Who's Afraid Of Binding Arbitration? I Am!
 Louis C. DeLuca of Woodbury, State Senate Republican Leader

 

For those who work in the private sector, it is a fact of life that when times are tough and the company isn't pulling in profits, you aren't likely to get a raise. This is a simple dictate of common sense that few in the real world ever dispute.

For those who work for the state or in municipal government, however, there isn't a single common-sense fiscal axiom that can't be drowned in the din of organized labor propaganda. This skewed reality is a world where union leaders view government employment as an entitlement and taxpayers as an endless source of income for salary increases, vacation days and better perks. To question the impact of this largesse on the taxpayers or the long-term health of the state's economy is to be, we are told, "against working families."

Apparently, in the minds of union leadership, it is only unionized employees who count as "working families." As we saw in 2002-03, when the state was more than a billion dollars in deficit, state employee unions refused to accept a one-year wage freeze and instead received $13 million in raises while private-sector employees throughout Connecticut lost benefits and took deep pay cuts.

These same union activists are now fighting tooth and nail to defend a binding arbitration process that soaks up state aid and leaves town leaders scrambling to fund the endless escalation of municipal employee salaries. It is well known that binding arbitration is the primary cause of property tax increases throughout Connecticut, and leaders from nearly all of the state's municipalities have begged the General Assembly to bring some relief to this fundamentally unfair system.

The problem is that the system guarantees municipal employees significant raises every time a contract is negotiated. Municipal employee unions are in the envious position of having an arbiter select between their proposal and the town's last best offer. At the very least, the union gets what the town believes is the absolute most it can afford to pay.

What's perhaps most disturbing about this system is that it undermines the basic principles of representative democracy, because the arbiter is not accountable to the voters. With municipal labor expenses accounting for 75 percent to 80 percent of most towns' entire budgets, this means that the primary factor that is driving property tax increases is beyond the power of the voter to change. There was a phrase for this back in the 1700s that you might remember: "No taxation without representation."

This year, fully aware that I run the risk of being labeled "against working families," I have proposed some very simple reforms to the binding arbitration process so that Connecticut's municipal officials might have a little more power at the bargaining table and might bring some relief to the state's property-tax payers.

First of all, when a town sets aside a so-called rainy day fund, this money should not be taken into account by the arbiter for the ability-to-pay criteria. It seems patently unfair that in taking the fiscally prudent measure of putting funds aside for future use, municipalities essentially penalize themselves at the bargaining table.

I am also proposing that towns be allowed to suspend binding arbitration for up to three years when facing fiscal difficulties. This would ensure that employees receive nothing less than their existing salaries and benefits during tough economic times, while the towns gain some flexibility to protect property-tax payers from big increases.

A third proposal is that local arbitration awards must be ratified by a majority vote of the town council. Then, as in state government, if these awards are rejected, the process must start over again.

These proposals, if enacted, would hardly undo the system. But the public employee unions and their sympathizers in the General Assembly have already begun trying to kill these bills. The Labor and Public Employees Committee has made a sham of the legislative process, turning so-called "informational hearings" into barely disguised union rallies. I imagine their union leader friends probably congratulated them on their creativity.

The hold that the unions have over the General Assembly will forever prevent the people of Connecticut from the broad-based tax relief that would keep the economy strong and more people employed. As long as municipalities have to pay these rising salaries, they will have to keep raising property taxes and asking the state for more money, and the state can only raise more money through the income tax, sales tax and taxes on the corporations that employ those of us in the private sector.

It's your tax dollars the unions keep taking to pay the relatively small number of Connecticut residents who have been lucky enough to secure state or municipal employment. Reforming the binding arbitration process would be the single most effective step to bring property-tax relief to the people of Connecticut, because the unions would no longer be able to dictate how your money is spent. The General Assembly has a choice: Reform binding arbitration and bring tax relief to all of Connecticut's residents, or succumb to special-interest pressure and make all of Connecticut pay for the convenience of a select few.

Louis C. DeLuca of Woodbury is the state Senate Republican leader.