Elected officials are also seeking to increase their freedom to control employment costs through the reform of civil-service rules. In New Jersey, Gov. Chris Christie, for all his bluster against public-employee unions, has barely even proposed to touch the state’s collective-bargaining apparatus. (One key exception: He attained passage, by a Democratic-controlled state legislature, of a law that will cap the monetary value of binding-arbitration awards for unionized public workers.)
Instead, Christie has trained his sights on the state’s civil-service rules. Those rules do not even allow municipalities to impose furlough days, which are an important tool for governments in many states to cope with budget gaps. (Permanent layoffs are an option, but they are far more disruptive to the public, not to mention to the workers who get laid off.) Among Christie’s proposed reforms are to allow furloughs and to allow municipalities to opt out of civil service entirely.
So far, New Jersey’s Democratic legislature has been unwilling to approve a civil-service reform that Christie finds satisfactory. But he has a record of achieving compromise with legislative Democrats after acrimonious fights, so a bill is likely this year — and even more likely if Republicans take control of the legislature in November.
Civil-service reform has also been a focus of New York mayor Mike Bloomberg, who has struggled in his efforts to reform the city’s public schools because of the strong employment protections enjoyed by the city’s teachers. Famously, New York for years maintained “rubber rooms” full of teachers too dangerous or incompetent to put in classrooms but who nonetheless could not be fired. Now, as he prepares to adjust to a state-aid cut of more than $500 million, Bloomberg is pushing for reforms that would allow the city to consider teacher quality when implementing layoffs.
Currently, the city (like many other school districts around the country) must lay off teachers on a “last in, first out” (LIFO) basis. This creates two problems. One is that the city must let go of young teachers even if they are high performers, simply because of their low seniority. The other is that the most junior teachers tend to earn the lowest salaries, meaning that more layoffs are necessary to achieve a given budget savings. Next year’s budget will involve 4,700 teacher layoffs, a number that would be smaller were it not for LIFO.
This isn’t a collective-bargaining matter: LIFO is mandated by state law, regardless of what any district’s teacher contract says. Bloomberg wants Albany lawmakers to repeal the law, but New York governor Andrew Cuomo, who already has his hands full with union leaders upset about budget cuts, has stalled, saying he wants to establish a new “objective” evaluation system before reforming the LIFO rule.
Not all of these proposed reforms to collective bargaining and civil-service rules will be enacted — but some will, and the trend in 2011 will be toward less power held by public-employee unions and more tools in the hands of state lawmakers seeking to manage their employee budgets. That’s good news for taxpayers — since employee compensation makes up 43 percent of state and local budgets, a shift in power toward management means less pressure for taxes to go up or public services to be cut back.
So don’t assume that all the action is in Wisconsin. The fire in Madison has spread to Trenton and Columbus — and, with any luck, will blaze on.
– Mr. Barro is the Walter B. Wriston Fellow at the Manhattan Institute. His research is focused on state and local fiscal policy.