Chris Powell: The binding arbitration disaster: How about electing municipal "contract arbiters'' to take fiscal responsibility?

With even Connecticut Gov.  Dannel Malloy acknowledging that binding arbitration for municipal government employee union contracts may be a bit of a problem amid state government's worsening insolvency, maybe sensible change is coming to Connecticut. But what the governor has proposed is timid, little more than an invitation to the General Assembly to discuss the issue, which is the last thing that legislators want to do, lest they provoke the unions and all the government employees living in their districts.   

The governor proposes only a change in the selection of supposedly neutral arbiters, who are picked by the arbiters already chosen by the management and union sides in contract disputes. Neutral arbiters are said to fear favoring one side or the other too much lest they not get chosen again and lose the arbitration work. So the governor proposes random selection for the neutral arbiters.   

But this would leave the binding arbitration system in place, a system that removes most of a municipal budget from the ordinary democratic process. The governor's proposal is not likely to save any significant money for the public.   

Elected officials want binding arbitration almost as much as government employee unions do because they don't want to have to be seen choosing between taxpayers and government employees. Elected officials want someone else -- those unelected arbiters -- to take responsibility for the big decisions that drive municipal taxes up or public services down every year. Elected officials want to be able to shrug and proclaim their helplessness to their constituents.   

The real reform of binding arbitration would be to repeal it and restore to elected officials the authority to decide the compensation of municipal- government employees. But even Republican legislators would never dare to do that, since Republican town officials don't want responsibility any more thanDemocratic town officials do.   

So another reform might be more instructive and almost as good: requiring each town to elect a contract arbiter at each municipal election -- to find just one person in every town willing to take political responsibility, and, really, to control a town's finances. Mayors, council members, and school board members  could continue to hold their offices and pretend to be important, but in effect the town arbiter would decide how most of the town's money was spent.   

Such a system would abruptly concentrate the public's attention on where most of its municipal tax money goes. There would be union candidates and taxpayer candidates for arbiter and, whoever won, the issue would be settled democratically.   

If just one Republican legislator could introduce a bill to elect contract arbiters, the unions would explode in outrage at the idea of restoring democracy to municipal finance and the arbitration system would be exposed as the anti-democratic and cowardly racket it is.   

The governor also has proposed a timid reform of another racket, the state's"prevailing wage" system of contracting for municipal construction projects.  This system forces municipalities to hire contractors who pay above-market wages to their employees. The effect is to force municipalities to give their construction work to contractors whose employees are unionized.   

The governor would raise the threshold at which "prevailing wage" work is required for municipal projects. The $100,000 threshold for remodeling work would rise to $500,000 and the $400,000 threshold for new construction would rise to $1 million.   

The president of the Connecticut AFL-CIO, Lori Pelletier, denounces this as an attempt to balance budgets "on the backs of workers," which expresses the union attitude perfectly: that Connecticut's taxpayers aren't workers too.

Chris Powell is managing editor of the Journal Inquirer, in Manchester,  Conn.   

Don Pesci: An overdue threat to Connecticut unions.

As June opened, the  Connecticut State Democratic Party held a fundraiser in Hartford. The usual political celebrities were in attendance, along with deep-pocket notables. For once in a long while, state unions in Connecticut were on the outside looking in – and protesting.

It was a difficult moment for union-friendly Democratic politicians.  Passing by State AFL-CIO President Lori Pelletier, Comptroller Kevin Lembo paused for a moment, bussed Ms. Pelletier on the cheek, acknowledged the protesters, and moved into the Hartford Convention Center to join those hawking for money at the Democratic Party fund-raising event.

Money, everyone knows, is the mother’s milk of politics. A political organization without money has no power; for power, the ability to convert ideas into practice flows in the rut of money. U.S. Sen. Chris Murphy, one of the attendees at the fundraiser, has often complained that he must spend a good portion of his time in Congress on the phone, chatting up large donors, a painful process familiar to all office holders. The public is beginning to notice the money-power connection, a constant theme of Bernie Sanders’s quixotic quest for the Presidency on the Democratic Party ticket.

