Governator over-feeds state unions

How much do state workers make? (Click here to find out.)

The state of California's payroll is skyrocketing, even as its budget deficit has grown to billions of dollars in recent months. In Gov. Arnold Schwarzenegger's first four years, the total bill for state workers' salaries jumped by 37 percent, compared with a 5 percent increase in the preceding four years under then-Gov. Gray Davis, a Chronicle analysis of state payroll records shows.

One month before Schwarzenegger took office in November 2003, just eight state employees earned more than $200,000 a year working in the core state government, which excludes universities and the Legislature. In April of this year, there were nearly a thousand, according to records.

And the number of state employees making six-figure salaries has more than doubled since 2003, to nearly 15,000. Meanwhile, the number of state workers has grown by 26,000 under Schwarzenegger after being cut by Davis, who was recalled from office in the midst of a severe budget crisis.

Some of the pay increases in recent years have been out of Schwarzenegger's control, including previously negotiated pay raises for some employee unions and court-ordered pay hikes for medical workers in the state prison system that are estimated to have cost the state hundreds of millions of dollars.

Also fueling the spurt in payroll growth: salary increases for employees in a few politically powerful labor unions, including the state's prison guards, as well as pay hikes for workers in the upper echelons of state government. Elected members of the Legislature, who will decide in the coming weeks how to resolve the state's $17.2 billion deficit for the fiscal year beginning July 1, also received increases last year.

"Salaries have only gone one way - up," said Charles Murray, chair of the California Citizens Compensation Commission, which sets pay for the state's top elected officials. Murray, a Republican from San Marino (Los Angeles County), has called for a pay cut for legislators and other elected officers in light of the state's huge deficit.

"If we had control over the janitors, I'd ask them to take a pay cut, too," he said. "The reasoning is very simple: We're in big trouble moneywise."

Legislators, gubernatorial aides and top medical professionals have received pay hikes in the last 12 months. And as the state looks at drastic cuts in many programs, the governor is proposing about $260 million in salary increases for the state's prison guards, whose pay jumped about 34 percent in five years under their previous contract.

At the same time, pay for many lower-ranking civil service workers has not kept up with the 15 percent increase in the state's consumer price index in the past four years, according to an analysis by the state Legislative Analyst's Office. Most civil service workers saw their pay rise by only 12 percent over that time.

The winners of the payroll race seem to be the unions with the strongest political ties or those who spend big bucks on political contributions and lobbying, said Christina Lokke of California Common Cause, a good-government watchdog group.

"There's lobbying going on among all these groups of state employees - and the outcomes are pretty imbalanced," she said. "Sometimes, politics and money beat good policy, that's when the public loses out."

Schwarzenegger spokesman Aaron McLear said much of the blame rests with the Davis administration, which negotiated some contracts in which workers deferred initial pay raises for bigger gains in later years.

"Essentially, when the governor came into office, many of these promises had already been made," he said.

California Highway Patrol officers got a 32 percent pay increase over four years through a contract negotiated by the Davis administration that linked their pay to the five largest police departments in the state. The average officer now makes $73,000 a year. The state's professional engineers received a 31 percent pay raise through a similar automatic-increase mechanism negotiated by the Schwarzenegger administration.

Examples of the salary hikes revealed in the state's payroll database and compensation documents include:

-- More than 100 physicians and surgeons working in state prisons saw their pay increase from an average of $129,000 to $238,000 in four years, and salaries for supervising psychiatrists jumped to $236,000, after a federal court-appointed receiver, Robert Sillen, determined that pay had been so low that the system was having difficulty attracting competent medical workers.

-- Legislators' annual pay climbed from $99,000 in 2003 to $116,000 this year, while the state attorney general's increased from $148,000 to $184,000. The governor's salary also rose, from $175,000 to $212,000, but Schwarzenegger declines to accept his salary. The state citizen's compensation commission sets these pay rates, and some of its members are now looking at whether it can lower them.

-- Eleven top advisers in the governor's office got hefty pay increases in August, a week after the governor signed a budget that slashed programs for the homeless, mental health services and parks. Chief of staff Susan Kennedy received a $32,000 pay raise, boosting her government salary to $175,000. Four years ago, the top aide in the governor's office earned a base pay of $138,000.

