Police union leader Harold MacGilvray
objects to reduced state funding
for the Quinn Bill.
When Deval Patrick finally arrived for his town hall meeting, Harold MacGilvray, president of the Massachusetts Municipal Police Coalition, and several other union leaders buttonholed him about the Quinn Bill. In the fiscal 2010 budget awaiting Patrick’s signature, funding for the police career incentive pay program had been cut to $10 million, about $40 million less than last year. The program had produced a better educated police force, the union leaders said, and they wanted to persuade him to take a second look at the cut. Instead, Patrick turned the tables on them. “Where am I supposed to get the money?” he asked.
That’s the question public sector unions are hearing more and more as the state furloughs employees, trims benefits, and transfers more workers into the state health insurance system.
Thanks to their get-out-the-vote strength on the campaign trail, Massachusetts public sector unions have traditionally enjoyed a mutually beneficial relationship with state and local politicians. In return for steering votes to favored candidates, the unions received support for healthy wage increases, strong pensions, and generous health care benefits for their members.
But the worst recession since the Great Depression, soaring health care costs, and a steady stream of news stories about pension and disability abuses by individual public employees have changed the dynamics of the relationship. Public officials are beginning to push back on sacred cows like the Quinn Bill, raising the prospect that the power and influence of public sector unions may be irrecoverably weakening.
“We may not have reached that tipping point yet, but we are very close,” says Rep. Harriett Stanley, a West Newbury Democrat, who chairs the Joint Committee on Health Care Financing.
On top of a national economy gone sour, Massachusetts faces homegrown budget busters like Medicaid, pensions, and debt service obligations that will outstrip revenues, even with a sales tax increase. This year alone, those payments comprise nearly half of the budget; in years to come they’ll chomp away at still more of it, leaving less for everything else. This ticking time bomb, plus cooling voter support for public sector fringe benefits, gives lawmakers an opening shot at everything labor leaders hold dear.
Tom Juravich, director of the Labor Relations and Research Center at the University of Massachusetts at Amherst, says Bay State public sector unions are facing their biggest challenge since they gained the right to bargain collectively more than 35 years ago.
But leaders of public sector unions are not all panicking. “Unions are alive and well,” says Robert McCarthy, president of the Professional Fire Fighters of Massachusetts. “We’re going to continue to do what we need to do to protect our benefits. My members put their lives on the line 24 hours a day, 365 days a year.”
Look for the union label
One of the first states with a strong labor presence, Massachusetts allowed public employees to join unions in 1958 and granted collective bargaining rights to most state and municipal employees in 1973. Although union membership nationally is declining, public sector unions in the Bay State remain strong. According to unionstats.com, more than 60 percent of Bay State public sector workers were union members in 2008, a 10-year high.
As the nation’s industrial sector has declined, the union factory jobs that swelled the ranks of the middle classes in Lowell, New Bedford, and elsewhere moved to the South and to countries like China and India. Public sector unions eventually moved to the forefront of the labor movement. But today those unions are facing the same pressures that practically killed off the private sector unions: layoffs, modest or deferred raises, and cuts in pension and health care benefits.
Why have public sector unions had so much clout? Unlike their private sector counterparts, they’ve had some control over their fate. Teachers, police, and other municipal employees were decimated by job cuts after the passage of Proposition 2 ½ in 1980. But that proved to be a wake-up call. In 1990, public unions helped fend off a ballot drive for a significant cut in state taxes; in 2008, they mobilized against a repeal of the state income tax. The Massachusetts Teachers Association alone contributed more than $3 million to the anti-repeal campaign.
Union support has long been a factor in the success of Democratic candidates nationwide and in Massachusetts. Unions rallied to US Sen. Edward Kennedy to help him beat back a strong challenge from Mitt Romney in 1994. Public sector unions like the MTA and the Service Employees International Union were also major players in Patrick’s lopsided 2006 victory for governor.
“We have taken people out when they needed to be taken out,” says Robert Haynes, the Massachusetts AFL-CIO president, “and we have elected countless people to office that would not have [gotten] there without the support of [public and private] employee unions. We are good at what we do.”
However, the political landscape in Massachusetts is changing. Today, disgruntled voters are speaking out against union pay and benefits that they themselves can only dream of. Only one in 10 Americans belongs to a union, so most workers are far removed from the days of having an organization negotiate for them with management over wages, pensions, and other benefits.
“The salaries for municipal employees in Boston certainly have improved because of collective bargaining,” says Samuel Tyler, president of the Boston Municipal Research Bureau, a business-funded watchdog group. “Contracts have been a little more generous over the past 10 years than in the private sector.”
According to Tyler, in fiscal 2009 it took five single-family property tax bills (at an average of $2,762 each) to pay the city’s share of the average family HMO insurance premium for just one city employee. And municipal employers are legally committed to pay pensions that are calculated on retirement age, years of creditable service, job classification, and the highest three-year salary average. Meanwhile, private sector employers are cutting back on their modest contributions to employees’ 401(k) plans.
