Politics & Policy

Cops, and Robbers

From the Aug. 30, 2010, issue of NR.

In July, the Fraternal Order of Police Lodge 103 in Bay City, Mich., used funds from its dues-paying members to erect a pair of billboards — one on Saginaw and Columbus, another on Euclid near Fisher — designed to instill fear in the 35,000 Michiganders the union’s officers were sworn to protect.

The billboards warned that unlike Bay City’s finest, city hall couldn’t prevent residents from being “Beaten,” “Shot,” “Stabbed,” or “Robbed,” and confronted passers-by with an image of a masked man pointing an automatic pistol at them.

City commissioners, facing a $1.66 million budget deficit, had asked the city’s eight public-sector unions — which include two separate Teamsters locals — to shed 10.8 percent in labor costs to avoid job losses. Only the firemen met the July 1 deadline for the cuts, having struck a tentative deal at the eleventh hour. The other seven were hit with layoffs — including the police, who saw five officers pulled from their force of 57, and who were given until the end of August to ratify new contracts if they didn’t want the reduction in force to become permanent.

It’s a story that is playing itself out in cities, counties, and states across the country. Hoboken, N.J., is planning to lay off 18 cops, eliminate top-brass positions, and civilianize a number of non-patrol police functions. Akron, Ohio, is eliminating holiday overtime pay for emergency-service workers and reassigning a number of police to school districts, where costs can be “shared.” East St. Louis, Ill., one of America’s most dangerous cities, is trying to stave off police and fire reductions in force with accounting tricks such as salary deferrals. In perhaps the most dramatic example, the gang-ridden city of Oakland, Calif., laid off 80 police officers — a full 10 percent of its force — in an effort to balance the city budget.

Everywhere, cash-strapped councils and legislatures in the second year of post-crisis America are struggling to bring outlays in line with a shrunken and stagnant revenue base after decades of metastasizing growth in public-sector labor costs. And they are being forced to take a hard look at their salary and pension obligations to police and firefighters — obligations that are both prime drivers of structural deficits and as close a thing as there is in local governance to a sacred cow.

And the fuzz aren’t taking it lying down. In Akron, Fraternal Order of Police local president Paul Hlynsky has engaged in a public war of words with mayor Don Plusquellic, accusing him of lying and negotiating in bad faith. In a move to rival that of the Bay City police union, Oakland police chief Anthony Batts responded to the layoffs by ticking off a list of 44 situations to which his reduced force would no longer be able to respond — and it wasn’t just cats up trees and noise-ordinance violations. The list included felonies like burglary and grand theft, extortion and fraud.

Throughout these crises, the unions have succeeded in casting the choice as one between public safety and layoffs, avoiding reductions in, or even talk of, their extravagant compensation packages.

According to the Bureau of Economic Analysis, in 2008, state and local governments spent $1.1 trillion on public-employee compensation, a number that accounts for fully one-half of their total spending. State and local employees earn, hour for hour, 34 percent more in wages than do workers in the private sector, and enjoy far more generous health-insurance, sick-leave, and pension benefits.

The public/private disparity is especially stark when one focuses on public-safety compensation in places such as Oakland; police and firemen have accounted for about 75 percent of expenditures from the city’s general fund over the last five years. Average total compensation for an officer in Oakland — a city in which the median family earns $47,000 — is $162,000 per year.

As with most public-sector workers, a major — and opaque — piece of emergency-services compensation comes in the form of lifelong pensions.

“Public-safety workers tend to receive the most generous public-employee pensions,” says Josh Barro, a Manhattan Institute fellow and expert on state and local finance. “They are based on a significantly shorter career — it is not atypical to see police and fire pensions based on 20 years of service — and they also tend to be more generous as a percentage of salary.”

Other laws make the payouts even more generous. In New York, for instance, a “presumptive disability” law makes it easy for firemen to secure lifetime, tax-free pensions at three-quarters pay; when examining a fireman for the purpose of determining whether he has a work-related disability, a doctor is required to start with the assumption that certain illnesses are job-related even if there is no evidence that they are. A fireman from a Bronx ladder company who develops a lung disorder will qualify for disability retirement even if it’s unclear whether he developed his impairment from smoke inhalation on the job, or from his two-pack-a-day cigarette habit.

The “presumptive disability” bonanza is sometimes exacerbated by abuse. In July, the New York Post told the story of John C. McLaughlin, a 55-year-old former FDNY lieutenant who retired in 2001 with an $86,000-a-year disability pension, after it was determined that he was an asthmatic with diminished lung capacity. This despite the fact that McLaughlin is an accomplished triathlete who regularly competes in long-distance races.

