The Business of the Union, the Business of the State

Whenever I read about arrangements such as Paul Edward Parker describes at the end of his Projo piece about state worker overtime, I wonder how polluted the public budget is with similar tricks and instances of advantage-taking:

One area that [Department of Mental Health, Retardation and Hospitals Director Ellen R. Nelson] hopes to address is a contract provision for union business. Union officials who also work for the state can be scheduled for weeks off, with pay, to handle union-related duties, such as meeting with other workers. But those union officials can also put in for extra shifts that week and be paid overtime, at the same time the state may be paying someone else overtime to cover the union official’s regular shift.
Nelson did not offer a solution, saying she wants to hear suggestions from the unions.

One suggestion that I would make is to declare that union business is not public business, and union duties ought to be financed via union dues. (At the very least, there would be a reduction in the money that unions would have on-hand to throw into the political ring.)
I also noticed, in the piece, an echo of a point that I’ve made before:

One reason state administrators find overtime more attractive than hiring additional workers is the benefits package that state workers receive.
“We have absolutely one of the richest benefit plans around,” [Department of Administration Director Beverly E.] Najarian said.
[Rhode Island Council 94 Executive Director Dennis R.] Grilli countered, “I think we’re getting a fair wage and benefit package. I don’t think it’s excessive.”

Note the strategic misdirection from the union guy: Grilli doesn’t address the comparisons, merely asserts his opinion. Suffice to say that his view of fairness isn’t surprising.
Also not surprising is another one of the aforementioned tricks:

Najarian described how the employees’ shares for health insurance are calculated. For most Rhode Island state workers, it is based on a percentage of the worker’s pay. In other states, including Massachusetts, workers pay a percentage of the insurance premium.
That makes a difference because, as health-care premiums escalate, the State of Rhode Island picks up a larger share of the cost.
Najarian also said that Rhode Island state workers pay less than their counterparts in Massachusetts — or in private industry.
She said the premium for a family health-care package is $16,148. Most Rhode Island state workers contribute 2.5 percent of their pay. With an average state worker having a salary of $46,600, the employee’s share would be about $1,165.
But a survey Najarian cited showed Massachusetts workers contributing 25 percent of the premium. The same formula applied in Rhode Island would result in employees paying $4,037 each.
When multiplied by roughly 15,000 full-time workers, the difference between the two formulas would be $43 million.

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Greg
Greg
14 years ago

$43 Million? Just by getting the union employees to pay into their medical benefits the same way the union employees in the People’s Republic of Massachusetts do?
Someone please give me a rational, well thought out reason why that’s an unreasonable cost-savings measure come contract negotiation time.

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Greg,
Let’s forget for a moment that the solution is totally out of historical context and ask the more basic question:
To get what you seek, what are you willing to give up??

Greg
Greg
14 years ago

We won’t fire them.

Bobby Oliveira
Bobby Oliveira
14 years ago

Dear Greg,
You can’t and the Governor said he won’t now.
Once again, your tough, whistling by the graveyard talk just points out your lack of leverage and weakness in your overall position.

SusanD
SusanD
14 years ago

“Someone please give me a rational, well thought out reason why that’s an unreasonable cost-savings measure”
I’ll answer that, Greg. There is no rational reason why it should not be implemented at the next contract.
While the biggest share of the responsibility for Rhode Island’s poor fiscal state rests with our misguided politicians, the pigginess of the public labor unions will make it impossible to sympathize when the system collapses or, best case scenario, substantial give-backs have to be made in order to salvage something … anything.

Tim
Tim
14 years ago

Council 94’s (largest state worker union??) contract expires next June. This is where the governor is going to ‘change the way we do business’ once and for all. Watch!

Mike
Mike
14 years ago

Council 94’s (largest state worker union??) contract expires next June. This is where the governor is going to ‘change the way we do business’ once and for all. Watch!
XXX
Boy, I hope so. He’s been a big dissapointment so far. He should propose a budget cutting the sales tax to 5% with MAJOR cuts in welfare, total elimination of state paid babysitters, 401k’s for all state workers/teachers and extensive layoffs.
I still await a response from the Marxists (er-“progressives”) on how NH runs a bigger state with 250,000 more people on HALF our budget. I think we all know the answer-bloated payrolls and benefits and a laughable Soviet style welfare system.