-- At the top of the state's salary list were chief officers for the California Public Employees' Retirement System and the state's stem cell research facility in San Francisco, known as the Institute for Regenerative Medicine, each of which is controlled by a separate board that is independent of state elected officials.

CalPERS Chief Investment Officer Russell Read made a base salary of $555,000 - plus incentive pay that pushed his total earnings to more than $900,000, according to a spokeswoman for the system. Alan Trounson, a renowned biologist appointed last year to head the stem cell agency, is paid $490,000. Four years ago, the top employee in the retirement system made a base salary of $360,000, and the stem cell agency didn't exist.

H.D. Palmer, a spokesman in the governor's Department of Finance, said state pay rates often aren't competitive with those in the private sector and in city and county governments throughout the state. This year, the three top investment officers at CalPERS, including Read, announced they will leave to pursue private-sector investment jobs, many of which pay millions of dollars a year.

"While the public needs to be concerned with the salaries being paid out to state employees, it also needs to know the state is in a competitive market and we need to find ways to attract and keep the best people," said Jason Dickerson of the Legislative Analyst's Office, which has recommended that the state keep a tight lid on any further pay increases.

Schwarzenegger's proposal for closing the state's huge budget gap next year includes a slight reduction in total state payroll costs - mostly by eliminating positions.

Still, this year the state will go into contract negotiations with 20 of its 21 major labor unions, all of which will be seeking pay hikes that are not currently in the budget.

"Because of collective bargaining agreements, we can't just go in and cut people's pay," said Palmer. "One way of reducing the payroll is to say to departments 'What positions can you do without?' "

-- How much do state workers make? Search a database of the state's top earners at: sfgate.com/webdb/statepay


Union-only construction defended

Unions really care about workers, not just dues income

I strongly disagree with the Chamber of Commerce and its view on Project Labor Agreements ("Project labor agreements would be bad for L.B.," Comment, May 18). While the Chamber only cares about business, labor unions have always been about people. Union leaders are concerned with workers earning a decent wage, safety on the job, affordable health care, and the ability to retire with dignity and respect. I applaud the City Council members who share the same values and struggle to find a way to help the citizens of Long Beach.

If the Chamber knew anything about construction and Public Works Projects, they would know the award always goes to the "lowest responsible bidder." An engineer usually derives an estimate, and whoever is closest wins the job. Most non-union contractors don't employ apprentices, so the union contractor can stay competitive by utilizing and training apprentices. All contractors are required to pay prevailing wages, typically union scale. The non-union contractor has an advantage, as there is little or no monitoring to ensure compliance. These contractors usually cheat the worker by misclassification, kickbacks, or reporting fewer hours than the employee works. A PLA helps the city by having union representatives police these jobs for proper classification, wages, benefits and safety.

Not all PLAs are good for job creation. The fiasco at the Pike and the Douglas Park PLAs are good examples. These were heavily weighted toward the employer, with minimal consequences for non-compliance. The Pike project employed a few helpers from Long Beach. Once the job was completed, they were terminated. The infrastructure at Douglas Park was installed by a contractor from San Diego, with few workers from Long Beach.

A PLA with the Building Trades ensures careers in the construction trades for the citizens of Long Beach. A percentage of the job is required to employ residents from the city. Entry-level apprenticeship opportunities are available to young men and women. Their career doesn't end at the completion of the job. Once they are indentured, the apprentice is guaranteed job placement for the duration of their program. Most trades train and supply books at no cost to the apprentice.

I know of no construction trade union which refers workers out by seniority. They are either dispatched in the order they sign an out-of-work list, or can solicit their jobs. A minimum area hire requirement would take precedence over any dispatch rules.

The biggest misrepresentation in the Chamber's letter was "the likelihood of labor disruptions." One of the reasons PLAs are negotiated is the guarantee of no work stoppages, strikes or slowdowns of any kind for the duration of the project. The union and the workers incur heavy fines for violations.

Project Labor Agreements are good for the city. There are studies which have proven that projects under a PLA come in on time, and at or under budget. For me, the best part is being able to take someone and give them a chance at a great career, with good pay and benefits. Shouldn't the citizens of Long Beach benefit by all the construction being done around their city? Don't we owe it to them to offer a chance to a better life?

- Joel Barton is vice-president of the International Brotherhood of Electrical Workers, Local 11.


Dems lock down politics in labor-state

The practice of holding fundraisers while New Hampshire lawmakers are in session has become a fixture for decades, and the cash count continues to grow with every election. The Senate Democratic caucus blew away records in 2006, raising more than $1 million to support the takeover of the upper chamber for only the second time in more than 90 years.

Well, they're out to reach another milestone this week when Senate President Sylvia Larsen hosts four fundraisers in back-to-back fashion across the street from the Statehouse – all for newcomers.

It was impossible to locate anyone who could recall a presiding officer of a New Hampshire legislative body helping to raise money for so many challengers right as the 2008 session reaches the down-and-dirty negotiations over controversial legislation.

All four are in The Barley House Restaurant. All carry the same ticket charge, $500 apiece to become a "host," $250 to "sponsor" and "$100" to be designated as a "friend."

Regardless of which of the four to which you would write a check, you were asked to RSVP to the same employee of the New Hampshire Democratic Party, Daniel McKenna.

Here's the schedule:

• Wednesday, 4:30-5:30 p.m., for Franconia Democratic Rep. Martha McLeod, who seeks to unseat Berlin Republican Sen. John Gallus.

• Wednesday, 5:30-6:30 p.m., for Rep. Stephen Spratt, D- Greenville, who's going after Milford Republican Sen. Peter Bragdon's seat this fall.

• Thursday, 4:30-5:30 p.m., for Rep. Matthew Houde, D- Plainfield, who wants to replace retiring Sen. Peter Burling, D-Cornish.

• Thursday, 5:30-6:30 p.m., to benefit House aide Amanda Merrill of Durham, who's seeking to follow Sen. Iris Estabrook, D-Durham, who also is retiring.

The Senate Democrats have the numbers, but don't expect this in-your-face fundraising to improve the karma with incumbent Republican senators.

"I know anything is fair in elective politics these days, but this does appear to be over the top,'' Bragdon said.

Meanwhile, the Senate Democratic caucus is filling its own coffers, and at the most opportune time.

The mailing to lobbyists and party donors went out at week's end for a high-ticket breakfast reception at the law firm of Sulloway and Hollis, kitty corner to the Statehouse.

The date: June 4, when the House and the Senate are expected to return to vote up or down on all conference committee reports.

Now, that's timely!

In the act

Democrats aren't cornering the market on thinking big when it comes to having a hand out.

On Tuesday afternoon, the Barley House will host the first Concord fundraiser for Rep. Sharon Carson, R-Londonderry, who wants to follow Sen. Robert Clegg, R-Hudson, who's running for Congress this fall.

No one in the state party or Senate Republican leadership is propping Carson's effort up, but she's charging the same tall freight for a ticket, starting at $500 as a "platinum'' sponsor, $250 to be "gold'' and $100 to earn "silver."

Sneaky legislators

Lobbyists will go at least another year paying the same $50 fee to register that they have since 1986.

After The Telegraph published an investigation into the growth of spending on lobbyists and lax oversight over what they report, Rep. Chuck Weed, D-Keene, asked the state Senate to consider an idea the House had already shunted aside: to double the registration fee and use the extra money to pay for making lobbyist reports available to the public online and to hire a state ethics officer to monitor compliance with these laws.

The Senate stuck it onto a House-passed bill (HB 1551) dealing with special-number license plates for veterans.

Rep. James Ryan, D-Franklin, was in full-throated righteous mode to decry the Senate adding such a non-germane subject to pending legislation.

"This is a bill that illustrates the 'silly season,' " Ryan said. "This bill came back to us with its title stripped.

"We would at least like to have some texture to the titles of the bill and the bills that we intend to pass.'' The House went on to kill the bill.

