Michigan Collective Bargaining Amendment, Proposal 3 (2002)

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Michigan Collective Bargaining Amendment, Proposal 3 (2002), was on the November 5, 2002 election ballot in Michigan as an initiated constitutional amendment, where it was defeated.

Election results

Proposal 3 (Collective Bargaining Amendment)
ResultVotesPercentage
Defeatedd No1,591,75654.4%
Yes 1,336,249 45.6%

Official results via: The Michigan Secretary of the State

Text of measure

The language that appeared on the ballot

The proposed constitutional amendment would:

1. Grant state classified employees, in appropriate bargaining units determined by the Civil Service Commission, the right to elect bargaining representatives for the purpose of collective bargaining with the state employer. 2. Require the state to bargain in good faith for the purpose of reaching a binding collective bargaining agreement with any elected bargaining representatives over wages, hours, pensions and other terms and conditions of employment. 3. Extend the bargaining representatives the right to submit any unresolved disputes over the terms of a collective bargaining agreement to binding arbitration 30 days after the commencement of bargaining.[1]

House Fiscal Agency Analysis

Ballot Proposal 02-3, also known as the Michigan Employee Rights Initiative (MERIT), contains language which would amend Article XI, Section 5 of the Michigan Constitution.

Michigan's first experience with binding arbitration ended with a $28 million award to be paid by the state in 1995. That award covered three years of retroactive pay for state police troopers and sergeants.

The state is in binding arbitration for a second time with the Michigan State Police Troopers Association (MSPTA). This binding arbitration is expected to cost the state approximately $25 million (the cost of the last best offer ranges from $21 million to $35 million).

If the state was in the same position with all classified state employees represented by unions, which is equivalent to over 40,000 or 20 times the number of troopers and sergeants, the retroactive costs for a three-year contract could exceed $500 million (20 x $25 million). The costs could be even higher if all state employees were covered by binding arbitation.

Currently, there are about 61,400 state employees. Of those, approximately 1,900 are troopers or sergeants represented by a union; approximately 42,500 are other classified state employees represented by unions; and about 17,000 are non-exclusively represented employees (managerial, supervisory, or confidential) excluded from collective bargaining rights pursuant to Civil Service Commission rules, or employees in the Business and Administrative unit.

Collective bargaining agreements are in place with all of the unions except the MSPTA. These agreements commenced January 1, 2002, and are valid for a period of three years, through December 31, 2004.

If the proposal is adopted and these contracts agreements remain valid, costs related to the ballot proposal for the over 40,000 state employees currently represented by unions would not begin to occur until January 2005 (FY 2005-06 budget). At this time, a 1% increase for all classified state employees costs the state over $30 million.

The Office of the State Employer interprets the ballot proposal language to mean that many state employees who currently are excluded from collective bargaining would be included. The Civil Service Commission approves pay each year for this excluded group of employees.

Approval of pay has been completed for FY 2002-03. Therefore, costs could start to occur in FY 2003-04 if employees currently not represented by a union are deemed eligible to bargain and are placed by the Civil Service Commission in a unit or units that elect a union.

Because the complete intent of the ballot proposal language is unclear on a number of different issues, and there are numerous questions remaining to be answered, it is difficult to ascertain a realistic range of the fiscal implications to the state if Proposal 02-3 is adopted.

Immediate fiscal impact, if any, cannot be determined. There are, however, likely to be long-term costs to the state if proposal 02-3 is adopted. New contracts are likely to include higher wage and salary increases. Each 1% increase in wages under current contracts would increase costs approximately $30 million per year.

The immediate fiscal impact will depend primarily on two factors: 1. Whether or not current contracts for approximately 42,500 classified state employees will be subject to renegotiation and binding arbitration results in retroactive wage increases; and 2. Whether or not approximately 17,000 managerial, supervisory, or confidential employees not currently represented by a union can, and do, unionize and, through binding arbitration, receive salary increases.

Whether either factor actually can or will occur cannot be determined because the validity of either may require legal action. If both occur, there could be a significant fiscal impact that would depend on the results of binding arbitration. If neither occurs, there would be no immediate fiscal impact.[1]

See also

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References