The Committee on Government Affairs was called to order at 8:12 a.m., on Tuesday, February 23, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Bache, Chairman

Mr. Lee, Vice Chairman

Ms. Berman

Mrs. Freeman

Ms. Gibbons

Mr. Humke

Mr. Mortenson

Mr. Neighbors

Ms. Parnell

Ms. Segerblom

Ms. Tiffany

Ms. Von Tobel

Mr. Williams

COMMITTEE MEMBERS EXCUSED:

Mr. Thomas

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Bob Gagnier, Executive Director, State of Nevada Employees Association (SNEA) said A.B. 131 was a proposal establishing collective bargaining for classified state employees. (Exhibit C) The bill was similar to A.B. 310 of the 69^th session, which passed the full Assembly in 1997. To give new committee members some background, in 1969 the legislature created Nevada Revised Statutes (NRS) 288, providing collective bargaining to local government employees but specifically excluded state workers. He pointed out 26 states presently provided state workers the right of collective bargaining. State workers were the only group of employees within the state denied the right to negotiate wages and working conditions. Even though state workers were denied that right a resolution was passed in 1969 urging the administration to work with SNEA. For many years SNEA was able to negotiate with the administration and in fact had written agreements with the administration in the 1970’s and early 1980’s but that was not the case over the past several years.

In the early 1970’s state salaries were equal to most local governments however, over the years those dropped behind by an alarming amount. Contributing to the drop was the fact local governments had designated agents to negotiate salaries. Current law required the personnel director to make recommendations for salaries during legislative sessions based upon four factors: surveys, changes in the cost of living, rate of turnover and difficulty in recruiting, and maintaining equitable relationships between classifications. Many of the classifications singled out for special pay raises over the last few sessions were those with the lowest turnover with no recruiting difficulty while classes with the lowest pay and highest turnover rate were ignored.

Mr. Gagnier went on to say badly needed units were sitting vacant at state prisons because of inadequate staffing, which caused overcrowding in other correctional facilities. He felt many employee issues brought before the legislature could better be solved with collective bargaining or by contract. The need for collective bargaining went beyond salaries with the greatest concern in the area of working conditions. Working conditions included such items as grievance procedures, dress codes, shift assignments, fair distribution of overtime, training, and in-house transfers. Management always said they were willing to discuss those issues, but in fact it was never the case. On an occasion where they did meet with SNEA, there was no meaningful dialogue but a matter of listening and doing what they wanted anyway. Mr. Gagnier said he would defer any questions until Mr. Thompson testified, as Mr. Thompson was due shortly in another committee.

Chairman Bache said he would take Mr. Thompson’s testimony and any questions from the committee so he could go to the Committee on Commerce and Labor.

Danny Thompson stated he was representing the Nevada AFL-CIO and as a former legislator had seen the same issue arise over the years. The foundation of unionism was collective bargaining and when the original Dodge Act was passed in 1969 by the legislature an injustice was done because all public employees were given the right to collective bargaining except state workers. He saw no difference between a state, county or city employee. In his state-of-the-state address, the Governor indicated over the past few years salaries of state employees had plummeted to 17 percent less than county employees. Mr. Thompson felt the main reason for the disparity in pay was lack of collective bargaining.

He went on to say law enforcement employees coming into state service became highly trained and then left state service taking positions with the county or city. The reason was they could do the exact same job but make a livable wage. Because so many law enforcement officers left state service immediately after completing their training, someone came up with the idea if an employee left before 2 years after his date of employment, the cost of any training received by the individual must be paid back to the state. After the budget was submitted the money committees worked with the state budget, and only in the waning days of the legislature were employee’s salaries considered, receiving whatever was left. As long as that particular process continued and collective bargaining denied, those 12,000 state employees would continue to be treated differently than police officers, firefighters and teachers. To solve the problem of turnover the state worker must be given the right of collective bargaining.

Mr. Williams stated it was his seventh term and believed Mr. Thompson was the Chairman of Government Affairs when he had first been elected and since then had tried to figure out the collective bargaining issue. Arguments had been made on both sides and he still did not see why state employees were denied the same rights other public employees had in the state. Over the years he noted employees transferred back and forth between county and city positions, but no one ever left those entities to take positions with the state. He asked Mr. Thompson why he felt state employees never received the same rights as other public employees, because the question of collective bargaining had been on-going for so many years and always denied.

