This month, Senator Harr and members of the Business and Labor Committee decided to study the Nebraska Commission of Industrial Relations (CIR). The reason you should care is fairly simple; it’s almost impossible to reduce local taxes due to the CIR rules. The CIR has a “ratcheting up effect” on government salaries and benefits, which taxpayers are responsible for.

LIBA offered the following information based on our investigation related to the 2011 changes implemented by state senators.

The negotiations conducted over the past few years between municipalities and public employee unions, and conversations we have had with both elected officials and those involved in negotiations with public employee unions, indicate that more work is needed to address the shortcomings of the CIR. Simply put, the present environment in which union negotiations take place remains detrimental to the interests of the taxpayers of our great state.

Both city and county officials have expressed frustration with the CIR process.

There is clear need to revisit the entire Industrial Relations Act. First, the current state of labor negotiations in Nebraska requires governments dealing with unions to meet standards for wages that are not realistic in Nebraska’s employment environment. Many municipal departments are forced to match wage standards and conditions of employment with those of employers in states like Minnesota, Michigan, or Illinois based on the current state of the law. Such comparisons are not appropriate given the very real differences between the economies and employment environments of these states and Nebraska.

Additionally, uncertainty about the proper calculations under the current formula requires elected officials to walk a fine line when handling negotiations. This uncertainty is further exacerbated by the high cost of hiring appropriate experts to make accurate calculations. In the face of the large amount of control and discretion afforded the CIR when a dispute during negotiations arises, the difficulty of calculating “comparable wages” and benefits accurately restricts elected officials from negotiating strongly for the best interests of the taxpayers they represent. The result is that the voice of the taxpayer is largely silenced in the negotiation process.

The changes made in LB 379 do not go far enough in making labor negotiations consistent and flexible for the government officials charged with the important obligation of responsibly managing the public’s finances. Frankly, more hard work from our legislature is crucial. Nebraskans deserve to see an earnest effort by this Committee to remove one of the biggest obstacles to the success of Nebraska municipal government and to address one of the largest expenses for taxpayers. Serious and tangible reform is still needed, and LIBA urges the members of the Business and Labor Committee to revisit the Industrial Relations Act.

LIBA studies and promotes these types of issues that are important to businesses and our community.  If you have an interest in joining LIBA, please call me at (402) 466-3419.  LIBA membership is not restricted to just businesses.  We also have “individual” memberships for those who want to help influence our local government decisions.