More states tackling public employee reforms

by Melissa Maynard, Stateline Staff Writer

The campaign to recall Wisconsin Governor Scott Walker for his anti-union initiatives was the most talked-about issue on the state labor front this spring. Walker, who sponsored legislation banning collective bargaining for most public workers, survived his recall election on June 5, emboldening fellow Republicans who remain eager to do battle with unions.

But while the Wisconsin campaign was attracting national attention, important developments for state workers were proceeding with less fanfare elsewhere in the country. Most notably, Arizona, Colorado and Tennessee passed sweeping overhauls of their civil service systems, which govern hiring and firing practices and offer the only avenue for grievances to be resolved in states where collective bargaining is banned.

These were moves of major proportions. State civil service systems were designed to ensure that employees would be hired based on their merits, rather than political affiliations, and would be shielded from political influence. Due process and grievance and appeal procedures were put into place to guarantee that rank-and-file employees wouldn’t be fired every time there was a shift in party control.

Supporters of civil service change argued, however, that state personnel codes have been riddled with archaic and cumbersome rules that make it difficult to hire and retain a talented workforce. Arizona Governor Jan Brewer said the existing system served to benefit the least productive employees while failing to reward and incentivize the best. She said the existing grievance system was so cumbersome that agency managers were keeping problem employees around just so that they didn’t have to deal with it.

Brewer made civil service changes her top priority in the 2012 legislative session, and she succeeded in getting them enacted. The changes will gradually transition the state away from a traditional civil service structure towards an “at will” system that mirrors private sector companies. Agency managers will have flexibility to hire and fire employees as they choose, and reward star employees with bonuses and pay increases without legislative approval.

The legislation will automatically eliminate civil service protections — including the ability to file a grievance or appeal disciplinary actions — for new hires and some current employees. Anyone who accepts a raise, a promotion or a transfer to another position in state government will convert to “at will” status. This means that state workers, whose salaries have been frozen since 2008, will have a difficult decision to make in October about whether to accept a scheduled 3.75 percent bonus. If they accept this one-time bonus, they will go to “at will” and permanently give up their current job protections. The governor’s office expects that, under the new law, 82 percent of the workforce would become “at will” within the next four years, compared to 26 percent currently.

Matthew Benson, director of communications for Brewer, says the governor is confident that the 35,000 workers who make up the state’s bureaucracy will remain isolated from politics. “These are the people who, administration through administration, keep state government operating,” he says. “We don’t see that changing. These positions by and large have nothing to do with politics. We don’t see a future administration coming in and clearing out the state workforce by bringing in their friends.”

End of Bumping

Changes to the personnel systems in Colorado and Tennessee will end, or at least minimize, a practice known as “bumping.” Bumping allows employees whose positions are being eliminated to force others with less seniority into lower positions, or even out of the workforce altogether. The resulting chain reaction can undo years of training and push employees into positions that are a poor fit for their skills.

A major focus of Tennessee’s civil service legislation was bringing more flexibility to the way the state recruits and hires workers, in preparation for an influx of new employees. Almost 40 percent of Tennessee’s workforce will become eligible for retirement in the next five years.  The legislation also streamlines the appeals process and overhauls the performance evaluation system for employees. Performance evaluations will be tied to pay and used as the primary consideration in layoffs.

“For decades, employment decisions in state government have been based solely on seniority with job performance never being considered, and employees have either received modest, across the board pay increases or nothing at all,” Republican Governor Bill Haslam said when he signed the bill in April. “No one has been able to convince me that is a good way to manage our employees or serve our taxpayers.”

Colorado Governor John Hickenlooper is pursuing additional civil service changes, but they will require a vote of the people because many of the existing civil service rules are part of the state’s constitution. The legislature voted to put a package of changes on the ballot in November that would give the state more flexibility in how it evaluates and hires job applicants. State agencies are currently required to choose from among the top three scorers on a competitive test; the new system would permit a more analytical approach under which the state could pick from the top six finalists.

Right-To-Work

Meanwhile, Indiana was enacting a controversial “right-to-work” law aimed at curtailing the influence of unions in private sector employment. The law makes it illegal for businesses and unions to negotiate contracts that require all employees — including those who do not wish to be union members — to pay union fees as a condition of their employment.

