Ohio's recent referendum (Issue 2) overturning Governor John Kasich’s signature law that eliminated collective bargaining with unions representing state workers is the latest in a series of heated battles between governors and public-employee unions in a host of states.
Notwithstanding the demise of reform in the Buckeye State, conflict over government labor relations is far from over and is very likely to continue. This is especially the case in states where the public workforce is heavily unionized and where slow economic growth will cause persistent budget problems—especially as pension and health benefits for retired workers crowd out other parts of their budgets. These conditions spell trouble for New York, California, Illinois, Rhode Island, Michigan, Ohio, and Washington State, among other states.
Because public sector unions' central task is to defend their members' occupational interests, they will have little choice but to resist reform efforts. But while public employee unions may be able to stave-off major efforts to address employee compensation costs, the need for states to address these issues will remain. In Ohio's case, the defeat by referendum of a structural reform approach, which would have given elected officials and agency managers more discretion, will require the state to adopt one of the other two dominant approaches—budget austerity or a combination of concessions and new revenues. Which is to say, Ohioans are in for some combination of service cutbacks and tax increases.