Mr. Thompson replied, until he became a lobbyist he had not realized all the barriers put in place to block passage of a bill. He thought the main problem was a lot of people did not understand collective bargaining, and felt if it was available to state employees, somehow it would impact businesses. If everyone who objected to collective bargaining went to all the little cities and towns in Nevada and observed the employees who were unionized and had collective bargaining they would realize those municipalities were not impacted in any way. Rather than having everything addressed by statute, problems could be solved by employers and employees getting together to negotiate the issues. As well as wasting taxpayer money, people were afraid of what they felt collective bargaining implied.

Mr. Williams felt people were not afraid of it as it was voted in for teachers, county, and city workers and he could still not understand why state workers were considered different. Mr. Thompson responded state workers were no different than city and county workers, police, teachers, and firefighters who had bargaining rights and he really did not understand the objections either.

Mr. Williams thought state workers should be compensated first because they were employees of the State of Nevada and as such worked for the citizens of the state. Mr. Thompson responded he would think that should be the case.

Ms. Gibbons questioned if there was a discrepancy statewide between county, city, and state of 17 percent in monetary compensation, would the margin be greater in Las Vegas and Clark County. Mr. Thompson replied he did not have exact figures, but the margin of disparity was considerably higher in the south with state employees falling further behind each year. He pointed out in 1999 they would fall even further behind and as the differential became greater more people would continue leaving state service in order to make a decent living.

Mrs. Freeman asked if the bill passed would both classified and unclassified employees have collective bargaining. Mr. Thompson responded it would give collective bargaining rights to all state employees.

As there were no further questions of Mr. Thompson, Chairman Bache asked Mr. Gagnier to continue with his testimony.

Mr. Gagnier addressed Ms. Gibbons’ question by stating the Department of Personnel did a study required by law every 2 years and felt that particular study was what the Governor based his 17 percent remark in his state of the state address. SNEA also did a survey every 2 years on local governments to verify the state study. As an example, an Account Clerk II with the state and a common class was compared with county and cities throughout the state, and salaries were 18 percent less at the entry level and 23.7 percent at the top level. An Associate Engineer in state service was paid 26 percent less than the same position in the private sector. Comparing a state correctional officer with Washoe County, City of Las Vegas, City of North Las Vegas and Las Vegas Metro, the state correctional officer made 49.1 percent less at the entry level and 53 percent less at the top.

Mr. Gagnier pointed out when the bill was drafted the bill drafters chose to make it part of NRS 288 rather than NRS 284 where it had been addressed in the past. He stressed none of the provisions of the Local Government Employee Management Relations Act would apply, the new section in NRS 288 was important because of provisions within the act which state employees did not want applied to them. Another important issue was budget cycles while the state dealt with 2-year budgets, local governments dealt with annual budgets. There were also provisions in the act stating law enforcement officers could only belong to organizations composed of peace officers, which conflicted with state government employees.

He added it was brought to his attention under section 2, lines 29 through 32 dealing with conflicts where the contract would take precedence he thought perhaps that section could be placed in regulations rather than statutes. The changes on page 3 were definitions and fairly standard. He pointed out at the top of page 4 of the bill, there was language excluding classified employees at grade 42 or higher, which alluded to the pay plan presently in existence, could be changed at any time by State Personnel. Also, on page 4, line 6, employees of the State Printing Office had a long history of negotiating through the International Topographers Union and had been excluded from the bill.

In section 17 at the bottom of page 4 was the negotiability section and defined what was negotiable. The language was more common in collective bargaining statutes and federal law regarding salaries, hours, working conditions and benefits other than the Public Employees Retirement Act (PERS). PERS applied to all public employees having a broader application, so the distinction was made.

Page 5 covered the open meeting law and created a new body, The Board for Labor Relations. Section 19 created the board and designated how members would be selected. It would be a part-time board serving for 4 years with section 20 covering duties and authority to exercise those duties.

Mr. Gagnier pointed out on page 8, section 25 covered employee rights. Nothing in the bill interfered in any way with right to work laws. Section 26 dealt with management rights, which he felt needed to be spelled out in government entities as opposed to private industry. Section 27 was complex because it determined collective bargaining units, what could be negotiated, and at what level negotiations would take place. Bargaining units were set up by what was called community of interest, which was by state classification. Nine bargaining units were determined to be the maximum, because in some other states there were up to 240 bargaining units within state government. The newly created board would review questions regarding the units and make the decision of which classification went into a particular bargaining unit. On page 10, the clause "The board shall not change an established bargaining unit arbitrarily" covered a very important issue as once bargaining units were established, classifications should not be moving in and out of those units in order to benefit one employee organization over another. When new positions were created in the Department of Personnel, the board would decide which unit the new positions could join based on a community of interest.

Section 28 covered the process of what must be done in order to be certified as an exclusive bargaining agent. The main thrust was 50 percent of any current membership must be certified, also covered were bargaining unit elections which assured all employees had a voice.

Mr. Gagnier explained Section 33 covered negotiations, indicating obligations and rights of the exclusive bargaining agent. He felt section 34 was also important because it specified, "the governor or a person designated by the governor shall on behalf of the executive department negotiate with the exclusive bargaining agent." If an agreement was reached it must be reduced to writing and signed by the parties without violating any law, but it could recommend changes in the law. He added a separate bill covering grievance procedures would be introduced. However if A.B. 131 became law the procedure would become a matter of negotiation. Grievance and mediation procedures were covered on page 15. If agreement could not be reached an arbitrator would negotiate on behalf of each party. Guidelines for the arbitrator as well as deadlines were also spelled out.

Page 18 covered when a contract went into effect and when sending a contract to the legislature, what the authority the legislature have. Mr. Gagnier addressed supplemental agreements indicated in section 45. It was conceivable employees in one agency had issues peculiar to that particular agency and it would not be feasible to bargain with the governor or his designee if the issue affected only one agency. It also allowed if one bargaining agent had two or more bargaining units, negotiations could be consolidated. The remainder of the bill dealt mainly with language changes. He wanted to quote one section on page 21, "If any provision of a collective bargaining agreement conflicts with any provision of NRS or a special act, the provision of the collective bargaining agreement is void and must not be given effect, unless the legislature expressly acknowledges the conflict and approves the provision of the collective bargaining agreement in a bill or concurrent resolution . . ." Which made it clear the collective bargaining agreement could not conflict with law. Mr. Gagnier wanted to make a final point the "no strike law" remained untouched, state employees would still be unable to strike if the bill passed.

Ms. Segerblom questioned how many state employees belonged to SNEA. Mr. Gagnier responded membership was around 4,000. State personnel/payroll had approximately 15,000 on the state payroll, which did not include the university system as it had its own payroll system. There were also several smaller groups with no guarantee SNEA would be the bargaining agent, as elections still had to be won.

Ms. Gibbons asked if correctional officers and highway patrolmen were covered under the same plan. Mr. Gagnier said correctional officers were included, but there was a separate bargaining unit for highway patrol officers. Some specialized areas would have their own bargaining units.

Ms. Parnell pointed out she represented Assembly District 40 which housed many state workers. In the last few months she had an opportunity to deal with many state agencies and personnel. She felt collective bargaining was an issue of fairness and she was submitting two bills: one dealt with grievance procedures and one dealt with bidding for schedules and days off. In talking with state workers she was most concerned with the morale issues. She believed low morale was created when people had no voice or control over conditions in the work place. With collective bargaining employees would be given a voice and in turn become more fiscally and personally responsible. She wanted to go on record as supporting the bill.

Chairman Bache had a question on page 5, section 19, "Members of the board serve at the pleasure of the appointing authority in each case." Previous language had the board serving for 4 years, yet in that section it stated they served at the pleasure of the appointing authority. He felt perhaps there should be language specifying board members could only be removed for just cause, which kept them more independent. Mr. Gagnier replied it was a point well taken. He would have no objection to changing subsection 5, lines 19 and 20.

Mrs. Freeman observed she had been on the Committee on Government Affairs for six sessions, and felt the bill under consideration seemed very even handed. She questioned if the governor or his staff was aware of the bill and if there had been any conversations with the governor’s office. Mr. Gagnier responded no meetings were held with any member of the governor’s staff. SNEA had asked for meetings on three different occasions but to date had no response.

Rich Houts, Secretary-Treasurer of the Northern Nevada Building and Construction Trades Council, testified he wanted to be on record the building trades council supported collective bargaining for state employees. His organization believed they should be afforded the same rights as all other public and private employees throughout the state.

Robert K. Curtis, Business Representative, Plasterers and Cement Masons of Northern Nevada, was also in support of collective bargaining for state employees. It was a right of not only employees but also employers in becoming involved in collective bargaining. There should be negotiations between the two entities in reaching an equitable agreement.