By that standard, there would be little left for the Legislature to do. Over the last two weeks, the Senate has managed to tack onto unrelated bills more than three dozen amendments dealing with subjects that already had gone by the wayside.

Here's just a sampling of other examples that, for whatever reason, didn't inspire enough outrage to kill the project outright.

• HB 1237: Liquor Advertising Study – The Senate tacked on language to allow patrons of the New Hampshire Motor Speedway to carry their own alcohol into a cocktail lounge on the premises as long the State Liquor Commission approves of the arrangement.

• HB 1219: Fish and Game Volunteers – The Senate added to this a bill the House already rejected, letting lobbyists serve on committees that advise the judicial branch.

• HB 1246: Making it legal to drink alcohol in a bar while performing – The ambitious Senate drafters took a second stab at perfecting a bill that proposes to set a better floor wage for delivery drivers in the bottling industry who often have to work longer than a 40-hour week.

Meanwhile, a proposed rewrite of the ethics lobbying law (B 482) remains alive and subject to last-minute negotiations. Among its changes, it would shrink from 12 to four the number of times a year they have to report their activities.

Fanning LaFlamme

You had better not forget one Nashua Republican when talking about who will try to replace outgoing Democratic Sen. David Gottesman.

He's Paul LaFlamme, a former Nashua House member who ran for the District 12 seat in 2004.

"I'm encouraged that people have called to ask me to think about it, even some who supported my primary opponent last time,'' LaFlamme said.

In that primary, Rep. Harry Haytayan, R-Hollis, prevailed and nearly beat Gottesman in the general election.

The Haytayan camp launched a late negative mail attack against LaFlamme that the most ardent supporters haven't forgotten.

Four years is a lifetime in state politics, and LaFlamme has stayed active locally:

• He worked hard on the breakthrough election of Nashua Mayor Donnalee Lozeau last fall.

• He's on the state steering committee of John McCain's presidential campaign and donated office space for the primary campaign's Nashua office.

• And he has worked on animal-rights issues. Last week, he helped lead an improbable effort that got lawmakers to approve legislation to include dogs and horses at racetracks being covered under animal cruelty laws.

The state's veterinarian, the state racing commission, and racetrack executives and their lobbyists all opposed the bill, contending it could unwittingly prevent the state vet or a state regulator from checking on an animal without "probable cause.''

Animal-rights supporters were undeterred, and for the second time in three years, they beat all the political odds to get a bill to the governor's desk.

Slaps on the hand

After several days of private talks, House Speaker Terie Norelli, D-Portsmouth, decided whether she would wield the axe on the 15 members of her leadership who signed a letter opposing the Norelli-backed constitutional amendment on education aid.

It really proved to be more like spreading a butter knife.

Late Thursday, Norelli announced that three vice chairmen had submitted their resignations after she had reinforced, in private meetings with them, that being in leadership means not taking a public position against a committee recommendation.

The three Democratic casualties were:

• Three-term Concord State Rep. Jessie Osborne, who was second in line on the House Municipal and County Government Committee.

• Two-term Rep. David Essex, D-Antrim, who was vice chairman of the House Environment and Agriculture Committee.

• Three-term Lebanon Democrat Lee Hammond, who was vice chairman of the Legislative Administration Committee.

With apologies to the individuals involved, eight of the 15 served or led influential committees with considerably more clout than these three had. Many had far more seniority, such as Lee Democrat Naida Kaen, who's completing her seventh term in the House, and Acworth Democrat Jay Phinizy, who's finishing a decade of service.

Osborne is the only one of the trio who has told House leaders she's running again; the other two have said they don't plan to be on the 2008 ballot.

Norelli said she has met with 14 of the 15 who signed the letter, and all signs point to this being the extent of leadership changes. She stressed that members of leadership remain free to cast a vote of conscience on any issue, but may not advertise or promote that view publicly if it isn't in sync with the company line.

"As speaker, I have never told anyone how they must vote," Norelli said. "The voters put them in the position of deciding that for themselves."

The tangible losses for each were the seat at the head of a committee table, a spot in regular closed-door meetings of the chairmen and vice chairmen, and a special vanity license plate.

