Colorados legislative ‘management bows to state workers
Here’s where I’m coming from, right at the top: Unions are not on my list of most admired institutions. I know there are perfectly defensible points of view on the other side, but I’ve always thought, for all the good organized labor might (or might not) do, it also promotes mediocrity. Unions are a drag on the workers who want to excel.
That thought crossed my mind in a couple of conversations I had last week. The first was my annual trip to the accountant’s office for the painful exercise of finding out how much money I have to send to my friends in Washington next month. Per usual, my accountant and I did our best to solve a few of the big problems the world is facing.
This year we tackled the state budget, but not before stopping momentarily at the situation in Wisconsin, where public labor unions now have less clout than they used to.
I might be inclined to say comparing public employee unions to private sector unions is like the proverbial apples and oranges comparison. It’s not. Apples and oranges are too similar. They’re both round, they’re both fruit.
When it comes to collective bargaining, there are no similarities. In the private sector, management holds a few cards, and management’s first loyalty is not to the union, but to the stockholders. In the public sector, though, “management,” (read: elected officials) is beholden only to the ballot box and the money that greases the electoral process. Guess where a lot of that money comes from. It comes from public employee unions.
Management, then, in the public sector, holds no cards whatsoever. Nor does it have any incentive to do anything not in the best interest of the union. What’s more, since a lot of the public sector “management” is term-limited, the people who give away the store today probably won’t be around when the bills come due in a few years, usually during the next economic down cycle.
Just ask any state legislator. The problems aren’t confined to Wisconsin. They are all over the country, including Colorado. The Colorado Public Employee Retirement Association isn’t a labor union. But it functions much like one, or at least it did a year ago, when legislators tackled the problem of PERA’s future unfunded liabilities. At the time, that number was north of $25 billion.
The solution, much ballyhooed at the time, called in part for future increases in the state’s contribution to the plan. State workers were paying 8 percent of their salary into the fund, close to what the rest of us pay into Social Security. The state actually pays more than that through a combination of funds, and the PERA reform legislation calls for the state’s total contribution to increase annually until it reaches a whopping 20-plus percent in 2017.
My accountant pays much more attention to numbers, particularly those that affect the incomes of his clients, than I do. He, quite correctly, noted that what our legislators did to help out state workers last year will do nothing but add more burden to the rest of us.
Maybe that legislation contained the formula that will solve PERA’s problems — or maybe it didn’t. But it is certainly not something in the best interest of the taxpayers in Colorado, who are overseen by a state government that can’t balance its budget. The PERA “reform” will do nothing but make the state budget crisis worse, more so every year.
The second conversation I had was with a friend who has been a perceptive observer of Colorado politics for the past three decades. She understands the ins and outs of state government. The Legislature, she said, can tinker all it wants with the structure of state government. It can combine departments and find efficiencies here and there. But the magnitude of the problem is so great that none of that will matter.
The only thing that will, she said, “is bodies and benefits.” Lawmakers last year did nothing but increase, dramatically, the cost of benefits.
That’s the kind of “management” we have in the public sector in Colorado.