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Ohioans, we have a problem.

Like too many families struggling to make ends meet, state and local governments are confronting major financial difficulties.

In the face of a projected $8 billion deficit, it should go without saying that Ohio can no longer afford to continue the policies and practices that have contributed to this problem.

For that reason, I introduced a landmark reform bill that would fundamentally change Ohio's collective bargaining law.

Change is hard, but these reforms are long overdue. State and local collective bargaining rules have not been updated in nearly three decades, and our economy has changed dramatically since the law passed in 1983.

The problem is simple: As the economy struggles, tax revenues decline. That means public employers - those responsible for managing our tax dollars - are faced with dwindling revenues to fund their operations at the same time demand for government services is growing. Add today's collective bargaining agreements to the mix, and these employers suddenly find themselves facing a dilemma: funding the increasing demands of their work force at the expense of their overall mission.

To put this in perspective, a Cincinnati City Council member told a Statehouse committee this week that union contracts have caused the city's personnel costs to grow at about 18 percent annually. He said these public employee contracts, once approved, are never reduced. "They are simply built upon and made more generous."

These collective bargaining agreements end up denying public employers even the basic flexibility to adapt to a downturn in revenue by adjusting payroll or reassigning employees to improve efficiency. The need to fund these agreements, not to mention the rest of the operation, typically results in a never-ending call for higher taxes. And so the cycle of government growth continues.

We cannot continue to govern by these rules.

I believe that government needs to start living within its means and operating by the same standards of efficiency, accountability and performance as private sector companies. Anything less will lead to greater failure and deeper unemployment.

We no longer have the resources to provide automatic pay increases, increasing salary benefits and job protection for seniority, just because a union contract demands it. Public employees should be paid and retained based on performance like everyone else. The best way to do that is to repeal collective bargaining for all state employees and adopt a merit-based employment system.

I do not expect this bill to provide a magic bullet that will help fix Ohio's immediate budget crisis, but I do believe it will