February 28, 2011

How Chris Christie Did His Homework - NYTimes.com

Matt Bai in the NYT Magazine skillfully recounts how NJ Governor Chris Christie takes on the question of teacher and public worker compensation, particularly pension and post-retirement health care benefits, which is the primary factor in the huge budget crisis in NJ. Below are his summary observations. (emphasis added)

The dilemma is severe states like NJ, AK, HA, CT, IL, DE, MA and WI which leaves few options for governors and legislatures as the long recession slowly dissipates with painfully slow job growth. States are simply going where the money is to rein in costs because stimulus largesse has disappeared and most have a constitutional requirement to balance the budget every year.

See graphic included in Bai's story (click on graphic to enlarge it).

"Now a new class of governors from both parties is promising to revisit union contracts in order to put their states on firmer fiscal ground. In Wisconsin, Scott Walker, an aggressive new Republican governor, just proposed legislation that would limit the rights of public workers to collectively bargain. “You can’t have one group who are the haves,” Walker told me recently, meaning government workers, “and one group, the private-sector workers, who are the have-nots.” Walker’s move led to protests in Madison, drawing President Obama into the debate and raising the prospect of French-style labor uprisings among public workers across America.

In part, the viral movement against public-sector unions is a result of political necessity. In states all over the country, balancing the budget has become an annual exercise in Copperfield-like illusion. Over the past decade, governors have exhausted all the easy options for eradicating, or at least hiding, deficits — building casinos and adding new fees, issuing bonds and securitizing tobacco revenue. Now, facing a painfully slow recovery and the end of stimulus spending from Washington, governors from both parties are finding that there are simply no more gimmicks left to exploit. They have to deal with what has long been an unspoken reality — that state governments have made a mountain of promises they can’t keep.

It’s also true, though, that what used to be unspeakable, politically, simply isn’t anymore. It’s not as if the problem of public pensions suddenly got so much worse than it was before (the shortfalls have been building steadily for years, after all), nor is this new crop of governors somehow genetically bolder than their predecessors. If politicians of both parties are suddenly willing to go after the pensions and health care plans of teachers and cops and firefighters, it’s probably not only because they’re out of budgeting options, but also because suddenly they see it as politically advantageous. In other words, not only are public employees’ contracts no longer untouchable for any politician who wants to stay in office, but it turns out that the opposite is true; taking the fight to the unions is a good way to bolster your credentials as a gutsy reformer with voters who have been losing faith for years in public schools and government bureaucracies."
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