Testifying for the Nevada Highway Patrol Association was Gary Wolff, Business Agent who said he was also authorized to voice support from Peace Officers Research Association of Nevada (PORAN) another peace officers group representing over 20 agencies throughout the state. He added he was also representing the Association of Firefighters who supported the bill. He saw one problem with the bill on page 4, line 2 of the bill, where any position at grade 42 or higher was eliminated from the process. A sergeant in the Nevada Highway Patrol (NHP) through pay increases could be at a grade 42, which eliminated them from collective bargaining, even though in another part of the bill it stated those officers could be involved in collective bargaining. He realized specifications were spelled out addressing employees in supervisory positions, who would not normally be involved in collective bargaining.

Mr. Wolff went on to say on behalf of the patrolmen, currently more than 11 percent of NHP troopers had submitted applications to other agencies. It cost the state $50,000 to train each trooper. Several years ago NHP troopers were the highest paid law enforcement officers in the state, today that same officer was paid 27 percent less than a Metro officer. NHP recently had a statewide recruitment drive for troopers receiving less than 400 applications. Mr. Wolff alluded to benchmark studies, salary surveys, and personnel studies done over the years, but nothing had really changed. State Personnel was trying to create a new classification system because there were so many position classifications it was difficult to determine exactly what a certain job entailed. He had been with law enforcement for 25 years and only recently became aware of two police officer positions. State Personnel submitted a proposal through its budget for $300,000 to hire a vendor to address employee classification problems but it was taken out of the budget. He added $300,000 would cover the cost of six troopers.

In responding to Mr. Williams remarks, he wanted to point out the reason collective bargaining legislation kept failing was because large businesses wanted complete control without having to deal with anyone through collective bargaining. Casino salaries were substandard with Reno building low-cost apartment buildings at alarming rates because of those low-paying jobs. Even though salaries were lower than Clark County the cost of living in Reno was traditionally higher. He stressed there would be people testifying against the bill, including Chambers of Commerce throughout the state, because of what collective bargaining might cost big business.

Ms. Freeman asked if the President of the United States was sending funds to the states for additional law enforcement officers, how would federal funding fit into the whole picture. Mr. Wolff responded he felt the funding was simply to put more officers on the street. The problem with federal money was there were always strings attached. A good example was salaries paid to the Division of Forestry where funding was actually paid by the counties, but filtered through the state.

Steven Barr, Nevada Correctional Association, testified correctional officers in both the north and south were leaving in mass numbers. Washoe county currently had a new policy allowing lateral transfers from the Department of Prisons and currently paid 26 percent more in starting pay which was tempting to the officers. In the south the starting salary was 51 percent more, with the starting salary for a Metro recruit the same as the top salary for a state correctional officer. Sixty percent of Department of Prisons line staff had 3 years or less experience with the department. The Department of Personnel conducted a salary survey of the 10 western states and concluded there was a 17 percent differential. Millions of dollars were being wasted as the state was serving as a training ground for other agencies. Once officers within the state met the criteria of their training, they put in applications with every other agency in the state.

Andy Anderson, President, Las Vegas Police Protective Association Metro, wanted to go on record as supporting collective bargaining for state employees. He stated he had been in law enforcement for over 26 years and when he started with the Metro Police Department in 1973, 200 applicants applied for 50 positions. In 1997 there were 4,000 applicants for 50 vacancies, which was a natural attraction of better paying departments. Collective bargaining had been fairly successful since it started at Metro in 1979 with increased benefits and better lines of communication within the department between management and staff.

He went on to say his organization now also represented several Parole and Probation officers in the north, and in meetings with them the primary concern was not benefits but low morale and supervision. Those types of problems could only be resolved with proper procedures and rules. Recently a collective bargaining procedure was established in Las Vegas encouraging communication, which he felt was the wave of the future. Collective bargaining accomplished a lot in both cities and counties and it would be best for the state. It would not bankrupt the system as shown by bargaining in Carlin and was a process giving all entities a level playing field.

As there was no one else to testify in support of the bill, Chairman Bache invited those in opposition to express their concerns.

David Howard, Public Policy Director, representing Reno Sparks Chamber of Commerce and the State Chamber of Commerce Association, testified his group was once again appearing before the Committee on Government Affairs in opposition to collective bargaining (Exhibit D), pointing out state and local government were separated for a good reason. If local government had not been separated he felt the room would be full because other public and private entities did not want to be associated with state employees. He had been coming before the committee for four sessions, and in response to Mr. Williams’ question the reason a bill had not passed was the separation issue.

