are less subject to discipline than private sector. This one is a non starter, give it up.

        • 3H

          Oh!  My mistake, I didn’t realize we were comparing apples to oranges.  How silly. I thought you were trying to make a point and trying to make sense.  Yes, most public employees make more than your average minimum wage job.  Good point!  That must mean that they are overpaid!   

          So… what about the rest of the statement – how do you know they do less?  Did you dream it?  Tarot cards?  Tea leaves?

          Most public employees are not considered salaried in the management sense.   Those that are management do not get overtime.  Those that are “salaried” (in that they get the same month by month rather than by the hour) are still considered hourly employees for the purposes of overtime.   In short.. if a public employee does the same job as a private sector employee, and the private sector employee gets overtime so will the public employee.  Also, the majority of public employees are not allowed to work overtime.  There are exceptions (such as the police) but most are not allowed to.
          Don’t get hung up on the term salaried Rupert.   Most “salaried” public employees are actually considered hourly for the purposes of overtime.  It’s based on duties – not how you get paid.We are not talking about exceptions – we are talking about the average public employee.  Do you really think it’s any different in the private sector?  Do you honestly believe that being a friend of the boss or related doesn’t come with job protections not afforded to everyone else in the workplace.  Your average, everyday, public employee.  You know, the clerks, the road crews – do you honestly believe that they don’t get disciplined for bad work?   Do you honestly believe they make more mistakes than those in the private sector?  That they are worse workers?   Do you consider Cease to be “par for the course”?  Why?  You do know what anecdotal evidence is, right?  The dangers of applying to the general population you’re trying to describe?Here you go… Father Riccardo Seppia (a Catholic Priest) was a pedophile.. therefore all Catholic Priests are pedophiles.  That is exactly how your logic works.  Kinda stupid, huh?    

          • visitor

            Why argue with this Rupert guy.  Had a bowl of stupid for breakfast, stuck on stupid.  Pick which you like best.  He is narrow minded and brings nothing of value.  Your debating with an 8th grader.  Just look how he constantly calls everyone (but himself) an idiot or some other name.  Start ignoring him and maybe he will just go a way

          • 3H

            LOL…  I try. Sometimes.  I really do.  I’ve already decided to ignore Joel..   I guess I can add Rupert to the list.

        • 3H

          “Please, I doubt you could even convince most liberals that government employees are less subject to discipline than private sector. This one is a non starter, give it up.”

          Because you say so?  Well, I guess that makes sense to someone who doesn’t know either his History or the fact that History is part of the Humanities.   You must be a government employee, right?

        • 3H

          So, don’t you think you’re using the word “salaried” was being deceptive?  Didn’t you know that you can be paid a salary, but not be management?  That it’s job duties, whether your are management or not, that determine your eligibility for overtime?    Maybe I should have put “deception alert” across the top of this post in caps.  

  • http://pulse.yahoo.com/_BFD7G5JBJ6XNMIM56X7SEXOVJQ CecilS

    Oregon is a hard core blue state. The majority lefties in  the Portland metro area vote dem without even looking at the other parties. That’s why Wu has won over and over again. The dems are like lemmings, and voting is automatic with hardly a thought given to what is at stake.

    • the real valley person

      Unlike Republicans, who are obviously thoughtful, analytical, neutral observers who vote what is best for the country. 

    • Rupert in Springfield

      Actually you are quite right here. Democrats tend far more to party loyalty than Republicans. This is where the famous phrase “the difference between Republicans and Democrats is Republicans eat their own” comes from. We see this every day in congress. Republicans will turn on someone with the least bit of impropriety – for example, virtually every talk show host insisting Larry Craig resign over the toe tapping incident. Democrats on the other hand will put up with a Klan member for decades, or will defend, at least initially, any outrage so long as the person is party loyal. 

      While Republicans might not vote for Democrats if they are dissatisfied with a Republican incumbent, they will probably stay home. Democrats on the other hand can be counted on to vote Democrat, no matter what the candidate, issue or what have you. So long as it has a D after it, they will support it.

      This is why NOW went off the deep end over a pubic hair on a Coke can when it was Clarence Thomas, but told us we should consider the good things and not the bad things when considering Ted Kennedy’s rape affair that took place at his house one Christmas or Bill Clintons Juanita Broderick rape accusation among many other. Clinton and Kennedy had D’s after their name, they were not to be questioned. Thomas had an R after his name so Senate hearings were demanded.

