STATE BUDGET:

Republicans seek employee benefit reform in exchange for tax hike

Thursday, May 7, 2009 | 2 a.m.

Republican legislators, drawing from the recommendations of the Greater Las Vegas Chamber of Commerce, have a list of changes they want adopted in exchange for supporting a tax increase. The proposals would make modifications to the following: the Public Employees Retirement System, the pension system for which almost all teachers and local and state government employees qualify; the Public Employees Benefit System, retiree health benefits for state workers; and local government compensation and collective bargaining.

Public Employees Retirement System:

• New hires would qualify for the maximum benefit of 75 percent of pay after 32 years of service, up from 28 years under current rules.

• New hires and current employees would qualify for full benefits at age 62; cops and firefighters would have to be 55. There are currently no minimum age requirements.

• Benefits for new hires would be calculated based on an average of the highest 60 months of pay instead of the current 36 months. Pay increases would be limited to 10 percent in each of those five years. According to chamber Chairman Steve Hill, this would avoid steep increases in pay at the end of a worker’s career to inflate the pension benefit.

Public Employees Benefit System:

• End the program for new employees.

• Current employees wouldn’t qualify for full benefits until after 30 years of service, up from 20.

Local government compensation and collective bargaining:

• Arbitrators would be required to look at what state employees, other regional governments and equivalent private workers make when deciding disagreements between local governments and employee unions. Currently arbitrators exclusively use other local government salaries for comparison, according to Hill.

• Local governments would be required to hold public hearings and provide full disclosure of finances before any vote on collective bargaining.

• Final decisions on contracts would require a vote by elected officials to make it clear “elected officials are completely responsible for ultimate decisions on public employee pay,” Hill said.

Firefighters want bigger piece of a smaller pie (5-4-2009)
Democrats' reforms favor employees (4-8-2009)
Crumbling finances cast pall over capital (4-5-2009)

Archive of Sun politics stories

Carson City — As the outlines of a state spending plan have grown clearer this week, so too have the demands Republican lawmakers are making in exchange for supporting a budget deal.

Republican legislators confirmed Wednesday that in exchange for supporting any tax increase needed to close the budget shortfall, they are asking for changes to state pensions, retiree health benefits and the bargaining agreements between unions and local governments.

“This is a huge opportunity to make reforms,” said Sen. Warren Hardy, R-Las Vegas. “They won’t help in the short term, but they will help in the long term.”

Hardy and Assembly Minority Leader Heidi Gansert, R-Reno, are members of the so-called “core group” of lawmakers from both parties and houses hammering out spending and tax plans behind closed doors.

Hardy denied that the Republicans’ demands are a quid pro quo for supporting a tax package.

“I understand we need more revenue, but we need reforms,” he said. “I look at it as a package.”

The Republicans’ demands echo those requested last month by the Las Vegas Chamber of Commerce in a letter to lawmakers.

Both Hardy and Gansert acknowledged that the Republicans have largely adopted the chamber’s agenda.

The reforms laid out in the Chamber of Commerce letter include:

• Changes to the state’s Public Employees Retirement System for new hires;

• Ending the Public Employees Benefit System for new hires;

• Changes to collective bargaining between local governments and unions.

Gansert said the list also includes changes to prevailing wage requirements on governments contracts. Other Republican sources said the list of demands has grown to include bills that lawmakers don’t want to pass.

The list of demands illustrates how much Republicans will test Democrats in the remaining days of the 2009 Legislature. While the Democrats have enough votes in the Assembly to override an expected veto from Gov. Jim Gibbons, they need two Republican senators to get a veto-proof tax plan passed.

Assembly Speaker Barbara Buckley, D-Las Vegas, said the Legislature is already addressing many of the Republicans’ areas of concern.

The Legislature is considering bills that would create a forced state savings account and create a rainy day fund for education, she said. And a key legislative committee voted this week to reduce retirement benefits for public employees.

On collective bargaining, she said she hasn’t heard local governments calling for changes.

The Chamber of Commerce’s letter provoked a strong reaction from public employee unions — a key Democratic ally — when it circulated last month.

“It’s outrageous that to come to the table, they make demands with regard to public employees,” said Lynn Warne, president of the Nevada State Education Association. “They need to pay their fair share.”

David Kallas, lobbyist with the Las Vegas Police Protective Association, called the list “pretty selfish and shortsighted.”

“They see an opportunity to do something that they philosophically believe in,” he said.

He said public employees had nothing to do with the state’s or country’s financial problems. “It was their (the Chamber of Commerce) members, in particular the banks and investment firms, that created the financial mess in this country,” he said.

The backing of the business community for spending and tax packages would give legislators significant political coverage. Republicans, in particular, are looking for the business community’s support.

Yet it is uncertain how far the chamber will go on a tax package, which some members of the core group estimate will be about $800 million.

Hill said the state’s budget hole “can’t fully be closed with cuts,” but he would not commit to how large a tax increase his members would support.

Hill said the changes to collective bargaining are meant to give counties and cities more leverage in negotiations in order to save money.

“The local public employees unions have a lot of clout,” he said. “I would guess, given the situation they’re in now, they would think it’s a good idea.”