The author of the original collective bargaining bill was Carl Dodge, but he had not fulfilled his original purpose. In 1985 the city of Reno came before the legislature requesting relief and testified the city was bankrupt due to collective bargaining with local employees, particularly safety employees. The message he wanted to leave was one of "level playing fields," which was fine for employees but should include employers. At a time when Reno could not afford to replace chainsaw blades for the parks department the firemen’s unit received a 9 percent increase through arbitration, when the cost of living increase was less than 3 percent. Jobs were created by businesses throughout the state, and if there were no businesses, no safety personnel would be needed to protect non-existent businesses.

Mr. Williams said the question he was asking was "why state public employees were treated differently than other public employees." It appeared the chamber was saying it was alright for singular bargaining but not gather collectively to protect their rights or decide their own fate. He felt no person should be denied that particular right. He respected both sides’ opinions, but he pointed out local governments and law enforcement agencies had collective bargaining for a number of years and the state continued to prosper. Also the Chamber of Commerce continued to prosper so he felt it was a reciprocal situation where each helped the other side. If collective bargaining worked for every other entity in the state and the state was still prospering, he questioned why state employees were being denied the same right. If the chambers felt collective bargaining was evil he questioned why they were not trying to repeal the rights of local governments. He believed if it was a choice between property and human rights, human rights should prevail and if it was good for one group of people, it should be good for all. He pointed out just because collective bargaining was in place it did not mean any group would get everything it demanded, they would only be able to negotiate.

Mr. Howard related Senator Dodge told him his original purpose for collective bargaining was to prevent strikes by local governments. As was pointed out that was still in the law and the original intent was to give the employees something in exchange for not striking. He pointed out to Mr. Williams local government was not in attendance and he would leave Mr. Williams to ponder why. He went on to say just because no one from cities or counties was there on the collective bargaining issue, if there were a way politically to repeal chapter 288, he felt business would fill the room in support of such a bill.

Carol Vilardo, Nevada Taxpayers Association said she was speaking in opposition to the bill. She was sympathetic with the issue raised regarding employee salaries as there was no doubt local government salaries, particularly in Clark County, exceeded even what private sector paid for comparable jobs. Complaints from private sector indicated even they were losing jobs to local government entities. It was not just the issue of salaries but also compensation. Private sector did not offer benefits anywhere near those offered by local or state governments. Collective bargaining worked very well in certain instances, but it had always been a very political issue. In 1993 and 1995 when problems in White Pine County first surfaced and the county came to the legislature for assistance with funding problems, local government still negotiated a 6 percent wage increase. That was at a time when cost of living increases were at 3 percent and property tax rates in the county far exceeded those in any other area of the state. She did not feel there would ever be a way to equalize salaries for identical jobs. It did not happen within the state or local governments and certainly not between the state and local government.

Another function in play when discussing salaries was one of supply and demand in the market place. Ms. Vilardo pointed out she had just seen an advertisement for an assistant manager position for a new Taco Bell currently under construction with a starting salary of up to $9 an hour. She had spent 23 years in retail sales, which was a minimum wage business and there was more to running a business than using collective bargaining in solving problems. Almost every state allowed collective bargaining by local government units rather than 26 states alluded to in testimony. Unlike local governments where elected officials served as both executive and legislative branches of government, state government had a division between executive and legislative branches which did not lend itself to collective bargaining. Another problem in Nevada was with the university that had a separate bargaining unit, and often referred to itself as the fourth branch of government.

Ms. Vilardo stated there was a constitutional provision saying the legislature would set the tax rates necessary to present a balanced budget. When such a situation occurred, as with the low economic forecast seen in 1999, the executive branch had two choices, either cut the budget or raise taxes. Additionally, whatever funding the university received was historically used at its discretion. In 1997 many professors expected increases in wages, instead money was used for building improvement. It seemed university regents used funding at their discretion in categorical spending, and that problem was not addressed in the bill. Another provision she felt should be in the bill was the check off for dues. In the original Dodge Act a provision was made if membership dropped below 50 percent there was disillusionment, and there was no such provision contained in the bill. There were philosophical differences, but it was frequently seen as purely a labor/management issue. She felt if employment were higher, the situation would be different because any available job would be a good job.

