Lisa Blais: Awakening The Sleeping Giant in Coventry & Elsewhere
Thursday, April 11, 2013
Ripped from the headlines:
Voters in Coventry turning a thumbs down to paying ever-increasing taxes supporting a local fire district. Woonsocket having difficulty working with public unions in the midst of serious financial crisis. Public sector union nurses at state-run hospital are members of the quarter million dollar club. Public sector union state employees doing laundry can make over $100,000. These are not headlines over the past couple of years. This is just the past couple of months!
More headlines
The Governor, once (still?) backed by public sector unions, puts forth legislation to either temporarily restrict the collective bargaining process or to reverse some of the benefits obtained through the collective bargaining process. Recently, the Governor hired a law firm to negotiate state worker contracts. It so happens to be the firm whose partner is the same labor attorney that the public sector lobbyists vilify at every opportunity in committee hearings at the State House – typically at hearings in the Labor Committee. The Treasurer proposes, and the General Assembly passes, legislation reforming the public pension system. Central Falls declares bankruptcy and slashes retired public employee benefits as they determine they are simply not sustainable. Rhode Island taxpayers subsidize the Central Falls retirement benefits.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIt would seem clear to the average taxpayer that the cost of public sector unions can no longer be sustained - the chickens have come home to roost, the pendulum has swung too far. Whatever idiomatic expression comes to mind is it time to look at public sector unions? Or, does it remain the third rail of politics?
What’s the long range benefit?
Have the public sector unions really served their members when those retirees in Central Falls have ultimately seen their pensions slashed? Or when retirees in Woonsocket are facing the same thing? Have the public unions really served the employers (RI state and municipal taxpayers) when they see nothing but increased taxes, while at the same time, experience cuts in government services and educational programs in order to fund the typically higher-than-private-sector salaries and benefit packages? Have the public unions really served the children of RI’s education system when tenure keeps even one mediocre or poorly performing teacher in the classroom instructing, or when the idea of meaningful teacher evaluations is fought, or when 40% of our students are substantially below proficient in math?
Wisconsin, the first state with public unions, said it was time
At a Labor hearing last year, a public union representative, when testifying on a bill, stated that “RI isn’t Wisconsin”. No, Wisconsin was not in as bad shape financially when it decided it had had enough and restricted the collective bargaining of public sector unions. Wisconsin was the first state in the country to legislatively allow public sector collective bargaining. Recently, Wisconsin decided that the power the public unions wielded over government and the associated high cost it burdened the taxpayers with was no longer sustainable.
There are others who said no to public unions.
Self proclaimed “Progressive”, President Franklin Roosevelt and long time AFL-CIO President, George Meany, both agreed on one thing. “Public unions could never work. It pits union employees against taxpayers. When public employee unions collectively bargain with the government, elected officials partially abdicate their responsibility to unelected labor leaders”. That means policy decisions are made, in part, by those other than the elected official. (You can see OSTPA’s reflection on municipal fiscal authority in a previous column, here.)
Look at it this way
In the private sector, employees seek to participate in what they see as a fair share in the profits of a company. The balancing factor is the free market - if the cost of the product in a private company is driven so high by the unions that no one purchases it, the company goes out of business, and the employees may end up with nothing. Many unions in the private sector have learned to operate somewhat as business partners during negotiations. The smart ones understand that the fiscal health and profitability of those employers are critical to the employment and financial well-being of their members. In the public sector, unions seek to demand more and more money from the taxpayer. Municipal and state governments are not for-profit centers. There is no balancing factor in government as the government simply taxes more - no free market choice in deciding whether to pay taxes or not.
By law, states can’t file for bankruptcy. Until recently, municipalities rarely filed for bankruptcy. Many of Rhode Island’s municipal workers believe that it won’t happen to them, in spite of their city’s dire financial condition (think Woonsocket and West Warwick), and even though it has already occurred in the neighboring city of Central Falls. But, it will probably happen again. In Woonsocket, they are desperately trying to refrain from using the bankruptcy word, but so far the unions are not cooperating. During state pension reform hearings, the public unions consistently told legislators “if you would just negotiate with us, we could work something out”. Ask Mayor Fontaine how well the negotiating process is working in Woonsocket.
Here’s part of the problem
Public sector unions develop a strong relationship with the government because they obviously must negotiate with the government. That’s why you see someone like George Nee, President of the RI AFL-CIO, on the Economic Development Corporation Board (EDC). What does a union have to do with economic development? Nothing, they simply reap the benefits of economic development and the potential to unionize more employees. Governor Chafee even asked Mr. Nee to resign at one point. Mr. Nee refused and Governor Chafee then nominated him to another term. You will note that there are no taxpayer organizations represented on the board of the EDC. Additionally, 4 of the 12 member public pension panel were represented by public labor.
How the cycle works
Rhode Island is a forced unionism state. One cannot be employed in a state or municipal position unless he or she pays the union, i.e. mandatory union dues (or agency fee) and the government entity must automatically deduct it from the employee’s paycheck. This money is then remitted to the appropriate union. Between the local NEA and the AFT, more than $6 million was reported in their filing. That money is then spent on big salaries (see the large salaries for NEA union leaders) for things like lobbying legislators to pass public union-favored bills, its spent on political contributions to candidates that further the public union agenda and its spent on funding additional organizations, like Ocean State Action, an organization with a dual role, to lobby on behalf of RI’s vulnerable and to lobby on behalf of the public unions. In turn, through campaign contributions, public union employees are elected to the General Assembly and propose (and sometimes pass) legislation that benefits the special interest public unions. As a result of the 2012 elections, one-third of General Assembly House members are current or former public union workers. In the Senate it is just over a quarter. It’s easy to see why RI law is so public-labor-friendly.
What was legislated in can be legislated out
The General Assembly created laws to allow the various public employee groups to collectively bargain. Separately, there are laws that allow state employees, teachers, municipal employees, state police, correctional officers, municipal police and municipal firefighters to collectively bargain. If Rhode Island taxpayers see any correlation between the high cost of government and the power of the public unions, they can elect legislators to vote out of law what they voted into law decades ago. Narrow the scope of bargaining, or does this topic remain the third rail of politics in RI?
It’s your tax dollars. It’s your decision.
Lisa Blais is a board member of OSTPA, a taxpayer advocacy organization in Rhode Island.
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