Public employee unions push bargaining bills

Bills strengthening the hand of public employee unions in bargaining for pay, pensions and working conditions are moving through the Legislature, usually on party-line votes with Democrats in support and Republicans opposed.

The new governor, Jerry Brown, dismayed fellow Democrats last week by vetoing a bill making it easier for farm workers to unionize in the private sector. Now he is likely to receive a number of bills pushed by powerful public employee unions.

Having a Democrat in the governor’s office, who relied on union contributions as he defeated a self-funded Republican who set a spending record, gives labor leaders the option of seeking legislative relief for some struggles with management.

The American Federation of State, County and Municipal Employees, AFL-CIO, is sponsoring at least a half dozen bills, most opposed in lists of varying length by cities, counties, special districts, schools and their statewide associations.

A lobbyist for an employer group told a legislative committee the issue in one bill should be resolved through collective bargaining — a reminder that unions often say pension reform should be bargained, not imposed statewide by legislation.

A pension reform ballot measure, once discussed, was not part of the new state budget enacted last week, but an initiative is still a possibility. Meanwhile, two union-backed bills deal with other strategic issues: bankruptcy and switching to 401(k)-style plans.

After declaring bankruptcy three years ago, the city of Vallejo got a labor contract overturned in court. A bill, AB 506, would require a local government to go through a process with a “neutral evaluator” or the state auditor before declaring bankruptcy.

A similar bill last year, AB 155, requiring approval of a state commission or a state audit, died on the Senate floor at the end of session without a vote, possibly facing a veto from the former Republican governor, Arnold Schwarzenegger.

After Orange County declared bankruptcy in 1994, another union-backed bill making it more difficult for municipalities to declare bankruptcy was vetoed by a Republican governor, Pete Wilson.

While in bankruptcy, Vallejo, still struggling to emerge, did not attempt to alter its biggest debt (pensions), negotiated a new contract giving police a 7 percent raise last year, and has paid outside lawyers $10 million or more.

A Senate committee analysis of AB 506 said that since Vallejo declared bankruptcy in May 2008 only one other local government (Sierra Kings Health Care District) has declared bankruptcy, despite the financial strain of a deep recession.

“Vallejo’s experience may serve as a cautionary example, encouraging fiscally distressed local governments to find alternative approaches to fiscal restructuring,” said the committee analysis.

Another bill is a response to a drive by San Diego Mayor Jerry Sanders and others to place an initiative on the ballot next year switching all new city hires, except police, to a 401(k)-style individual investment plan.

In 1981, when former Gov. Pete Wilson was mayor, city employees in San Diego voted to drop out of Social Security and Medicare in exchange for a city promise of pensions and retiree health care.

The bill, AB 1248, requires local governments to provide Social Security for workers not receiving a pension. The additional employer cost, 6.2 percent of pay, could reduce the estimate of city savings from switching to a 401(k)-style plan.

An estimate by pension officials that the change would increase taxpayer costs during the first six years is already an issue. The outcome of a 401(k) vote in San Diego could be a trendsetter, influencing whether similar measures are proposed elsewhere.

Two bills would overturn rulings made by the administrator of state bargaining laws, the Public Employment Relations Board, when most of the members were Schwarzenegger appointees.

SB 857 would overturn a board ruling last year allowing employers to recover costs for preparing for unlawful strikes. The University of California seeks $9 million from the California Nurses Association for a 2005 strike blocked by court action.

AB 501 overturns rulings preventing unionization of some school employees, who are not teachers or in “classified” jobs such as food, maintenance and clerical. The bill applies to 70 joint powers agencies, mainly for transportation and vocational education.

Another bill, AB 646, allows unions to request a “fact-finding panel” when bargaining reaches impasse. Citing Torrance and Cerritos, a union lobbyist said employers can seek impasse to impose their “last, best and final offer” under current law.

A bill allowing more employees to get paid time off for union activities, AB 1203, is opposed by employers worried about mass vacancies and finding replacements. Unions pay the salary and benefits during leave for school employees, but not for county workers.