      Contrast that with something like National Review, or the NRA which will gladly turn on a Republican if he all of a sudden “grows in office” and a fundamental disagreement in ideology takes place. Pat Buchanan? As conservative as they come. NR disowned him and did a cover story on it after his AMEN comments.

      Lars Larson? Noted Republican. Renounced his NRA membership after they agreed to Pelosi’s attempts to give them special first amendment rights.

      Yet with Democrats? You can count on them to always defend their guy so long as he has a D after his name.

      Why? Because you can never admit you are wrong when you entire ideology consists of a belief in being able to run the lives of others better than they can themselves.

      It’s really that simple. When your whole mindset and view of government is people don’t make the right choices, we must make those choices for them, it becomes extremely damaging to admit human fallibility.

      For Republicans its easier. When you believe government is incapable of running every aspect of peoples lives then admitting to a mistake is not such a grave threat to the ideology.

      Those that seek to run the lives of others, can never admit fallibility.

  • http://www.theportlandalliance.org Editor

     Conclusion
    Over the last 4 years, the private sector has lost 110,000 jobs because only 8% of the workforce is union.  During that same time union-protected state employees have seen  6,400 new jobs created. 

    Oregon’s unemployment rate remains way too high at 9.4% and 187,000 Oregonians are still out of work.  780,000 Oregonians are on food stamps. Governor Kitzhaber has done the right thing by the people of this state because “Approximately three of every four dollars that the state spends from
    its general fund ends up in a paycheck and in payments for benefits that
    accompany a paycheck.”

    These paychecks keep working families working and produce income for the state as well. The 37% of public employees who are protected by joining together in unions have seen job increases.  But the 92% of private employees who have not joined together in unions are seeing job  losses.  The message is clear.  Unity and solidarity creates jobs and wealth. Unions help create safe workplaces, good working conditions, and increase productivity and jobs. These jobs fill state coffers and provide essential human services.
    The solution is transparent.

    Go union for good pay, decent treatment, jobs, and respect.  Or turn tail, surrender, and allow greedy transnational economic cartels to steal the American dream.  No fear.  No compromise. And no surrender.  We can take back our nation.  Instead of allowing criminals to misuse our military to enforce corporate adventurism abroad, we can invest in America, create jobs, rebuild our infrastructure, repair our ports, upgrade our railroads,modernize our utilities, fix our schools, and provide for the the most vulnerable among us.  When we join together to protect ourselves from corporate greed… all ships will rise.

  • Employed by Oregon’s taxpayers

    As a state employee, I don’t care for what’s been negotiated over the years with giving up many pay raises for the past 10 years just to have fully paid insurance premiums & employer paid retirement. I agree that the retirement program should be a matching program like most other employers, where they only put in what the employee is willing to pay, too. Unfortunately, many raises have been bypassed in favor of these paid benefits. When I first was hired 7 years ago, I was making the same amount as employees who had been working there 3 years. When the union negotiated a pay raise 2 years ago, they did it by removing the first step (entry level pay), so those who had finally gotten to step 2 after the previous freeze was lifted (some having been in the same position for 4 years), were now making the same pay as those who were newly hired. I don’t know how many private employers wouldn’t give their employee a raise for 4 years (although I’m sure there are plenty right now), but there weren’t as many then. 

    Now the paid benefits will gradually start being reduced as well, so I am glad that we did get some pay increases, but I agree that we should be paying more of the health insurance premiums & retirement ourselves. This gives a person more choice & control.

    Of course, those of us who work for the state do appreciate the
    stability and, believe it or not, many of us like working for the people
    of Oregon. One major draw back with have a union is that lazy workers
    are protected too. That can be frustrating for those of us who feel they
    have a moral obligation to make the best use of their time (or at least
    most of it, I still have to go to meetings even if I don’t think
    they’re very useful). Anyhow, just wanted to share another viewpoint from someone on the inside who sees pluses & minuses.

  • Employed by Oregon’s taxpayers

    Just as an FYI, state workers are getting a small cut in pay. Someone making @ $3,000 month would have reduced pay of around $1,700 over 24 months (@ $71/mo)  depending on insurance costs & actual reductions for furloughs.

    • wnd

      Just wondering…Politifact checked or slanted?  

      • Employed by Oregon’s taxpayers

        It’s just a rough estimate based on what the union has told us regarding the contract. Until I can read the details of the contract for myself, I wouldn’t be able to come up with any firm numbers. They haven’t made a draft available to members yet. FYI: I’m a tax auditor, so I’m not bad at number crunching, but I don’t have enough info for anything other than an educated guess.

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