These days, every politician is bought by someone, and Democratic politicians are by no means safe from the politically fatal accusation that influential donors have them on a short leash. Republicans are often cited as being the party of the rich, but in truth the fat-cats on Wall Street against whom Mr. Sanders has raised a stink contribute equally to both parties.  

Many of the union protesters wearing shirts emblazoned with the motto “UNION POWER” likely were Sanders supporters. All of them want Gov. Dannel Malloy’s “progressive” government to take a stick to rich people in Connecticut, boost the progressive income tax, and cease and desist grinding the faces of the poor.

But in fact,  Suzanne Bates of the Yankee Institute reminds us, the Malloy administration did raise taxes on the rich; Mr. Malloy and progressive Democrats in the General Assembly, bowing to union pressure, increased the top tax rate “for single people making over $500,000, or a married couple making over $1 million” by 0.29 percent, a measure that was supposed to increase personal-income tax receipts by $151.5 million.

Despite the progressive knock on the rich, income-tax receipts “continue to decline -- dropping $425 million below projections made before taxes were increased.” In its plunge, Connecticut is beginning to taste the bitter fruit of diminishing returns: It is no longer true in Connecticut that more taxes mean more revenue.

Mr. Malloy, attempting to adjust a chronically out-of-balance budget, has sworn off raising taxes, because Connecticut, which has not yet recovered fully from the Bush-Obama recession, is heavily reliant for its tax revenue on large financial operations in the state; in addition, Connecticut  is losing revenue as one-percenters and large companies move to less punishing, low-tax, low-regulatory environments.

 In his recent budget, Mr. Malloy, the architect of the largest and second largest tax increases in Connecticut history, facing yet another deficit, did what previous Connecticut governors have done from time immemorial: He cut spending across the board, shifted dedicated funds from one to another non-lockbox spending pile, and announced some layoffs. State workers in the executive and judicial branches so far have received only half of the 1,900-to-2,000 layoff notices “the governor said two months ago that he anticipated being ordered by June 10,” according to a posting in CTMirror.

Following the boycotted fund-gathering event, union rank and file protesters, including Ms. Pelletier, disbanded, no doubt congratulating themselves on having made an important political point or two. Only a handfull of protesters showed up. Many influential in the labor movement were in attendance at other events, and some accessed the fund raiser through other entrances, perhaps fearing backlash from the politicians and the rank and file to which they pander.

In the absence of structural changes in how government gets and spends revenue, “necessary” layoffs will continue; however, all state unions are facing an existential threat in new administrative reforms being pressed upon states by the national AFL-CIO union leadership.

At a meeting last March, Ms. Pelletier advised union members that a “mandatory reorganization of all the Central Labor Councils (CLCs)” had been put on the table. The National AFL-CIO, Ms. Pelletier told the group, according to minutes of the meeting, “wants this reorganization to be completed by June of this year.” The reorganization would entail an "agreed upon” confiscation of all per capita income -- i.e. union dues paid by all the Central Labor Councils CLCs.

Under the new arrangement, CLCs would be reformed into “Chapters.” Money and authority would flow from disbanded CLCs to an “area organization(s),” a new group of labor business administrators “which all the chapters are a part of,” according to a message issued by AFL-CIO Northeast Guild Officer Jan Schaffer.

Following the establishment of the provisionally titled “Regional Federation of Labor” apparatus -- targeted to be in place by the end of June -- protesters at the concluded Democratic Party fund raiser likely will see a money raid on reorganized CLC bank accounts by the new mandated regional apparatus. And (see above) he who has the money will forcefully wield power under pain of non-compliance. Under the new arrangement, CLCs would lose their much prized autonomy to as yet uninstalled administrators, who then would parcel out funds and marching orders to former CLCs -- renamed “Chapters” in a larger book written by regional or even national leaders.

Little or none of this information has yet filtered down to union rank and file members. Only delegates and those with approved credentials are allowed to attend the meeting at Connecticut’s annual AFL-CIO convention in Hartford on June 9 and 10.. One may expect resistance from delegates not in agreement the new national AFL-CIO edict, but that resistance can only begin after rank and file unionized workers become aware that delegates and other decision makers have failed to be transparent with members not privy to orders from above issued by leaders who fear transparency and honest dealing.

Don Pesci is a Vernon, Conn.-based political writer.