S.B. 98, Taxes, Collective Bargaining, and Horse Trading

The essence of the current problems related to balancing the Nevada budget in the state Legislature give every appearance of being grounded in the Democratic Party support for labor, and collective bargaining rights, versus the Republican position which seeks to trade tax increases for concessions about collective bargaining.

The Las Vegas Chamber of Commerce has made no secret of their priorities from the outset with regard to eliminating features of collective bargaining for public employees:

“It is difficult to adequately adjust public employee pay without reforming the rules governing public employee collective bargaining for state and local government employees – Nevada Revised Statutes Chapter 288. NRS 288 requires binding arbitration, shifting decision-making and budget control from the officials elected to make those decisions to an arbitrator often from outside Nevada. Binding arbitration should be eliminated and final decisions should be left with those elected to make them.

Reforming NRS 288 to allow for collective bargaining agreements to be opened in the event of a fiscal emergency would bring flexibility to managing fiscal challenges while continuing to deliver public services. Additionally, evergreen clauses in all newly negotiated collective bargaining agreements should be prohibited.”  [LVCoC]

Nor has the Reno/Sparks Chamber of Commerce been silent on the matter.  Their Number 5 legislative priority for the 2011 session — “In order to ensure the efficient delivery of government services, we will oppose giving state employees collective bargaining rights. To allow local government entities to deliver services to residents efficiently, eliminate binding arbitration and allow local government entities to reopen contracts during declared fiscal emergencies. Clarify that school administrators are not covered under NRS 288.”  [RSCoC pdf]

As of April 15, 2011 the Chambers signaled their tentative support for some tax reform , but reiterated their demands for “collective bargaining reform” as a price:   Reduce the state contribution to employee retirement benefits for new employees; discontinue the state subsidy for employee health insurance benefits for new employees; “reform” collective bargaining for local entities (state employee do not bargain contracts), and support measures that seek to amend teacher/school district bargaining at the local level.  [Las Vegas Sun]

The trading position appears reasonably obvious — the Chambers will not oppose some concessions in terms of taxation IF they can achieve the limitation of public employee collective bargaining rights at the local level, and continue the policy of no collective bargaining for state employees.  In sum, the posture appears to be: “We will give you a little — certainly not more rational taxation on mining, or Heaven Forfend discuss amending the state constitution to incorporate a progressive income tax — if you (labor) will give up retirement benefits, health care insurance benefits, collective bargaining rights in terms of mediation/arbitration, subjects included in the collective bargaining process, and allow school districts to do away with salary schedules and seniority.

Thus, no one should be surprised at the latest amendment to S.B. 98, emanating from the Chamber of Commerce which would allow local entities to (1) renegotiate contracts if revenues come in 5% below expectations, (2) eliminate binding arbitration, (3) remove public sector managers and administrators from the bargaining process, (4) and require that newly negotiated contracts take effect at the beginning of the prior contract’s expiration.  [NNB]   If this sounds familiar — like the initial position of the Chambers of Commerce listed above — you’re right; that is precisely what it is.

Horse trading is a fine old legislative art in these United States.  However, what the Chambers of Commerce appears to have in mind is trading a pony (minimal concessions on taxation) for a working saddle horse.   IF public employees are willing to give up retirement benefits, retiree’s health care benefits, arbitration, subjects of mandatory collective bargaining, salary schedules, seniority clauses, and evergreen clauses — then Maybe the Chamber will ‘negotiate’ on tax increases.

There is a difference between horse trading and hostage taking, although it seems that the Chambers of Commerce in Nevada are more willing to indulge in the latter than the former during this session of the Legislature.