Wednesday, March 21 , 2018, 7:09 pm | Light Rain Fog/Mist 57º


Tom Donohue: Governors Show Leadership on Budgets, Pensions

Most states are proposing that unionized employees contribute more to health care and benefits

The fiscal crisis in many states has crested recently as reform-minded governors seek to avert insolvency and address structural budget problems. While many factors have contributed to state budget woes — including declining revenues, rising health-care costs and chronic overspending — unaffordable and unsustainable salaries, pensions and other benefits for unionized government workers are a substantial part of the problem.

It’s not difficult to understand how we got here. Unionized government workers have tremendous leverage to negotiate their own wages and benefits. They funnel tens of millions of dollars to elect candidates who will sit across from them at the negotiating table.

This self-dealing has resulted in ever-increasing wage and benefit packages for unionized government workers that often far outstrip those for comparable private-sector workers. These unsustainable obligations are threatening to bankrupt state governments. And when the money to cover these obligations falls short, these same politicians turn to the private sector for more taxes, undermining economic growth and jobs.

To their credit, many governors are trying to break this cycle. Although proposals vary from state to state, most involve requiring unionized state government employees to contribute more — or at least something — to their health-care and pension benefits. Some require restricting or eliminating collective bargaining rights for unionized government workers. Even President Franklin Roosevelt and labor leader George Meany believed that government workers should not have the right to collective bargaining.

Unionized government employees and their supporters have become unhinged at any hint of reform. They compare their protests to those sweeping the Middle East as repressed citizens struggle for democracy. (The irony of their supporters in state legislatures fleeing their states to avoid the democratic process is apparently lost on them!) Widespread sick-outs by teachers and others are not winning them public relations points.

Ultimately, this is not a matter of what the unionized workers are willing to concede, but what the taxpayers — their bosses — are willing to support. Their message in November was loud and clear.

In New Jersey, Gov. Chris Christie, when booed by an audience of union members, said: “Why are you yelling at me? I’m the first guy to come along and tell you the truth about how your pensions are going to go bankrupt. I’m not making promises I can’t keep. I’m trying to save your pensions, not eliminate them.”

As governors lead on tough budget problems, let’s hope our elected officials in Washington are watching — and learning.

— Tom Donohue is president and CEO of the U.S. Chamber of Commerce.

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