A Burden Too Great, Even For ‘Big Shoulders’

Chicago Buckling Under the Weight of Government-Union-Boss Abuses

chicago_government_unions_debt(source: National Right to Work December 2015 Newsletter)

A little over a century after it was memorialized by poet Carl Sandburg as the “City of the Big Shoulders,” Chicago is struggling to salvage its historic renown for vibrancy and resilience.

The key challenge the city faces is a financial crisis that is primarily the result of state government-imposed union monopoly bargaining and compulsory union dues and fees in the public sector.

In late October, the Chicago City Council, acting at the behest of Democrat Mayor Rahm Emanuel (D), rubber-stamped a budget that foists a massive $543 million property tax hike on already-beleaguered home and business owners over the next four years.
The purported purpose of this lowering of the boom was to reduce unfunded liabilities in public-safety union pension funds.

Union Bosses Have Pressured Politicians to Divert Taxpayer Money From Pension Funds

But insufficient tax revenue is not the source of Chicago’s woes.

The fact is, police, fire and other Chicago retirement funds for unionized government employees are underfunded largely because Big Labor bosses have, often and successfully, pressured elected officials to misallocate taxpayer money that should have gone into pensions.

“By mandating union monopoly bargaining in the government sector,” noted National Right to Work Committee President Mark Mix, “Illinois state law effectively makes it impossible for local elected officials to reform how public employees are compensated without Big Labor’s stamp of approval.

“For example, under a deal forged years ago, taxpayers must now cover nearly 80% of the ‘employee’ share of teacher pension contributions in Chicago Public Schools [CPS].

“Now that this deeply troubled school district faces a nearly half-billion-dollar hole in its current budget, CPS officials would love it if teachers covered a more reasonable share of their own pensions. After all, the taxpayer cost for CPS pensions alone is now over $600 million annually!”

‘There Is Little Discretion At the Local Level’

“But Chicago teacher union bosses’ response this fall to a CPS request for pension-contribution reform was to threaten to shut schools down by walking off the job,” Mr. Mix noted.

“As a consequence of union bigwigs’ intransigence and Illinois labor laws that empower them to perpetuate an unworkable status quo, massive layoffs of Chicago teachers are likely this spring.

“Chicago’s plight is almost hopeless. Local elected officials will need plenty of help from state lawmakers in Springfield and Gov. Bruce Rauner [R] to pull their city back from the brink.

“As Cate Long, a Reuters contributor who specializes in the municipal bond market, has correctly observed with regard to pension contributions and benefits for unionized government employees, ‘There is little discretion at the local level on these issues.’ ”

State Labor-Law Reform Can Help Chicago Avoid Bankruptcy

One important thing Mayor Emanuel and other Chicago elected officials can

do is press hard and publicly for government compensation reforms, even knowing union kingpins will never agree to them.

That will increase the pressure on the Big Labor-dominated Illinois General Assembly to give Chicago and other local governments the power to circumvent obstructionist government union bosses.

“Union-label state Senate President John Cullerton and House Speaker Michael Madigan [both D-Chicago], as well as the vast majority of politicians in the caucuses they head, are sure to resist a roll-back of government union bosses’ monopoly-bargaining privileges,” acknowledged Mr. Mix.

“But before too much time passes it may become plain for all Illinoisans to see, even in Springfield, that a curtailment of government union chiefs’ extraordinary powers, along the lines of what neighboring Wisconsin adopted nearly five years ago with its Act 10, will be necessary for Chicago to avoid bankruptcy.

“Gov. Rauner has already indicated he would be on board for such a reform.

“And, as a wide range of nonpartisan observers now recognize, Act 10 has enabled municipalities across the Badger State to save billions of taxpayer dollars while only rarely resorting to blunt instruments like layoffs.”