LINCOLN — A proposal to change a much-maligned Nebraska labor court appears to satisfy many concerns of state and municipal officials, but business groups continued to raise objections at a special legislative hearing Wednesday.
A particular target of criticism was the lack of provisions regarding labor rulings that involve public schools and teachers.
State Sen. Jim Smith of Papillion called that a “gaping hole” in the legislation. Business groups said schools aren't subject to the comprehensive reforms proposed for cities and state government.
“The legislation does not seem to address schools,” Smith said. “At least there's a starting point with the other public sectors.”
The divided opinions came during testimony on a proposal to overhaul the Commission of Industrial Relations, a five-member panel that decides labor disputes between local governments and public employees.
The hearing marked the first public airing of Legislative Bill 397, billed as a compromise intended to address criticism that the CIR handcuffs local officials in their efforts to control labor costs.
The testimony not only illustrated a wide range of views but provided a glimpse of the tough battle ahead as the Legislature attempts to forge agreement on one of the session's biggest issues.
Sen. Steve Lathrop of Omaha, chairman of the Business and Labor Committee, said at the hearing's conclusion that the legislation is a work in progress. He encouraged those who didn't get a chance to testify to contact committee members.
“We're literally keeping a log of problems and proposed solutions,” he said. “In the end, we will address them.”
Lathrop said the lack of proposals regarding the CIR's role in public education resulted from a lack of consensus within school groups on what should be done.
Collective bargaining rights for public employees have come under fire nationwide as governments struggle to control costs in the economic downturn. Huge protests have been staged in states such as Wisconsin and Ohio, claiming that attacks on bargaining rights are an attack on the middle class and unions.
In Nebraska, the target has been the CIR. Some government and business groups blame the labor court's rulings for blocking local governments from addressing budget problems, such as Omaha's unfunded pension liabilities of $700 million.
While its defenders say CIR rulings result in a fair average wage, critics say pension benefits have helped skew public compensation in comparison with private-sector jobs.
Officials representing the cities of Omaha and Lincoln and the League of Nebraska Municipalities testified in support of LB 397.
The bill would allow the CIR to consider pension and other benefits in ruling on wages.
It also would require the commission to compare compensation of public jobs with that of similar jobs in the private sector. Advocates say that would prevent public sector wages from growing disproportionately.
One of the lawmakers who helped craft the bill, Sen. Dennis Utter of Hastings, said he initially believed that the CIR should be abolished.
But Utter said he came to believe that clearer rules and guidance in LB 397 will result in more predictable rulings from the CIR and savings for taxpayers.
“Some people say that LB 397 is the ‘CIR on steroids,' but I believe it puts the CIR in a strait jacket,” he said.
Lincoln businessman Tonn Ostergard said the complex bill did not achieve comprehensive reform of all facets of government and contained “very little” pertaining to public schools.
Ostergard submitted a letter that called for taking away the CIR's power to decide contract disputes and give it authority to only recommend solutions.
Lathrop said in an interview that idea was an “illusion” that wouldn't resolve labor disputes.
But the main target of the day appeared to be K-12 schools.
A representative of the state teachers union, the Nebraska State Education Association, said the union was fine with the current structure of the CIR. The lack of teacher contract disputes that go to the CIR — perhaps one a year — illustrates the lack of problems.
During his testimony, John Bonaiuto of the Nebraska Association of School Boards acknowledged that his organization had come “late to the party” and didn't have CIR reform on its radar when the 2011 session began.
Bonaiuto and a representative of the Nebraska Council of School Administrators said that they hope to soon offer proposals on cost-containment but that it's been hard to find consensus within their organizations.
“That's not good enough,” shot back Sen. Brad Ashford of Omaha. “We need your comments, and we need them in a hurry.”
“Time's running out,” added Lathrop.
Wednesday was the 63rd day of the 90-day legislative session.
Ashford, who helped craft LB 397 and who is a former CIR judge, said the education portion of the bill “needs more work.”
He said he believes that school superintendents and school boards need more flexibility to address CIR decisions during economic downturns, but that no one has found a way to do that.
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