Global Economic
Trend Analysis

Recent Posts

Monday, December 13, 2010 8:59 PM

Common Sense Rules to Halt Runaway Union Benefits; What You Can Do To Help

Mish Moved to MishTalk.Com Click to Visit.

Montgomery County, Maryland proposes an arbitration rules change that would require arbitrators to place the highest priority on the county's ability to pay without hiking taxes. It also would require the arbitrator to weigh other factors, such as the interest and welfare of county taxpayers. I propose statewide rules that would mandate just that.

Please consider Montgomery looks to tackle budget woes with fresh ammunition

The Montgomery County Council looked to tighten its fiscal belt this week equipped with a fresh analysis of the county's budgetary plight and a plan to ensure that an arbitrator, if called in to break an impasse, would first and foremost consider the county's ability to pay union contracts.

The proposal comes as a study by the county's Office of Legislative Oversight reports that the primary driver behind a 71 percent increase in spending by the county over a decade was a 64 percent increase in personnel costs.

The average Montgomery County employee salary increased 50 percent and the cost of benefits rose more than 120 percent during the 10-year period, according to the study by OLO.

The report, requested by the council, is "a message to the executive branch and county employee unions, ... that somewhere there has to be a balance met," said council Vice President Valerie Ervin (D-Dist. 5) of Silver Spring, who has proposed changing county law to make affordability the "priority" consideration in arbitration.

Ervin's proposed bill would require an arbitrator to give the highest priority to the county's ability to pay. It also would require the arbitrator to weigh other factors, such as the interest and welfare of county taxpayers.

During OLO's presentation to the council Tuesday, Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg said, "I believe the message is going forward that the council needs to see agreements that are not only affordable in year one, but sustainable in years three and four."
Containing Runaway Spending

The Washington Post chimes in with New bill would help contain runaway spending in Montgomery County
PUBLIC WORKERS in Montgomery County have enjoyed a spectacular run over the last decade, thanks to munificent politicians, powerful unions and a badly tilted playing field that favors workers over management. Many workers who were on the county's payroll in 2000 have seen their salaries double, in addition to receiving ever-improving benefits. Since salaries and benefits amount to 80 percent of county spending - and almost 90 percent of school spending - the fruit of the county's profligacy is a structural deficit that has proved impervious to repeated tax increases.

A bill before the County Council would provide officials with a lever to restore some balance. It was introduced by the new council chair, Valerie Ervin, a product of years in the labor movement. That Ms. Ervin would sponsor legislation to trim the power of public-worker unions is a hopeful sign - and a telling one of how tilted the field has become.

The result is that Montgomery has the fattest and least affordable contracts in the region and is now cutting services to pay for them.

In the event that an impasse in contract negotiations leads to arbitration, Ms. Ervin's bill would require the arbitrator to give priority consideration to the county's ability to pay without resorting to tax increases. This is common sense.
Montgomery, County Facts and Figures

Here are a few interesting facts about Montgomery County.
Montgomery County is a county in the U.S. state of Maryland situated just north of Washington, D.C. and southwest of Baltimore. It is one of the most affluent counties in the nation, and has the highest percentage (29.2%) of residents over 25 years of age who hold post-graduate degrees. The county seat and largest municipality is Rockville. Most of the county's approximately 971,600 residents live in unincorporated locales, the most populous of which are Silver Spring, Germantown, and Bethesda, though the incorporated cities of Rockville and Gaithersburg are also large population centers. It is a part of both the Washington Metropolitan Area and the Baltimore-Washington Metropolitan Area.

As of 2008, Montgomery County is the second richest county per capita in the State of Maryland and 8th richest in the nation, with a median household income of $91,440.
Calling Chris Christie

It's rather late in the game but we must applaud common sense whenever and wherever it is found. I like this proposal. It's a small down payment of what needs to happen. The ultimate goal is to kill public union collective bargaining entirely, scrap Davis-Bacon, dump prevailing wage laws, and legislate mandatory right to work laws that would be binding across all 50 states.

Those things will not happen soon, and some of them cannot happen at the statre level. However, the proposal for arbitrators to place the highest priority on ability to pay without hiking taxes looks like something that can be accomplished en masse at the state level, for all public union negotiations within a state.

Send a Message to Chris Christie

Is anyone on Chris Christie's staff tuned in? If so, please take this taxpayer-friendly idea and run with it.

To ensure the message gets through, please Contact Governor Chris Christie, no matter what state you live in. If he acts on this idea, other governors will follow.

That link opens up a form, so select a topic of Pension and Retirement. The sub-topics for labor make no sense.

Put in a subject line something like "Common Sense Rules to Halt Runaway Union Benefits".

Write in your own words what you think needs to be done. This is what I wrote.
Dear Governor
I applaud your efforts to rein in public union graft, untenable wages, and especially untenable benefit packages wildly out of tune with wages and benefits in the private sector.

I came across an article in the Washington Post about how Montgomery County, Maryland proposes arbitration rules change that would require arbitrators to place the highest priority on the county's ability to pay without hiking taxes. It also would require the arbitrator to weigh other factors, such as the interest and welfare of county taxpayers.

Here is a more detailed link from the Maryland Gazette.


Instead of having each county tackle these issues on their own, I believe you should tackle this at the state level REQUIRING that all public union arbitration boards "place the highest priority on ability to pay without hiking taxes".

Such laws would allow county boards to proceed with confidence in arbitration disputes. Currently many boards will not go to arbitration because arbiters nearly always side with unions.

Thank you very much.
Mike "Mish" Shedlock
Whether you live in New Jersey or not, please contact Christie. Whatever he can accomplish other governors will consider.

However, please don't stop with the state of New Jersey. Pass this idea on to the governor in your state as well.

Here is a complete list of Email addresses, phone numbers, and Fax numbers for US Congress and Governors

If enough people respond, we will see change, one state at a time.

Mike "Mish" Shedlock
Click Here To Scroll Thru My Recent Post List

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats