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The Teacher Union’s Power and Barriers to Entry

Erika Sanzi asks some key questions of the Providence Teachers Union, but the last one cuts right to the heart of unionization, at least in the public sector:

Will the union stand in the way of eliminating the arbitrary barriers to entry into the teaching profession so that we can begin to build a long overdue talent pipeline to include people who come to teaching via an alternative pathway?

The application of some simple logic finds the reason the union will likely answer “yes” to this question — meaning “yes, we will stand in the way” — until absolutely forced to moderate.  The union’s primary value proposition to its members is that it will gain them privileges and security.  The teachers to whom this protection is most valuable are those with the least capacity to fend for themselves and gather their own leverage.

The more talented a teacher is, and the more experience he or she has in other environments than government schools, the less he or she needs the union as leverage against management and the more independent he or she will be as a union member (or bargaining unit member if he or she does not join the union).

Imagine a flood of conspicuously competent people — driven by the mission of turning Providence around and enabled by the extremely desirable compensation packages that government unions have secured — entering the system as full participants.  Not only would those new teachers refuse to stand for the union’s obstruction of the mission’s success, but they would present a stark contrast to the most dedicated union members, who should predictably be the ones with the most need for union protection.

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The Mystery of Deteriorating Roads

As is true around the state, the condition of the roads are a constant (and justified) complaint in Tiverton, with a particular focus on those that the state owns and, therefore, is responsible to fix.  Oh, they’re on the 10-year plan for repair, but that means at least five more years — five more winters and five more thaws — until the worst of them are addressed.

A local landscaper asks a question that occurs to many Rhode Islanders, in one form or another:

Louis Dupont, said the state “better do something.”

“The state gets all this money from the lottery. Where does it go?” Dupont asked. “That baffles me. All that money. Where does it go?”

Asked his opinion of the eastern stretch of East Road, Dupont says: “The tractor almost jumps off the trailer.”

The state now has a $10 billion budget, and the municipalities collect another $2.5 billion in taxes on top of that.  Where does all the money go?

Well, this is the Know a Guy State, and budgets fund special favors, handouts, pet projects, and a substantial pay premium for government employees.  Once a chunk of cash is claimed for anything or anyone, it becomes an entitlement that is extremely difficult to take away.  When money does go toward infrastructure, cost-growing mandates from the state, such as prevailing wage, drive up the expense to ridiculous heights so taxpayer dollars can’t go as far as they otherwise would.

Big-government politicians everywhere understand that they’re better off siphoning money to things that shouldn’t be priorities so that the public will consent to higher taxes and more fees in order to fund the things that they really care about, and Rhode Island has made that principle a way of life.  Until we stop shaking our heads and writing it off simply as the way things are around here, the practice will continue.

But imagine if we insisted on change and our roads were rapidly repaired, perhaps even while we experienced a reduction in taxation.  Decline has been a choice, and it is within our power to reverse it and rocket up the national rankings that give Ocean State residents a near-monthly slap.

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RI Seeks a Workaround to Janus

Ballotpedia highlights a new union-helping law in Rhode Island:

On July 8, Governor Gina Raimondo (D) signed H5259 and S0712 into law. These companion bills authorize public-sector unions to impose fees on non-members who request union representation in grievance and/or arbitration proceedings. It requires public-sector employers to notify unions within five days of hiring new employees. It also requires employees to file written notice with the state controller in order to discontinue payroll deductions for union dues.

Some labor attorneys with whom I’ve spoken have suggested that this is patently unconstitutional under the Supreme Court’s Janus decision.  They say that if union members do not have to pay extra for a service — that is, if the service of grievance representation is included in dues — then non-members cannot be charged for it.

At the very least, one can say that it is a legally gray area.  Consider this from Janus, wherein the court is arguing that the idea that employees are “free riders” if they can’t be forced to pay agency fees is not a very strong point (citations removed):

What about the representation of nonmembers in grievance proceedings? Unions do not undertake this activity solely for the benefit of nonmembers—which is why Illinois law gives a public-sector union the right to send a representative to such proceedings even if the employee declines union representation. Representation of nonmembers furthers the union’s interest in keeping control of the administration of the collective-bargaining agreement, since the resolution of one employee’s grievance can affect others.  And when a union controls the grievance process, it may, as a practical matter, effectively subordinate “the interests of [an] individual employee . . . to the collective interests of all employees in the bargaining unit.” Alexander v. Gardner-Denver Co.

