Over at Reason, Tim Cavanaugh has a lengthy piece in the current issue on California's struggles to rein in public unions. Even though it must have been written well in advance of the current foofaraw in Wisconsin, the timing couldn't be better. Cavanaugh makes the oft-overlooked point public employee unions are such a fiscal black hole that it's nearly impossible to spend money on any of the other ambitious and expensive programs frequently advocated by progressives:
As 72-year-old Jerry Brown enters his second governorship, he has an agenda to match that power, with visions even greater than those that haunted his two-term administration of the 1970s and ’80s: building 20,000 megawatts of renewable power, laying a new high-speed rail network that will connect the state’s major cities, forging a statewide infrastructure for alternative energy, hiring thousands of green employees. The new governor’s environmental agenda is ambitious, untenably expensive, and indelibly popular with voters and lawmakers.
Yet when Brown looks out on Democrat-controlled California, he seems less like Caesar at the Rubicon than Wojciech Jaruzelski at the Gdansk Shipyard. Brown is champion of a workers’ party with monopoly control, yet all his plans are being derailed by a labor movement nobody can harness.
At press time, California was being governed under a state of economic “emergency” declared by Brown’s predecessor, Arnold Schwarzenegger, in light of a staggering $28 billion budget shortfall expected in the next 18 months.
It gets worse. Medium-term unfunded liabilities for government employee pensions are pegged by the Legislative Analyst’s Office at $136 billion—and that’s a lowball figure. Legislative analyst Mac Taylor acknowledges in his current fiscal outlook report that the estimate leaves out billions in funding shortfalls at the pension funds for public school teachers and University of California employees. In the next 10 years, taxpayers will most likely be on the hook for somewhere between $325 billion and $500 billion. (Over the past five years, state revenues averaged $94.5 billion per year.)
Go ahead and read the whole thing. And while we're at it, Cavanaugh's piece also brings to mind this editorial in the Washington Post last year about Montgomery County, Maryland and Fairfax County, Virginia. Both suburbs are highly desirable places to live and both have terrific public school systems. But one state doesn't have collective bargaining rights for public employees and politics in the other county is dominated by public employee unions. Take a guess at how that's working out:
The results have been striking -- and strikingly unaffordable -- in a county where more than half of all spending goes to public schools. The average teacher salary in Montgomery today is $76,483, the highest in the region. Average pay for teachers is now almost 20 percent higher in Montgomery than in Fairfax and has increased much faster than in most local suburban school systems. Since 2000, salaries for Montgomery teachers, as for many other county employees, have nearly doubled, rising at almost triple the rate of inflation. ...
Virginia law denies public employees collective bargaining rights; that's helped Fairfax resist budget-busting wage and benefit demands. As revenue dipped two years ago, Fairfax officials froze all salaries for county government and school employees with little ado. By contrast, Montgomery leaders were badly equipped to cope with recession. County Executive Isiah Leggett took office proposing fat budgets and negotiating openhanded union deals after he succeeded Mr. Duncan. Then, as economic storm clouds gathered, he shifted gears and cut spending -- while still trying to appease the unions.
Notoriously, one such deal guaranteed almost $300 million in pension benefits over 40 years to thousands of employees based on salary increases they never received. The giveaway became known as "Phantom COLAs," for the cost-of-living raises that were never paid. And even when Montgomery's teachers agreed to give up cost-of-living raises last year, about two-thirds of them continued to receive step increases of up to 4 percent.
The cozy ties between elected officials and public employees unions in Montgomery have formed the backdrop for a drumbeat of reports about county employees' bountiful benefits, perks and abuses. In the past few years we've learned about county police officers who helped themselves to hundreds of thousands of taxpayers' dollars to secure cut-rate weapons for personal use. More than half the officers who retired recently from the police force left claiming "severe disabilities," some of them dubious, entitling them to huge taxpayer-funded benefits for life. Veteran firefighters may retire at age 46 and continue working for three years while simultaneously accruing pension payments that increase at a taxpayer-guaranteed rate of 8.25 percent annually, regardless of market performance. Meanwhile, Montgomery's teachers union has wielded such outsized electoral clout that politicians who received the teachers' endorsement in the most recent elections reached into their pockets and wrote checks to the union. As far as we know, this occurs nowhere else in America.
Again we see that public employee unions prove to be a Faustian bargain. In many, many cases progressives and Democrats lack the popular or private-sector support to get elected without the help of public unions. (Note that bit above about politicians having to pay the Montgomery teachers union for their endorsement.) Once in office, progressives end up less a representative of the people, but more as a union subsidiary. After the promised union pay-offs, they're simply unable to afford to spend money on anything else and spend all their time struggling to appease the union.
This is exactly the problem Walker is trying to address in Wisconsin -- see the press release on his bill:
The budget repair will also restructure the state debt, lowering the state’s interest rate, saving the state $165 million.
These changes will help the state fulfill its Medicaid spending on needy families of about $170 million; funding that the previous administration did not have in its budget. It will also allow the state to spend an additional $21 million in the Department of Corrections.
Additionally, the budget repair bill gives state and local governments the tools to manage spending reductions through changing some provisions of the state’s collective bargaining laws.
Given the choice between the union status quo or eliminating some bargaining rights for public workers so the state can pay for Medicaid and allow for more local control, Walker's choice here hardly seems radical.