Governor Terry Branstad will seek legislative action to increase pension contributions from Iowa’s police officers and professional firefighters. The change would offer relief for city budgets while cutting into the paychecks of public safety workers.

The Iowa Center for Public Affairs Journalism’s IowaWatch.org blog reported July 23 on an interview Branstad gave earlier this month. I recommend clicking through to read the whole piece by Lyle Muller and Robert Maharry. They explain that under current Iowa law, firefighters and police officers pay 9.4 percent of their wages into the Municipal Fire and Police Retirement System of Iowa.

That amounted to 31 percent of the pension fund’s total costs in fiscal 2011, the last year for which data are available. The share was 34 percent in fiscal 2010.

Local cities must cover the rest under Iowa law, regardless of how much is needed, to make the system strong enough financially to cover pensions paid to 4,000 fire and police officers in Iowa who have retired. Often that arrangement has increased the government share, although not always. […]

“We’re hearing a lot from municipal governments: this is not fair, that this is creating some real financial burden,” [Branstad] said in the interview, which also covered other topics: education reform and politics. “And you can talk to the city of Cedar Rapids or Des Moines. I’ve heard from a number of those mayors and from city managers: this is a real significant financial burden.”

Any change would have to be addressed in state law, which establishes the rate that firefighters and police pay into the system and what cities pay. That law prohibits cities from paying less than 17 percent of the employees’ salary. But cities are paying 26.12 percent of an employee’s paycheck this year, said Terry Slattery, executive director of the Municipal Fire and Police Retirement System of Iowa, which administers the pension program.

Muller and Maharry provide more detail on current costs for the cities of Des Moines and Cedar Rapids, as well as how much each city would save under Branstad’s proposal.

The Iowa League of Cities likes the idea of limiting city obligations toward police and firefighters’ pensions. That organization lobbied strongly against Branstad’s approach to reducing commercial property taxes during the 2011 and 2012 legislative sessions. Perhaps the governor hopes this overture on pension reform will reduce the pushback from local governments over property tax reform. I doubt that will happen, because the potential hit from cutting commercial property taxes is larger than the potential savings from forcing police and firefighters to contribute 40 percent of their pension fund costs.

If Republicans hold the Iowa House and win control of the Iowa Senate this November, Branstad has a good chance of getting what he wants on pension reform during the 2013 legislative session. Then again, taking on middle-class public safety workers could be politically risky. According to Muller and Maharry, a 60/40 split in pension fund contributions from police officers and firefighters “would have increased their obligation to the retirement pool 17 to 29 percent in recent years.”

Wisconsin Governor Scott Walker exempted unions representing police and firefighters when he went after public employee collective bargaining rights in early 2011. However, Niala Boodhoo reported this year that Wisconsin “police and firefighters are finding, they, too, are facing increased pension and health care costs.”

Speaking of labor issues, AFSCME Council 61 President Danny Homan was a guest on Iowa Public Television’s “Iowa Press” program last weekend. Later this year, Homan will be a key negotiator over the next two-year contract for the state workers AFSCME represents.

[O. Kay] Henderson: Mr. Homan, your colleague just mentioned contract negotiations.  This fall your union will enter into contract negotiations with state management.  What is your expectation given the history that you have with the former Branstad administrations?

Homan: My expectation right now is guarded based on some of the political stunts that this Governor has pulled.  And his demands that he believes that he can come to the table and demand that we will do things tends to make me believe he’s not coming to the table to sit down and bargain with us other than to come in and tell us what we’re going to do.

Henderson: So do you expect it will end up in arbitration?

Homan: I have a long history of 25 years in bargaining contracts.  Probably less than one percent of the contracts that I have bargained over those 25 years has ended up in arbitration.  I’m going to work as hard as I can to not go to arbitration.  But if that is where we’ve got to go, then that is where we’ve got to go.  I want to address Dean [Borg]’s question to [Iowa Federation of Labor President] Ken [Sagar] on sharing the pain.  This [AFSCME] union, since 2011, has taken three years where we took no across-the-board increase.  We did that to preserve our health insurance.  In 2009 we took a zero across-the-board increase.  Six months later we gave up five unpaid days to help this state with its budget crisis because there was a crisis, there was a problem.  What more do the hardworking state employees in this state have to give up and have to sacrifice to where the realization that they are sharing the pain is there?

The biggest sticking point in negotiations will be Branstad’s call for state employees to contribute 20 percent of their own health insurance premiums. Two weeks ago, AFSCME filed a prohibited practice complaint over Branstad’s executive order allowing state employees to contribute to their health insurance premiums.

Any relevant comments are welcome in this thread.

P.S.-Branstad told Iowa Watch that he will decide in 2014 whether to seek a sixth term as governor. Postponing his decision until the election year will complicate matters for ambitious Iowa Republicans. No gubernatorial candidate will be able to raise significant money or build a campaign organization before Branstad announces his plans, leaving only a few months to get ready for the June 2014 GOP primary. I still expect Branstad to run for governor one more time.