Rory Reid, chairman of the Clark County Commission, said he’s been busy dealing with the county budget and wasn’t versed in the details of the debate over collective bargaining.

Even if Democrats agree to the Republicans’ demands that are unpopular with the public employee unions, some will still paint them along with Republicans voting for taxes as supporters of big government.

That was clear Wednesday as another business group, the Keystone Corporation, traveled to Carson City to tell legislators and the governor they could not pay more in taxes.

“There’s another voice,” said Monte Miller, treasurer of the political group and a close adviser to Gibbons. “I think we can get close” to balancing the budget without raising taxes.

Bob List, vice president of the group and a former governor, said he thinks the budget could be fully balanced without raising taxes.

“Raising taxes on business? That means layoffs, and that’s unacceptable,” he said.

Sun reporter Joe Schoenmann contributed to this story.

Discussion: 9 comments so far…

By gmag39

5/7/09 at 6:04 a.m.

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What a silly dreamer. NEVER GONNA HAPPEN.
And might I say, how ABSOLUTELY WRONG it is
to keep trying to balance the state's budget on the backs of public employees. Get a clue, republicans! Come up with an EQUITABLE solution to the problem.
p.s. Only Nevada, with all of it's GAMBLING and MINING INDUSTRIES, would be short of ideas on where to find MONEY.
By lvsun123

5/7/09 at 6:25 a.m.

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Bob List was quoted above:
"Bob List, vice president of the group and a former governor, said he thinks the budget could be fully balanced without raising taxes.

"Raising taxes on business? That means layoffs, and that's unacceptable," he said."

Why is it that Bob List (a republican) thinks it's UNACCEPTABLE to raise taxes on business, when they want to cut public employee's salaries? This is a direct tax on a few public employees, which is even more UNACCEPTABLE!!!!!!!
By neiman1

5/7/09 at 6:54 a.m.

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The public employee unions don't seem to understand the purpose of public employees. They are hired to serve the needs of the business community and the residents. The business and residents are not here to support the public employees.
By NCEP

5/7/09 at 8:05 a.m.

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The police officers must be embarrassed by their frosted-tipped, union hack's comments. Public employees' salaries, benefits and retirement have not caused a strain on the budget? And he blames Chamber members? Uh, Davey, who do you think pays your salaries, benefits and retirement? Hint: it isn't the public sector! In the meantime, back here on planet Earth ...

David Kallas, lobbyist with the Las Vegas Police Protective Association, called the list "pretty selfish and shortsighted."

"They see an opportunity to do something that they philosophically believe in," he said.

He said public employees had nothing to do with the state's or country's financial problems. "It was their (the Chamber of Commerce) members, in particular the banks and investment firms, that created the financial mess in this country," he said.
By travislv86

5/7/09 at 8:12 a.m.

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I'm a teacher, and this system does need to be fixed. I have seen a bunch of out of state teachers, usually retired and already on some sort of retirement, come to Vegas, work five years, and then collect a pension of the rest of their life. I don't know all the nuances, but changes are absolutely needed! Even with those changes they are proposing, we would still have a great state retirement system, and based on how my personal investments are currently looking, I am going to need it.
By DavidKallas

5/7/09 at 8:32 a.m.

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NCEp,
By all means please explain how Public Employee groups contributed to the current financial mess our economy is in.
Name one Public Employee or their group that wrote a sub-prime mortgage,invested in hedge funds, took bail out money or paid their executives bonuses?
Last I looked Public employees contribute to their salaries the same as you, assumming you pay taxes.
Last year Public Employees contribited millions to the local economy in the form of taxes and purchases from local businesses.
Rather then focus on my hair how about focusing on the issue.
Have a nice day!!
By NVCitizen

5/7/09 at 1:33 p.m.

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The rhetoric that continually drools out of the mouths of the Republicans is at best a load of crap and at its worst, dangerous to the victims of domestic violence, injurious to the ongoing need of many for medical treatment, unfair to the state employees and teachers who would bear the brunt of their tax increase (yes, TAX INCREASE in the form of a pay cut or a work furlough, and embarrassing to all Nevadans who each day see NV ranking at the bottom of every educational statistic, and at the top of every crime statistic. There is a reason the Republicans were swept from office this past November in both State and National Elections; it is because the GOP is out of touch with reality and out of touch with the wants and needs of the American taxpayers.
I implore the legislature to do what is best for Nevada, not what is politically expedient for Republicans trying to once again push their outdated, ignorant political ideology.
By No_Name

5/7/09 at 1:44 p.m.

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Bob List's comment just astounds me. It's unacceptable to do anything that would cause layoffs in the private sector, but layoffs among public employees is fine. Private or public, layoffs are layoffs and they mean more people out of work and collecting unemployment. What makes some layoffs acceptable and some not?
By gmag39

5/7/09 at 2:11 p.m.

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nieman1, dude, you are so, so funny! RE-read
your own post. Do you suppose these public employees do their jobs because "I LOVE THAT OL'
NEIMAN CHARACTER. I WILL DO HIS BIDDING FOR FREE! LIKE A SERF, OR AN INDENTURED SERVANT, OR A SLAVE!"
What all of you public employee/teacher bashers
forget is this: YOU HIRED THEM! Even public employees have bills to pay.

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