COLUMBUS, Ohio (AP) — The repeal of Ohio's collective bargaining law has no immediate credit impact on the state or its local governments, according to an analysis by a top ratings agency.
More than 61 percent of voters rejected the law in last week's election. The measure restricted the collective bargaining rights of Ohio's more than 350,000 teachers, firefighters, state employees and other public workers. Among other provisions, public employees would have been required to pay at least 15 percent of their health insurance.
The law's repeal is expected to have "minimal fiscal impact" on the state, Fitch Ratings said in an analysis last week. Part of the agency's reasoning is that anticipated savings from the legislation were not assumed when lawmakers drafted Ohio's two-year budget, and state employees already contribute 15 percent toward their health insurance.
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The state has held the agency's second-highest AA+ credit rating since at least April 2010. Ohio's credit outlook has also been stable since that time.
Ohio Gov. John Kasich and fellow supporters of the law had promoted the collective bargaining overhaul as a means for city officials, school superintendents and others to better control their costs and keep workers on the job during a time of limited budgets.
Opponents had contended the collective bargaining restrictions were an unfair attack on public employee unions that had worked cooperatively with their government employers for decades. They also accused lawmakers of exploiting a state budget crisis to pass an unpopular measure unpopular.
After speaking on Tuesday at an event in Columbus, Kasich told reporters he was pleased by Fitch's analysis.
"This does not affect our budget," Kasich said about the collective bargaining law. "This was only designed to give people the tools to deal with the changes that we needed to make in the state."
Kasich, a first-term Republican, said he was still reflecting on the results of the election, and that he planned to speak with the Ohio Municipal League, county commissioners and others about how to move forward.
"I'm going to tell them, 'Anything that you think that you have where we can get tools to help you, we're open to (them),'" Kasich said.
Kasich declined to comment on an effort by tea party groups in the state who are pushing for an amendment to the state's constitution that would prevent workers covered by union contracts from being required to join unions or pay dues.
"I'm in reflection mode," Kasich told reporters. "And it's not the time for me to be thinking about those things now."
Cities, townships and other municipalities saw significant cuts in Ohio's nearly $56 billion budget that took effect in July.
While local governments will face continued pressure to offset an estimated $2 billion in reductions from the state budget, Fitch analysts say their agency does not expect the defeat of the law to have an immediate impact on local governments' budgets.
Asked about Fitch's analysis on the effect of the law's repeal on local governments, Kasich said the report speaks for itself.
State Sen. Keith Faber, who defended the law in public debates, said that schools and municipalities have benefited from the law, despite its repeal. He said as the collective bargaining measure moved through the Legislature, it forced teachers and firefighter unions to make concessions they otherwise might not have been willing to make.
Faber, a Celina Republican, said he wasn't surprised that the analysis found no immediate credit impact on the state or its local governments.
"In the long term, it's yet to be seen," Faber said in an interview.
The ratings agency said it didn't focus on the strength or weakness of collective bargaining rights in its evaluation, but rather on "how they are exercised and their impact on a government's operations and decisions."
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