March 25, 2015

Restoring Accountability and Transparency—Four Quick Points on SB 549

After several posts directed at the labor reforms included in SB 549, it might be useful to summarize what the bill would do. SB 549 is aimed at increasing accountability and transparency in government labor relations. If passed, the bill would:

  • Require a union that seeks to represent public employees as their exclusive representative to stand for re-election by those employees every two years. Existing law often prevents public employees from having a say in who represents them. These elections would ensure public employees have a voice.
  • Require collective bargaining sessions to be held in open sessions covered by the Sunshine Law. Due to a legal loophole, such meetings often are held behind closed doors.
  • Require government unions to disclose financial information in an annual filing. These filings would be similar to the filings traditional private-sector unions already have to make.
  • Limit the term of government collective bargaining agreements to two years, rendering evergreen clauses unenforceable.

All four of these are modest, yet important reforms.

Just a Bill

January 31, 2015

Union Cronyism and the Board of Aldermen

108696481_construction_worker_holding_hard_hat_articleI was driving home from work the other day and listening to “Back Stabbers” by the O’Jays on 88.1. At the end of the song, the DJ gave some commentary, “The back stabbers. They smile in your face. It could be the milk man, it could be one of your friends, or it could be the St. Louis Board of Aldermen.”

I didn’t catch why my DJ was upset with the Board of Aldermen, but one reason Saint Louisans are upset with the board right now is their decision to consider a bill that purportedly limits minority businesses from bidding on county government contracts.

The bill mimics regrettable legislation passed by the county in 2012 that requires bidders on construction contracts of $25,000 or more to maintain their own Department of Labor-approved apprentice program. The catch is that union contractors are often the only bidders who can meet this requirement.

When the county council adopted its bill in 2012, my colleague David Stokes wrote,

While some non-union companies do participate in apprentice programs through industry organizations, union-affiliated companies still have a decided advantage in meeting the requirements of this new bill. This is a blatant ploy to guarantee that union companies will win all county bids. . . .

Using the council’s authority to prevent non-union contractors from even attempting to participate in county projects is an egregious misuse of power. It is bad enough that this will increase costs to taxpayers, but the use of government for political favoritism is simply indefensible and immoral.

Just as it was two years ago, this type of legislation still appears to be a naked attempt by elected officials to please a powerful special interest.

Law should facilitate open access, such that access to public institutions is not contingent on personal relationships and political connections. Law should be structured to apply to everyone equally. By favoring unionized contractors over non-unionized contractors, this bill fails in providing a neutral rule. It reeks of cronyism, and it is the sort of thing Saint Louisans are right to be upset about.

January 22, 2015

Open Collective Bargaining at Monarch

Firefighter Turnouts-Gear Rack
In October 2013, the Monarch Fire Protection District implemented a new approach to collective bargaining with the union representing rank-and-file firefighters. Rather than hold meetings on pay, benefits, time off, and work rules behind closed doors, the board of the fire district decided to make these meetings open to the public.

With open collective bargaining, any citizen, journalist, or Monarch employee interested in the process could show up to a meeting and see the demands made by the union and the board. In theory, this process would keep demands in check, tactics civil, and allow the public to see how government decisions are made.

One might think that a more transparent process for determining how a government entity delivers services and spends taxpayer money would be welcomed by all; however, it appears that the union did not like the arrangement.

“The union lawyer tried stunts to close the meetings to the public,” says Jane Cunningham, one of three members of the fire district board.

According to Cunningham, when collective bargaining was held behind closed doors, it was easy for the union to get whatever terms they wanted in the contract. In essence, the union was able to exert complete control over the fire district because it had majority control of the board and could collectively bargain without public scrutiny.

No one would suggest that private-sector collective bargaining should occur in public forums. That’s because the terms and conditions of private employment are, well, private. But the public has an interest in what public employees are paid, both because taxpayers are picking up the tab and because the right balance of compensation is important to getting good service without being overcharged.

