Serious suggestions for public pay reform

Pretty much everything else in the book, “Rethinking Public Sector Compensation,” will be contentious, although it doesn’t need to be.

Reilly, who now teaches at San Diego State University, knows what he’s talking about. His research is comprehensive and points to one conclusion: The way we pay public employees is broken, and overpromising pension and retirement health care benefits has created looming deficits nationwide of between $1 trillion and $3 trillion.

(To put that in perspective, according to astrophysicist Neil Degrasse Tyson, if you stacked a trillion $1 bills on top of each other, you could reach the moon and back, four times!)

“It’s just crowding out services,” says Reilly, who will be signing copies of his book from 3 to 5 p.m. on Saturday at the Sahara West Library, 9600 W. Sahara Ave.

The system is broken in many ways, Reilly argues. Elected officials and public employee unions have a conflict of interest; officials accept campaign contributions and grass-roots support from unions, and then turn around and vote for generous compensation and retirement benefits. Left unrepresented? The public interest.

Contracts are hammered out in private collective bargaining sessions. And the details of those contracts don’t get the scrutiny they deserve from the media or the public, which allows costs to be pushed into the future, where deficits grow.

The structure of public jobs – with built-in raises based on seniority, rules governing hiring and firing and binding arbitration in case of disputes – creates organizations geared toward job security, not innovation, Reilly argues. “We’ve skewed it, ridiculously, toward long-term employment,” he said.

But government isn’t a jobs program; it’s supposed to be about providing the best services to the public in the most efficient way. “The whole point of public employment is to deliver services,” Reilly said. “That should drive our debate. That should drive our discussions.”

It should. But would-be reformers generally are cast as anti-union zealots out to dismantle collective bargaining entirely. (That’s not Reilly’s view; he says wages and workplace issues should be bargained.)

What should we do? Reilly has a list:  

First, he says contracts should be negotiated openly, perhaps subject to the requirements of state open meeting laws. Independent consultants should review them to determine the real present and future costs, before elected officials vote.

Second, Reilly suggests appointing a panel of qualified citizens to negotiate collective bargaining agreements, or at least making such people part of the government’s negotiating team.

Third, if benefits are to be increased, the public should be allowed to vote on the increases.

Fourth, when it comes to public pensions and retirement health care benefits, Reilly says states and local governments must shift to 401(k)-style plans for new employees. Older employees should be asked to contribute more to their retirements, and no new benefits should be offered until the plans are fully funded. The Legislature should stipulate that changes to pensions and health care programs should not be subject to collective bargaining, he says.

Fifth, he says public employment should be at-will, not civil service, so long as strong whistle-blower and anti-political coercion laws are in effect.

Reilly’s book is serious, tackling a serious subject in a frank way. He’s going to meet a lot of resistance from unions representing public employees, the vast majority of whom work hard and are dedicated. But the problems he outlines cannot be denied or ignored, and the solutions he puts forward deserve serious consideration. Because the bottom line is, we don’t have enough dollar bills to stretch to the moon and back.

 

Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at (702) 387-5276 or ssebelius@reviewjournal.com.