Christie to Propose NJ Pension Rollback; United Steelworkers Tries to Organize Car Washes; Illinois Legislators' Phone Service Canceled for Nonpayment

The circus in the bankrupt state of Illinois continues unabated. Please consider Legislators feeling sting of Illinois' deadbeat ways

State Sen. Dave Luechtefeld was in session in Springfield earlier this year when he got a call from the secretary in his district office. She was calling from her cell phone because the district office phones, which are paid for by the state of Illinois, had been disconnected for nonpayment.

"That was the first time," recalled Luechtefeld, R-Okawville.

His office phones were later cut off again, with the state still months behind in paying for the service. He's now getting renewed threats from the phone company of a third cutoff. "It's laughable," he said, "but it's not."

It's the same story at the district offices of Illinois' elected legislators across the state: Phone, utilities, garbage and rent payments months behind, prompting a monthly flurry of terse late notices and cutoff threats to offices with the state emblem on the doors.

Of course, in a state where teachers are getting laid off, hospitals are struggling and small businesses are failing because the state isn't paying its bills, the office budget plight of a relative handful of politicians isn't going to cause anyone to take to the streets.

But the news of a northern Illinois legislator who was forced to shut down her district office because the state had stiffed her landlord for so long certainly drives home the depth of Illinois' $13 billion budget crisis

Illinois legislators keep offices in or around the Capitol in Springfield, and also have district offices back home. The state allots $69,409 per year for the district office expenses of each House member, which goes toward salaries for office staff, rent, utilities, supplies and related costs. For senators, who have larger districts and often maintain more than one district office, the annual allotment is $83,063.

Lawmakers have often complained that the annual allotment is too small, given the need for clerical workers, professional office space and other significant expenses. However, the current problem of deadbeat district offices isn't about the budgeted amount, but rather about the state's cash flow problems, which stem from a deficit that's roughly 50 percent the size of the state's entire regular operating budget.

"We have 220,000 vouchers sitting in our office waiting to be paid, because we don't have the money to pay them," said Alan Henry of the Illinois comptroller's office, which is responsible for cutting the checks. Those backlogged vouchers at the end of August totaled about $4.5 billion in late bills, which are paid as money becomes available to the state from taxes, fees and other sources.

United Steelworkers Tries to Organize Car Washes

The New York Times reports Labor Tries to Organize Carwashes in Los Angeles

The carwashes of Los Angeles would appear to be an unlikely target for a unionization drive. Many of the estimated 10,000 workers in the business here are illegal immigrants, who are too scared to speak out or give their bosses any excuse to fire them. Many carwash companies have just two or three outlets, not 20 or 30, requiring scores of separate organizing efforts. And carwash owners, who invest a million dollars or more in each facility, are fiercely resisting the prospect of being tied down by collective bargaining and union rules.

Nonetheless, labor organizers have set out to unionize this city’s carwash workers, hoping to improve their paltry pay and end widespread abuses. The unions, led by the United Steelworkers, acknowledge that it is a struggle, but they voice confidence that they can organize the first carwashes in the next few weeks or months, and that this will start a domino effect once other owners realize that unionized businesses can survive and even thrive.

California officials have estimated that two-thirds of the 500 carwashes in Los Angeles violate workplace laws. Many workers say they are paid just $35 for a 10-hour workday — less than half the minimum wage — and some say they are not paid for time during which no cars go through the wash. Others complain that they are not given gloves or goggles even though they often use stinging acids to clean tire rims.

Randy Crestall, owner of Autospa Chevron Hand Wash in Valencia, a Los Angeles suburb, said that law-abiding owners resented their scofflaw competitors.

“They’re a blight on our industry,” said Mr. Crestall, a former president of the Western Carwash Association. “As good operators, we don’t like them to be on the same playing field as us.”

Mr. Crestall said the unionization push would hurt everyone. “Having a union will mean higher wages, and that will lead to higher prices,” he said. “That will mean fewer consumers coming to carwashes, and fewer jobs for these workers.”

The unionization drive calls itself the Clean Carwash Campaign and has created a brigade of former carwash workers, many of whom had been fired for backing a union.

“This is not the type of campaign you win overnight,” said Chloe Osmer, the campaign’s strategic coordinator. “It’s the type of campaign where you have to bring the floor up in the industry before you can really have some unionization success.”

Although no carwashes have gone union, the campaign helped persuade city officials to investigate the Pirians’ carwashes. Last year, the city attorney charged them with a total of 220 misdemeanors that could have meant 120 years in jail. In mid-August, the brothers pleaded no contest to six charges, including grand theft and conspiracy. They were ordered to repay $1.24 million to 54 underpaid workers.

Although I am not in favor of minimum wage laws, enforcing those laws and especially work conditions is a reasonable thing to do.

I happen to agree with owner Randy Crestall who says the effort would lead to fewer jobs.

Indeed, unionization could kill most of the hand wash business. Unions leaders do not care about such things. They want what is good for the union, employees be damned.

Christie to Propose New Jersey Pension Rollback

A spokesman for the Chris Christie says Christie Will Propose New Jersey Pension Rollback

New Jersey Governor Chris Christie will unveil legislation that aims to trim a $46 billion pension deficit by scaling back benefits and suspending cost-of-living increases, said a person familiar with details of the proposals.

The measures would roll back a 9 percent increase in pension benefits that was enacted through legislation in 2001, and suspend cost-of-living increases for at least three years, said the person, who declined to be identified because he isn’t authorized to speak ahead of Christie’s announcement next week.

Kevin Roberts, a spokesman for Christie, said the governor will propose pension measures “early next week” and declined to confirm details of the plan.

“It will be a plan to bring solvency to a system that is dangerously on the brink,” Roberts said today in an interview. Any changes Christie will outline are designed to “ensure the system is going to be there in the long-term for those employees that are already here,” Roberts said.

Legislators in 2001 changed the formula used to calculate pensions for new retirees by dividing the number of years worked by 55, rather than 60, which in effect resulted in a 9 percent benefit enhancement. Christie is seeking to reverse that legislation and return to at least 60 for current workers, the person said. Legislators previously rolled back the higher benefits for workers hired after May 22, according to state bond documents.

Cheers for New Jersey, Boos for Illinois

Once again three cheers go to Chris Christie for confronting the pension crisis head on. Actually, Christie did not go far enough, something every state pension plan will find out as soon as the stock market falters.

Three boos go to the state of Illinois which has one of the highest property tax rates in the nation yet we still have a school budget crisis and in fact a budget crisis everywhere one looks.

It is crystal clear Illinois governor Pat Quinn is incompetent and must be removed. Although it is highly unlikely Bill Brady (Quinn's challenger) will be anywhere as good as Chris Christie, it would be hard to find someone worse for Illinois than Quinn. Fortunately it appears Bill Brady will easily beat Pat Quinn in the upcoming election. Taxpayers have simply had enough.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List