Las Vegas Review-Journal (Sunday)
The perils of bargaining for state workers
What the state employees union recently did is all the proof you’ll ever need that collective bargaining for government employees is an awful idea.
Last week, AFSCME Local 4041, which represents state employees, filed an unfair labor practice complaint against Gov. Steve Sisolak. The union claims the governor didn’t follow Nevada’s new collective bargaining law before announcing work reductions for state employees in response to the gaping coronavirus budget hole. Last month, Sisolak revealed that he would furlough state workers one day a month and freeze merit increases.
“The way the governor is acting is a disgrace to our state and a disservice to all Nevadans,” AFSCME Local 4041 President Harry Schiffman said in a statement. “He needs to come out of hiding and talk to us.”
Nevada’s private-sector unemployment rate was 25.3 percent in May. Tone deaf doesn’t even begin to describe complaints from the union, whose members have so far avoided everything but the most minor of consequences despite the massive economic destruction plaguing the private economy.
It’s also quite the about-face. In 2018, the union spent millions in service to electing Gov. Sisolak and other Democrats. Its holy grail was collective bargaining for state government workers, the first step toward massive wage and benefit hikes. The practice was already in place for Nevada’s local government employees, and, on the campaign trail, Sisolak was eager to allow their state counterparts to board the gravy train.
But the problems with collective bargaining for public-sector workers have been demonstrated over and over again. The taxpayers who must pay the bills rarely have a true representative at the negotiating table. As a result, personnel costs soar, crowding out public services and creating the type of fiscal crackups that have pushed many jurisdictions — and even a state or two — to the verge of bankruptcy.
From a political standpoint, Democrats have very little incentive to control costs given that they benefit heavily from the financial support of government labor organizations.
To make matters worse, Nevada’s collective bargaining statutes are weighed heavily in favor of public-sector unions. Once there is a negotiating impasse, any dispute heads to an unaccountable, out-of-state arbitrator, who must first consider the state’s “ability to pay,” a one-sided proposition that, as a practical matter, too often works to the detriment of the taxpayers. Such contracts also inevitably make it more difficult for officials to react during crises such as the current pandemic.
As a former Clark County commissioner, Gov. Sisolak knew these problems all too well. Once elected, he began to recognize the potential longterm ramifications of his proposal and eventually supported a modified collective bargaining bill with an escape clause that ultimately allows the governor to override negotiations and set wages at a level he or she “deems appropriate.”
How this will actually work in practice remains to be seen. But at least it provides a modicum of flexibility that wouldn’t be possible had the Legislature ceded pay authority to union officials. And that’s precisely what the state needs right now. In fiscal year 2021, Nevada faces a $1.3 billion budget deficit thanks the coronavirus and its hit on gaming and sales taxes. That’s around 25 percent of total state spending obligations.
A special session to close the budget gap is imminent. Absent a federal bailout, the cuts required to close the shortfall will be significant. State government workers shouldn’t be exempt from that process and pain.
Gov. Sisolak says he’d be happy to review any proposals from the union. Fine. Given the size of the budget hole, all helpful ideas are welcome. But the most valuable lesson is on display for all Nevada taxpayers to see: Collective bargaining for government workers is terrible policy.