In general, public employees are not living the lives of the rich and famous. William Bulger, the former Senate president and University of Massachusetts chancellor, may pull down a pension of $196,000 a year (which he boosted by including his housing allowance in his pension calculation), but the average annual pension for a state employee is about $24,000. Stanley, the West Newbury representative, says she receives emails all the time from constituents who complain that public sector employees are lazy, their benefits excessive, and their pensions extravagant. “The facts do not support these assertions, but people have chosen to believe it, [and] it is really tough to argue them off those points,” she says.
News about flagrant abuses, like the case of the disabled firefighter competing in a bodybuilding contest, has hurt public employees’ standing. So have intractable conflicts like long-running contract disputes over drug testing, pensions, and other issues between the city of Boston and Boston Firefighters Local 718. (At press time, the two parties were in arbitration before the state Joint Labor-Management Committee.)
So with these examples in mind and people losing jobs and benefits all around, some are convinced that every public sector employee is gaming the system. “Because wealth is becoming distributed so unevenly, I think you are going to continue to see this middle-class anxiety,” says Rep. Katherine Clark, a Melrose Democrat. “Public unions become the scapegoat for it, especially [since] all it takes is a few bad actors for the whole system to seem corrupt.”
UMass-Amherst Tom Juravich
says unions must be flexible
if they want to remain effective.
This change in public opinion has emboldened lawmakers to make their moves. Earlier this year Patrick signed a pension reform law that curbed the most outrageous abuses (like Bulger’s) in the state retirement system. One of the state’s most powerful unions, the Boston Carmen’s Union Local 589, took significant hits from an overhaul of the state’s transportation bureaucracy. The debt-plagued MBTA’s labor costs are some of the highest in the country, and to gain savings, the Legislature scrapped the agency’s longstanding and much-criticized “23 and out” policy, which allowed workers to retire in early middle age (with some of them moving on to earn full salaries at new jobs). Future employees must work 25 years and reach age 55 before they can collect benefits.
MBTA employees and retirees, along with Massachusetts Turnpike Authority and Tobin Bridge workers, were also shifted into the state health insurance system. But although the reforms will save the state millions in fringe benefit costs, the Carmen’s Union and other MBTA unions aren’t playing ball. Last month, they filed a lawsuit in Suffolk Superior Court to block those and other changes. (Carmen’s Union president Stephen MacDougall did not respond to requests for comment for this article.)
Stanley says she wants unions to be part of the solution, not part of the problem. “When the pie is large enough to accommodate everybody, collaboration is probably that much easier,” says Stanley. “When the pie is the same size or even shrinking, as we see right now, that collaboration becomes tougher.”
Going on the defensive
Unions won’t agree to anything that infringes on collective bargaining without a struggle. To them, state lawmakers and municipal managers are maneuvering behind closed doors to deprive them of hard-won pay scales, work rules, and benefits instead of openly negotiating in good faith. “This is the contested terrain right now,” says UMass– Amherst’s Juravich. “To what degree are political players going to be able to alter the nature of collective bargaining here in the Commonwealth?”
This question explains why police were so incensed about the Quinn Bill. Enacted in the 1970s, the law was designed as a tool to professionalize police forces. It calls for base salary increases of 10 percent for an associate’s degree, 20 percent for a bachelor’s degree, and 25 percent for a master’s degree — with the state picking up half the cost of the raises for municipal police officers.
Union leader MacGilvray, a 13-year veteran of the Medford Police, argues that the Quinn Bill isn’t a perk. With his schedule, a second job is a nonstarter, he says, and he needs the extra income. “My base salary would not be able to buy a home in Medford [or] support a family of four kids,” he says.
Gov. Patrick proposed $42 million to fund the Quinn Bill (down from $50 million the previous year), which was bad enough as far as municipal police unions were concerned. But when it emerged from the House Ways and Means Committee, lawmakers had zero-funded the program.
“We had a lot of money we had to find, and that [program] was $42 million,” says House Ways and Means Chairman Charles Murphy. Zero-funding roused police unions and their allies. Rep. Christopher Fallon, a Malden Democrat and the son of a police officer paralyzed in the line of duty, gave a passionate speech on the House floor hailing the program as not a benefit but “an entitlement.” The final House budget slotted the program at $25 million.
However, sentiment didn’t sway the Senate. What got the attention of senators was an April Department of Revenue report, released after the House finished its deliberations, showing tax receipts for the month coming in at $500 million below projections. Senators responded by slicing $15 million from the House appropriation, making new municipal and state police hires no longer eligible for the benefit, and barring the State Police union from including any Quinn Bill language in any future agreement.
(Many communities are now waiting to see if they are legally on the hook for funding the state portion of the Quinn Bill benefits. At press time, Mashpee, North Andover, and Westborough were dealing with legal action by police unions.)
“We were the collateral damage of a fiscal crisis,” says George DiBlasi, government liaison for the Massachusetts Fraternal Order of Police, a law enforcement advocacy group.
UMass–Amherst’s Juravich says unions must be flexible if they want to remain effective: “They have to have the courage to say no when it’s appropriate, but I think they also have to have the courage to move in new directions and talk about issues.”
