GOP PUSHING FOR RIGHT-TO-WORK: A
legislative season marked by efforts to curb union power is nearing its
end in many states, but possibly not before further restrictions are
So-called right-to-work bills that would allow workers to opt out of
joining unions were proposed in 18 states this year, an unusually high
number for an issue that hasn't seen any expansion in a decade.
Right-to-work laws, first permitted under the Taft-Hartley Act of 1947,
are on the books in 22 states, mostly on the Great Plains and in the
Labor experts attribute the current surge in right-to-work legislation
to the same factors singled out for the other labor-unfriendly efforts
this session: state budget woes, Republican gains in the November
elections and the influence of Tea Party groups that are unsympathetic
to organized labor.
"The political equation has changed in a lot of states," said Michael
Eastman, Executive Director of Labor Policy for the U.S. Chamber of
Commerce. "Measures that may not have been possible two and four and six
years ago now may be."
Some of this year's measures have already died. In Indiana, for
instance, House Republicans abandoned their right-to-work push to get
Democrats who had fled the state partly in protest of that effort back
to the negotiating table. Most of the other right-to-work bills probably
aren't far enough along in the process to pass before this year's
One state where that doesn't appear to be the case, however, is New
Hampshire. Republicans, who took control of both of the state's
legislative chambers last fall, passed a right-to-work bill two weeks
ago (HB 474). Last week, Democratic Gov. John Lynch vetoed it. So
whether New Hampshire becomes the first right-to-work state in the
Northeast now hinges on whether House Republicans can come up with
enough votes for an override. The Senate passed the bill with the
two-thirds majority that would be required, but the House vote, 294-102,
fell short of that mark. Forty-seven Republicans voted against the bill
and another 22 didn't vote at all.
Local union officials aren't optimistic about their chances of avoiding an override.
"I would say that we don't have the votes right now," said Dennis Caza,
political coordinator for International Brotherhood of Teamsters Local
633, in Manchester, New Hampshire.
Supporters of right-to-work legislation in New Hampshire and elsewhere
say the public-employee pensions and benefits set by generous union
contracts are a major contributor to states' fiscal problems, and the
state of the national economy and job market have focused more attention
on the issue.
But in vetoing HB 474, Lynch said his state's economy had nothing to gain from a right-to-work law.
"New Hampshire has a lower unemployment rate and a stronger economy than
most states with so-called right-to-work laws," he wrote in his message
to lawmakers, adding, "In states with a right-to-work law, workers on
average have a lower standard of living," bring home less pay and more
often go without health insurance.
Union officials say the right-to-work measures are nothing but a
political attack, seeking to curb their influence by eliminating their
key source of political funding.
The aim of right-to-work bills is to "weaken the labor movement in key
states around the country," said Mark MacKenzie, president of the New
Hampshire AFL-CIO. "If you look at the map, it has nothing to do with
protecting workers' rights but taking over key areas of the country"
ahead of the 2012 presidential election. (WALL STREET JOURNAL, UNION
LEADER [MANCHESTER], CONCORD MONITOR)
STATES OFFER ONSHORE 'CAPTIVES':
U.S. companies looking to conduct some of their business free from the
burdens of state government regulation used to have to travel to places
like Bermuda and the Cayman Islands to do it. Now there's no need for
them to leave America's shores.
About 30 states, including Delaware, Hawaii, South Carolina, Utah and
Vermont, have passed laws allowing companies to set up insurance
subsidiaries called captives, which can accomplish the sort of complex
transactions previously done almost exclusively offshore.
Originally, "captives" referred to the subsidiaries set up by large
companies to insure the companies' own risks. For example, oil companies
used them to gird against environmental claims. The light regulation
these captives have been subject to in their overseas locations offer
the parent companies considerable cost savings.
The new U.S.-based captives offer that same benefit. By refinancing a
block of health insurance policies through a subsidiary in Vermont,
Aetna reaped $150 million in cost savings, primarily because the insurer
didn't need to maintain conventional reserves at the same level
required by regulations in its home state of Connecticut. Other
insurers, including MetLife and American International Group, have also
refinanced policies and annuities through local captives.
In addition to the potential cost savings, captives also offer insurers
an opportunity to put to use some of the money they've stashed in
reserves, making more cash available for acquisitions, bonuses and
dividends. Just weeks after Aetna's deal went through, the company
announced a fifteenfold increase in its dividend.
For the states that have authorized them, the captives, they say,
promote business travel, create jobs and provide a source of additional
revenue. Not long after Vermont got into the business in 2001, the taxes
and fees it levied on the insurance premiums collected by captives were
enough to cover 2 percent of state spending. The state also credits
captives for creating 1,400 full- and part-time jobs, and for depositing
$1 billion with local banks and other financial institutions.
But some states aren't sold on the idea. California, for one, has decided to pass on captives.
"We are concerned about systems that usher in less robust financial
security and oversight," said Dave Jones, the state's insurance
commissioner. "We need to ensure that innovative transactions are not a
strategy to drain value away from policyholders only to provide
short-term enrichment to shareholders and investment bankers." (NEW YORK
BUDGETS IN BRIEF: More than $2
billion in high-speed rail money that was rejected by FLORIDA Gov. Rick
Scott (R) was redistributed last week to 15 other states. Those along
Amtrak's Washington-Boston Northeast Corridor were the biggest winners,
with that route receiving almost $800 million of the funds (ST.
PETERSBURG TIMES, MIAMI HERALD). • U.S. House Republicans' plan to
repeal the federal health care reform law and convert the Medicaid
insurance program into block grants to states could force as many 44
million poor and disabled Americans out of the program over the next ten
years, according to analysis by the nonprofit Kaiser Family Foundation
(LOS ANGELES TIMES). • The National Labor Relations Board is opposing
Boeing Co.'s decision to construct a $1 billion production facility in
SOUTH CAROLINA instead of WASHINGTON, where the company is based. The
agency claims the decision was motivated by the company's desire not to
deal with labor unions; WASHINGTON has a unionized aerospace workforce,
while SOUTH CAROLINA does not (STATELINE.ORG). • The ALASKA Senate
passed a $2.8 billion capital budget bill (SB 46) last Tuesday, as the
Legislature's special session entered its final week (ANCHORAGE DAILY
NEWS). • CONNECTICUT Gov. Dannel P. Malloy (D) ordered the layoffs of
4,742 public employees in more than 40 agencies. Despite hours of
intense negotiations over the past two months, Malloy has failed to
reach an agreement with the state's worker unions that would yield $2
billion in savings and concessions over the next two years (HARTFORD
COURANT). • VERMONT Gov. Peter Shumlin (D) is expected to sign
legislation this month (HB 202) phasing out most private health
insurance in the state. The move would be the first step in moving the
state toward a government-run system similar to Canada's, in which
public health care is available to all residents regardless of income
(BURLINGTON FREE PRESS). • KANSAS legislative negotiators agreed on a
$14 billion budget (HB 2014) last week for the state's 2012 fiscal year.
The deal would cut overall spending between 5 percent and 6 percent
(LAWRENCE JOURNAL WORLD)
- Compiled by KOREY CLARK
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