Issue 2, November 2011: Repeal of SB 5 Will Reveal Kasich's Ineptitude

Governor John Kasich and his Republican allies deserve an “A” grade in good government for passing SB 5 and introducing HB 69. Salaries and benefits is the 800 pound gorilla of state and local government budgets. If the governor and legislature are serious about controlling government spending, then total compensation of government employees was absolutely the best place to start. Unfortunately, the fact that Issue 2 is on the ballot as a referendum to repeal SB 5 and that the polls indicate that government employees will be successful in repealing SB 5 demonstrates that Kasich and company are totally inept. Kasich deserves an “F” grade in politics.

Taking on the police, fire and teachers unions all at the same time appears at first glance to make John Kasich eligible for an addendum to Profiles in Courage. The other actions taken in his first year in office just make him appear vindictive and a hatchet man (not a good political move for a Lehman Brother alumnus). Kasich allegedly wants to help all local governments in Ohio balance their budgets. Instead of decimating local government funding from Columbus and reneging on the promise to make school districts whole as the personal property tax was phased out, Kasich could have had state government bear the brunt of the cuts needed to balance the State budget.
Some local mayors and city managers might have accepted the cuts reluctantly but then Kasich floated the idea of collecting income taxes on a statewide basis and then doling it out to local government. No one in local government trusts Kasich or his future successors to be fair in handling the income taxes after the bait and switch on the CAT tax/personal property tax and the slashing of local government funding.

Kasich claims to want to make public schools more accountable and efficient. That’s great but it is hard to accept when he has gone overboard to help charter schools run by major contributors to his campaign committees. Kasich would have been smarter to make open enrollment mandatory for ALL Ohio school districts. Public school employees would still hate Kasich but open enrollment would be much harder to criticize than support for select charter schools run by cronies. Kasich could have announced an open enrollment policy when he pardoned the Akron woman for sending her child to the Copley-Fairlawn school district and made himself a statewide hero to parents with school age children.

Kasich’s knack for alienating people, and apparently enjoying it, is bad enough but then the Building a Better Ohio campaign appears to be run by a bunch of pansies that make the League of Women voters look like Teamsters. Tammany Hall stated it crudely, “Politics ain’t bean bag.” Oswald Spengler, more eloquently reversed Karl von Clausewitz’s dictum stating “Politics is War by other means”. Building a Better Ohio issues pabulum like “Issue 2 simply asks government workers to pay at least 15 per cent of their health insurance and 10 per cent toward their guaranteed public pension. That’s hardly too much to ask when many Ohioans have no job at all”. The campaign needs some raw meat for the voters if it is going to overcome a 13% deficit in the polls and reverse an absolute majority in favor of repeal.

Politics is about resentment and there is plenty for Ohio taxpayers to resent about the public servants they employ.

Public school teachers are required to work 180 days per year and they get additional sick days. Private sector employees work 225-240 days per year including their sick days.
Public employees get to accumulate their unused sick days over decades. If the sick days remain unused at retirement, they are paid in a lump sum at their ENDING PAY RATE not the rate of pay during the preceding 30 years. In the private sector sick pay policy is “use it in the current year or lose it.”

Firefighters get to work 24 hours on and 48 hours off which means they get to sleep on the job. Fire fighters and their fellow safety workers the police like to point out how dangerous their jobs are. So is the job of an iron worker or miner yet for some reason there are far more men and women trying to become fire fighters and police officers than most other jobs. If the safety forces across Ohio had their total compensations cut 10% or more, they could be replaced in short order with people who would be glad to have those jobs.

Those never ending school levies on the ballots across Ohio are for teachers annual pay raises. Teachers claim they need the raises to keep pace with inflation. Interestingly enough the biggest components of inflation are medical costs and education. Public school teachers pay virtually nothing of their health care costs and they are the inflationary education cost. In one sense they are asking for a raise this year because they received a raise last year. The same teacher may have refinanced his home several times in the past 20 years thereby lowering his own personal cost of living. Pay raises in the private sector are virtually non-existent and pay decreases were fairly common in 2009.

Public employees are being asked to pay 15% of their health care costs. Private sector employees routinely pay 33% of the premiums plus co-pays, co-insurance and deductibles.
Public sector employees are all eligible for defined benefit pension plans. And they are sweet deals. If a public employee started working early enough, retiring before age 55 with a $30,000 to $50,000 annual pension is routine. Better still the check or direct deposit comes like clockwork every month with no hassle and no need to manage an investment portfolio. Finally that pension has an annual raise of 3% which means they are not stuck with a fixed income. How does that compare to a private sector employee? Retirees from defunct steel companies had their pensions cut in recent years despite being backed by the federal Pension Benefit Guaranty Corporation. If someone put all their money in bank certificates of deposit because they don’t want market risk, at today’s rate of .5% that would require a $10,000,000 deposit. Social Security pays its maximum benefit if a worker retires at age 70 and it still won’t pay a living wage compared to the prior employment. What about private sector 401K programs? None of them match as much as the City of Cleveland pays for its employees into the Public Employees Retirement System which exceeds 10%. Also employees have to make their own investment decisions. Employees of KeyBank and the former National City will never recover from the investment they made in their own employers

The people who want to repeal SB 5 claim it is an attack on the middle class. Actually SB 5 is attempting to keep the public sector middle class from taxing the private sector unfairly. Taxes in Ohio and the US may or may not be as high as Europe. What is undeniably true is that the private sector middle class is paying for benefits for the public sector middle class that it will never enjoy. The newly hired engineer at First Energy will need to work well into his sixties to pay the salary and benefits of his classmate who went into teaching and may retire at age 52 with a better pension which will be paid over a longer time period.

The fact that John Kasich and his fellow Republicans cannot seem to make a case to protect Ohio taxpayers is pathetic. Perhaps it is because private sector employees hope they too someday will receive benefits equal to those of the public sector if they protect the public sector. That won’t happen because the arithmetic does not work. It is not possible for every American to work for 30 years and be retired for another 30. The only way for some fairness to be reestablished between the private and public sectors is to reduce the benefits of the public sector.

When SB 5 is repealed Kasich will have done permanent damage to the movement to restrain government. The only good that can come of the defeat is if the Republican Party would disband and make way for a competent party to represent the cause of limited government.