Now that open collective bargaining is in place at Monarch, it appears that the union is no longer getting exactly what it wants in collective negotiations, and community interests are being better served.

Will other government entities open their collective bargaining negotiations? Only time will tell. For now it appears that Monarch is taking a step in the right direction with this innovative approach to government transparency.

At the time this story went to print, the firefighters union had not responded to our request for comments.

January 7, 2015

What Do Home Care Union Executives Really Want: A Wage Increase for Their Workers or a Union Contract?

residentialworker1On Christmas week, while many Missourians were exchanging presents or grabbing Chinese food, members of the Missouri Home Care Union were hard at work lobbying the governor. Ostensibly seeking higher pay for the home care attendants the union represents, the union placed carolers outside the governor’s mansion singing Christmas songs with lyrics altered to convey their message. Irving Berlin’s “White Christmas” became “I’m Dreaming of a Fair Governor,” and St. Louis Public Radio captured union members singing several bars of “home care workers are coming to town.”

The odd thing about this press junket is that the governor wants to give home care workers the pay increase the union is asking for, but the union objects to the method the governor proposes to give home care workers this pay bump. From the governor’s Office of Administration:

“The governor supports the wage range provision of the labor agreement between the Missouri Quality Home Care Council and the Missouri Home Care Union that provides a pay raise for home health care workers. To ensure the wage range provision of the agreement has the full force and effect of the law, the administration will be implementing the wage range recommendation through an administrative rule.”

Jeff Mazur, executive director of the union, responded by calling the governor’s proposal to enact the pay raise “unnecessary and unwise.” It appears union executives like Mazur are really after a governor’s order implementing a collective bargaining agreement. We’ve seen this before in other states.

Home health care unions, like the Missouri Home Care Union, formed to represent home care attendants who received Medicaid funding for acting as a personal assistant of a person in need of care. In many states, such as Illinois and Michigan, once home care unions were formed, they negotiated a union contract that forced all home care workers to pay a portion of their check to the union, whether or not the worker wanted union representation.

Imagine you’re enrolled in Missouri’s home care program and you’re getting a check from the government to help offset the cost of taking care of a disabled relative. Now imagine that the state bound you to a union contract against your will, and a portion of your check is going to union executives and their pet political causes.

Governor Nixon is right to be cautious of the union’s demands. If Missouri is better off increasing payments to people enrolled in the home care program, it can do so without entering a collective bargaining agreement. Such collective bargaining agreements can have bad consequences for the home care assistants subject to them, who often cannot afford to have their benefits tapped into by a union that they do not support.

November 18, 2014

University City Should Carefully Consider Privatization Proposal; Ignore Special Interests

University City is considering outsourcing emergency medical services (EMS). Predictably, this proposal has been the subject of debate among city council members. Two council members have questioned whether the city should outsource one of its core services, while another member urged the council to remain open minded until they have all the data on outsourcing.

The Show-Me Institute has written favorably about EMS privatization policies in the past. Privatization, when done right, can increase efficiency and expertise, provide improved services to the public, and decrease costs. However, all outsourcing proposals must be carefully considered to ensure privatization is done properly.

The University City Council ought to investigate the specifics of this privatization proposal for how it would affect services and city finances, rather than shooting from the hip and accepting or rejecting a privatization proposal on purely political grounds. Public employees, city officials, and businesses that the city may contract with are all interested parties in any outsourcing effort. When deciding whether to contract out services, the council should do its best to ignore the special interests and focus on the details of how this proposal affects the city as a whole.

Private ambulances have served parts of Saint Louis County for years, and University City might be able to benefit from private ambulances as well.

August 27, 2014

Of Super Bowls and Economics

Following the passage of a resolution in the state legislature, the Missouri Department of Economic Development has convened a Super Bowl Task Force to consider what Kansas City needs to do to attract the annual event. According to The Kansas City Star,

“‘I can think of no better place to host the Super Bowl than Kansas City, the best football town in America,’ [State Senator Paul] LeVota said in a statement. ‘We’ve got incredible fans and a city more than capable of handling such a huge event.’

