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We must face reality

Mickey Gardella | Wednesday, March 9, 2011

I am writing this piece on behalf of the taxpayers across this country that are caught in the middle of the debate over public sector union compensation. We are in very tough economic times, and workers, both in the private and public sectors, have had to make sacrifices in their personal and family budgets. It is evident that while taxpayers have had to make adjustments in their budgets, some public sector union bosses think they should be immune from necessary fiscal austerity measures. To be clear, I am directing my argument to the leaders of the public sector unions, not necessarily the rank and file.

Public sector benefits have been ballooning for decades with no regard for the taxpayers that have to pay for salary increases well above the rate of inflation and lavish health and pension benefits. The day of reckoning is here for many states. Pension and health benefit systems are nearly bankrupt and, due to the harsh economic times, most state governments realize that it is not feasible to tax their way out of the problem.

Governors like Scott Walker among others have proposed necessary and prudent measures to lay groundwork for sound state finances in the future. The public sector unions, not understanding the structural problems that are plaguing state budgets, have stood in opposition. Walker and other governors, such as Chris Christie of New Jersey, have put forth a simple message: Public sector unions must contribute more to their health care and pension benefits if they expect those benefits to actually be there in the future.

The public sector, on average, pays considerably less than the private sector toward their health and retirement benefits. If we are to have any sense of fiscal sanity, public sector workers need to sacrifice and bring their benefit contributions into line with reality, i.e. the private sector, which cannot pass the buck onto taxpayers.

To put more of a burden on taxpayers in these economic times, with taxes too high already, would be irresponsible and would not make states any better off. Benefit costs will continue to balloon if the system remains unchanged, and states will tax their citizens out of hope for future prosperity.

With respect to collective bargaining, several governors have or have proposed placing caps on the rate of salary increase for public workers. Rates of salary increase for public workers have been unsustainably high in many states, further crushing taxpayers in their state and local taxes.

Collective bargaining procedures have been heavily in favor of the unions, with the taxpayer not having a seat at the table. Walker’s plan would cap the rate of salary increase at the level of inflation, only to be overridden by voter approval. It makes sense that the people who foot the bill for public sector salary increases finally have an opportunity to have their voices heard.

By making tough choices now, jobs will be saved and created. In Wisconsin, upwards of 10,000 public workers could be laid off if the wages and benefits systems are not reformed. So public sector jobs will be saved if Walker’s plan is enacted.

I am not arguing that reforming public sector wages and benefits are the only problems that states have in their budgets, but in many cases they are a serious problem. Each state must face this concrete reality of crushing debt head on or risk financial collapse. Unlike the federal government, states cannot print money, so the matter is even more urgent. Sacrifice will not be easy or enjoyable, but it must be done so that future generations as well as current generations can attain prosperity.

Mickey Gardella is a sophomore majoring in political science. He can be reached at [email protected]

The views expressed in this column are those of the author and not necessarily those of The Observer.