A Mystery to Me

The Tribune ran two stories today talking about collective bargaining from the Massachusetts perspective. The first, from Bill Kirk, talked about the potential for the Wisconsin fallout to hit Massachusetts. Good piece worth a read. In the story I talk about how the “numbers do not work” and offered my opinion that ultimately the system will need to change to reflect the economic realities involved. The second story, from Shawn Regan, talked about the effort to legislatively overturn the SJC decision limiting municipal contracts to three years. In that story both Mayor Fiorentini and I talked about the harm that such legislation would deal to municipal taxpayers. Certainly adjusting the law to allow such clauses in the future, to be bargained, would be acceptable to many municipal managers. But to legislatively impose them moving backwards would not seem to me to be in line with the idea that these items ought to be collectively bargained.

Some broader points need to be made. The first is that Mayors and Managers must balance municipal budgets. Generally the goal is to do so while maintaining core services. That is what we are paid to do, and in my opinion that is what the public wants us to do. In that context let me address the the items I spoke to directly in the Kirk story. The first point is that municipal employees must pay more for health care. This is true today, and unless cost containment hits the system, it will be true tomorrow. The larger point is not simply to cost shift to employees, but to recognize that the price for the purchase of this “service” is rising by double digits every year. That means that in a realistic and sane world that the purchasers of health care, management and employee, will have to pay more every year. The idea that taxpayers alone would have to foot the annual increases is absurd, but all too often has been the union position. The entire issue of removing health care from collective bargaining in Massachusetts has only come about because of the refusal of local unions to accept some degree of responsible change in the system. You reap what you sow.

The second item I mentioned in the Bill Kirk story was the potential for conversion to a “fixed contribution” pension system for municipal and state employees. That is a bit of a longer shot but I think it should be considered for new employees. Even if it were it obviously would not help with the existing pension problems. So without going into the weeds of pension funding let us examine some of the big picture pension issues. One issue, which has been brought up continually by unions, is that their members are being penalized for the excesses of Wall Street. Pension funds have lost billions in principal, in many cases due to outright fraud. Certainly the unions make an argument here that cannot be disputed. Wall Street essentially looted the country, and pension funds were a big victim. The question is what do we do now? That is where the answers become less than overwhelming. I talked about the Governor’s advocacy for pension deferral this year, which saved the Commonwealth from a huge increase in pension costs in this cycle by stretching out the full funding schedule. It appears as though I was critical, but I am not. I support that proposal because it is coupled with some substantive pension reform measures. And having said where the unions were right earlier, this is where they are dead wrong. Protection of a pension system that allows the flagrant abuses that have occurred in Massachusetts is not politically defensible. And contrary to union assertions, the abuses are not outliers, but rather indicative of a systemic problem in the pension area. And the unions ought to be standing tall for reform in this area, as the public is fed up with the nonsense. Why that is so hard to figure out, from a union political perspective, is a mystery to me.

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