All get to keep the choice seats they were given in Representatives Hall because of their leadership roles and to serve as free agents if they choose to run again and get re-elected.

"When I became speaker, I realized that in exchange for that responsibility and authority, I had to give up some of my independence," Norelli said.

"Committee chairs and vice chairs are given a certain amount of responsibility and authority, and they, too, must recognize they are part of a team and publicly, at least, must support that team."

However, there remains within Norelli's expanded leadership group some difference of opinion as to whether the punishment should have been more severe. Several of the 15 insisted they weren't aware that the signed letter would go beyond the closed caucus of House Democrats. The ringleaders should have been sacked, some insist privately.

"Basically, a lot of them had not stopped to think that it would go public," Norelli said. "There are no mentors to teach us. Basically, we are learning as we go."

Hello? Norelli supports the first education-funding amendment of her 12-year service in the Legislature, there's a private spat in her caucus, and any elected official on the inside thinks there's no way this is ever going to see the light of day?

There's no question past speakers have had to take a lot more firm action than this. Consider the example then-House Speaker Gene Chandler, R-Bartlett, made of Amherst Republican Rep. Cynthia Dokmo.

Former Gov. Jeanne Shaheen wanted to have GOP backers for her plan to dedicate a sales tax to state education aid. Dokmo agreed to come aboard as a co-sponsor even though the House GOP leadership had already taken the view that it would again oppose broad-based sales or income taxes.

Without any private negotiation, Dokmo learned she was gone as chairwoman of the House Judiciary Committee.

The rift remaining with the House Democratic leadership group is neither unusual nor at the type of fever pitch that has been seen at the close of previous sessions.


Rest assured, those one-on-one talks Norelli had with each of her leadership team will display some scars.

On this issue alone, it surfaced Tuesday at a fundraiser at the Kimball Jenkins Estate in Concord. Some in Norelli's leadership team told some who signed the letter they were "disinvited" to the fundraiser because of their show of disloyalty.

More than one source at the fundraiser confirmed that when one of the letter signers up, that lawmaker was turned away at the door. Norelli declined to confirm the report.

"The last week and a half have been a difficult time for those who signed the letter and those who did not," Norelli said. "We're going to sort all of that out and remain a strong and productive team."

Does this mean the signers can expect a spot in Norell's second term as speaker if the voters send all of them back?

Not quite.

"The makeup of the House is going to be different; it always is, and there may be a different makeup of people interested in leadership," Norelli said.

Different tactic

Another one of those letter signers, Phinizy, will soon announce that he'll seek the nomination to run against Sen. Robert Odell, R- Lempster.

Two years ago, Phinizy was one of four Democrats to run for speaker in a race Norelli won hands down on the first ballot. Phinizy gives the Senate Democrats a credible candidate against a seemingly safe three-term incumbent Republican.

In a year that favors Democrats in this left-leaning Sullivan County, Odell will be tough to beat.

Another target

This wasn't the only incident that resulted in a House Democrat losing his or her "leadership plates."

A labor coalition made a renewed push in the last week at a long-shot attempt to prevent retirement reform from going to a committee of negotiators.

This was in the vain hope of ramming through the House the Senate-passed bill that would spare new policemen and firefighters from having to work five more years and be at least five years older than they are now before they can retire.

At any rate, labor gained only 10 votes, as the House decided by a 2-1 margin to let the talks toward a compromise beginning Tuesday.

But House Majority Floor Leader Daniel Eaton, D-Stoddard, confirmed that Barrington Rep. Marlene DeChane, a retired state employee, agreed to resign her position as one of his seven assistants (job description: vote counters on the House floor).

Eaton said DeChane was observed lobbying many of her colleagues to oppose the House-passed bill again in violation of the team loyalty oath.

"This involved more than a single conversation, and this was not the first time this had occurred,'' Eaton said.

DeChane couldn't be reached for comment Friday.

Quotes of the week

They used different approaches to unsuccessfully urge the House of Representatives to end a dispute over retirement reform legislation Wednesday and to embrace a Senate-passed bill that a coalition of union groups support.