As pro-union protesters from around the state descended upon the Indiana Capitol, Democrats stalled the right-to-work bill for a few weeks by denying the House the quorum necessary to conduct business. Ultimately the legislation passed by a comfortable margin, making Indiana the 23rd state to enact such a law and the first to do so in the industrial Midwest. To date this year, legislators in 19 other states have introduced some form of right-to-work legislation, but Indiana has been the only state to enact it. New Hampshire Governor John Lynch, a Democrat, has vetoed a similar right-to-work bill.

Pension Issues

States continued to make changes to the retirement and health care benefits that they have historically provided to their workforces. “There has been a lot of uncertainty among employees as pension legislation has been making its way through state legislatures,” says Leslie Scott, director of the National Association of State Personnel Executives. “There’s a little more stability this year as far as maintaining employment, but changes in benefits are now the major issue.”

Pension legislation asking workers to chip in more toward their retirement income was enacted in states controlled by Democrats as well as those dominated by Republicans. New York Governor Andrew Cuomo, a popular Democrat, shepherded legislation that asks new workers to contribute more toward their pensions and to work longer before retiring.

States continued to experiment with cash balance and hybrid retirement plans that function more like a 401(k) than a traditional pension. The plans transfer some of the risk to workers when pension investments don’t make money, but allow more portability if workers choose not to spend their entire careers in state government. Louisiana Governor Bobby Jindal, a Republican, signed legislation last week that creates a mandatory cash balance plan for new employees. Virginia and Kansas passed similar overhauls of their pension systems earlier this spring.

After Wisconsin

The most intriguing questions following Walker’s recall survival in Wisconsin may play out in states with powerful public sector unions and strong collective bargaining rights. Now that the recall election is over and Walker has kept his job, many expect a heightened level of activity in state legislatures around labor issues. Gary Chaison, professor of industrial relations at Clark University, says he expects to see a slew of bills that would have the cumulative effect of severely weakening unions by eroding their infrastructure and limiting the scope of bargaining negotiations.

“I think state legislatures are going to be tremendously emboldened,” he says. “Most state legislatures now are sitting on a bill that would limit [union] dues payments. Most state legislatures are just waiting to bring that out. They can always tell their unions, ‘You may not like it, but it could be a lot worse.’”

In Michigan, however, voters this fall will consider a ballot measure that fights back against recent legislative challenges to union power by putting public sector collective bargaining rights in the state’s constitution. It is designed to void anti-collective bargaining bills already enacted by the Republican-controlled legislature and signed by Republican Governor Rick Snyder. One of the laws in question, which passed earlier this spring, makes it illegal for school districts to collect union dues. It is also a preemptive strike against future legislation, including a right-to-work bill that has some support in the legislature but is opposed by the governor.

California voters will consider a ballot measure in November that would prohibit governments from deducting union dues from workers’ paychecks if the money will be used for political purposes.

Maine controversy

Labor relations in Maine have proven to be particularly thorny under Republican Governor Paul LePage, and the legislature has shown some interest in limiting current collective bargaining rights. This spring the legislature ended collective bargaining for family childcare providers paid by the state who are currently represented by the Maine State Employees Association. The LePage administration has been unable to reach an agreement with that union, the largest representing state workers, since its previous contracts expired in July 2011. The union has three pending complaints before Maine’s state labor board.

The governor stirred up controversy by calling the middle tier of state employees “about as corrupt as you can be” in an April 26 town hall meeting. A follow-up letter he sent to state employees didn’t do much to help smooth things over. After acknowledging that many state workers are doing “great things for the people of Maine,” the governor wrote that other employees, for whatever reason, “have not come on board. Roadblocks have been put up, hurdles have been thrown in the way, and information has not been passed along to senior management … In my opinion it shows that they have been corrupted by the bureaucracy.”

Stateline.org is a nonpartisan, nonprofit news service of the Pew Center on the States that reports and analyzes trends in state policy.

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  • Rupert in Springfield

    Wow, some of these measures actually give one pause. Could it be that there is actually innovative thinking going on? I sure think so.

    Brewers phase in to “at will” via raise acceptance is absolutely inspired.

    The elimination of “bumping” is great. The practice is not uncommon in government work and idiotic on the face of it. One would think that in a group of adults, say a legislature, simply outlining the practice to the group would result in unanimous agreement as to its inanity and it would be voided forthwith. Apparently entrenched interests make that difficult. Good for Colorado and Tennessee for tackling these though.

