Public worker issues blocking budget deal

By David McGrath Schwartz

Thursday, May 21, 2009 | 2 a.m.

Democrats and Republicans remained at odds late Wednesday on the last disputed points in the way of a budget deal — proposed reforms of public employee pensions, retiree health benefits and collective bargaining rules for local governments and their employee unions.

Senate Republicans say their votes for tax increases are contingent on dialing back these benefits. And Democrats need at least two Republicans in the Senate to pass a tax package and override an expected veto from Gov. Jim Gibbons.

Both sides have given ground during the negotiations, but a handful of differences remain.

The Las Vegas Sun compiled a list of those differences Wednesday after talking with Democratic and Republican leaders, as well as representatives of the business community and labor groups.

Democrats want to hold the line on scaling back pension benefits for new hires, and oppose a proposed change that would require public employees to work until age 62.

Dennis Mallory, head of the state workers union, said he thinks an agreement will be reached on pension and health benefit reform.

Perhaps the most contentious issue is the rules governing collective bargaining between local governments and their employee unions. Sources with the teachers union called it “our hill to die for.”

“It isn’t broken. So why fix it?” Lynn Warne, president of the Nevada State Education Association, said late Wednesday.

Republicans, meanwhile, say local government employee pay and benefits, which are outside the Legislature’s control, are the most significant issue of the three.

Steve Hill, chairman of the Greater Las Vegas Chamber of Commerce, said, “We still will need improvements to bills we’ve seen.”

A hearing is scheduled for this morning on some of these proposed changes to public employee benefits. Legislators have said they need to pass a budget and tax plan by today, or at the latest Friday, to have enough time to override a Gibbons veto before the session ends June 1.

The following shows where the sides were Wednesday night on the three key issues:

Pensions for public employees

Current law: To receive full pension benefits, new public employees must serve 28 years. Also, public employees who are not firefighters or police officers can retire after 30 years without penalty.

The proposed reforms lawmakers are debating would affect only newly hired public employees.

Democrats: Want to require 30 years of service for new employees to receive the full pension. They do not want to place an age limit on when employees who are not police or firefighters retire. They have agreed to increase the retirement age for police and firefighters by five years in some circumstances.

Republicans: Want to require 32 years of service for new employees to receive the full pension. They also want a minimum retirement age of 62 for employees who are not police or firefighters.

Health care benefits for retired state workers

Current law: Employees begin “vesting” — accruing retirement health benefits — after five years of service. After 20 years they are eligible for the state’s full health care subsidy. Lawmakers are debating changes that would affect new employees and existing state workers.

Democrats: Begin vesting after 15 years for all employees hired after June 30. Employees would be fully vested after 20 years.

Republicans: Want retired workers to lose the health care subsidy after they become eligible for Medicare.

Collective bargaining rules for local governments and their employee unions

Current law: When negotiations go to arbitration, only the government’s ability to pay during the first year of the contract is examined and the fact-finder is not required to compare the offer with state and private sector wages. There is also no requirement to have a full public hearing on the contract.

Democrats: Want a government’s ability to pay over the length of a contract to be considered at arbitration. They also agree that contracts should not be approved on consent agendas.

Republicans: Want state worker and private sector salaries to be considered during arbitration. They also want to require full public hearings on contracts in front of local government bodies.