An Acute Example of the Broader System
If you skipped the historical essay to which Marc linked on Monday, give it a read. It concerns the making of the pension mess in Providence, and its most valuable insight, in my view, is the light that it shines on the entire dynamic created by public sector unions.
The defining statement comes from firefighter and Local 799 union President Stephen Day, who was a member of the 1989 Providence Retirement Board that then Chief of Administration John Simmons said “broke the city”:
“All we did” on Dec. 6, 1989, says Day, “was vote in broad daylight and do what we had the right to do. If we had the authority to do this, we were going to do it. You can’t fault someone for being aware” of the laws. “I don’t regret it at all.”
Of course, union leaders typically have good reason to be aware of the law, because they work so hard in such a long-term coordinated fashion. Step one was to give the unions the controlling hand on the Retirement Board:
During the 1970s, Senate Majority Leader John P. Hawkins, a former Providence firefighter himself, and other senators began advocating legislation that would add two union representatives to the city’s Retirement Board, thus tipping the balance. The legislation eventually passed around 1977.
Step two appears to have been to insert some innocuous-seeming language in the city’s home-rule charter, and step three was to lob a court case into the system (to a judge with who knows what motivation) to change the nature of the board’s authority:
The [spring 1989] case involved a Providence police officer, Walter Bruckshaw, who, along with 100 other city employees, wanted to buy credit in the city pension system for work they had done for other government agencies. The Retirement Board denied them. The court ruled the city’s home rule charter, which went into effect in 1983, granted the Providence Retirement Board control over city pension decisions.
And voila. Day and his counterpart in the police union, Richard Patterson, ran for seats on the board promising to “boost the pensions of current and future retirees. The result? Compounded cost of living adjustments (COLAs) of 3-6%, tripled minimum pensions for police and firemen, and reduced minimum years of service. As city administrators strove to control the bleeding, the unions maneuvered these issues into contract negotiations. Then came all of the individual Pension Board decisions:
In 1991, every police officer who retired in Providence –– 21 in all –– received a job-related disability pension from the Retirement Board.
Of the 53 firefighters leaving their jobs, the Retirement Board approved disability pensions for 48 of them.
So, yes, Day’s statement about authority isn’t without justification, but the authority ultimately comes not from the narrow scope of Providence politics and governance, but from the reality of public-sector unions in the first place. The unions get a seat at the negotiating table as employee representatives, and they get a hand in the political process that determines those with whom they’ll be negotiating. That’s simply the incentive structure of the system, and as becomes more undeniable with every passing month, the incentives are far too strong even for fiscal reality and inevitability to overcome.