One attacked the claims of House Democratic leaders that the House-passed bill spreads the pain evenly, while the other concedes some attacks above and under the radar from organized labor against the bill went overboard.

"Everyone is going to say it's a compromise. Compromise? The only compromise they were asking the employees to make and retirees to make was give them all their money. There was no compromise coming from the other side." - REP. DANIEL SULLIVAN, Manchester Democratic representative, who also is a Manchester Fire Department lieutenant

"I will apologize for a lot of the misinformation. A lot of those statements, you are going to take away our pension, a lot of that was based on misinformation, fear, a lot of fear, rumors and panic." - REP. GEORGE WINCHELL, Atkinson Republican representative, who also is a retired Salem police officer.


Jeff Merkley, Oregon DINO

Related story: "Public opinion survey on card-check"

Democrat wants to end secret-ballot union elections

Jeff Merkley is doing labor union bosses' dirty work. While campaigning to protect American workers jobs, Merkley is also supporting a law to strip workers of their fundamental right to a private ballot vote on the job. Jeff Merkley says he’ll remove your right to privacy if he’s elected to the U.S. Senate. Why would someone who claims to protect workers support a bill that takes away private ballot elections?

Watch Merkley Pander to Union Bosses

It’s a classic case of you-scratch-my-back-I’ll-scratch-yours for one of his biggest special-interests—labor union bosses. In the past year, 21 percent of Merkley’s PAC contributions—more than $40,000—have come from labor bigwigs, and more money is sure to come.

Union bosses want Merkley to vote for the deceptively-named Employee Free Choice Act (EFCA) so they can force more workers into unions without a vote and collect more dues. Merkley has said he “will work personally to pass it in the U.S. Senate.”

If Jeff Merkley thinks a private election is the best way to elect himself, why doesn’t he support the same system for working Oregonians?

Tell Jeff Merkley to protect workplace democracy.

Gordon Smith

Gordon Smith has consistently opposed efforts to strip workers of their fundamental right to a private ballot vote on the job.

On June 26, 2007, Smith joined with 47 other Senators to vote against the bill that would have removed your right to privacy in the workplace.

Since Smith’s election to the Senate, union-supported legislators have introduced the deceptively named Employee Free Choice Act (EFCA) three separate times. Smith opted not to cosponsor any of those proposals.

Tell Gordon Smith to continue defending workplace democracy.
Where do the Senates Candidates Stand on Employee Rights?

How much does it cost to buy a new law in Congress? About a $1 billion. (That’s billion with a “B”).

This year it is estimated that the labor movement will spend more than $1 billion supporting some political candidates that back forced unionization through the deceptively-named Employee Free Choice Act (EFCA).

That is more than any other special interest group in Washington.

As a result many candidates are appeasing their labor union funders in backing this undemocratic and intrinsically flawed legislation.

Find out where your Senate candidates stand on EFCA and tell them to pledge to protect workers rights.


Columnist turns over a rats' nest

I struck a nerve with last week's column titled "Hey, unions: What part of 'budget cut' don't you understand?" Actually, it was more than one nerve. It was more like an entire nervous system.

I challenged the unions in Martin County to stop their whining after one secured 2.5 percent cost-of-living raises even for those who received less than satisfactory reviews, while the Teamsters union continues pushing for 8.5 percent raises as the government tries to slash $26 million from its budget.

Some responders had good points. Others but did their best to skewer me for even questioning the unions' rightful request for more dough:

Hey Glen, you jerk, what part of capitalism don't you understand? - Jim Fireman

First, Jim, I'm going to make a wild guess. I bet you're a fireman. Let me also guess that you don't read my columns that often, since I spell my name with two N's As for the capitalism, what I understand is that times are really bad right now, which means asking for 8.5 percent raises like your friends in the Teamsters union are doing might be asking a bit much.

Your article on Sunday ... about unions and government pay raises really hit the nail on the head. - Butch

Thanks, Butch. But just between you and me, let's not use such violent language when discussing the Teamsters.