The Quinn Bill was the highest-profile face-off between state officials and public sector unions, but hovering under the radar was another challenge that has important implications for future budgets. The Pacheco Law requires state agencies seeking to award contracts to private companies to show cost and quality savings for services that would otherwise be performed by state employees. Critics see the measure as a barrier to privatization; organized labor views it as a means to preserve jobs. Contracts under $200,000 have always been exempt from the law, but this year the Legislature raised the contract ceiling threshold to $500,000, marking the first time the threshold has been raised since the law was passed in 1993.
“I was not happy with the fact that it was modified,” says Sen. Marc Pacheco, but he added that he was pleased that lawmakers were able to get the measure back to a “more reasonable modification.” (Senate Republicans failed to raise the threshold to $2 million, a move that would have opened doors to more competition since there are more contracts in that range.)
But even that modest change was seen as a setback by unions. The law was changed with no debate, according to Rich Rogers, executive secretary-treasurer of the Greater Boston Labor Council. “Nobody is questioning you can save money, but if the reason you can save money is slashing people’s wages and benefits, all you are doing is further eroding the economy,” he says.
On the municipal side, an estimated 75 or more communities have negotiated pay freezes of one form or another, covering some or all groups of their workers, according to the Massachusetts Municipal Association. Those moves have sparked wage-and-benefits battles across the state. When Franklin faced a $5 million budget gap, town administrator Jeffrey Nutting asked the municipal unions to take a wage freeze and defer raises until July 2010.
“I’m not going to kid anybody, if you want to save the jobs of your members, you need to have a pay freeze,” he says he told the unions. (All the town’s unions speedily agreed, except for the teachers’ union, which took several months before finally signing on.)
A bigger hot button issue is municipal health care, which is subject to collective bargaining. Most cities and towns have not moved to the Group Insurance Commission (GIC), the state’s health care system that gives employees less of a say in plan design. Many current contracts require municipal employers to assume more of the costs than their workers do, so municipal union leaders show little inclination to give up negotiating plan design elements, such as deductibles, co-pays for doctor visits, and pharmaceutical coverage. These elements are breaking municipal budgets and forcing managers to triage benefits, though the ultimate solution to mounting health care costs may depend on national legislation.
Plan design may be a bigger issue during the fiscal 2011 budget season, which promises to be even more dire than the past one. Murphy insists that lawmakers will look for savings anywhere they can find them.
“Whether or not plan design should be submitted to collective bargaining or not will be a point of debate,” he says. The House Ways and Means chairman adds that there’s more movement toward taking steps and votes that perhaps would not have been taken six years ago. “Fiscal realities are such that decisions have to be made regardless of the outcome and regardless of the fact that we’re upsetting unions. It’s still got to be done,” he argues. “There is more of a willingness to do that now, given the deficit we’re facing next year and the year after that.”
To break this impasse in the public sector, Barry Bluestone, director of Northeastern University’s Dukakis Center for Urban and Regional Policy, argues for a new “grand bargain” between public officials and unions that preserves union jobs in return for quality, cost-effective public services. But rather than finding common ground or calling for a new dialogue with public officials, Bluestone fears that unions are going in the opposite direction, espousing more hardened positions and showing more antagonism. He says unions need to be more open to reforms such as reductions in work rules and job classifications, as well as membership in the GIC.
The true test of public sector union power and influence will be on display next November. So far, politicians up for reelection are bucking union demands. Even though he’s facing a tough reelection fight next year, Patrick pushed for pension reform and didn’t fight to increase Quinn Bill funding. Both Patrick and Boston Mayor Thomas Menino are also risking the wrath of the teachers’ unions with their charter school expansion proposals. “Some of [Patrick’s] initiatives are real problems for us,” says Thomas Gosnell, the American Federation of Teachers Massachusetts president.
Most union leaders say they are keeping open minds on the gubernatorial candidates heading into the 2010 election. Michael Grunko, president of Service Employees International Union, Local 509, says he thinks that Patrick is the best choice at this point. Nevertheless, he warns that the union doesn’t expect the same massive outpouring of support in this election that they saw in the last. “Frankly, in tough times our enthusiasm gets tempered by our own members, and our members are not happy people at this point,” he says.
Bluestone agrees. “They don’t have to come out and support Charlie Baker or Tim Cahill or Christy Mihos, but by not providing strong support to Deval, this makes it more difficult for him to get reelected,” he says.
But Haynes, of the Massachusetts AFL-CIO, makes no secret of the fact that he’s keeping track of how candidates responded to public sector union issues like police details, municipal health care, and pension and transportation reform. “We are angry at a number of people for not standing up [for us],” he says.
As the campaign and budget seasons heat up, tempers are bound to explode over how shrinking state resources get divided up. Public sector union leaders aren’t enthralled with the idea of “givebacks,” however, and believe the assault on their benefits will ease once the overall economy shows signs of improvement — even in the face of a state revenue picture that remains grim.
“Our enemies have been writing our obituaries for years,” says Rogers of the Greater Boston Labor Council. “I’m pretty confident that when the good times return, we’ll be able to advance our agenda again.”