Saturday, January 15, 2011

Why can't the city tear up its contracts?

This is my response to Patrick Barret, the labor counsel for the City.  His Midlands Voices can be read here:

I am pleased that Patrick Barrett laid out the facts that have led the city and fire union to an impasse.  He notes that after 30 years of overall wage and benefit increases this is the first time that any major concessions have been reached.  The main concession was the ending of pension spiking.  Hailing these changes as substantial is partisan hyperbole at its best.  Noting that the city cannot void its contract, dictate terms, or do nothing has shown how one sided these negotiations have become.

The city is tied by law to have only one fire department and that fire department is union.  By law the union cannot strike leaving the city without fire responders, a law that was necessary because of the previous law.  By law the CIR is to bring wages up to be comparable to other cities.  The CIR may not give the union everything it wants but they get something.  The pension system is by law required to pay out defined benefits which has led to the shortfall.  The city by law is not allowed to raise its sales tax without state approval which led to the unfair restaurant tax and increases in property taxes.  Those taxes led to the recall.

Poorly written laws have led to this whole mess and no side is willing to take a look at the big picture.  The fire union has monopoly control of fire response in Omaha and ultimately gets its wages from the threatening side of a gun.  It is hard to negotiate with someone who knows you have no alternatives.  After 30 years of greasing the legal system the public unions, state legislature, and past city councils  have written into law a beniefit plan that is detrimental to Omaha's finical stability.  It takes a special person to let go of a deal like that, but this path is unsustainable.

We need a leader willing to make the sacrifices necessary to put the city on sound financial footing.  Defined benefits need to be reformed to defined contributions.  This may be costly in the short term but is the morally right choice.  The laws that are a barrier to this transition need to be eliminated.  Omaha, the state legislature, and indeed the whole United States, have made a mistake in thinking that defined benefit plans for monopolistic government services are sustainable.  The time for reform is now.  This recall is an investment in the future as much as it is a referendum on the past 30 years of bad deal making.

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