Category Archives: Public Sector

Organized Labor, the Supreme Court, and Harris v. Quinn: Déjà Vu All Over Again?

Source: William B. Gould IV, Stanford Public Law Working Paper No. 2572695, March 2, 2015

From the abstract:
Harris v Quinn presented this issue anew in 2014 – it was the most recent chapter of litigation concerning “union security agreements” and their permissibility in the public sector – but by no means will it be the last. Harris relates to the constitutionality of such agreements, which compel membership or financial obligations on the part of union represented employees (frequently as a condition of employment) and endure throughout our economy in the private sector, as well as the more recently-organized public portion of it. The resolution of this and related issues inevitably affect, in some measure, the role of trade unions in American society. It cannot be gainsaid that this involves the democratic process itself in a pluralistic society, through which unions attempt to achieve their objectives through both the collective bargaining and political processes. For more than two centuries, the issue of so-called union security agreements, which compel membership in a labor organization in some sense of the word, has been fought out in American labor-management relations and in the courts. Complicating the contemporary relationship is that organized labor is in a period of retreat and decline. Related to this issue is the question of appropriate union discipline authority imposed on workers who defy various kinds of union rules and who are ostracized, for instance, over such matters such as strike-breaking.

The State and Local Workforce: Analysis and Forecast

Source: Joshua Franzel, Government Finance Review, Vol. 31 no. 3, June 2015

The challenges of the past decade have required the state and local sector to make many significant adjustments to its workforce. …. Highlighting recent workforce survey findings, this article will provide an overview of the size of the state and local workforce, wage and benefit considerations, and workforce management issues….

Strategies for Well-Funded Pension Plans

Source: Elizabeth Kellar, Government Finance Review, Vol. 31 no. 3, June 2015

The funded status of public pensions remains a hot topic, yet the pension plans that are well funded get little attention. State and local pension plans hold an aggregate of $3.77 trillion in assets and have 14.4 million active members and 9 million retirees. Public employees and employers contribute to pensions during an employee’s working years. Why is it, then, that some pension plans are better funded than others? The Center for State and Local Government Excellence examined four defined benefit pension systems that have a long tradition of being well funded: the Delaware Public Employees’ Retirement System, Illinois Municipal Retirement Fund, Iowa Public Employees’ Retirement System, and North Carolina Retirement Systems. The study found certain characteristics common to all of these well-funded plans…..

GASB Issues Final Guidance on Fair Value

Source: Stephen J. Gauthier, Government Finance Review, Vol. 31 no. 3, June 2015

In February 2015, the Governmental Accounting Standards Board (GASB) released GASB Statement No. 72, Fair Value Measurement and Application. The new standard will change how fair value is measured, but not the specific items that must be reported at fair value. The new standard will take effect starting with the fiscal period that ends June 30, 2016. …

Scott Walker’s Real Legacy

Source: Donald F. Kettl, Washington Monthly, Vol. 47 nos. 6/7/8, June/July/August 2015

What did the Wisconsin governor’s union busting actually accomplish for the “hardworking taxpayers” of his state? And what do his actions tell us about how he might govern as president? …..

….But let’s presume he does become the nominee. Walker’s triumph over the unions could continue to be a useful tool for him, not only in firing up the GOP base but also in reaching out to independents, 47 percent of whom take a dim view of unions, according to the same Pew poll, and even to persuadable Democrats. The 2016 elections will be a battle over the role of government in failing to spur a too-weak economy and boost stagnant incomes. The Democratic nominee will likely present herself (or, less likely, himself) as a champion of the middle class who will wrest control of government away from the big banks and other powerful corporate interests and use it to benefit average Americans. Walker will be armed with an equivalent reform narrative. The problem with government, he can say, is not just that it is too big, holds back private-sector growth, and robs us of our freedoms—the standard Republican view, which he tirelessly proclaims—but that it has been captured by its own employees, who run it for their own benefit, not the public’s. Just as he took on the unions in Wisconsin, he can say, so will he take on the bureaucrats in Washington, returning power back to “the hardworking taxpayers.”

So it’s worth looking carefully at Walker’s arguments for why he busted the state’s public employee unions. To what extent were those unions the obstacle to getting the state’s fiscal house in order—a key argument Walker made during the 2011 standoff? To what degree do state and local government employee unions drive government’s costs up and push its performance down?

Even more important is the question of how Walker’s experiences and management choices at the state level might translate at the federal level. Is a governor whose greatest accomplishment is the crushing of state and local government unions the right person to lead the government in Washington?….