I agree, Glenn. But the only thing more disgusting is how much you members of the verminous "American" media get paid to give an opinion that most people don't give two urinary trickles about. As terrible, lazy, and worthless all of us government workers allegedly are, it pales in comparison with the amount of money you overpaid, self-important, rabble-rousing, voyeuristic media ghouls make. - State Officer

State, let me compliment you for the excellent string of adjectives you have put together here. Send me a résumé, and maybe we can find you a job on our overpaid staff.

Hey, Palm Beach Post editor, what part of fraud don't you understand? ... The News Media deliberately inflates foreclosure numbers to scare away home buyers. - Donald

I'm afraid this column is about unions, Donald. Let's stay on topic.

Martin County government is a costly paper pushing bureaucracy that sucks the hard-working taxpayers' blood like a vampire. - Skeleton Crew

Love the metaphor, Skeleton. I presume you earned that name after your bloodthirsty bosses got through draining your platelets.

Wrong! A 2.5% cost-of-living adjustment is NOT a raise. If an employee does not get a cost-of-living adjustment, it is the SAME THING as having your pay CUT. - Honest Worker

Honest, I honestly like the way you think. I plan to use that line of reasoning the next time I ask my media-ghoul bosses to boost my already massive salary. I just hope they don't notice the higher figure under the "Total Earned" column on my paycheck.

- Glenn Henderson


Undoing worker-choice in Alabama

Stunning parliamentary move

Alabama business leaders watched their top legislative priority - a bill to allow small companies and employees to deduct health-care premiums from state taxes - stall in the Legislature this year, but they saw some successes.

Business groups and small companies point to a bill that brought Alabama's unemployment laws in line with national guidelines, saying that it promises to save Alabama companies of all sizes up to $700 million each year.

They also cite their success in stopping bills they thought would hurt state businesses and even called an extended Senate logjam a mixed blessing.

None of that masked their disappointment about another failed effort to pass the health-care bill that would have allowed workers at small businesses to deduct 200 percent of the of their health insurance costs from their state taxes.

The small business would have received a similar break.

Dr. Mickey Golden, a Montgomery veterinarian, said the bill would have made it easier for his company to attract and retain good employees.

"We are well aware of it and followed it," he said of the bill's progress in the Legislature.

"It would be great if we could get it back up there and get it through."

Supporters came closer to passage than in previous years when it never came up for serious consideration.

Rosemary Elebash, executive director of the Alabama Chapter of the National Federation of Independent Businesses, said she was pleased that the bill remained technically alive until the session's final hours.

She said that the group came close to getting the bill passed shows how far it has come.

"We look at that as a starting point we didn't have last year," she said

Elebash said that while the health-care bill failed to get an up-or-down vote, in part because of stalling tactics in the Senate, the session wasn't a total loss. The Senate showdown froze bills for weeks, and she said that applied to good and bad bills alike.

"I think that works both ways," she said. "It stopped some unfriendly business bills, and it did prevent some positive things."

Golden said the biggest victory for business was the State Unemployment Tax Act bill that protected the state's low unemployment insurance rates.

"That was a big thing for us," he said.

Elebash said the bill means about $700 million annually for Alabama employers.

Alabama missed a deadline by not passing the bill during the 2007 session, but business and labor leaders negotiated a deal to pass it in 2008.

Labor leaders supported it largely because of an increase in weekly unemployment compensation payments. Unemployed workers can collect up to $235 weekly now. That will increase to $255 on July 1 and to $265 in 2009.

The bill also called for a break in benefits, after the 13th week, something business leaders wanted.

"We worked and negotiated with labor unions on these issues," Elebash said. "This stabilizes the unemployment trust fund and keeps it a healthy fund."

She said the partnership would extend into the rest of the year as labor and business look at ways to improve the state's unemployment system.

"We will look at the unemployment laws that have not been changed in decades," she said.

Labor and business did not make peace on all items before the Legislature this year.

Elebash said business leaders were stunned early in the session when bills to repeal the state's right-to-work law were introduced. She is happy about that.

But her lingering memory of the 2008 session will be of the health insurance bill that failed.

"You always focus so hard on the major ones," she said.


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