“Not only would the fans love it, but the economic impact would be enormous, he said.”

Ah, there is that elusive term, “economic impact.” It is thrown about to justify all sorts of government spending, but it is little examined by media and little understood by the taxpayers whose money will be used. We recently reviewed similar claims about Kansas City’s effort to attract the GOP convention. In that piece, we cited a Daily Beast story about the recent Super Bowl in New Jersey:

“So, there’s no economically sound way to predict a Super Bowl’s impact before the event and those that try have been proven wrong again and again. But don’t expect that to stop the cheering from the few with the most to gain. When asked for a more detailed analysis of Super Bowl XLVIII, the host committee demurred, but assured in a statement, ‘Super Bowl XLVIII is expected to be an economic boom [sic] for the region.’”

A 2006 study conducted by the College of the Holy Cross, “Mega-Events: The effect of the world’s biggest sporting events on local, regional, and national economies,” analyzes past Super Bowl impacts. The report concludes with a sobering warning to those who would embark on such expenses:

“The most important piece of advice that a local government can take regarding mega-events, however, is simply to view with caution any economic impact estimates provided by entities with an incentive to provide inflated benefit figures. While most sports boosters claim that mega-events provide host cities with large economic returns, these same boosters present these figures as justification for receiving substantial public subsidies for hosting the games. The vast majority of independent academic studies of mega-events show the benefits to be a fraction of those claimed by event organizers.”

Hosting a Super Bowl in Kansas City would be a great opportunity to show off our city to the rest of the world. Afterall, the term “Super Bowl” was coined by Chiefs owner and American Football League founder Lamar Hunt. But regional boosters need not wear blinders. At what cost does such an event cease to be worthwhile, especially when so many basic services in Kansas City already seem to be falling by the wayside? If we’re going to bring people to the City of Fountains, let’s at least make sure we can afford to operate the fountains.

August 11, 2014

Krugman Upended By His Own Logic

In a recent New York Times column, Paul Krugman made the assertion that “self-proclaimed libertarians deal with the problem of market failure both by pretending that it doesn’t happen and by imagining government as much worse than it really is.”

According to Krugman, the “self-proclaimed libertarians” are either stupidly or maliciously engaged in “projection” – attributing base motives to their political opponents that underlie their own highly prejudicial reasoning.

Kudos to Per Bylund, a research professor at the Hankamer School of Business at Baylor University, for flipping the situation around and pointing out how all you need to do is to replace “libertarian” with any of the words that Krugman might use to describe his own thinking to see a wonderful example of projecting your own intellectual failings onto others of the opposite persuasion.

As Bylund observed in today’s Mises.org: “Keynesiasn/progressives/(whatever) like Krugman deal with the problem of government failure both by pretending that it doesn’t happen and by imagining the market as much worse than it is.”

June 26, 2014

Tell Taxpayers Where Their Money Went

The Republican Party has eliminated Kansas City as a potential host city for the 2016 convention, and with it went any reason for keeping the details of the bid a secret. In April we wrote:

The mayor of Kansas City, Mo., disclosed that the city is ponying up another $65,000 to woo the 2016 Republican convention. Jackson Co., Mo., Wyandotte Co./Kansas City, Kan., and Johnson Co., Kan., also are chipping in an additional $65,000 each. This $260,000 total is in addition to the $100,000 that Kansas City, Mo., already spent. We participated in a KSHB TV story about the spending and asserted that taxpayers ought to be told what is being promised in their name.

At the time, the mayor and the convention committee refused to tell taxpayers how much money the city was spending, where it was going, or how much more was promised. According to the Kansas City Star:

The Star filed a Sunshine Law request with the city and the Kansas City Convention Visitors Association asking for information from the proposal on the potential public cost of the convention.