Mrs. Freeman responded most of the issues raised had been brought before the committee in every past session she could remember. With regard to White Pine School District problems, there were many hearings and at no time had she heard anything about collective bargaining. What had been brought out related to the people serving on the school board and the way in which school funding was handled. Grand pianos were being bought while payrolls were not met. She recalled, during the funding crises in the city of Reno Senator Raggio had requested an audit from them but no other city in the state. She felt collective bargaining was not an issue in any local government’s problems but one of home rule. The biggest problem in small counties was lack of industry so no tax base was being provided.

Ms. Vilardo clarified when she had talked about White Pine County she was not referring to the school district but financial problems throughout the county including the cities of Ely, Ruth, and McGill. She knew both White Pine County and the city of Ely had collective bargaining. Increased wages in the county were great enough to reduce budgets because of a lack of a tax base. The effect reduced the work force so services had to be cut. In 1981 school districts testified general fund budgets were being cut because property tax prior to the tax shift had been paying for most of the wages. At that time wages for the school district were running 68 percent to 74 percent of the county budgets, today the percentage was anywhere from 85 to 87.7 percent. That was a huge jump in a very short period of time and was due mainly to the way contracts were negotiated. The entire budget process was run by the tax base, and as had been brought out in a hearing before the Committee on Taxation, a reduction in industry was taking place so cuts were made in services, or there were a minimum number of employees providing some services.

Mrs. Freeman interjected to question why the collective bargaining issue was not raised in the Committee on Taxation. Ms. Vilardo responded she tried to focus on issues in a bill relating only to which hearing she was attending and in the Committee on Taxation systemic problems were not addressed.

Mrs. Freeman remembered a study done in 1990 which only recently was being reviewed which cost the state over $600,000. It had addressed the whole issue of collective bargaining in cities and counties, how funding was accomplished and how services were provided. Because those issues were not addressed in the past she felt it was difficult to look at one tax base issue and not take in the whole picture.

Ms. Parnell said she had a concern with what she had heard, it was assumed collective bargaining would automatically "break the bank." As a teacher and part of a bargaining unit there were a number of years when the governor announced at the end of the session the raises public employees would receive and teachers were not included. Teachers went to the bargaining table, analyzed what was available in a particular district and resolved not only funding but also working conditions. She stressed collective bargaining addressed more than just salaries.

Ms. Vilardo said she did not disagree and when negotiations began there was more than just wages at stake. She felt it was a "break the bank" issue because teachers were included in the state classified pay bill. There was a provision indicating the amount to be added for school districts. She had seen state budgets approved with a 3 to 4 percent raise over the biennium, while school districts negotiated a 5 to 7 percent raise over that same period of time, so adjustments had to be made elsewhere. She felt the separation of powers at the state level was the reason not every state had collective bargaining.

Mr. Humke noted both the revenue side and generation of money from taxes had been discussed. He noted the effective date on the bill was July 1, 1999, and as the money committees were currently building the budget for the coming biennium he questioned if costs associated with A.B. 131 were being built into the budget. He said if the bill passed the only way to cover costs would be budgetary changes and as the Governor pointed out 95 percent of the budget was contained in what was referred to as "base." Those costs were driven by population increases and increased needs and questioned where cuts could be made. Ms. Vilardo replied she would give a very limited response, as she was not an expert on budget matters. If the bill were passed July 1, 1999, the only impact would be whatever funding was necessary to set up the three-person state employee board. The wage issue would be nominal, but funding was needed for space, rent, equipment and staff, which would obviously raise the costs. If an unexpected expense arose, such as passage of the bill, there would only be two places to cut costs and that was wages, benefits, or both. Assuming the base budget was accepted there would be certain constraints, which meant "enhancements" would have to be changed. There was a constitutional provision stating if funding a balanced budget fell short, taxes must be increased.

Ms. Gibbons commented she was sitting in a very pretty building and there was a new beautiful Supreme Court Building with nice grounds across the way, but all the improvements were made to things and in opposing the bill it seemed people were being left out. The state was a complex working machine and needed competent people to watch after taxpayer dollars. She supported business, but more importantly she felt people must be supported.

Ms. Vilardo said collective bargaining was not the only way to support people. Employees and management could confer, which was what Mr. Gagnier referenced when agencies used to sit down with the executive branch of government to resolve problems. The legislature by policy determination could resolve issues and was why collective bargaining was not needed.

