Sen. Holt Calls for Repeal of 'Binding Arbitration'

State Sen. David Holt has introduced legislation to repeal the system known as "binding arbitration." Holt, R-Oklahoma City, said Senate Bill 826 would restore taxpayer control and fiscal responsibility to local spending decisions.

"Since its enactment in 1994 through labor union lobbying, 'binding arbitration' has taken the power to make spending decisions away from Oklahoma taxpayers and placed it in the hands of unaccountable out-of-state attorneys," Holt said. “Not surprisingly, a bad system has created bad results - tax increases, more burdens on pension systems, and cutbacks in core services, including public safety.”

Under the binding arbitration system, stalled negotiations between local governments and labor unions over tax dollars are turned over to a panel of arbitrators. The deciding arbitrator is almost always an out-of-state attorney submitted by the federal government. The deciding arbitrator chooses from the two positions, and any decision in favor of the labor union is legally binding unless an election is called and voters disapprove. Despite routine dissatisfaction with such rulings, the calling of an election has not emerged as a practical option in the 17 years since enactment, leaving the arbitrator’s ruling as the final word.

SB 826 returns the power of the purse to the taxpayers of Oklahoma by repealing binding arbitration. In lieu of that process, parties will continue negotiating, but taxpayers will never be forced to accept spending increases mandated by an arbitrator.

The original 1994 legislation was only narrowly approved by an overwhelmingly Democratic legislature, requiring two attempts in the House, and was then signed into law by Democratic Governor David Walters.

Holt noted that much had changed in the 17 years since the controversial union measure became law and that now Republicans control the governor’s office and the legislature.

“The voters of Oklahoma delivered a reminder this past election that the citizens are in charge of how their tax dollars are spent. At the state level, we would never allow an attorney from Texas to tell Oklahomans how we must spend our money and then leave us with the bill—but that is exactly what’s happened at the local level for 17 years,” Holt said. “The time has come to repeal this bad law and put Oklahoma’s taxpayers back in the driver’s seat.”