McLaughlin is hardly alone. An astonishing 80 percent of 2010 FDNY retirees have qualified for disability benefits.

How did police and fire unions score such a sweet deal? Part of it is institutional. Since public-safety unions can, by law, virtually never strike, nearly all of them take advantage of their right to force “interest arbitration,” wherein an ostensibly neutral third party settles contract disputes between labor and government. As such arrangements became commonplace through the 20th century, police and fire unions began to see their compensation rise faster than that of non-uniformed public employees. The availability of legally binding arbitration meant that unions had less incentive to deal directly with their government employers, while elected officials facing angry voters could blame expensive settlements on the imposition of the arbitrators.

The effect of forced arbitration on the fiscal health of local government is starkly illustrated in a recent comparative study of Fairfax County, Va., and Montgomery County, Md., undertaken in a refreshing Washington Post staff editorial from May:

Virginia law denies public employees collective bargaining rights; that’s helped Fairfax resist budget-busting wage and benefit demands. As revenue dipped two years ago, Fairfax officials froze all salaries for county government and school employees with little ado. By contrast, Montgomery leaders were badly equipped to cope with recession. County Executive Isiah Leggett took office proposing fat budgets and negotiating openhanded union deals. . . . Then, as economic storm clouds gathered, he shifted gears and cut spending — while still trying to appease the unions.

Notoriously, one such deal guaranteed almost $300 million in pension benefits over 40 years to thousands of employees based on salary increases they never received. The giveaway became known as “Phantom COLAs,” for the cost-of-living raises that were never paid. And even when Montgomery’s teachers agreed to give up cost-of-living raises last year, about two-thirds of them continued to receive step increases of up to 4 percent.

As a result of their different collective-bargaining policies, the two demographically similar jurisdictions have “parted ways.” Montgomery County is “lurching under the weight of irresponsible governance, unsustainable commitments and political spinelessness,” while Fairfax, “though facing tough choices[,] . . . has a brighter future.”

But beyond institutions, political — and even cultural — norms play a role in the special status of police and fire compensation. For one thing, cops and firemen are swing voters.

“Their unions are more powerful in the sense that they are more politically heterodox,” says Barro. “Teachers’ unions are nearly unanimous in their political support for Democratic officeholders. Fire and police unions split their loyalties more, and are therefore in a better position to extract support from politicians.”

“Republicans don’t view it as a waste of time to try to make police unions happy,” he adds.

And if public-safety workers are split in their political allegiances, the elected class is unified in its deference to men and women in uniform, especially after a decade whose defining acts of heroism were performed by cops and firemen from New York and New Jersey. Politicians are loath to be seen as trying to nickel-and-dime our heroes.

Legislators have been able to see the sense through the sentimentality before, most notably in the case of education policy, where the elite consensus — from editorial boards to the Obama administration — is moving away from teacher hero-worship and the fetishization of things like class size (a preoccupation that happened to pad the coffers of the unions) and toward teacher accountability. But fiscal crisis notwithstanding, this has yet to happen in public safety.

Instead, public-safety unions have been able to buffalo the public into thinking that keeping the peace requires breaking the bank. What the public sees is scary billboards and lists of unenforceable statutes, and not, for instance, the fact that the Oakland Police Department backed out of a job-saving deal that would have required officers to make a mere 9 percent pension contribution, because the city could guarantee only one year, and not three, without further layoffs.

That police unions say they want to avoid layoffs yet act so as to make them necessary should leave little doubt that their priority is to preserve the privileges of their vested senior members at the expense of both the rookies who are usually first out the door and the communities they serve.

In solving the immediate crisis posed by the unions’ intransigence, state and local governments facing structural deficits must be allowed to lower labor costs without endangering public safety — by reducing compensation across the board instead of laying off staff. In most jurisdictions, governments can’t renegotiate the terms of existing union contracts, even in fiscal emergencies. This must change. Better yet, states should follow the lead of Virginia and ban collective bargaining by public employees.

We must take care that public-safety workers are not allowed to hide behind the badge. That they are our heroes does not excuse them from taking part in the difficult choices that must be made to restore solvency to state and local governments. If the unions won’t let them, and the elected class won’t make them, then the citizenry must shame them. Somebody must watch the watchmen.

Daniel Foster is news editor of NRO. This article first appeared in the Aug. 30, 2010, issue of National Review.


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