Mr. Williams said he had a comment on how the whole conversation seemed directed. There was so much concern about economic forecast and whether there was money to "buy chains for chain saws." He had seen times when there was a lot of money available and economy in Nevada was booming but the chambers did not waltz into the legislature and say lets help the employees out. The bottom line appeared no matter if times were good or bad, state employees were ignored. The overall feelings expressed seemed to be nothing could be done for the employees because the next poll or study of economic indicators might show there was not enough money. It seemed state employees had been waiting around for the good times to arrive, and yet when they did raises still were not forthcoming. He felt the whole issue was in giving state employees the same right every other worker had in the state because he could not see where collective bargaining had impacted the state in a negative way. People moved into the state everyday, so no one was avoiding Nevada. The question was what was being done to help the employees of government who represented the entire state including the legislature.

Ms. Segerblom said her concern was the quality of life for state employees. If state employees had more money to spend it surely would bring in more tax revenue so it would even out. If employees kept leaving state service to go to cities and counties, eventually there would not be any qualified employees left.

Sam McMullen, Las Vegas Chamber of Commerce and the Retail Association of Nevada stated it was a difficult situation each time the issue came before the legislature. He realized the issues covered real people and their paychecks, which was always a touchy subject. He felt all business people understood the concerns and issues of motivated employees, good morale, and maximizing benefits. All 5,700 employers throughout the state understood the fact sufficient taxes were flowing into the state to balance the issues. There were a number of changes made to the bill over the years, and the present bill was much improved. Conceptually for the chambers it did not alleviate their main concerns. He would let the committee read his testimony (Attachment E) and would summarize the issues.

Basically there had to be a balance between taxpayer and cost of government. Unfortunately, a balanced budget must take place before pay raises could even be considered so it became a key factor in building the state budget. People paid taxes and in turn those taxes were used to invest in services and people. The feeling in private sector was a question of payroll and benefits with questions raised by proponents, which in effect pitted state worker against local government workers in saying there was disparity between their salaries. In across the board comparisons, local governments certainly had the highest bases with state government next and certainly private sector was the lowest, which made the argument of inequity and imbalance a parody. Local governments met yearly and focused on balanced budgets, but the state had a constitutional requirement to balance the budget over the biennium.

The problem with the bill was it tweaked the state process and unfortunately some of the most adjustable costs were people costs. He pointed out collective bargaining was not the only answer there were remedies in place which he felt were adequate, with a wide range in grades and working conditions. The bill brought up political features of the budget, and if a collective bargaining agreement were thrown into the process the legislature would be faced with the consequences. He added state pay raises had been given employees in the past when the fiscal picture was a little brighter, unfortunately 1999 was not one of them.

In requiring collective bargaining to be part of the budget it would mean the governor would have to figure a way to accommodate the issue. Programs were in place, which were very effective and passage of the bill would pit all the programs against each other.

He concluded by saying a process was in place with tools and procedures, which could be used in place of collective bargaining. Perhaps they were not fully used, but the way the bill was worded it created leverage on a process that did not need anymore problems.

Mr. Humke asked if Mr. McMullen represented only the Las Vegas Chamber of Commerce. Mr. McMullen responded he also represented the Retail Association of Nevada including grocery stores, chain pharmacies, and major retailers throughout the state. Mr. Humke questioned if there were other chambers beside Las Vegas he was representing. Mr. McMullen replied he only had authority to represent the Las Vegas chamber.

Mr. Humke went on to say if the bill passed effective July 1, 1999, with concerns raised regarding section 42 and 44, was he saying it could trigger special sessions. Mr. McMullen responded it clearly offered the opportunity. Regarding the budget, Mr. Humke questioned if the budget was re-opened and it triggered wholesale changes, would there be time in a special session, or even the present session to change budget accounts.

Mr. McMullen felt the bill forced changes be made in less time and without much flexibility. Once the original bargaining agreement was received the timing in section 43 pressured the legislature into only two alternatives, either revise the agreement or accept it as it was written. There was no timing indicator for the legislature as far as revising, submitting, and acting on the agreement. He felt it was a policy issue, which needed close scrutiny as it was always in the waning days of the legislature, salaries and people issues were pitted against available dollars.

Chairman Bache adjourned the meeting at 10:25 a.m. as there was no further business.

RESPECTFULLY SUBMITTED:

Virginia Letts,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: