Iowa budget crisis changes labor’s focus

Iowa’s organized labor unions had to be pleased when 2009 came to an end.

The year began with another in a string of disappointing legislative sessions. None of labor’s four priorities — choice of doctor, prevailing wage, open-scope bargaining and fair share — garnered the 51 votes needed in the Iowa House to pass, despite a 56-44 Democratic majority that organized labor helped build.

Then the economy crashed, creating a gaping hole in the state’s budget that was filled with across-the-board cuts. The group most affected by these cuts was public sector employees, who agreed to re-open their contracts in order to avoid nearly 500 layoffs.

Now, with the 2010 General Assembly set to gavel into session next week, more budget cuts are on the horizon. So while their four principal legislative goals remain unchanged, the focus has shifted to ensuring legislators make sound budget decisions and avoid massive layoffs.

“Because of what we went through the last couple months with having to sit down with the governor to come up with an understanding and then having a statewide vote by our members to take five unpaid days to save 479 jobs, our priorities have shifted somewhat,” said Danny Homan, president of the American Federation of State, County and Municipal Employees Iowa Council 61.

AFSCME‘s members are understandably concerned, Homan said, and “some are probably very pissed off.” The bulk of what has been done to this point to balance the state budget “has been done on the back of the state’s employees,” and now they are worried about what will happen to them in the next fiscal year.

“At some point, doing more with less just breaks down, and I think we’re at that point,” he said. “I think we have to figure out how to keep what we have, because we just can’t keep doing more with less. The less is running out.”

Homan said one of the first goals would be to work out an early retirement package so that some state workers can leave their jobs voluntarily instead of being forced out. The union is also going to push for a comprehensive overhaul of the state’s workforce.

“The system right now is heavy on management,” he said. “We want to go in and take a look at the level of management we have in state government and make sure that’s at an appropriate level and come up with ways to, instead of always laying off the folks who do the front-line work, maybe eliminating some middle management positions that have grown during good times.”

The hardest work, though, will be reworking Iowa’s tax system to make it fairer, said Ken Sagar, president of the Iowa Federation of Labor AFL-CIO.

“We are at one of those critical points where we as a state are going to have to decide how we’re going to do things in the future,” Sagar said. “Are we going to continue to give tax breaks to people so they can buy airplanes, or, are we going to take those tax breaks back and fund education?”

Legislators, especially in the wake of the film tax credit scandal, have already vowed to look at all tax credits offered by the state to evaluate their worth. Homan said that while no one wants to pay more taxes, there are obvious examples of tax breaks that benefit the few that could be eliminated.

“You don’t pay any sales tax on ostriches,” he said. “Somebody that goes out and buys an airplane, they don’t pay a sales tax on an airplane, nor do they pay sales tax on the parts to repair that airplane. Clearly, legislators don’t want to raise taxes, but there are things they can do that won’t raise a single tax on a large majority of Iowans.”

Another example of smart budgeting would be combined corporate reporting, which would close a tax loophole allowing multi-billion dollar corporations that do tens of millions of dollars of business in Iowa to avoid paying Iowa income taxes, said Marcia Nichols, political and legislative director for American Federation of State, County and Municipal Employees Iowa Council 61.

“For a corporation to come in here and make money off of Iowa citizens and pay no taxes, we’ve been harping on that for eight years now,” she said. “That’s not going to affect the average citizen, but it will put more money in the state government to allow us to continue to provide services to the most vulnerable citizens and education of our children.”

Four principles

Despite an historic budget crisis, Nichols said labor will still be working to pass the four principles it has been advocating for many years. While the votes are there in the state Senate, in the House a handful of Democrats have blocked the passage of labor’s priorities. And when a bill expanding collective bargaining rights of public employee unions cleared the legislature in 2008 it was vetoed by Gov. Chet Culver.

Republicans and business groups like the Association of Business and Industry have been adamantly opposed to labor’s agenda. House Minority Leader Kraig Paulsen, R-Hiawatha, told the Mason City Globe-Gazette that as long as the labor bills remain on the table, some employers would not invest in Iowa or its work force.

Sagar points to one of the four bills — changing Iowa workers’ compensation law to allow employees the right to designate a doctor to treat them for workplace injuries — as an example of the hypocrisy of the opposition.

“When people were opposing health care reform, one of the principal things they talked about is that ‘By God, we have to make sure you don’t lose the ability to choose your own health care provider,’” he said. “And yet, here in Iowa it seems to be almost sacrilegious for people to choose their health care provider if they happen to be injured on the job. This doesn’t make any sense to me.”

One unlikely ally labor has garnered is Steve Deace, the host of a Christian program on Iowa’s largest radio station and an influential voice in the social conservative community. While he doesn’t necessarily support labor’s agenda, he called Republicans “hypocrites” for opposing things like “choice of doctor.”

“They don’t want to let the little guy go to the doctor of his choosing, yet they’re also concerned the Mitt Romney-[Barack Obama] health care omnibus bill is going to allow the government to dictate what health care you can get and from whom,” he said. “Huh?”

Deace also pointed to prevailing wage, which would require contractors to pay the same hourly wages and benefits on public projects as they would pay on private sector projects, as an example of Republican hypocrisy.

“A lot of the same Republicans railing against things like prevailing wage also have no problem with raiding taxpayer money for their corporate buddies,” he said. “For example, how many of the top Republican donors in Iowa are getting rich off of taxpayer-subsidized industries like ethanol or state-sanctioned gambling?”

If corporations and millionaires are going to be allowed to “raid the treasury, then it’s only fair to let the little guy who does most of the living and dying in this state get his cut as well,” Deace said.

Election year power

In recent years, national and international unions have played a significant role in Iowa elections. In 2008, AFSCME International donated $346,000 to the political action committee of its Iowa local, AFSCME Iowa Council 61. Among other big unions donors were the Service Employees International Union, which donated $125,000 to its local, and the Laborers’ International Union of Illinois, which contributed $200,000 to the Great Plains Laborers’ Council Iowa PAC.

That money helped Democratic candidates and county parties around the state, and Democrats expanded their majorities in both the House and Senate.

But after Democratic majorities failed to move key components of organized labor’s agenda from 2007 to 2009, some Democrats are quietly concerned that national labor groups won’t direct resources to Iowa, instead moving on to other states where large investments seem more likely to pay dividends.

Homan said who the union ultimately supports will be up to the members, just like it has always been.

“Who our members want to go out and work for are the candidates we will work for,” he said. “Frankly, it’s never been about how much money this union gives. It’s about people we can put in the streets working for candidates. We will work for candidates who will work for working people issues.”

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said during a time of economic trouble, labor bills would help bolster the state’s middle class.

“We’d like to grow the middle class in Iowa and we think those issues will help strengthen the voice of ordinary people in the work place, and that’s important,” he said. “It’s hard to tell whether the votes are there to pass them. I can’t say I know at this point what the best opportunities are, but if we find the votes we will certainly go forward with them.”