Thursday, February 12, 2015

Rauner's War on Unions



Rauner’s Illinois Revival Project?


Illinois Gov. Bruce RaunerENLARGE
Illinois Gov. Bruce Rauner PHOTO: ASSOCIATED PRESS
Bruce Rauner has the biggest reclamation project in American politics, and this year it’s the state drama to watch. The first Illinois GOP Governor in 12 years is off to a strong start by targeting the source of the state’s fiscal and economic rot: the corrupt political bargain between state lawmakers and public unions.
On Monday Mr. Rauner signed an executive order ending mandatory union fees for state workers who don’t want to join a union or support its agenda. He declared that Illinois’s contracts with public unions,
including the American Federation of State, County and Municipal Employees (Afscme), violate the First Amendment by forcing workers to associate with the union against their will.

Opinion Journal Video

Illinois Policy Institute CEO John Tillman on how Governor Bruce Rauner might tackle the state’s $111 billion unfunded pension liability. Photo credit: Getty Images.
The same logic guided the U.S. Supreme Court’s 2014 decision in Harris v. Quinnthat a mother who accepted a state subsidy for providing home care to her disabled child could not be forced to join a union. In Harris the Justices stopped short of ruling on what Justice Samuel Alito called the “full-fledged” public employees who are forced to pay dues under the Supreme Court’s decision in 1977’s Abood v. Detroit Board of Education.
But the Justices cast doubt on the precedent, noting its “questionable foundation.” Compulsory union fees are especially problematic, the Court wrote, because “in the public sector, both collective-bargaining and political advocacy and lobbying are directed at the government.”
Now Mr. Rauner’s team plans to take that logic to federal court in a lawsuit against Afcsme and other government unions seeking to overturn Abood. The First Amendment protects the freedom of speech and association, so Mr. Rauner will argue that a public worker who opts out of a union can’t be forced to financially support the union.
The government unions that have dominated Illinois politics for decades aren’t amused. Afscme Council 31 executive director Roberta Lynch called the order an illegal “scheme to strip the rights of state workers and weaken their unions.” Chicago Teachers Union President Karen Lewis called Mr. Rauner “ Scott Walker on steroids.”
Mr. Rauner will need to be as tough as Mr. Walker because Illinois faces a ballooning fiscal mess. The Governor’s budget office estimates the state had a $5.8 billion backlog of unpaid bills at the end of 2014, and the current fiscal year could add another $1 billion to the operating deficit.
Mr. Rauner is making his pitch around the state with slides that show the Land of Lincoln is the Midwest’s economic laggard. According to the Bureau of Labor Statistics, from 2003 to 2014 Illinois had 0.2% employment growth, compared to 3.8% in Indiana, 8% in Iowa and 7.3% nationwide. Net Illinois job growth was 10,300 compared to 109,000 in Indiana and 115,900 in Iowa. Chief Executive magazine ranks Illinois the 48th for doing business, the Small Business and Entrepreneurship Council ranks it 35th, and the Tax Foundation puts its business tax climate at 31st.
Central to the mess is the rising bill for state pensions and salaries, and the constant union demands for higher taxes for pay for them. Compensation costs for state employees make up about one third of the state budget, with an astonishing 25% of current state tax dollars going to fund retiree benefits and an $111 billion unfunded pension liability.
Mr. Rauner campaigned on a plan to reform pensions by keeping current retirees in the old system while moving current workers into a 401(k)-type model. In a memo to lawmakers last week, the Governor suggested the state could consider something like the federal model, which switched in the 1980s from a defined-benefit plan to a 401(k) and Social Security model without a defined benefit.
The current system is unsustainable, but so far it has been unreformable thanks to the ties between legislators and public unions. According to the Illinois Policy Institute based on data from the state Board of Elections, between 2002 and 2014 86% of state lawmakers received campaign cash from government unions. House Speaker Michael Madigan received more than $1 million.
Reducing this union stranglehold on policy is essential to turning the state around, and Mr. Rauner is thinking creatively. The Democrats who have a supermajority in the state legislature won’t make Illinois a right-to-work state. But Mr. Rauner is trying a work-around by encouraging areas in the state known as “home rule” communities (so-called because they are allowed to opt out of certain state regulations) to become right-to-work zones.
That idea will have particular appeal for downstate manufacturing towns and those along the border that have been losing to neighboring Iowa and Indiana, both right-to-work states. Afscme’s state contract expires on June 30, and the renegotiation will be another chance for reform.
The sages of Springfield are saying that Mr. Rauner can’t win and so would be smarter to go along with a tax increase in return for small pensions reforms. But that won’t solve the state’s problems and would mark the Governor instantly as a lame duck. Mr. Rauner carried 20 state House and 10 Senate districts that are represented by Democrats. If he can break the union monopoly on Springfield, his Illinois revival has a chance.

3 comments:

  1. Anonymous2/12/2015

    Iceland jails former bank bosses: http://www.visir.is/iceland-jails-former-kaupthing-bank-bosses/article/2015150219597

    Iceland gave zero (0) bailouts. Where is the leadership here?

    ReplyDelete
  2. Anonymous2/13/2015

    I don't anyone below executive level with a 401k that can retire its work until you die for them. Keep the pensions!!

    ReplyDelete
  3. Anonymous2/13/2015

    wouldnt mind if he went after our useless teachers union here in Chicago.

    ReplyDelete