Athough armed with presumed new political power, Democrats and their union allies are willing to make some compromises.

Employers dropped opposition to a bill listing prohibited labor practices, including knowingly providing inaccurate information during bargaining, when the author of AB 1975 agreed to exclude job applicants and make other changes.

A bill prohibiting the hiring of “union avoidance” consultants and lawyers to deter or minimize worker rights, SB 931, was prompted by labor problems at the University of California.

A union lobbyist told an Assembly committee that UCLA employees setting up a union information table were “harassed and intimidated,” UC Irvine administration banned buttons advocating worker rights, and similar things happened at UC Berkeley.

But a long line of lobbyists said the broadly worded bill could create problems for other government agencies. Some of their concerns were mentioned by several Democratic members of the committee.

For example, government employers might be unable to hire consultants to evaluate health plans, attorneys to prosecute discipline issues, or outside help to resolve disputes prior to litigation.

When a Republican, Diane Harkey of Dana Point, pressed the author, Sen. Juan Vargas, D-San Diego, for a list of rights that cannot be “minimized” and suggested amendments before the bill was approved, she was interrupted by the chairman.

“I will determine whether something gets passed out of the committee or not,” Warren Furutani told Harkey, “and I will determine what we have as discussion.”

As Harkey began to rise from her seat saying she would not attend committee meetings if not needed, Furutani smoothed over the incident. Then he turned to Vargas and said he thought the bill may be too “far reaching.”

Furutani told Vargas that he would appreciate “more wordsmithing and looking at this” and that not “all the people that came up and testified in opposition to the bill are bad guys.”

Harkey stayed, voting “no” along with fellow Republican, Alan Mansoor of Costa Mesa, as the bill passed out of the committee without amendments on a party-line vote and went to the Assembly floor.

A Vargas spokeswoman said the senator is talking to the opposition and has no immediate plans to take up the bill.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 5 Jul 11

18 Responses to “Public employee unions push bargaining bills”

  1. FLAK88 Says:

    Actually, it appears that the unions are recognizing the possible feasibility for 401Ks for the future but want to be certain the new people get covered by SSA and a few other compensatory measures. Seems fair to me.

  2. neil Says:

    In other words, “We’re the public employee unions, we paid for you, we own your soul, so now it’s time for you to deliver and give us all we want.”

  3. Reilleyfam Says:

    Go Union!

  4. SeeSaw Says:

    The biggest issue should be to make sure that the DB pension system is preserved. Such a system has existed in CA for 97 years, and is one factor in assuring that a stable middle class will persevere, in CA.

  5. spension Says:

    DB systems are more economical and less risky than DC, but you need competent DB pension managers who understand more than just smooth extrapolation… they need to understand the incredible volatility of financial markets.

    Because California did not have pension managers like that, and/or because the educated and knowledgeable people were ignored as DB benefits were raised (for example in 1999), we now face huge DB plan debts.

    The worst thing is that besmirchment of DB plans in general has occurred. DB plans, well run, are simply better (less risk) and cheaper than DC plans.

    What needs to happen is `mea culpas’ by the big pension system management. They screwed up big time, and by not admitting it and getting on with it, they might consign the next generation of employees to expensive DC plans. The private sector has already done this…

  6. Rex The Wonder Dog! Says:

    Go Union!

    ==
    Yes, go >>>public<<< unions. Go AWAY!

  7. Rex The Wonder Dog! Says:

    DB systems are more economical and less risky than DC,
    ============
    LOL…dude, I have no idea what you’re smoking but you need to put it down, that comment is 100% baseless.

    There is NO risk in a DC because they cannot be underfuned. CalTURDS is short $500 BILLION!!!!!, with a B.

  8. Rex The Wonder Dog! Says:

    The biggest issue should be to make sure that the DB pension system is preserved.
    =============
    That is seesaw/public employee/trough feeder code talk for the “public- NOT ME- needs to cover our pensions because CalTRURDS went to Las Veghas and lost all the principle.”.

