FLEMINGTON, N.J. — Ever since Marie Corfield’s confrontation with Gov. Chris Christie this fall over the state’s education cuts became a YouTube classic, she has received a stream of vituperative e-mails and Facebook postings.
Public Workers Face Outrage as Budget Crises Grow
Published: January 1, 2011
“People I don’t even know are calling me horrible names,” said Ms. Corfield, an art teacher who had pleaded the case of struggling teachers. “The mantra is that the problem is the unions, the unions, the unions.”
Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules.
It is an angry conversation. Union chiefs, who sometimes persuaded members to take pension sweeteners in lieu of raises, are loath to surrender ground. Taxpayers are split between those who want cuts and those who hope that rising tax receipts might bring easier choices.
And a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending.
A brutal reckoning awaits, they say.
These battles play out in many corners, but few are more passionate than in New Jersey, where politics tend toward the moderately liberal and nearly 20 percent of the work force is unionized (compared with less than 14 percent nationally). From tony horse-country towns to middle-class suburbs to hard-edged cities, property tax and unemployment rates are high, and budgets are pools of red ink.
A new regime in state politics is venting frustration less at Goldman Sachs executives (Governor Christie vetoed a proposed “millionaire’s tax” this year) than at unions. Newark recently laid off police officers after they refused to accept cuts, and Camden has threatened to lay off half of its officers in January.
Fred Siegel, a historian at the conservative-leaning Manhattan Institute, has written of the “New Tammany Hall,” which he describes as the incestuous alliance between public officials and labor.
“Public unions have had no natural adversary; they give politicians political support and get good contracts back,” Mr. Siegel said. “It’s uniquely dysfunctional.”
Even if that is so, this battle comes woven with complications. Across the nation in the last two years, public workers have experienced furloughs and pay cuts. Local governments shed 212,000 jobs last year.
A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers. The Manhattan Institute, which is not terribly sympathetic to unions, studied New Jersey and concluded that teachers earned wages roughly comparable to people in the private sector with a similar education.
Benefits tend to be the sorest point. From Illinois to New Jersey, politicians have refused to pay into pension funds, creating deeper and deeper shortfalls.
In California, pension costs now crowd out spending for parks, public schools and state universities; in Illinois, spiraling pension costs threaten the state with insolvency.
And taxpayer resentment simmers.
Trouble in New Jersey
To venture into Washington Township in southern New Jersey is to walk the frayed line between taxpayer and public employees, and to hear anger and ambivalence. So many Philadelphians have flocked here over the years that locals call it “South Philly with grass.”
These expatriates tend to be Democrats and union members, or sons and daughters of the same. But property taxes are rising fast, and voters favored Governor Christie, a Republican. Bill Rahl, a graying plug of a retiree, squints and holds his hand against his throat. “I’m up to here with taxes, I can’t breathe, O.K.?” he says. “I don’t know about asking anyone to give up a pension. Just don’t ask for no more.”
Governor Christie faced a vast deficit when he took office last January, and much of the federal stimulus aid for schools was exhausted by June. So he cut deeply into state aid for education; Washington Township lost $900,000. That forced the town to rely principally on property taxes. (Few states lean as heavily on property taxes to finance education; New Jersey ranks 45th in state aid to education.) The town turned its construction office over to a private contractor and shed a few employees.
Assemblyman Paul D. Moriarty, a liberal Democrat, served four years as mayor of Washington Township. As the bill for pension and health benefits for town employees soared, he struggled to explain this to constituents.
“We really should not receive benefits any better than the people we serve,” he says. “It leads to a lot of resentment against public employees.”
All of which sounds logical, except that, as Mr. Moriarty also acknowledges, such thinking also “leads to a race to the bottom.” That is, as businesses cut private sector benefits, pressure grows on government to cut pay and benefits for its employees.
Robert Master, political director for the Communication Workers of America District 1, which represents 40,000 state workers, speaks to that difficulty.
“The subtext of Christie’s message to a lot of people is that ‘you’re paying for benefits you’ll never have,’ ” he says. “Our challenge is how to defend middle-class health and retirement security, not just for our members but for all working families, when over the past 30 years retirement and health care in the private sector have been essentially demolished.”
This said, some union officials privately say that the teachers’ union, in its battle against cuts to salaries and benefits, misread Mr. Christie and the public temperament. Better to endorse a wage freeze, they say, than to argue that teachers should be held harmless against the economic storm.
In the past, union leaders, too, have proven adept at winning gains not just at the bargaining table. In 2000, union lobbyists persuaded legislators to cut five years off the retirement age for police and firefighters — a move criticized as a budget-buster by a state pension commission. The next year, the budget still was flush and union leaders persuaded the Republican dominated legislature to approve a 9 percent increase in pension benefits. (The legislators added a sweetener for their own pensions.)
Those labor leaders, however, proved less successful in persuading their legislative allies to pay for such benefits. For much of the last two decades, New Jersey has shortchanged its pension contribution.
Governor Christie talked about tough choices this past year — then skipped the state’s required $3.1 billion payment. Now New Jersey has a $53.9 billion unfunded pension liability.
A recent Monmouth University/Gannett New Jersey poll found a narrow plurality of respondents in the state in favor of ditching the pensions for a 401(k)-type program. Public pensions, however, run the gamut, from modest (the average local government pensioner makes less than $20,000 a year while teachers draw about $46,000) to the gilded variety for police and firefighters, some of whom collect six figures. And then there’s the political class, which has made an art form of pension collection.
Some politicians draw multiple pensions as county legislators, called freeholders, and as prosecutors or union leaders. Back in Washington Township, people tend to talk of state government as a casino with fixed craps tables.
A white-haired retired undercover police officer, whose wrap-around shades match his black Harley-Davidson jacket, pauses outside the Washington Township municipal building to consider the many targets. He did not want to give his name.
“Christie has all the good intentions in the world but has he hit the right people?” he says. “I understand pulling in belts, but you talking about janitors and cops, or the free-loading freeholder?”
Good Jobs, at What Cost?
So how much is too much? On their face, New Jersey’s public salaries are not exorbitant. The state has one of the highest per-capita incomes in the country, and the average teacher makes $66,597, which even with benefits is on par with or slightly behind similarly educated private sector workers, according to Jeffrey H. Keefe, a Rutgers professor who studied the issue for the liberal-leaning Economic Policy Institute.
Mr. Keefe, however, uncovered some intriguing class splits. Blue-collar public workers make more money than their private sector counterparts. For such jobs, public unions have established a higher wage floor.
The sense that public workers enjoy certain advantages is not a mirage. Public employees pay into their pension funds, but health benefits often come at a fraction of the cost of most private sector packages.
Government employment also tends to be more secure. When the economy crashed, federal stimulus dollars safeguarded many public jobs. The alternative, many economists point out, was to force towns and cities into extensive layoffs, even as unemployment hovered around 10 percent and millions of Americans sought help from public agencies.
But it accentuated the perception that public workers, however tenuously, inhabited a protected class. That’s a tough sell in Washington Township.
Ask Michael Tini, 54, who works as a card dealer in Atlantic City, about teacher salaries and benefits and he taps his head, not unsympathetically.
“Look, I understand that teachers are the brains of the operation, O.K.? But my hours are cut, and my taxes are killing me.”
He taps his head again. “They have got to take it in the ear, too.”