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Donna Perry: Too Many Broken Promises to Taxpayers

Thursday, June 07, 2012


As Wisconsin Governor Scott Walker was emerging from a game changing recall effort rejection Tuesday night over a well-funded and massive voter turnout effort mounted by Wisconsin’s formidable public union empire, a much smaller drama was playing out in a crowded high school auditorium in West Warwick. Though the politics that were at work which culminated in Tuesday night’s victory for Walker may seem a world away from the stormy town council hearing that was being heard over the proposed elimination of sports and enrichment programs in West Warwick schools, the thread of a similar public sentiment was running through both scenarios to a greater degree than what may first appear.

When you strip away the huge cash infusion that fueled both sides in Wisconsin, the throngs of union protesters, months of fiery rhetoric, and the bombardment of ads, you are left with a central recurring theme.Broken promises have been the mantra of unions fighting back against pension reform attempts but what’s emerging now is a broken promises sentiment from the taxpayer. Whether it’s heard in Wisconsin, New Jersey, California, Indiana or RI, it’s a distinct rallying cry and it surely will get louder after Tuesday. Wisconsin unions viewed Walker’s collective bargaining reform platform as a declaration of war on their right to a process that locks in promises of compensation and benefits. The real problem with the process is it yields promises that states, whether in Wisconsin or anywhere else, can no longer afford.

On Tuesday, there were clearly a greater number of Wisconsin voters who seemed motivated by their own sense of promises not delivered.Voters there have felt betrayed in recent years on the promise that their state could provide a strong job market, hold down property taxes, and curb the soaring cost of the public employee sector. In West Warwick, the sense of broken promises felt by parents that the town will offer a fully enriched public education for their children, is the same as the sense of broken promises felt by weary and modest income homeowners in Woonsocket that their city can remain a viable and affordable community that can keep costs under control.West Warwick is only the latest in a string of Rhode Island communities where a familiar drama keeps playing out before the local school committee and town council. The rallying cry from parents may vary from one town to another but the larger sentiment remains: the curriculum, sports and enrichment programs have to matter as much as the payroll and the pensions.

If there’s any doubt that there is a direct link between the ongoing pressure in numerous communities to make drastic cuts to programs and the steeply rising cost to the pension obligations, one need only to look to recent reports from the state Auditor General on the annual required contribution (ARC) payments and how much of the local property tax revenues it eats up—therefore leaving less and less for curriculums, sports and all the rest. As an analysis by GolocalProv this past spring demonstrated, communities like West Warwick and Woonsocket operate under conditions very similar to what occurred in Central Falls prior to the receivership. West Warwick’s annual contribution for pensions and health benefits is gobbling up between 35%-40% of its tax levy. Woonsocket is even worse, with an estimated 60% of the tax levy needing to go toward retirement obligations. (Central Falls had a levy at roughly 57% when it was first brought under state oversight.)

Due to the fact that in Rhode Island, pension benefits and retiree health care for employees in locally managed plans are set through collective bargaining agreements, it has become difficult if not impossible to alter them even as worsening local budgets take hold. It was against a similar backdrop in Wisconsin that Governor Walker decided the only remedy was to rein in the collective bargaining process itself if there was to be any hope of enforcing higher co-pays into both the pension itself and the health plan.

The second major piece of Walker’s reforms, which have now withstood the onslaught against him, was his reversal of the mandatory—and automatic—dues collection by unions from their rank and file public employees.Make no mistake about it: the automatic dues collection system is the most potent weapon held by union bosses over the rank and file employee and it was that piece of the Walker reforms which was viewed as the greater assault on union (leadership) power than the reforms to the pensions or health care benefits themselves.Though it produced warfare in Wisconsin, it should come as no surprise that the revolt, which is clearly spreading to other states, will eventually come from within the ranks themselves especially as workers begin to realize union leadership may be bargaining them into a bankruptcy corner from which there is no way out. Now that is truly a broken promise.

Donna Perry is Executive Director of RISC, RI Statewide Coalition - http://www.statewidecoalition.com



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