  9. SeeSaw Says:

    You aren’t covering anybody’s pension RWD, so draw a deep breath. Why don’t you grow up and discuss issues like an adult , instead of acting like a child. I do not need to engage in any code talk. I am a regular citizen, just like you.

  10. spension Says:

    >>>DB systems are more economical and less risky than DC,
    ============
    >>LOL…dude, I have no idea what you’re smoking but you need to >>put it down, that comment is 100% baseless.

    The bases are:

    1)A single person has a few percent chance of surviving until 95, but the average life of a large pool of people is always very close to 85. So the average balance per person needed in a pooled pension system to cover people until death is a whole lot less (only until age 85) than that needed in a DC system (need to cover until 95).

    2)A single person in a DC plan is jerked around by the volatility of the markets a lot more than a pool of people. The Safe Withdrawal Rate is about 3% of capital/year for a single person in a DC plan. For a pooled pension 6% is OK because the long duration of contributions and payouts smooths out the fluctuations.

    3)Management fees are far less in a pooled pension system, because you don’t have to respond to every individual churning their investments.

    That does not mean that DB systems have been well managed in California… they have not! The volatility of the markets was not fully understood by the DB system managers, even though they get paid >$200,000/year. And so they allowed gross overpromises in benefits.

    But still, however you say it… a $1 put in a DB system gives the retiree more benefit than $1 put in a DC system.

  11. susan Says:

    What Calif. needs is a bill like Wisconsin’s. The public unions are breaking the Ca. economy and our Gov. is enabling them! No matter what the union gets, it’s never enough. Now we find out that the public union reps. were in the room when Gov Brown was finalizing our budget. The unions didn’t want reform on the ballot and Brown accommodate them.

  12. Sol Says:

    “Bills strengthening the hand of public employee unions in bargaining for pay, pensions and working conditions are moving through the Legislature, ”

    Just what we need with these pensions insolvent and the state bankrupt.

    The parasites have killed the host and don’t even realize it.

  13. SeeSaw Says:

    Well Susan, will you still be thinking that when those politicians in Wisconsin get recalled?

  14. Rex The Wonder Dog! Says:

    You aren’t covering anybody’s pension RWD, so draw a deep breath. Why don’t you grow up and discuss issues like an adult , instead of acting like a child.
    =============
    I am a dog seesaw, I refuse to grow up!

  15. Rex The Wonder Dog! Says:

    But still, however you say it… a $1 put in a DB system gives the retiree more benefit than $1 put in a DC system.

    ================\

    No it does not-it only shifts the DB hazard of their ROI losses to others.

  16. Rex The Wonder Dog! Says:

    Well Susan, will you still be thinking that when those politicians in Wisconsin get recalled?

    ==========
    I WILL!

    BTW seesaw, incase you have been asleep at teh wheel thelats month-the collective bargaining reforms were implemented by the WI Supreme Court-YIPEEEEEE!

    Coming to CA soon. Why do you think Jerry Clown refuses to put pension and spending limits on the BALLOT along side his pension taxes????????

    Let the people decide is his motto-that si unless it interfers with HIS agenda.

  17. Rex The Wonder Dog! Says:

    What Calif. needs is a bill like Wisconsin’s. The public unions are breaking the Ca. economy and our Gov. is enabling them! No matter what the union gets, it’s never enough. Now we find out that the public union reps. were in the room when Gov Brown was finalizing our budget. The unions didn’t want reform on the ballot and Brown accommodate them.

    ================
    I loike you Susan, you are very smart person!

    There should never have been collective bargaining at tahe public employee level-because there si NO BARGAINING!

  18. SeeSaw Says:

    You and Susan should move to Wisconsin if you think its so great. California is not Wisconsin. There are a lot of recall efforts going on in Wisconsin, because of what it has done to its public work force.

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