One year ago today, I stood before many of you and warned of the storm clouds that were forming overhead. I spoke of the extended recession and the impact it was having on local and state budgets. I expressed concern that with payrolls being essentially locked –in, due to mandatory collective bargaining, at 3% and health care cost rising between 12 and 15%, it was only a matter of time before the economic bubble would burst. Little did I know that the imminent burst was only months away.
...as we now know, the jobs creation promise of 2009 nationally has more closely resembled a nightmare. With unemployment a year ago at 8%, it is currently over 10% and since the signing of the stimulus bill, we have lost 2.8 million jobs. These job loss figures clearly have a direct effect on state and city budgets. Cuyahoga Falls is no exception. Cities essentially rely on two forms of revenue: property taxes and income taxes. In 2009, we saw both of these revenue sources decline.
...on the income tax side, historically, the city would expect growth of 1-2% per year. In 2009, we saw our income tax decline by $504,000 over 2008. A third source of income for most cities is the interest on our reserve funds. Once again, we are seeing a significant drop in revenue. In the year 2000 for example, we realized over $2.2 million dollars in interest, and now due to significant lower interest rates, we saw the interest on our reserve drop to $547,000.
In response to these significant drops in revenue, we mandated that the nonbargaining employees accept a wage freeze along with six furlough days. Additionally where applicable, we would cease the ability to sell back vacation and sick leave. I am proud of the AFSCME union which was the first union to step forward and agree to our proposal. Our Fire union, the
UWUA electric union and finally the dispatchers, followed shortly. Unfortunately, we did not get concessions from the two police unions, which necessitated the loss of three patrolmen and a community service officer. Additionally, four sergeants were reduced to patrolman status.
So what does the future hold? Obviously, much depends on the flow of the economy. If 2010 resembles 2009, cities all over the state, indeed all over the nation, will be looking for a lifeline.
In Cuyahoga Falls, we will be negotiating with all six of our public employee unions. We do not anticipate these negotiations will be easy, however, with a keen eye on fiscal responsibility, the administration will be resolute in its demands to lower expenses. And indeed, with payroll representing 75–80% of our general fund budget, the public sector unions are the obvious place to go.
Which brings up the question that I have raised in this forum in the past: Is it time to eliminate public sector unions?
The history of public sector unions goes back to 1962 when President John F. Kennedy signed executive order 10988 allowing unionization of the federal workforce. This changed everything in the American political system. President Kennedy’s order swung open the door for the unrelenting rise of the unionized public workforce in many states and cities.
And of course, 47 years ago, the American workforce landscape looked very different. As recently as 1980, there were more than twice as many private sector union members than there were public sectors. Today 51.4% of Americans 15.4 million workers are employed by the government. This is the first time in American history that there are more public sector union members than there are private. So my question is, can we the taxpayers continue to afford this expense?
The problem for the economy is that the public sector unions create a self-reinforcing cycle of higher spending and taxes. The union helps elect politicians who repay the union with more pay and benefits and dues-paying members, who in turn help to re-elect those politicians.
I recall the 2006 example of former New Jersey Governor John Corzine shouting to a rally of 10,000 public workers “We will fight for a fair contract”. Mr. Corzine was supposed to be on the other side of the bargaining table representing taxpayers, not labor.
...As we can see from the desperate economic and fiscal woes of California, New Jersey, New York and other states with dominant public unions; this has become a major problem for the U.S. economy and smaller “d” democratic governance. The agenda for American political reform needs to include the breaking of public unions' power to capture an even larger share of private income.
Congratulations to Mayor Robart. His message is one that needs to echo from cities to towns, counties to states, and all the way to the halls of the federal government.
It's time to break the public sector unions whose agenda is directly counter to that of the taxpayers.
Photos: RPC Photo / Robert J. Lucas Cuyahoga Falls. Linked by: Mish. Thanks!