    In short – most of the creative thinking in government will be about how to make government more about those who pay for it, the citizen, and less about funneling election coffer money through union contracts.

    I see this as a wave that will hopefully spread in upcoming years. In the back of their minds, citizens know these kinds of idiotic employment practices go on. They don’t like it and frankly I think its an exciting shift to government being more about the citizens, the taxpayers and not about corrupt union contracts that clearly are at odds with the taxpayers interests.

    It’s interesting contrast between how state government, and the current administration, deal with economic realities. On a national level we have a White House paralyzed by the past. Anything other than big government big union solutions would not even occur to them. Yet on the state and local level we see different and innovative solutions, such as outlined here, to try and deal with a problem that everyone knows will have to be addressed, the size and cost of government. What a nice counterpoint to the absolute sinkhole of thought we apprehend in the White House.

    • David from Mill City

      It is in the best interest of the Country as a whole that
      workers receive fair and reasonable compensation for the work they do. It may
      not be in the best interest, as he perceives it, to provide his employees with
      a fair and reasonable compensation package as that is likely to cost him more,
      reducing his profit, then not providing with a fair and reasonable compensation
      package. But that is a different matter.

      As workers represented by Unions are more likely to receive
      a fair and reasonable compensation package then those that do not. It is in the
      best interest of the Nation as a whole that Unions exist and flourish. The fact that Unions in the political sector
      champion the interests of the middle or working class is an added benefit.

      “At will” is a nice way of saying that it is acceptable for
      some people to get a free ride on the labor of others. It is also a way to
      slowly erode the effectiveness and eventual existence
      of Unions.

      Given that strong Unions are a necessary counter balance to
      those forces desiring to convert our nation from a Democracy into a Fascist State,
      on the Italian corporatist model. That those forces desire the destruction of
      Unions I understand. What I do not understand is why so many intelligent people
      who will not benefit from living in a Fascist State should so actively and
      passionately support those policies that will convert our country into one.

      • Rupert in Springfield

        >What I do not understand is why so many intelligent people
        who will not benefit from living in a Fascist State should so actively and
        passionately support those policies that will convert our country into one.

        Then let me explain it to you.

        The problem with your argument is what you take as axiomatic, others do not.

        It simply does not follow to most people that unless the guy at DMV makes more than they make that Hitler is coming to town.

        • David from Mill City

          The guy in DMV makes more because he is in a Union and they
          are not. Rather than trying to destroy his union as to lower his wages, they
          should form their own Union and raise their own wages.

          As to why they do not see the link between destroying Unions
          and the rise of a Fascist State, on the Italian corporatist model, could it be
          the billions of dollars being spent by those who believe they would benefit from
          a Fascist State, on the Italian corporatist model, to spew misinformation and
          the advocacy of those who bought the misinformation.

          By the way it was Mussolini and not Hitler who was the
          leader of the Italian Fascist State.

          • Rupert in Springfield

            >Rather than trying to destroy his union as to lower his wages, they
            should form their own Union and raise their own wages.

            And the owners of the mom and pop business? What are they to do? Go on strike?

            Not everyone is employed in a business where they can form a union, demand more from the boss and magically the money appears.

            >By the way it was Mussolini and not Hitler who was the
            leader of the Italian Fascist State.

            And Mussolini was also the darling of the left and considered a major intellectual in progressive circles in the 30’s

            Are you sure you want to continue with discussion of Mussolini?

            I sure wouldn’t.

          • David from Mill City

            You raise an interesting point about Mom and Pop Businesses,
            you are correct they cannot form a Union, but there may be other adjustments to
            their business model that could raise their
            bottom line. That assumes that their expectations
            in regards to the profitability of their business are reasonable. As to
            business models that require an ongoing subsidy, in the form of paying its
            workers less than living wage, are fundamentally flawed.

            As to people not being in a business that lends itself to unionization,
            I suspect many are in industries that could be unionized. As history has shown
            many of the benefits won by Unions have spilled over to non-Union operations. Besides the main point I was making is that it
            is better for the nation as a whole if rather than dragging public sector wages
            down we worked to bring private sector wages up and Unionization is one proven
            way to do it.

            As to Mussolini, while he might have been the darling of
            1930’s progressives it is now 2012. And remember that it was the United States,
            under a Democratic President, with the help of Brazil and the Commonwealth Nations
            that deposed him. Any way it is the undesirability
            of a Corporatist Fascist State that I was expressing not the merits of its
            1930s era Italian advocate and his contemporary supporters.

