Scott Lang

Mass. cities need new deal with public employees

By Scott Lang
December 22, 2010

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CITY GOVERNMENTS in Massachusetts follow costly, inefficient 20th-century industrial models for compensating their employees. Archaic rules dictate the structure of health insurance, pension plans, and other benefits, and the degree to which these rules diminish our capacity to provide vital services to our citizens may come as a surprise to many of our taxpayers.

The costs to the taxpayers of health insurance and pensions have risen 217 percent over the past decade in New Bedford, and over 200 percent on average across Massachusetts. With limited revenue streams, these rising expenditures represent dollars that cannot be used to put more police officers and firefighters on our streets or to offer our children smaller class sizes by hiring more teachers. Such dollars are instead allocated to pay the rising costs of current employee benefits. Soon, benefit costs will crush local government everywhere.

To prevent that, Massachusetts must examine pensions, benefits, and wages for public employees in a comprehensive way. We must honor the employment covenant that we have made, while designing a new covenant for future employees that will more closely align total employment costs in the public sector with those in the private sector.

After 50 years of gains made through collective bargaining, jobs in municipal government now frequently offer higher wages than comparable jobs in the private sector. This is problematic during a time when all of our citizens face the ravages of this recession. According to the US Bureau of Labor Statistics, when the value of benefit packages is factored in, the total average cost to private-sector employers is $27.49 per hour per employee. In state and local government, the total cost is $39.83 per hour — a 45 percent difference in total cost to our local governments. These are national statistics, but it’s fair to assume the pattern holds true in Massachusetts.

It’s vital that our public labor unions understand that current public employees will only have job security if we can bring government spending in line with revenue; otherwise, as layoffs continue and positions lost through attrition remain unfilled to cut costs, the functions of government will be outsourced to the private sector by necessity. This will further diminish the number of government jobs, as well as our capacity to provide direct services to our residents.

As revenues decline, unions are put in the impossible position of demanding that their contracts and benefits be honored — even if it means laying off significant numbers of their own members to pay for the benefits of other members. Under a new public employment covenant, the unions will once again be able to advocate for all of their membership, rather than be forced to sacrifice union positions in exchange for the status quo.

We can avoid this. The Legislature should create a task force to develop a new public employment covenant for the future. This panel should include members of Governor Patrick’s administration, the House and the Senate, labor, the business community, representatives from municipalities, and citizens’ groups — and should have a broad, frank, transparent discussion about how to develop models of local government that are sustainable in relationship to the revenue that cities and towns can realistically raise. We need to find solutions to contain costs and create designs for appropriate health insurance and pension plans.

These issues are urgent, so this task force should report back to the people by the end of this fiscal year.

We cannot have a strong state unless we have strong municipalities. It is imperative that we find systemic and equitable solutions that will allow our cities to strengthen public safety, revitalize their neighborhoods, and improve their schools.

Scott Lang is the mayor of New Bedford.