Over the past twenty-four hours, several media outlets, such as the Dispatch and the Plain Dealer, have been reporting on a supposedly “ new analysis” on SB 5 done by Kasich’s Department of Administrative Services.   I say supposedly “new” because although I have yet to see it myself, the press reports seem to contain the very same “analytical” claims by the same agency we dissected all the way back in FEBRUARY

But even as the Kasich Administration tries to highlight what they claim (through faulty statistics) are the savings of the bill, they’re equally trying to deny that SB 5 creates these savings by cutting wages.  As Rob Nichols said in the Columbus Dispatch:

Kasich spokesman Rob Nichols said the governor is correct – the bill does not prescribe what government leaders pay their workers.

"Nowhere in the bill are there any instructions on what an employee should be paid," he said. "In fact, the bill preserves the right for employees to collectively bargain their salaries with their employer."

The Dispatch piece, in fact, seems to point out many of the same flaws I pointed out back in February… in criticizing the last Dispatch story that reported virtually the same claims without question.

But before we get to the similarities between what the Dispatch wrote today and what we wrote in criticizing the Dispatch’s February reporting of the same or eerily similar claims by DAS, there’s a real simple problem with Kasich’s argument: it conflicts with a major line of argument made by both Nichols and Kasich during the campaign.

"This bill does not cut anybody’s salary."- Gov. Kasich, repeatedly.

Kasich’s argument is that the savings created by eliminating longevity pay and step increases is not a cut in wages because those promised increases have yet to be realized.  Yet, isn’t this the same John Kasich who repeatedly called Ted Strickland a “tax raiser” because Strickland temporarily stayed (until the end of his term) promised income tax cuts before people were expecting to receive them?  Using the same line of reasoning he used in regards to taxes, John Kasich the Candidate would argue that John Kasich the Governor is, in fact, cutting wages.  And unlike Strickland, Kasich’s move is permanent.

And Nichols claim that government won’t dictate instructions on what an employee should be paid is also totally false.  Perhaps Nichols should read the bill and find in its 500 pages the provisions that give DAS the authority to proscribe rules determining how “merit pay” will operate, which means an unelected government bureaucracy will be providing instructions on what an employee should be paid.

And that, of course, raises another flaw in the DAS analysis.  It considers the “savings” by eliminating the step increases and longevity pay being eliminated, but it doesn’t factor in the raises in wages people should get under SB 5’s ill-defined and currently entirely theoretical “merit” pay system.  After all, someone in government besides Jai Chabria and Beth Hanson is still going to get a raise, right? 

Unless those who get raises under the system do so at the expense of their co-workers in a revenue-neutral fashion, “merit” based pay will still result in increased government payroll spending.  You cannot honestly call something a savings until you factor in all of the fiscal consequences of a change compared to the status quo.  DAS’s math is missing half the equation—the part that offsets the savings with the increases in expenditures under the new system—resulting in yet another error that grossly overstates the potential “savings” to taxpayers.

Since the DAS is sophisticated enough to realize this, we must assume that their “analysis” makes an assumption that SB 5’s “merit pay” system will, in fact, be revenue-neutral.  Therefore, to those employees who don’t financially benefit from SB 5’s “merit pay” system, who are losing out on step increases and longevity pay, they are definitely taking a pay cut under SB 5.

Add that to the number of errors in the analysis that have been pointed out by the Dispatch today and us in February.

The Dispatch said:

But what’s not said in the analysis is that those savings would not occur right away. The new law would not affect workers until their current contracts expire.

We said:

The bill cannot save any money right now because it cannot impact collective bargaining agreements that are still in place.

Which is funny because my post and Joseph’s post both point out this obvious error was to correct the same Dispatch reporter who wrote the story in February who wrote today’s story correcting it.

The legislative liaison for the Ohio Department of Administrative Services, himself, revealed one of the biggest holes in his own agency’s analysis of SB 5’s purported savings:

Asked if the pension or health-insurance changes could be considered pay cuts, Kaman said local governments "tcan bump up their wages to make up for that." (emphasis added.)

That would be the “absorption rate” issue we identified way back in February.  Any claims of savings from SB 5 relies on the assumption that organized labor does not obtain any increases in wages for their members to offset SB 5’s mandated increases in employee contributions to benefits.

The Dispatch said today:

The department used 2010 data, though state workers that year did not get step increases as part of wage concessions. The estimate is based on what they would have gotten had the steps been in place.

We said in February:

Over 35%, over a third, of the savings the Administration claims SB 5 would save the State is in step increases.  However the “analysis”  concedes that these savings can, and already have been obtained, through the current collective bargaining law.image

The Dispatch also reported today that the DAS’s analysis assumes that step increases at the local level are no different than step increases at the state level.  This, too, turns out to be a majorly faulting assumption on DAS’s part.

The problem is that until merit pay is implemented and we see how much the additional employee shares are offset with wage increases, the true number of “savings” created by SB 5 cannot be accurately determined.  However, between this site and the Dispatch, there have been five major errors identified in the DAS’s analysis, and every single one of these errors indicate that the actual number is substantially less than the Administration is claiming.  In fact, just one of these errors alone suggest the analysis overstates the savings to the State by one-third.

