Tuesday, July 29, 2014
Inquirer Daily News

Can the unions stop the pension amendments?

Today, three of the four unions representing municipal workers blasted amendments made to House Bill 1828, which authorizes Philadelphia to increase the local sales tax and defer contributions to the city pension fund. Organized labor is turning up the heat in Harrisburg and that could mean trouble for Mayor Nutter. If the mayor underestimates the power of the unions, the legislation cold go down in defeat. The original bill provided straightforward fiscal relief, but the State Senate changed the legislation to include a freeze on benefits for current workers and big cuts for future employees. If the city doesn't make the changes, the state will pull the plug on $700 million in revenue. That would mean 3,000 layoffs and the closure of many city facilities. For the unions, it's a losing proposition either way-- they have to hurt their members or devastate services. Still, that hasn't stopped labor from aggressively criticizing the bill. The unions are making their argument in public and private. Cathy Scott from AFSCME DC 47 and Bill Gault from the firefighters laid out their opposition to the bill in an op-ed in the Daily News.

Can the unions stop the pension amendments?

Today, three of the four unions representing municipal workers blasted amendments made to House Bill 1828, which authorizes Philadelphia to increase the local sales tax and defer contributions to the city pension fund. Organized labor is turning up the heat in Harrisburg and that could mean trouble for Mayor Nutter. If the mayor underestimates the power of the unions, the legislation cold go down in defeat.

The original bill provided straightforward fiscal relief, but the State Senate changed the legislation to include a freeze on benefits for current workers and big cuts for future employees. If the city doesn't make the changes, the state will pull the plug on $700 million in revenue. That would mean 3,000 layoffs and the closure of many city facilities. For the unions, it's a losing proposition either way-- they have to hurt their members or devastate services.

Still, that hasn't stopped labor from aggressively criticizing the bill. The unions are making their argument in public and private. Cathy Scott from AFSCME DC 47 and Bill Gault from the firefighters laid out their opposition to the bill in an op-ed in the Daily News.

Also, Philly Clout reported Fraternal Order of Police held a conference call today to blast the pension amendments. The unions are also intensely lobbying members of the State House, targeting members of the Philadelphia delegation that have strong ties to organized labor.

The argument goes like this: it's unfair to penalize city workers for the fiscal state of the pension fund. The shortfall exists because former Mayor's-- dating back to Frank Rizzo in the 1970s-- failed to make adequate contributions to cover promised benefits. Now, workers are being asked to pay the price for poor decisions by political leaders.  

Unions have more than arguments to back up their opposition to the bill. A quick search of campaign finance records show that House Leadership-- including Speaker Keith McCall, Majority Leader Todd Eachus, and Whip Bill DeWeese-- have gotten nearly $70,000 in contributions from AFSCME in the past three years. These lawmakers are not from Philadelphia and may feel more allegiance to the unions than to Mayor Nutter.    

Here is the nightmare scenario for Nutter: an odd coalition of fiscally conservative and pro-union lawmakers team up to the defeat the bill. That could potentially happen if Republican lawmakers decide to oppose the sales tax hike on principle and are joined by enough Democrats who don't want to hurt the unions.

There is another possibility, which is also bad for Mayor Nutter. The bill could be amended again to weaken the pension reforms and sent to conference committee. That would mean another delay and put even more revenue in jeopardy. As Philly Clout reported on Monday, the city is already in jeopardy of losing $10 million in sales tax revenue for October. If the bill goes to conference committee, that money would absolutely disappear.

What do you think? Do the unions have enough power in Harrisburg to stop the pension reforms?

About this blog
Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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