Bob Walsh
Bob Walsh
14 years ago

Mike – Well, I am not a Marxist (unless Groucho counts) but I assume you know by now that the “New Hampshire” miracle is really the New Hampshire mirage. NH, in fact, has 24,700 state employees in total (source: Governing Magazine, which lists RI at 17,500). More importantly, NH has 188 state government employees per 10,000 population (31st nationally) versus RI at 164 per 10,000 population (40th nationally).
We do have more poverty in Rhode Island, and deal with it charitably, which matches the values of the majority of folks in our state. We also have a higher cost of living, and our public sector compensation is generally in line with MA and below CT (which is our market).
And by the way, a lot of the pension math floating around is just plain wrong as well – there would be no savings in a conversion to a 401-k type system, which is why West Virginia switched back after making the change.

Greg
Greg
14 years ago

“there would be no savings in a conversion to a 401-k type system”
Back it up with some data once in a while, Bob.

Bob Walsh
Bob Walsh
14 years ago

Greg – While I have been accused of many things, not having the facts is not one of them. Was there some part of this post from August 12, 2007 9:14 PM that you did not understand?:
“The pension system question provides a perfect example of bad facts leading to bad conclusions. This is an extremely important point regarding pensions – teachers already contribute 9.5% of salary towards their own pensions, and while the combined management contribution (state and local) is listed as over 22% of salary in the coming year, the vast majority of that contribution is related to the existing unfunded liability, and the sustaining contribution needed to actually support the pension for the individual teacher is less than 4%. So, if you did manage to stop the pension system on a going forward basis, the vast majority of the contributions would still need to be made in addition to a match for a 401-k type system. We need to stay on the path toward full funding of the system, without any more game playing, and when full funding is realized, the state and local contribution needed will be under 4% combined.
Check with the pension board, do your own math, consult with the experts, etc. – these are the actual mathematical facts – keeping the pension systme intact is cheaper, and it provides a better benefit in almost all respects.
(Explained another way – every time the pension system was underfunded in one way or another – early retirements, banking crisis, marked to market, less than market rate return, etc. – it was as if the state borrowed the money at 8.25% (the average expected annual yield on the fund.)
Posted by Bob Walsh at August 12, 2007 9:14 PM”

Greg
Greg
14 years ago

So, when the state goes bankrupt and we default on ALL the pensions (likely within the next five years at this rate), THEN we can get the unions to support a 401(k)?
How short-sighted would you like to be, Bob? If you switch to 401(k) for all existing workers, the FUTURE liability vanishes completely. Aren’t we supposed to ‘think about the children’? Wouldn’t our children appreciate that we solved their pension liability problem?

Tom W
Tom W
14 years ago

Let us not forget the municipal employment / FTE’s in the total – the following from the U.S. Census Bureau tells the story (the tables don’t carry over well to this format, so I’ve provided the links to the original. Note RI’s total (with approx. 20% lower population) is over 93,000 vs. New Hampshire’s approx. 70,000!
http://ftp2.census.gov/govs/apes/06stlri.txt
2006 Public Employment Data
State and Local Governments
RHODE ISLAND
Total population 2005: 1,032,662
Total
Employees Full-Time Total
(Full-time + Equivalent March
Function Part-time) Employment Payroll
Total 24,816 20,594 93,251,855
http://ftp2.census.gov/govs/apes/06stlnh.txt
2006 Public Employment Data
State and Local Governments
NEW HAMPSHIRE
Total population 2005: 1,272,486
Total
Employees Full-Time Total
(Full-time + Equivalent March
Function Part-time) Employment Payroll
Total 24,566 19,076 70,436,549
Site with some interesting stats comparing NH to RI:
http://www.sugisorensen.com/statecompare.cfm?mode=compare&state=RI

Tom W
Tom W
14 years ago

Postscript: the above figures indicate that RI’s state and local staffing is almost 33% higher than New Hampshire’s, even though our population is about 20% lower!
Using Mr. Walsh’s rationale expressed above, that’s a heck of a lot of “poverty” workers!

