Ohio's electorate soundly rejected Issue 2 (the referendum on Senate Bill 5) on Tuesday. As almost everyone knows, that statute made significant changes to collective bargaining for public employees in the Buckeye State. The most controversial bits included changes to binding arbitration (to give management the right to impose its last best offer), a ban on strikes by public employees, and the elimination of seniority as the sole factor for determining who should be laid off when cutbacks are necessary.

Though teachers and their unions were most definitely included???both in Senate Bill 5 and in the frantic, well-funded ($30 million) effort to persuade voters to repudiate it???education-policy watchers outside Ohio may not appreciate the extent to which this was really a referendum on policemen, firemen, and other ???first responders??? in the public sector. They and their unions were covered by the measure, too, and played the lead role???and by far the most visible role???in the campaign to undo it. There is, in fact, every reason to believe that if the first responders hadn't been involved, Senate Bill 5 would have survived Election Day.

[pullquote]On the same ballot, Ohio voters repudiated Republican plans to restructure collective bargaining in the Buckeye State and the big plans of Beltway Democrats to reshape the nation's healthcare system.[/pullquote]At their raucous victory party on Tuesday night, union leaders said the vote should send a clear message to Governor Kasich and GOP legislative leaders. ???Their biggest mistake was to think they (Republicans) could come up with a solution and impose it on a bunch of people,??? said Bill Leibensperger, vice president of the Ohio Education Association. He continued, ???There has always been room to talk. That's what collective bargaining is about. You bring adults around a table to talk about serious issues.???

He was half right. Ohio's voters indeed rejected what they were persuaded was a Republican over-reach to reshape state and local government and how it deals with its employees. The same day, however, and by an even greater (2 to 1) margin, Ohioans spurned key pieces of President Obama's l Affordable Care Act. Issue 3, thereby exempting Buckeye State residents from the new federal health insurance mandate.. Supporters of that ballot item boasted that, ???Today, Ohio voters sent a clear message to President Obama??? We reject the mandates of ???Obamacare.'???

In sum, on the same ballot, Ohio voters repudiated GOP plans to restructure collective bargaining in the Buckeye State and the big plans of Beltway Democrats to reshape the nation's healthcare system. So what lesson should politicians and policymakers draw?

Ohioans???like Americans generally???are largely centrist in their politics. (That's why it's been a key swing state in so many national elections. Remember ???As Ohio goes, so goes the nation????) The political extremes on both sides are loud and polarizing, of course, yet most state voters are moderates open to compromise. They don't like one-party solutions and are skeptical of big fixes, wherever they originate. Lasting change and real reform in a state like Ohio requires some level of bipartisan support and collaboration.

What does this mean for education reform? Are we facing a period of political paralysis in Ohio (and beyond) where nothing can be changed even when change is needed? Will elected officials be so shell-shocked from this particular electoral pounding that they will simply nibble on the margins of reform?

That would be a terrible mistake. Surveys have consistently shown that Ohioans support bona fide school-reform efforts, and many of the other education reforms that were tucked into the 300 pages of Senate Bill 5 had and still have the support of voters. These include:

  • Creating a salary structure free of automatic step increases;
  • Requiring performance-based pay for teachers and nonteaching school employees;
  • Limiting public employer contributions toward health care benefit costs;
  • Requiring annual evaluations of teachers to include student performance data; and
  • Requiring that any lay-offs be based in part on these evaluations.

The Fordham Institute polled Ohioans on education issues in 2005, 2007, and 2009 and in every one of these surveys Buckeye residents said they preferred paying teachers according to their ???performance and how effectively they teach??? rather than compensating them for ???years of service and degrees earned.??? In 2009, the margin was a striking 69 to 15 percent. Further, an overwhelming 87 percent favored ???giving local public schools more freedom to fire teachers that aren't performing,??? while only 11 percent opposed such a measure.

Quinnipiac reported two weeks ago that Ohioans supported (49 to 40 percent) the provision in Senate Bill 5 that pay increases for public-sector employees (including teachers) should be based on merit rather than seniority. And again, as Ohio goes, so goes the nation. Recent national polls show Americans overall support merit pay and tying tenure to performance. An Education Next survey earlier this year found that ???those who say tenure should be based on academic progress increased from 49 percent to 55 percent between 2010 and 2011.???

Nor does the economic imperative to do more with less go away with this week's vote. Budgets are tight. Revenues are down. Taxpayers are stressed, not least because so many of them lack jobs. (Ohio's unemployment rate is 9.1 percent and it has lost 400,000 jobs over the past five years.) It was this basic reality that mobilized Republicans to pursue the changes wrought by Senate Bill 5 in the first place: They would save a lot of money.

University of Arkansas economist Robert Costrell captured the profound challenges still confronting Ohio when he wrote of this week's vote:

The core fiscal issues that motivated SB5 remain unsolved for school districts.??SB5 was a very broad bill, which contributed to its defeat, but specific provisions are quite important for keeping school district costs under control.??There??were two particularly important provisions regarding health insurance.??First, the law capped district contributions at 85 percent, so that teachers would have to pay 15 percent.??By comparison, the collective bargaining agreement for Cleveland sets the employee share of premiums at about five percent.??Second, and perhaps even more important, the law gave districts the ability to set plan design, subject to best practices established by a state board.??Currently collective bargaining agreements establish which plans will be offered, what the deductibles and co-insurance rates??are, etc.??In Cleveland, for example, there are no??deductibles at all for in-network coverage, nor is there any??co-insurance.??This is quite astounding???well below industry standards, even for generous plans, like those we find in public universities.??These provisions are written into the union contract.??They will be very difficult to remove, under current bargaining law, which leaves school districts at a great disadvantage at the bargaining table.??So districts like Cleveland will continue to face huge budget difficulties, now and in the future.??The defeat of SB5 will mean layoffs and other education cuts,??unless these provisions are re-enacted separately.

Senate Bill 5 is now dead, but the underlying problems facing Ohio schools and budgets remain. To make any progress, bold changes are needed in education and other parts of the public sector. But as Philip Howard perceptively noted in yesterday's Wall Street Journal, across the entirety of the public sector the unions are still powerful obstacles to needed change.

--Terry Ryan

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