Thank you to everyone who responded to my previous newsletter. I enjoy hearing from you and your constructive feedback is appreciated.
Happy Mother’s Day to all the mothers receiving this newsletter – you make our state a better place!
As promised in the last newsletter, I will be addressing some of the hot topic bills that you’ve been hearing about.
Below is a Community Commentary that I wrote which appeared in Foster’s Daily Democraton April 23.
HOT TOPIC BILLS: MISCONCEPTIONS AND FACTS
by Senator Fenton Groen
It is not surprising that any changes involving public employees’ livelihoods and citizens’ taxes will result in vigorous and hot debate. I welcome that debate and I have reached out to constituents on all sides of this issue….
It is the responsibility of the legislature to provide a proper balance between the needs and rights of public employees and the needs and rights of the taxpayers who pay the bills.
Now that the heat of the rhetoric has cooled somewhat, I want to briefly summarize a few of the collective bargaining bills and state clearly what they do and what they do not do. You may have heard (as I have) that the Senate and House bills cancel collective bargaining, attempt to break the unions, hurt the middle class, create an unfair advantage for employers in negotiations and severely damage our retirement system.
I will briefly describe the content and effect of two senate bills and two house bills that have been most vigorously debated, and I think most inaccurately portrayed.
House Bill 474 – The Right to Work Bill
Misconceptions: Opponents have said that this bill will take away collective bargaining rights, reduce wages, create an unfair advantage for non-union members and will cost jobs.
Fact: HB 474 has two basic provisions. 1st, it simply restates the Federal law that says an employee cannot be forced to join a union as a condition of employment. 2nd, it states that a non-union worker cannot be forced to pay union dues or fees.
The first provision is already federal law. The second provision protects non-union workers from having to support a union.
Senate Bill 3 – Repeal of the Evergreen Law
Misconceptions: Opponents have said that this bill is an attack on unions and gives an unfair advantage to employers in negotiations.
Fact: The Evergreen Law stated that if a public employer and a union reach an impasse in negotiations and no agreement is reached, the existing contract will remain in effect, regardless of current economic conditions. For example, if the current contract allows for automatic raises of 5% per year, those raises will continue regardless of the current inflation or cost of living increases. SB3 repeals this Evergreen Law. I believe that this repeal creates a more level playing field in negotiations between employers and unions.
House Bill 2 – The Kurk Ammendment
Misconceptions: This is probably the most misunderstood of the bills that deal with collective bargaining provisions. I have heard both opponents and supporters of the Kurk Amendment claim that this amendment will cancel collective bargaining and end public sector unions. I have been told that it will destroy the quality of our education, cause our best teachers to leave and reduce the quality of our police, fire and municipal services.
Fact: Current law mandates that if a contract expires without a new contract in place, all of the terms of the contract are frozen at its expiration. This is called the Status Quo provision. This rule makes it very difficult for an employer to negotiate for cost reductions in benefits, changes in work rules or changes in expectations for output and efficiencies.
The Kurk Amendment simply ends a collective bargaining contract when it expires. That means the terms of a contract end at the expiration of the contract, giving both the employer and the employees a level playing field to continue their negotiations.
This is nothing more than recognition of standard contract procedure. For example, if a firm negotiates a one year contract agreement with an insurance company for health insurance coverage for its employees, neither the firm nor the insurance company is obligated to continue under the terms of the contract after it expires.
Nothing in this bill cancels the union representation. The union will still negotiate for its members, represent them in grievances and continue to function fully as the employees’ representative.
Senate Bill 3 – New Hampshire Retirement System Reform
Due to space limitations, I will address only three of the many misconceptions I have encountered regarding this bill.
Misconceptions #1: Changes that were made to the retirement system two years ago fixed the system and it does not need further reform.
Fact: The bill passed two years ago was a much needed reform to the accounting method of the retirement system. At that time, the unfunded liability was under 3 billion. In two years the unfunded liability has increased to nearly 4.7 billion dollars.
Under the rules adopted two years ago, this liability was spread over 30 years and the entire burden for the payments on that liability falls on the employers. Employee rates are fixed. But employer rates have increased to more than double the employee rates. By 2014, under current conditions, the employer rates will in many cases be over triple the employee rates. These costs will be passed directly to taxpayers and are unsustainable.
Misconception #2: SB 3 “fixes” the retirement system on the backs of the employees so that employers (and taxpayers) can get a big break.
Fact: SB 3 increases the employee rates from 5% to 7% in Group I (teachers and municipal employees) and from 9.3% to 11.3% in Group II (police and firefighters). This will help to flatten the increases that employers and taxpayers will pay. But employers will still pay 2 to 2 ½ times the employees’ rates for years to come.
Misconception #3: SB 3 seriously worsens benefits to public employees, threatens our competiveness to keep good employees, and fails to keep promises made to employees.
Fact: Changes to vested employee benefits are minimal, mainly dealing with the way the average final compensation (AFC) is calculated, to prevent spiking of benefits in the last 3 years of service.
Changes to new hires are moderate. For example, under existing rules, Group II employees can retire after 20 years of service at age 45 with 50% pay. Under new rules, new Group II employees can retire after 25 years of service at age 50 with 50% pay. These changes are prorated for existing Group II non-vested employees to ease in the changes over 10 years. I believe these and other changes are moderate and fair.
In the end, it is the responsibility of the legislature to provide a proper balance between the needs and rights of public employees and the needs and rights of the taxpayers who pay the bills. While there are still differences between the House and Senate versions that need to be negotiated, I believe that the final outcome will be an honest and fair approach at striking that proper balance.