The next paragraph suggests less-invasive means than agency fees, such as charging for the service.  However, the text and a related footnote imply that the ability to charge is dependent on the employee’s request for union representation, which seems to suggest that non-members in a collective bargaining unit can choose other representation.

If non-members must be covered by a contract and cannot negotiate their own, separate grievance procedures, they should be afforded the option of hiring some other representative for that narrow purpose than the union.  Naturally, this being Rhode Island, we should expect all legislation to be geared toward helping the labor unions rather than balancing the legitimate interests of everybody involved.

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How You Can Help Break the Union Grip that Contributed Mightily to Providence Education “Horror Show”

By now, you must have heard about the scathing Wall Street Journal editorial on the Providence school system. They didn’t hold back, and it is right in line with what our Center has been saying for years. It is a total embarrassment for teachers who truly care about educating kids.

The WSJ put blame on the powerful teachers unions as a key reason why students are not receiving the education they deserve.

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Rhode Island’s Politicians Are Failing

For too long, the political class has failed the people of our state. At $888 per year for each of Rhode Island’s one million residents, a family of four is paying over $3,500 annually for excessive compensation deals for government workers, while the basic needs of their own families are being ignored by politicians.

With almost two-thirds of these excessive costs being heaped upon municipal taxpayers, our recent Public Union Excesses report further estimates that property taxes could be reduced by 25% if more reasonable, market-based collective bargaining agreements were negotiated.

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Discussing the State’s Effect on Municipalities on State of the State

The RI Center for Freedom & Prosperity’s new board member, Judge Robert Flanders, recently accompanies me for an appearance on the State of the State show to discuss the effect that state-level rulings and legislation can have on cities’ and towns’ ability to manage themselves and their budgets.

6-10-19 Impact of Legislation/Court Decisions on Municipal Management and Cost from John Carlevale on Vimeo.

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Important One Year Milestone: Union Membership is Now Your Choice

The end of the 2019 school year coincides with an important milestone: June 27th will be the one year marker since the U.S. Supreme Court issued its landmark decision in Janus v. AFSCME, which determined that forcibly collecting union dues and fees from public workers, including teachers, is unconstitutional.

This summer is the perfect time to ask yourself the question: What is my union doing for me?

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How the Issues Blend in the General Assembly

Maybe I’m being a little too cynical, but a serendipitous press release from the Rhode Island Senate at least provides an opportunity to contemplate how things operate at the State House.

As readers probably have heard by now, the Democrat leadership of the Senate engaged in an unprecedented last minute political stunt by pulling an abortion bill that decriminalizes fetal homicide from the Judiciary Committee and sends it to the Health and Human Services Committee, which everybody expects to pass it.  The reason for this unusual move was that Senate Republicans looked like they were going to leverage their rights as a minority under the chamber’s rules to add two votes to the “nay” side and stop the radical, unnecessary, and deceptive legislation.

The odd thing about it is that Senate Majority Leader Michael McCaffrey (D, Warwick) and Senate President Dominick Ruggerio (D, Providence, North Providence) could have done the same thing.  Instead, the Senate president managed to ensure that the bill passes committee without admitting that he voted for it.

Now the press release posted on the Web the same day as the committee maneuver:

The Senate today passed legislation (2019-S-803Aaa) sponsored by President of the Senate Dominick J. Ruggerio (D-Dist. 4, North Providence, Providence) that takes a new approach to economic development on large tracts of state land. Spurred by delays and impediments imposed upon the Hope Point Tower proposal for the I-195 Redevelopment District, the bill intends to create a more streamlined process for approvals on these state-owned parcels moving forward.

“We have a rare opportunity for development at the former I-195 land and some other areas across the state,” said Senator Ruggerio. “In the I-195 District, a developer is hoping to invest more than a quarter of a billion dollars to create an iconic structure that redefines the skyline. We should have welcomed this investment with open arms. Instead, we did everything we could to chase the developer away. Thankfully, he’s still here. This process has sent a terrible message to anyone looking to invest in Rhode Island.”

