Friday, February 12, 2010

Public Employee Union Unfunded Liability

We all know what is happening with the budgets of our state and local governments. Most are bankrupt or nearly insolvent. The main cause is the high cost of public employee labor contracts. The reason that we are all in this situation is that our elected officials who are responsible for these contracts have been gutless when dealing with the unions. It is not their money and their pay is often a function of how much the unions are paid. They clearly have a conflict of interests. The fact that states and cities can't go bankrupt sets up a situation where the unions can bleed the local tax payers and no one seems to be able to do anything about it. When our elected officials agreed to retirement programs they knew at the time that when the payments came due, they would not be in their positions anymore. They like the union members would be home collecting from the tax payers. Most of the officials who negotiated these union contracts for us tax payers were once members of these same unions and most of the members of the unions were former friends and associates. So now you know some of what caused the problem, but how are we going to get out of the problem and bring sanity back to fiscal matters?

Notice how the unions are very careful how they define the bargaining unit. No managers can be in the union. In the case of the teacher's unions, they let the department chairmen into the union bargaining unit even though they are the real managers of the schools. It is kind of unique in these types of unions. Each union member owes more to his department chairman than they do to the school or university. It is like each department chairman has his own little principality and us tax payers to pick up the bill. He has a perfect patronage system with himself the good guy and the tax payers both the bad guy and the one picking up the tab. Nice setup if you can get it and the public employees have it. Now how do we crack this clear monopoly?

Redefine the bargaining unit so that everyone has skin in the game. How do you do that? The school should hire everyone who is in the community that pays taxes to support the school. Hire everyone over 18 who is a voter for $1.00/yr. That is right, put them on the payroll. Now when any contract has to be ratified it will be by people who have a vested interest in the process from both ends. Teachers would be able to vote, but someone who only was paid $1.00/yr would also get the right to vote. It would be like our regular elections where people who pay "no" tax have the same voting power as a person who pays millions of dollars. If it is fair in one situation, then why would it not be fair in another? My guess is that we would get a lot more realistic contracts and pay schedules for our public employees.

I think you can see where I am going with this, but I don't see any other way that we can get control of this out of control situation with public employees. I do have some other ideas, but that is for another day.

Brewmaster