March 2, 2004

Testimony Before the Labor Committee

by Susan Kniep, President 

The Federation of Connecticut Taxpayer Organizations, Inc.

 

BINDING ARBITRATION

 

 

My name is Susan Kniep.  I am the former Mayor of East Hartford and currently the President of the Federation of Connecticut Taxpayer Organizations, Inc. 

I ask that you support House Bill 5042, and that your committee continue to assess the crippling effects of Binding Arbitration on local municipalities and its taxpayers.      Resolutions, as initiated by the Federation, are being passed by local legislative bodies which encourage you to  open the debate on Binding Arbitration and fix the system.  A Resolution to this effect has been passed by  East Hartford, Washington, East Hampton, Roxbury, Bridgewater, Goshen, Pomfret, Salem, Putnam, Tolland, Wethersfield, North Stonington, Watertown, New Britain, Brookfield, Berlin, as other towns consider its passage.  By next year, we expect all towns to have passed this resolution which can be found on our website ctact.org.     

Town leaders and taxpayers are crying out for relief.  You can give that relief, but it takes courage, and yes,  the unions are an effective force on election day.  They demonstrate that force when they fill this room to standing room only.  However, you have a greater responsibility then the next election, and that is to protect the taxpayers of this state who work in the private sector and are paying 100% of the cost of these public union contracts. 

Bill 5042 looks at the town’s ability to pay.  Let’s change that word to the taxpayers’ ability to pay.  With 70% to 90% of local budgets paying for personnel related expenses, that ability is diminishing. 

Of course, those who suggest changes to this antiquated system of personnel management are considered union bashing by both union members and some members of this panel.   They say by making these suggestions we fail to respect the unions.  Well, respect is a two way street.   Town taxpayers now pay roughly 90% for a lucrative healthcare system for public employees, and yet these same employees want more and are going to court to get it through their lawsuit against the taxpayers.  Where is the unions’ respect for the many workers in this state who have no health insurance or are under insured?  In fact, some unions had to back out of the lawsuit when it became evident that in some cases they paid nothing for their insurance and the taxpayers paid 100%.  Police and Fire are retiring at $50,000, $60,000, $70,000 and more.  In East Hartford, the police union can retire at these rates and can elect to participate in another union perk which will allow them to receive basically two paychecks 5 years prior to retirement.  This results in a direct payment of  $200,000 to $300,000 upon full retirement plus an annual retirement at $50,000 or $60,000 a year or greater.   Vacations and days off surpass the private sector as it evidenced by the unions’ appearance on Feb 26 before this committee.     And let’s not forget the two wage increase concept of union contracts.  Little of which has been discussed here.  The first is step increases and the second is negotiated salary increases.  No one wants to talk about step increases but they are expensive, are automatic, and can increase an individual’s salary by 10% or more annually when combined with the negotiated wage increase.  And heaven forbid management assigns another responsibility to a union member.  That will be grieved, as arbitration is not only about renewing contracts, but determining grievances as well.   

But unlike the private sector, towns are perceived to have deep pockets because there is a resource to meet the demands of the arbitrators and the unions.  That resource is the taxpayer through increased taxes.  Taxpayers include those who are losing their jobs in the private sector and are forced into low paying jobs.  Tell me, as the majority of you appear to support Binding Arbitration for public employees what are doing for your own constituents who are losing their jobs in the private sector and who stand to lose their homes.  What town do you know of which has laid off town employees to the extend that the private sector has made your constituents part of the unemployment rolls.  Are you contacting these private companies and defending the rights of your constituents in the private sector to the extent you are defending the public sector unions?  

We are not asking that Binding Arbitration be eliminated.  Bill 5042 restructures   this antiquated system of personnel management called Binding Arbitration.   When the economic stability of a community is at risk, its elected officials should have full power over its finances.  They should be allowed to open union contracts and freeze wages.  Municipal leaders should not be forced into wage increases when taxpayers are losing their jobs and their homes.

It is the uncertainty of the future which is the basis for local officials to set money aside to protect the financial interests of the town and its taxpayers.  The Budget Reserve fund of municipalities should be protected and should not be up for grabs by the unions.   The State no longer has money in its rainy day fund.  So much for the state’s ability to manage its finances.    You can at least protect municipalities from this same fate.

In summary, we look to you for equity.  You can provide that equity to taxpayers through Bill 5042.   We ask that you also consider forcing union contracts to public vote and public negotiations.  Unions give their members the right to vote on these contracts.  Why do you deprive the taxpayers of a vote?   Unions can negotiate their contracts in secrecy even though taxpayers finance these contracts 100%.    Why don’t you bring the negotiation table out from behind closed door and eliminate the secrecy of these contracts?    

There is a pot of money on the table before you.    Let me remind you that the taxpayers, who cannot be here today because they are working, work hard to keep  that pot full with their tax dollars.  The question is: Are you, our State Representatives,  willing to revise Binding Arbitration laws and give the Mayors, First Selectmen, Town Managers and other town officials the ability to manage this pot of money by controlling their local budgets and the taxpayers’ dollars?!?