This paper examines Ohio's Senate Bill 5 (SB5), signed into law by Governor John Kasich in March 2011 in response to an estimated $8 billion state budget deficit. The paper outlines the fiscal conditions that prompted the legislation, details the bill's key provisions — including restrictions on collective bargaining, public employee healthcare contributions, teacher performance evaluations, and anti-strike rules — and addresses common myths circulated about the law's effects. Drawing on budget data and pro-SB5 sources, the paper argues that the legislation was a necessary fiscal measure rather than an attack on public workers, and calls for public support ahead of a statewide referendum.
When first-term Ohio Governor John Kasich signed Senate Bill 5 into law on March 31, 2011, he was doing what he thought was best to help his state deal with an estimated $8 billion budget deficit. He was also aware that the legislation — which would substantially curtail the power of 350,000 public workers, including teachers, law enforcement officers, and firefighters in Ohio — would stir up a fierce political battle, and he was clearly willing to take on that fight. The reasons why this legislation, which would be contested through a statewide referendum, was necessary had not been fairly or thoroughly reported in much of the mass media, in or out of Ohio. It is time to set the record straight: to present the true facts of the dangerous budget deficit in Ohio and to reveal the truth about Senate Bill 5 — separating the facts from the myths that the media and others have put forward.
While many citizens and a controversy-hungry media focused on the referendum scheduled for fall 2011 — contingent on the proper number of registered voters signing the petitions — the media appeared to lose sight of the underlying facts. First and foremost, the budget deficit facing Ohioans was a major fiscal and social issue that had to be confronted. The governor, along with the legislature, bears ultimate responsibility for the health, safety, and well-being of Ohio's citizens. The budget passed by the legislature and signed into law by the governor is designed to meet both the fiscal and social obligations of the state.
According to SunshineReview.org, a non-profit transparency organization, Ohio operates on a biennium cycle, meaning its budgets cover two years at a time. At the time of the bill's passage, Ohio was in the second year of its budget cycle: year one ran from July 1, 2009, to June 30, 2010, and year two ran from July 1, 2010, to June 30, 2011. As with other states and the federal government, both the Ohio House and Senate must approve a budget bill before it is sent to the governor for his signature. Ohio law "forbids the carrying over of a deficit from one year to the next," Sunshine Review explains — and that restriction was central to the fiscal problem confronting the governor and the legislature.
The budget shortfall for the next biennium, beginning July 1, 2011, was estimated at $8 billion. However, the Sunshine Review group asserted that the total state debt, in real terms, was closer to $68,961,315,845 (nearly $69 billion) when calculated by adding the total outstanding debt, pension and OPEB unfunded actuarial accrued liabilities (UAALs), unemployment trust funds, and the 2010 budget gap as of July 2010. Given this enormous fiscal gap — whether measured at $8 billion or $68 billion — action was unavoidable.
Sunshine Review noted that one avenue available to the government for closing the gap was legislation to reduce public employees' healthcare benefits and pensions. The organization reported that the median personal income for all Ohioans was $31,284, while public employees of the state of Ohio had a median pay approximately 33 percent higher, at $41,350. Moreover, when average taxpayers learned that nearly 1,000 public employees earned more than $100,000 in 2010 — not counting state workers employed at Ohio State University and other universities, many of whom were also highly compensated — there was a natural desire among those taxpayers to bring those expenses down in some way to address the $8 billion shortfall.
Senate Bill 5 was introduced by Senator Shannon Jones. The Ohio Senate approved the bill 53–44 on March 30, 2011, and Governor Kasich signed it into law the following day. The groups lining up to oppose the bill included Ohio teachers' unions, police unions, and others. After introducing the bill, Senator Jones stated, "The reality is, in the state of Ohio, we're out of money. What we need to do is give management the flexibility to be able to continue to provide the high-quality services that they've come to expect" (Sunshine Review).
The real budget shortfall could have been even higher than $8 billion, according to incoming Senate Finance Chairman Senator Chris Widner, who noted that beyond the $8.4 billion gap in the coming budget, "there is also a series of other things swirling around out there impacting our budget… other expenditures we are committed and obligated to make" (Marshall, 2010, p. 1). Widner suggested that the total shortfall could reach as high as $10 billion (Marshall, p. 1).
What specific provisions did this controversial legislation contain? Senate Bill 5 (SB5) would "restrict collective bargaining to wage issues," eliminating the right of public worker unions to negotiate on matters they had previously bargained over — including healthcare, pensions, and workplace conditions such as staffing levels at fire stations and classroom assignments for teachers (Naymik, 2011). SB5 would also require public employees to pay "at least 15 percent of their health care coverage," a share that remains lower than the up to 23 percent that many private-sector workers already contribute toward their healthcare costs. The bill would further revise how teachers are paid: evaluations would be tied to students' scores on standardized tests, and teachers could be laid off or dismissed based on those results (Naymik, p. 2).
SB5 also "eliminates binding arbitration" for union contracts. If employees in a union could not reach an agreement with Ohio government officials, a government-appointed "fact-finder" would make recommendations. If the union rejected those recommendations, a "legislative body" — such as a city council or county supervisors — would vote within 30 days of the expiring contract to choose between the "last, best" offers made by each side (Naymik, p. 2). The bill additionally changed the threshold required to decertify a union: whereas previously a majority of employees was needed to vote for decertification, under SB5 only 30 percent of workers would need to vote to dissolve the union. SB5 also made it illegal for union members to strike and required written permission from an employee before any payroll deduction could be made "for a contribution to a union political action committee" (Naymik, p. 3).
"Debunking common misconceptions about the law"
Is SB5 an attack on teachers, firefighters, and police, as some have suggested? The answer is a resounding "no." In fact, this legislation was a carefully considered measure designed to prevent Ohio's budget deficits from continuing to worsen year after year and to keep the state from sliding into a fiscal black hole from which recovery would be exceedingly difficult. Those who support this common-sense legislation must roll up their sleeves and help defeat the anti-SB5 referendum at the ballot box that fall.
You’re 77% through this paper. Sign up to read the remaining 1 section.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.