Bob Walsh
Bob Walsh
14 years ago

Greg,
Your analysis is incorrect. Please research how pension plans actually work, and the true costs involved.
TomW –
Your own links prove you wrong (while we disagree on many, if not most things, you usually have your facts correct, so I assume you had some glitch in the analysis).
Your links to 2006 census data show total state and local government FTE’s of 69,777 for NH and 51,232 for RI.
The 2007 report I cited shows NH state numbers of 24,700 and local numbers of 62,400 for a total of 87,100 and the equivalent RI numbers of state, 17,500 and local 37,700 for a total of 55,200, with the ultimate source for these figures being the US Bureau of Labor Statistics. I assume the discrepency is more due to your figures being adjusted to FTE’s as opposed to a big change from 2006 to 2007. Your census data links do provide a good breakout by category of employment, including higher ed, etc. One interesting category in your data is “public welfare” FTE’s – RI – 1733 versus NH – 4036 (but we do have more employees than NH in the health, social insurance and hospitals categories and a lot less in highways). Some of this may be a categorization difference, but the comparisons are very interesting. Of course, NH has 508 FTE’s working in liquor stores, versus none for RI.
The total government monthly payroll in your data is higher for NH as well ($234 million versus $227 million), but as we know, the per employee number would be higher for RI since we have only 73% of their total government FTE workforce.
Nice find, lots of data to ponder.

Greg
Greg
14 years ago

So, Bob, if we switched to 401(k) plans now, our children and their children would still have to pay pensions 100 years from now? How does that work? Please enlighten me as my years working for a brokerage firm handling 401(k)s apparently makes me too friggin stupid to understand how pensions will always be a burden on the populace even if we stop offering them.

Tom W
Tom W
14 years ago

Bob,
When you’re right you’re right. My bad.
I misconstrued Total March Payroll as number of FTE’s, when it is actually the total dollar amount of the payroll for the month of March 2006 (RI about $93,000,000 and NH about $70,000,000).
If one goes to the link below, and then clicks “2006” under available data, and then clicks “Viewable Data – Summary Data for the Nation and by State” and then “state summary table” for NH and RI, one finds the following employment data
http://www.census.gov/govs/www/apesst.html
RI: Full Time 24,816 / Full Time Equivalent 20,594
NH: Full Time 24,566 / Full Time Equivalent 19,076

Mike
Mike
14 years ago

Posted by Bob Walsh
Mike – Well, I am not a Marxist (unless Groucho counts) but I assume you know by now that the “New Hampshire” miracle is really the New Hampshire mirage. NH, in fact, has 24,700 state employees in total
XXX
Nonesense, if that were the case NH wouldn’t have a “zero” sales tax (try to “broaden” that!) and a “zero” income tax compared to RI with the highest sales tax in America and mid-range income taxes. Plus we have two casinos feeding a quarter billion a year to the unions and wefare-ites!
I notice one fact you don’t touch is that NH, with 250,000 more people, has a budget barely HALF ours. Sounds like a “miracle” to me. Or is it just that in NH creatures like you, Kate Brewster, etc. are afforded all the credibility of those pathetic IWW stooges?
Here is a link showing that NH’s budget is barely half ours. Note the 10.2 billion dollars is for TWO years, ie. 5.1 billion per year. Compare that to 8billion for RI for ONE year with 250,000 people. See the light?
http://www.nhha.org/nhha/state_law/legislative/legislative_021907.php

SusanD
SusanD
14 years ago

“the total dollar amount of the payroll for the month of March 2006 (RI about $93,000,000 and NH about $70,000,000)”
[Again, we should emphasize, this is state and local levels combined.]
So New Hampshire lays off part of its public work force every March …? If not, they are spending substantially less than Rhode Island to service a larger population.

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