This is a big-money deal of particular interest to labor unions, for which Ruggerio worked until he retired after becoming Senate president.  The only reason I hesitate to link this with the abortion bill is that the vote wasn’t really that close: 28 to 8.  On the other hand, eight “nay” votes is pretty substantial in our one-sided legislature.  Had 10 votes flipped, the bill would have failed.  When the bill was in Senate Judiciary, four flipped votes would have stopped it.

So, the lesson:  When considering the up-and-down votes on any particular bill, you can’t assume legislators are judging the merits alone.  The lives of unborn children, in this case, can perhaps be sacrificed for the sake of a crony development deal.  Or perhaps some other backroom deal has been struck so that the House will stop the legislation in exchange for a return favor from the Senate.

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Upcoming Budget: More Privileges for Insiders or Real Help for RI Families?

With the General Assembly session nearing the end, we fully expect the new state budget to contain no meaningful remedies to the many problems that plague our state, such as high taxes across the board, high energy and healthcare costs, and onerous regulatory burdens on job-producers. In our Public Union Excesses report, we identified that there are $888 million per year in excessive collectively-bargained costs, responsible for driving up local property taxes by up to 25%.

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Public-Sector Labor Legislation and the Law of Unintended Consequences

While we must be wary of giving credit-rating agencies the power to dictate the legislation of our elected representatives, Rhode Islanders should contemplate the significance of this development, which Katherine Gregg reports in the Providence Journal:

A warning from one of the nation’s largest credit-rating agencies, Moody’s Investors Service, has revived the debate over the union-backed continuing-contract legislation that Gov. Gina Raimondo signed last month over the objections of city and town leaders.

The new continuing-contract law indefinitely locks in wages and benefits in expired public-employee contracts. The teacher union lobbyists who took the lead in pushing the bill said it was aimed at preventing cities and towns from unilaterally slashing pay or making employees pay more for their health insurance during deadlocked negotiations.

“The law has the potential to provide collective bargaining units with advantages in negotiations,’’ Moody’s public-finance division wrote in a special report out Thursday that echoed one of the biggest concerns raised by Rhode Island mayors and town administrators.

Moody’s worries that the law may be “a significant impediment to local governments’ ability to negotiate labor contracts,” and as a local elected official participating in negotiations, I can confirm that to be the case.  It isn’t just a matter of unions’ refusing to make concessions that help government agencies balance their budgets.

The legislation — and even just the fact of its passage, along with the firefighter overtime bill — is already shutting off areas of discussion.  A municipality and union trying to balance current expenses with employees’ long-term interests can’t trust that the state won’t change the rules out from under them.  Even in a situation when the current members of a particular union have long demonstrated a desire to work cooperatively with management, decision-makers can’t consider only that relationship, but must worry about the unknowns of what future union members might do and how union-friendly legislators might change the rules on their behalf.

As with so much in Rhode Island government, the legislature and governor have demonstrated that they don’t take the broad, long-term effects of their actions into consideration.  One imagines that if they were ever to acknowledge the law of unintended consequences, they’d move swiftly to pass legislation repealing it.

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Help Spread the Word About the Cost of Government Unions

Wow, has our report shaken up the status quo! We have done the research, and we have connected the dots. The number one driver of the Ocean State’s declining population and jobs numbers – the high property taxes we all pay – can now be directly connected to the excessive costs of government, as mandated by government union collective bargaining agreements.

Now, we are asking your support to help us spread the word.

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Political Monday with John DePetro: Labor and Abortion in Rhode Island

My weekly call-in on John DePetro’s WNRI 1380 AM/95.1 FM show, this week, was about the likely future of legislation supporting organized labor and promoting abortion, as well as the governor’s chances of spinning her performance for state and national consumption.

Open post for full audio.

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Rhode Island’s Political Leaders Are Failing on Their Promise to Help Average Families

At $888 per year for each of Rhode Island’s 1 million residents, a family of four is paying over $3,500 annually for excessive compensation deals for government workers, while the basic needs of their own families are being ignored by politicians.

With almost two-thirds of these excessive costs being heaped upon municipal taxpayers, the report further estimates that property taxes could be reduced by 25% if more reasonable, market-based collective bargaining agreements were negotiated.