    • David from Mill City

      Rupert

      Regarding our present economic situation, our own history shows
      us that Federal Government spending can and will get our national economy
      working again. We also can see from what is happening in Europe that cutting
      government spending only makes the economic situation worse.

      As to what we are seeing at the state and local level is a
      decline in the type and amount of services that the public as a whole receives
      for their tax dollar. This response,
      while unfortunately necessary due to our current economic situation, is
      destructive and not innovative.

  • bill sizemore

    Oregon will have to circle the drain a couple of more times before reforms like these come to Oregon, but they will come. Measures have been filed to accomplish many of these same things here, but the pro-union attorney general and Oregon Supreme Court have sabotaged the ballot titles so as to make the measures unpassable. Unions should be on notice that this is the only reason such measures have not been on the ballot here. Well, the unions already know this, which is why they invest so much effort on this front, including donating so much money to attorney general races. But, once we figure out how to make the courts play straight with ballot titles, Oregonians will have the opportunity to turn this state around at the ballot box.
    If anyone doubts my description of the problem, go into the Secretary of State archives and see what kind of ballot titles our measures have received in the past, measures, for example, that merely say things like, “No employee shall be required to join or pay money to a union as a condition of employment.” The ballot titles the supreme court requires for such measures are so convoluted and distorted that it is hard to see how they even go with the measure to which they are attached. They are intentionally designed to fail, and that’s why the unions maintain the power they do here in Oregon. The court does this for measures that would enact right to work laws or repeal Little Davis Bacon or any other measure that would loosen the union stranglehold on this state.
    Make the supreme court play fair and everything would change in one election cycle, which by the way is the reason the unions pay so much attention to judicial elections while we by and large ignore them at our own peril. Oregonians agree with us on these issues, if we could just get the questions put to them honestly.

    • Rupert in Springfield

      I wouldn’t say the ballot title/description is the sole reason why such measures fail, but it is a part of it. I do remember maybe 15 years or so ago when Oregon’s little Davis Bacon act was up for a vote. I had plenty of friends who were incredulous at the fact that this was going on and when I told that it was absolutely true, and every government job I did they would hand me a wage sheet showing what I had to pay people.

      To a one, they told me they were not sure if they had voted to get rid of DB when they actually went to vote because the wording on the ballot was confusing somehow.

      Davis Bacon and the little Davis Bacon laws are reprehensible, not just because of their racist origins, but also because they are a flat out rip off.

      However, like other problems we have, Oregon will once again be at the end of the pack when it comes to eliminating this sort of thing. Facing economic realities is not something Oregon has tended to be good at in the past. Other states will have to lead the way.

  • MAx

    The monies going to the retired peoples is a contract and must not be messed with by anyone.

    • guest

      D’oh boy Glorious MAximus resounds like a Neo-Comm with lots of (inflationary catalyst) COLA ‘contracted’ and flowing in his fountain of PERS.“`Meanwhile, private sector retirees with fixed pensions get to eat cake-crumbs fallen off a governmentium tableau. Yeah-h-h, , what a revolt’n development that is.

  • 3H

    I’m not entirely sure what is innovative or creative about turning the clock back to the pre-labor movenment days. If you think there is corruption now (a term that is losing all meaning through overuse) wait until you see what happens in Arizona. No appeal? No grievance? Nice, don’t piss of your boss. Don’t make your boss look bad. Be sure to laugh at all their jokes, and unless you have witnesses (which you won’t), do not file a sexual harassment charge.

    Rupert, I believe you once asked of what use unions are anymore. I think you see the answer right in front of you. It’s not just about wages, but a union is about rules, fairness, and reigning in, a little, the power your supervisor has over your life. Keep an eye on Arizona and other states. I’ll lay down good money that in 5 years or so, there will be stories of managerial abuses that would not have happened under a civil service system.

    As Scott Walker has already so prominently expressed: the public unions are only the beginning. Once they are weakened and made useless, the next move will be to weaken the private unions. You can already see it here on OC with the call to make Oregon a Right to Work state. Unions are one of the few institutions that can provide balance to corporate money. If you think the Citizen’s United decision was a bad one, wait and see what happens if there is only one major player in the game.

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