Both declined, citing state law — and a concern about revealing details of the bid to competing communities.

“We will not be addressing specific questions related to the Finance section of our response,” said an email from Julie Sally, a spokeswoman for the Kansas City convention task force.

City spokesman Chris Hernandez also declined to provide the requested information, as did Mike Burke, the attorney for the KCCVA.

Now that there is no risk of compromising the bid, the city and the KCCVA should reveal what commitments they made, where the money went, and to whom. Their economic impact projections for the convention were pretty wild, too. We would like to see who generated those, and how.

April 11, 2014

Tell Taxpayers Where Their Money Is Going

On Thursday, the mayor of Kansas City, Mo., disclosed that the city is ponying up another $65,000 to woo the 2016 Republican convention. Jackson Co., Mo., Wyandotte Co./Kansas City, Kan., and Johnson Co., Kan., also are chipping in an additional $65,000 each. This $260,000 total is in addition to the $100,000 that Kansas City, Mo., already spent. We participated in a KSHB TV story about the spending and asserted that taxpayers ought to be told what is being promised in their name.

Kansas City Mayor Sly James argued that hosting the convention is a once-in-a-lifetime opportunity, and he may be correct. Certainly, we all are proud of Kansas City and eager to show off on the 40th anniversary of the last time we hosted. Those are arguments for spending the money — they are not arguments for not telling taxpayers how the money is being spent. If the mayor is so confident about his choices, there is no reason to hide who is getting the money and for what. Furthermore, taxpayers ought to know what additional commitments the city is making to the convention committee. Remember, the $165,000 spent so far is just for the bid to host. Hosting itself will cost millions.

The city claims that the convention will have a large economic impact. We previously have written that those estimates are largely useless as they assume that without the convention there would be no economic activity — which is just silly. The city’s “fact sheet” suggests the economic impact to Kansas City would be similar to Tampa’s in 2012: $214 million. The city likely is getting that from a Tampa Tribune story in which they cited a University of Tampa analysis:

The total impact takes in $214 million in direct spending by the groups that put on the convention, including the Tampa Bay Host Committee, the City of Tampa, the convention’s Committee on Arrangements and corporate sponsors.

Note that in addition to ignoring any economic activity that would have happened without the convention, this impact includes spending from Tampa’s taxpayers.

Lastly, it was gratifying to read in their “fact sheet” that the city thinks we have sufficient hotel rooms and bus service to accommodate the convention, and that our airport has more than 50 direct flights. Let’s hope city officials remember this the next time they advocate committing public funds to convention hotels, streetcars, and new airport terminals.

March 4, 2014

Kansas City Republicans’ Absurd Claims

Last Wednesday, FOX 4 News asked us our thoughts about Kansas City refusing to release details on the use of tax dollars to support the city’s bid for the 2016 Republican Convention. It mirrored a similar story that the Kansas City Star published earlier. In both, the Show-Me Institute advocated for transparency. In a city as cash-strapped as Kansas City, voters should be told where their tax dollars are being spent. One would think Republicans would agree.

FOX 4 reporter Macradee Aegerter also asked about the claims of economic development that come from such conventions. I said in the interview that such claims are speculative, the bid committee often employs the economists that make the claims, and that the real impact rarely lives up to the hype. (This segment aired in the 6 p.m. version of the story, which is not yet online.) In the segment, a member of the bid committee claimed that the convention would have an economic impact of $250,000,000. That’s a quarter-billion dollars.

We don’t believe it. (Or, perhaps more delicately, we want to verify those numbers before we believe it.)

Certainly, having such a convention in Kansas City is a good thing, and not just for the money it will bring to the area. As a matter of pride, I would love to see Kansas City host again on the 40th anniversary of our last convention. But the idea that having the convention here amounts to a net gain of $250 million is absurd, and it casts a light on how calculating the economic impact of other items is the economic equivalent of alchemy.