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Unfairness in RI Government’s Priorities

Mike Stenhouse’s recent op-ed in the Providence Journal puts the RI Center for Freedom & Prosperity’s Public Union Excesses report in a broader context:

Beyond these extreme financial costs, an even more corrosive impact from this political cronyism is at play. People have lost trust in their government and are fed up with betrayals from lawmakers who have forgotten them, who cater only to special-interest concerns. Lawmakers make it ever-harder for people to take care of their families and reside in Rhode Island.

For these reasons, Rhode Island is not keeping pace with the rest of the nation when it comes to jobs and population growth. After 10 years of perhaps the slowest economic recovery among all states, Rhode Island’s political leaders are failing on their promises to help the average family.

Instead, by heaping more privileges upon those who help get them elected, politicians continue to lose the trust of the people, who are also losing hope for their state. These tragic circumstances have conspired to make it a virtual certainty that the Ocean State will lose a prized U.S. congressional seat after the 2020 national census because of its stagnant population growth.

Rhode Island strangles its families and businesses with taxes and regulations, but often, the sheer unfairness of the system can be the real poison.  As a member of the Tiverton Town Council, yesterday I participated in a “business walk” hosted by the Newport County Chamber of Commerce, which involved stopping in to talk with some business owners around town.

Of course, we heard about the problem of taxes, but the subjects that really animated business owners would better be classified as injustice.  The cost of government labor was seen not only as a cause of high taxes, but also as a budget imbalance preventing infrastructure improvement.  Similarly, the capriciousness of enforcement, with the rules not seeming to apply fairly to every business and changing depending on which government inspector paid a visit, is irksome beyond the cost.

Even after figuring out how to overcome all the regulatory obstacles that the state throws in their way and even after building high taxes, regulation-driven energy costs, and government bungled healthcare expenses into their business models, they still never know when an inspector will find some new rule to enforce or the legislature will come up with some new fee or obstacle to impose.

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Union Excess Talk on Changing Gears

Dr. Dennis Sheehan and I had the pleasure of appearing in-studio with Mike Collins and Chris Maxwell this past Saturday for their WPRO show, Changing Gears, to talk about the report that we co-authored for the RI Center for Freedom & Prosperity about the excess costs of state and local government attributable to collective bargaining with labor unions.

Listen to “Changing Gears” on Spreaker.

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How Much Union Members Are Paid, And How Much Taxpayers Can Afford

With the third highest property taxes in the country, a major encumbrance within an overall anti-taxpayer and anti-business climate that has dropped Rhode Island into bottom-10 rankings in a number of critical national indexes, the excessive costs of collectively bargained government services can be directly linked to this statewide problem.

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Local Pensions and the Labor Squeeze

A summary for Pensions & Investments of Rhode Island’s latest report concerning local pension plans passes a spotlight quickly past the ways in which government agencies, aided and abetted by labor unions, obscure the costs of benefits:

For the underfunded plans, assumptions about investment returns and payroll growth “may not be realistic,” said the report, which cited Providence’s 8% return assumption as the highest in the state.

“In more than a few cases … local pension liabilities are, or have the potential for, crowding out other important budget priorities.”

Take a look at the scorecard for Providence on page 22 of the report.  The plan is 26.3% funded, which means it would have to have about three times more money in the fund collecting investment returns right now in order to be solvent.  The city assumes that its payroll will only grow 3.5% per year, which must account for both raises and new hires.  It also assumes an unrealistic 8% return on its investments every single year, which means it can put less actual money into the plan each year, because it assumes more will come from investments than is likely.

To top it all off, Providence has more former employees collecting pensions than it has employees paying into the system.  Consequently, it pays out more every year than it adds to the fund, by about 4%.

Think about that.  The city’s pension fund is actually shrinking, not growing.

In order to buy labor peace, Rhode Island governments have made huge retirement promises.  So they don’t break the bank, they’ve then disguised the true cost with unrealistic assumptions.

That sword cuts both ways, though.  Because the pressure that the pensions should be applying to budgets is drastically understated, labor unions are able to push for bigger raises and benefits for active employees, which has crowded out the money for appropriate pension funding.  Now that accounting standards are making pension funding more visible and even mandatory, it has joined with other labor costs in squeezing the budgets for other expenses — even as prevailing wage and other union rules have ensured that the money for those other expenses cannot go as far as it should.

As the RI Center for Freedom & Prosperity’s new report on excessive labor costs shows, these and other problems are creating a huge additional burden on our state, which is already struggling to meet budgets while allowing its economy to grow.

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