Global crisis should trigger end to status quo at home

From The Beacon, April 2009, Vol. XXXV, #4

The national and global economic crisis is real. We are feeling it on every Main Street in Massachusetts and seeing it in state capitals throughout America, in Washington, D.C., on Wall Street and corporate boardrooms, and in Europe and China and beyond.

Like a many-headed hydra, the recession has attacked from multiple points and dealt serious wounds to homeowners and the housing market, personal savings and business investments, access to credit and capital, employment, consumer confidence and spending, and on and on. State and local governments across our nation are in fiscal crisis. Basic services are threatened. Career teachers, public safety workers, and municipal employees are losing their jobs.

We can’t get through these tough times without making tough decisions, especially when the choices are between bad and worse. And certainly, this is no time to protect the status quo, if the status quo is contributing to the problem or blocking necessary solutions.

The citizens of Massachusetts understand this, and they are looking to their elected and appointed leaders for bold action to address the challenges at hand.

This presents a unique opportunity to advance reforms that under usual times are well-regarded yet lack the fuel of urgency, but in a time of crisis are absolutely necessary and should be propelled forward.

It has been very tough to crack the status quo, especially in the area of public-sector personnel matters. Business and civic groups, including the MMA, have pressed hard for health insurance reform, disability retirement reform, pension reform, and much more. But until this year, entrenched special interests have successfully convinced state leaders to rebuff these reform efforts, even as stories of abuse and lost savings abound.

The problem is the triangulated system of governance here in the Bay State. Cities and towns lack the power and authority to manage their workforces and their revenue bases. That power rests in the hands of the governor and Legislature, through state laws and regulations. Employee groups organize (with significant political resources) to convince the state to maintain the current system, which handcuffs municipal officials as they try to implement even modest changes to benefit communities and local taxpayers.

In actuality, this resistance to reform and modernization will work against the long-term interests of employees. Without these important reforms, local officials are now forced to eliminate thousands of municipal and school employees from payrolls. Younger workers are seeing their careers end early. Local residents are seeing a decline in core essential services. All communities are overly reliant on the limited and regressive property tax.

Many veteran employees and employee groups may care less about layoffs than protecting existing benefits, but that’s not where the public is, especially when those benefits are more generous than what state government or the private sector offer.

Let’s take the case of employee health insurance. The state exempts itself from collective bargaining on health insurance issues, including plan design. This has allowed state government to keep its health insurance costs down by implementing reasonable co-payments and deductibles and establishing cost-saving tiered networks. But under pressure from municipal and statewide public sector unions, state officials mandate that cities and towns must get union approval for any similar changes in local health plans.

Real reform would give local officials the same power the state has to update health plans, and this simple change would save more money, more quickly and more efficiently than any other single reform, saving millions of dollars and protecting against the elimination of thousands of municipal and school positions, while providing municipal employees with health insurance plans that are equivalent to what the state offers its own employees.

There are many examples of state intrusion into what should be local decision-making in the area of personnel. Cities and towns are required to negotiate in order to regionalize services, including public safety dispatching. Union approval is necessary to secure the ability to implement drug testing for police and fire employees. The state-set injured-on-duty and disability retirement systems are clearly abused (we all remember the photograph of the bodybuilder with an alleged back injury), but reform can’t gain traction. The costly civil service system is antiquated, but remains in place even though employees have more than adequate protection under existing collective bargaining agreements and other employment laws.

Massachusetts will fail the test if we do not tackle and reform the tough issues that bedevil our personnel systems. We may make it through the recession – that will be handled by the passage of time – but we will be all the weaker for the lack of action, financially and economically.

Ultimately, the people of the Commonwealth will recognize the sad reality and demand change themselves.

Yet if state and local officials grasp this opportunity for real reform and achieve meaningful results, the residents of Massachusetts will applaud and appreciate the leadership and the actions.

The crisis is real. The reforms must be as well.