….To what extent, then, did Walker’s crushing of the unions help Wisconsin’s “hardworking taxpayers”? The $3 billion he saved in his first term was certainly something. But that amounted to less than 1 percent of overall state and local government spending over that time period. Those savings came from the pockets of teachers and other public servants who are also taxpayers and whose compensation, by most measures, was not out of line. The law Walker signed didn’t contribute to the fiscal health of the state’s public pension fund. It provided management flexibilities that could ease school reforms down the road but that the governor himself hasn’t taken much advantage of. And, as we’ve seen, Walker could have won most or all of that $3 billion through tough negotiating without going for the jugular and virtually eliminating collective bargaining. Why, then, did he do it?

It’s tempting to portray the struggle over Wisconsin’s unions as a matter of high policy. In reality, however, it was the culmination of decades of increasingly fierce partisan wrangling that pitched the state’s Democrats, along with their union supporters, against resurgent Republicans and their allies in the business community…..

Compensation Benchmarking Practices in Large U.S. Local Governments: Results of a National Survey

Source: Michael Thom and Thom Reilly, Public Personnel Management, OnlineFirst, first published on May 18, 2015
(subscription required)

From the abstract:
Growing competition over human capital has reiterated the importance of strategic practices to maintaining a high-quality public sector workforce. But how often does the public sector study pay and benefits among competitive peers? This study presents the findings of a national survey of human resource professionals regarding compensation benchmarking practices. Just over half of respondents indicated they conducted a benchmarking study within the last decade. A majority said their jurisdiction only compares compensation with other public employers, with a smaller number including both public and private competitors. Salaries were the most frequent topic of concern; fringe benefits and paid leave time were less often compared. Several jurisdictions conducted benchmarking studies for purposes other than compensation; about one quarter gathered data for purely informational purposes and 9% carried out a study in anticipation of labor negotiations. A series of best practices for benchmarking studies is offered in conclusion.

A Better Way to Set Public Pay
Source: Thom Reilly, Governing, Voices of the Governing Institute, June 29, 2015

Too few local governments are taking advantage of a valuable tool: benchmarking compensation among their public- and private-sector peers.

The State Pensions Funding Gap: Challenges Persist

Source: Pew Charitable Trusts, Issue Brief, July 2015

From the overview:
The nation’s state-run retirement systems had a $968 billion shortfall in 2013 between pension benefits governments have promised to their workers and the funding available to meet those obligations—a $54 billion increase from the previous year. This report focuses on the most recent comprehensive data and does not fully reflect the impact of recent strong investment returns.1 Because state retirement systems have historically accounted for investment losses and gains over time, the latest data still include losses from the 2008 Great Recession and do not fully incorporate the strong returns of recent years. As recent strong investment returns are fully realized under new accounting standards, preliminary data from 2014 point to a reduction in unfunded liabilities for the majority of states. Many states have also benefited from reforms enacted since the financial crisis.

Gideon’s Servants and the Criminalization of Poverty

Source: Alexandra Natapoff, Ohio State Journal of Criminal Law, Vol. 445, 2015

From the abstract:
In ways that slip beneath the doctrinal radar, public defenders often behave like social workers. They find drug treatment and jobs for their clients, and intervene with landlords and employers. Conversely — and ironically — many civil welfare service providers act increasingly like law enforcement officials. Teachers call the police on their students, while welfare case workers often refer their clients for prosecution. This role-switching — by criminal lawyers and civil servants alike — is a function of the tight connection between criminalization and poverty: poor people tend to get swept up in the criminal system and such encounters tend to make people poor. This nexus is particularly powerful in the world of minor offenses and urban policing in which crime, unemployment, racial segregation, and lack of social infrastructure swirl around in one large, nearly inextricable mass. As a result, criminal justice actors are heavily preoccupied with defendants’ social welfare even as the welfare state routinely treats its clients as presumptive criminals. These hydraulic forces affect every official actor — from police officers to prosecutors to emergency room nurses and public school teachers. But public defenders play a special role. Their multi-faceted service commitments to both criminal and welfarist outcomes reveal deep features of the criminal system itself and its conflicted governance relationship to its most vulnerable constituents.

When Wall Street Offers Free Money, Watch Out

Source: Cezary Podkul – ProPublica, and Allan Sloan – Washington Post, July 10, 2015

Bankers and new accounting rules are emboldening governments to borrow-and-bet their way out of pension problems, a strategy that’s backfired in the past.

…..Bet Big, Then Go Short
Governments that borrow money to fund their pensions often pay less into their pension funds in future years than they’re supposed to. Here’s how the 20 biggest pension bonds deals since 1996 have worked out. Explore the app ….

Police Aren’t the Only Public Workers Wearing Body Cameras

Source: Mike Maciag, Governing, June 10, 2015

Some cities have started equipping them not just to cops but also other government employees who often encounter confrontation. …. Soon, Miami Beach will become the first larger city in the country to extend cameras to multiple departments outside of law enforcement. City commissioners passed a $2.7-million plan last year funding cameras for employees in parking, code enforcement and building and fire inspection, in addition to police. The police department started rolling out body cameras in May, and other departments are expected to follow suit this summer. …..