 Kasich LiedWhatever the true number may be, the purported savings of SB 5 is nowhere close to the number that the Administration is claiming under DAS’s deeply flawed, and frankly, amateurish “analysis.”  Kasich’s DAS report is not analysis; it’s propaganda, hoping that Ohioans are duped into buying overinflated claims of savings while Kasich spins madly to avoid those same Ohioans from realizing that his savings come at the expense of their neighbors’ paychecks.  Kasich has improved government efficiency, though.  He’s now able to tell two lies at once.

  • Guest

    Cutting net take home pay feels the same to me as cutting wages. Collectively bargained packages include salary, insurance benefits, retirement pickups, etc. A+B+C = the package. Through the bargaining process, that package is decided. Sometimes employees taking no increase in salary results in an employer being able to avoid increasing insurance premiums. If A, or B, or C is cut, then take home pay is less. For me personally, if SB5 becomes law, I will immediately take a 2.3% cut in take home pay, plus I will pay 5% more of my insurance premiums. Kasich and his cronies can say SB5 is not “cutting wages” all they want – the fact is that for the majority of us, even before any merit pay provisions (or lack thereof) or lack of step increases is figured in, we would take a cut in take home pay immediately.

  • stryx

    “The department used 2010 data, though state workers that year did not get step increases as part of wage concessions. The estimate is based on what they would have gotten had the steps been in place.”

    This was my favorite part of the Dispatch article.

    If Chewbacca lives on Endor….

  • Anonymous

    People called John Boccieri Nancy Pelosi’s Puppet. But Kasich and Renacci are strung at the shoulders by John Boehner. The party of “NO IT ALLS” will end up, after all the lies, pointing that george bush, boehner, mcclownell finger at the Democrats. Who is eating this phony bird seed anyway?

  • Anonymous

    Without kissing too much Plunderbutt, I have to wonder why the writers on this website have to educate the writers for a major Ohio newspaper. It’s clear the Dispatch writer takes (I’m being generous here) “cues” from this site. Of course, the newfound insight appears two months after the Dispatch writer’s initial lazy analysis, presumably read and trusted by countless thousands of Dispatch customers.

    Do they not have time to sufficiently digest these public documents? If they do have time, do they lack the intelligence, critical thinking skills, reading comprehension, to spot the logical holes? Or is critical analysis now too politically charged? The Dispatch’s editorial decision-makers so worried about ACCESS that they are content to act as a government sieve rather than a objective public forum?

    It’s either intentional or incompetent. Either way, this sort of failure to serve the public is shameful. The Dispatch is not a community weekly — I guess.

  • Anonymous

    This is the same logic I use when I have to pay the plumber and I can’t believe I just spent $250 to fix a toilet.

    “Well, he charged me 250 dollars. But if he would have had to fix the toilet AND the hot water heater, he probably would have charged me like 450 dollars. So I saved 200 dollars, based on what he would have gotten had the hot water heater broken, too.”

    Try it the next time you buy something. It feels pretty good.

  • Anonymous

    You are absolutely correct. I believe a majority of state employees are exempt from collective bargaining, meaning they are not allowed to be in a union. The elimination of longevity WILL result in a substantial loss of income for many, many state employees. As I have written before, I believe my calculation was over $7,000.00 just in longevity. The only hope for us all is that DAS will write rules that preserves longevity pay already earned when “merit” tables are written. I am hopeful that Governor Kasich will keep his word that no one will lose their current pay under SB5. However, I am looking for a second job…

  • dlw

    What was that about Kasich “needing” to pay his peeps more in order to lure them over from the private sector (hahahahaha)? Once state workers are all screwed over so very thoroughly, how many of them are going to leave? And with the new lower pay, lack of raises, and crappy benefits, who exactly is going to look to the public sector in Ohio as a lifetime career option? And then what will our gov’t services look like…….

  • Dariad

    Savings will be generated from this bill only in 2 ways – firing everyone who is at the top of every payscale in every public job, or by doing what I think many in government and school districts will do once collective bargaining agreements expire or when fiscal emergency is declared. They will simply say the pay for teachers is 30K – 40K, and you can earn an additional 10K of merit pay if you meet certain standards this year. Even if you made 60K, you will fall into the new range. Take it or leave it. Nobody is fired, thus saving on the unemployment costs to the state, and potential discrimination lawsuits are avoided. That is how this new regime of people running the state thinks.

  • publichealthgirl

    I didn’t want to hit the like button for that because it is sad, but probably true…

  • publichealthgirl

    I didn’t want to hit the like button for that because it is sad, but probably true…

  • dlw

    If I read the bill correctly, teachers who currently make more than the max of their new pay scale aren’t to receive pay cuts… nor are they to receive raises. At all. Ever. Unless the pay scale at some point changes such that they no longer are being paid at or above their range’s max, they’ll just keep making what they’re making. Nice, hunh?

  • Anonymous

    You are reading that absolutely correct.

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