The host committee is likely assuming that without the convention, hotel occupancy would be zero. Spending downtown would be zero. Travel in and out of Kansas City would be zero. Then it still probably over-estimates what will be spent here because of the convention. In reality, a hotel that would have had 70 percent occupancy without the convention may have 95 percent occupancy because of the convention. One can claim the difference as “economic impact” but not all of it. But we won’t know how the committee reached the quarter-billion number until it reveals how it calculated a $250,000,000 impact. (If the committee releases the estimate and it proves to be legitimate economic analysis with a multiplier effect below two, we will gladly admit we are wrong.)

As written in the Daily Beast story about the recent Super Bowl in New Jersey:

So, there’s no economically sound way to predict a Super Bowl’s impact before the event and those that try have been proven wrong again and again. But don’t expect that to stop the cheering from the few with the most to gain. When asked for a more detailed analysis of Super Bowl XLVIII, the host committee demurred, but assured in a statement, “Super Bowl XLVIII is expected to be an economic boom [sic] for the region.”

We’re not asking the committee to reveal anything legitimately embargoed about its bid. We just want to know how the committee arrived at that estimate for the impact should the convention occur in Kansas City. Certainly, Republicans would agree that the sound economic policies they advocate require sound economic assumptions — otherwise, how are they supposed to be any more responsible with taxpayer money?

February 26, 2014

Paycheck Protection Bills Return To The Missouri Legislature

One of Americans’ most fundamental rights is the right to free speech. Unfortunately, that right often is undermined in the area of public employment. Many public employee unions not only collect dues for their representation, but they also collect them for political activity. Generally speaking, the presumption is that the employee supports the union’s politics, even though that’s not always the case.

Shouldn’t unions have to compete for their political dollars and donations like any other interest group? I think so. That’s why “paycheck protection” reforms are so important: they allow employees to opt in to paying for a union’s politics, rather than forcing them to opt out. The presumption, in other words, is that the employee’s political dollars are first and foremost the employee’s, not the union’s. That modest reform would re-balance the power of dues collection in favor of public employees rather than defaulting in favor of public unions.

The good news is that Missouri’s legislature passed a law last year that would have rectified the problem. The bad news is it was vetoed, and that veto wasn’t overridden during the special session.

But the (other) good news? Variations of that legislation are currently circulating in the Missouri House. HB 1093 and HB 1617 address the issue directly, requiring a separate consent form for dues to be collected and used for union political purposes. HB 1093 is particularly good in requiring an accounting of dues to ensure that dues earmarked for representation are not spent on politics. Without that verification mechanism, it would be difficult to determine whether the law is being followed and whether employees’ free speech rights are being upheld.

I will keep an eye on both of these bills; stay tuned.

November 28, 2013

We Are Thankful For Data

Debate over public policy is rife with stories about individuals who will benefit or suffer from proposed legislation. It can be a difficult thing with which to wrestle. And because much of what is offered is anecdotal, it could be true and yet not at all representative of the impact of the regulation at hand.

Debate in Missouri about Medicaid, education, and taxation is filled with anecdotes that give an either incomplete or misleading picture of policy proposals. That is why we here at the Show-Me Institute love data. Spreadsheets may not make for an impressive photo opportunity, but data analysis is necessary if we are going to improve the lives of Missourians.

To that end, our colleague Michael Rathbone has been shepherding our new website: ShowMeData.org. This new interactive tool allows you to generate all sorts of data on property taxes, population, Gross State Product, labor force, employment, unemployment, and more over the years. And not just in Missouri but the entire country. For example, is it true when Missouri politicians complain that Texas Gov. Rick Perry is poaching people and  jobs? This chart shows that Texas’ population has been growing for decades while Missouri’s remains stagnant. Want to research cigarette tax rates in Missouri and neighboring states? That’s here.

Should you be locked in a political discussion this holiday with that irascible brother-in-law, visit Show-Me Data for some valuable context. We’re all grateful for the stories of America’s greatness, now we have the data to back it up.

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