Can we reduce Acton's labor costs?

The Commonwealth of Massachusetts has entered into a Faustian bargain with the public-sector employee unions, and that decision is going to cost taxpayers in Acton (and around the Commonwealth) a bundle.

State law gives public employees the right to negotiate their own union contracts so long as they agree not to strike. (Introduction to the law is here: http://www.mass.gov/lrc/publications/gb-introduction.pdf. The full explanation is here: http://www.mass.gov/lrc/publications/gb-all.pdf)

There is an elaborate process set up for arbitration when the "two sides" cannot reach an agreement. But one side is, collectively, all of us: the taxpayers. The other side are the employee unions, who have a vested interest in the outcome. And then you have state law, which clearly favors the rights of the unions. The bottom line is that the arbitration process makes sure that the basic contract stays the same year after year. Any changes to benefit the taxpayers must be negotiated; therefore, the contracts must keep increasing and never go backwards. This system does not work when the economy is in recession and wages and benefits should be scaled back, as we shall soon see.

With the current economic slowdown, wages and benefits are being reduced in the private sector. Not so in the public sector. I am going to focus on the teachers' contract in this article. If you want to see the contact, it is posted on Acton Forum at http://www.actonforum.com/sites/default/files/AEA_Contract_1.pdf.

In Acton, our leadership is proposing what they call "zero percent" budget increases. But our public school teachers will be getting an average wage increase of 3-4% per year, and that is estimated without any standard "raise" involved (the so-called COLAs, or Cost of Living Adjustments, are being estimated at zero). So while those in the private sector are losing their jobs or having their wages decreased, our public-sector union employees are getting healthy increases and Cadillac fringe benefits.

These increases are for things like stipends, "step" increases, "lane" changes, super-max bonuses, and early retirement incentives.

One might think that because the contracts are expiring June 30, 2010, that taxpayers would have the opportunity to change them to reflect the current economic situation. How about a true wage freeze? How about scaling back health insurance subsidies to 50% or 60% instead of the current 85%? How about stopping the practice of paying teachers that have 10 or more years in the system a special bonus to retire?

But state law has come to the rescue of our public employees to the clear detriment of taxpayers. The state requires that no unilateral changes to the contract may be made unless agreed upon by both parties (or ordered by arbitration.) So if the unions agree to nothing, guess what? All of the current raises, bonuses, and benefits remain in effect into the future...forever.

So even though the current contracts expire June 30, 2010, all of the bonuses, steps, lanes, supermaxes, and stipdends remain in effect past the expiration of the contract, unless specifically changed in the next contract. There is nothing taxpayers can do unilaterally to change anything.

So while workers in the private sector lose their defined benefits pensions, have to pay 50% of their own health insurance costs, and get negative raises (if they still have a job), our teachers and other state and municipal employees have no such worries. Teachers are scheduled to receive increases on average of 3-4% in FY11. And any changes to their wage and benefit package must be agreed upon by their union. So if the school committee manages to negotiate a reduction in the health-insurance subsidy, guess what? There will be a corresponding increase elsewhere to pay for it. Everything is a quid pro quo when in comes to negotiating with the unions. In short, the contract terms for our union employees can only be increased and will never be reduced.

If this situation isn't Exhibit A in the case for abolishing public-sector unions, or at least ending their ability to block realistic changes based on the economic situation, I don't know what is. And so long as our elected officials continue to be supported by the public unions to achieve their election, the system will never be changed.

Welcome to Massachusetts.