Archive for the 'Economics' Category

RIRA to GA – Stop Fiscal Irresponsibility – Binding Arbitration – Never Ending Contracts

The Rhode Island Republican Assembly, like just about every other person and organization concerned about the solvency of the State of Rhode Island, adamantly opposes binding arbitration. Monetary issues in public-sector union contracts should not be decided by unelected individuals, who cannot be recalled by the election process if they saddle the taxpayers with budget-busting contracts. It is the responsibility of our elected representatives to make decisions in the public interest for the general welfare. Appointed bureaucrats should not be making decisions that are going to financially affect the taxpayers who then have no ability to reward or punish those decisions at the ballot box.

As the state and local cities and towns all struggle with out-of-control spending, the last thing we need is to permit binding arbitration which would allow our elected representatives to continue to avoid the hard fiscal decisions which must be made.

In a recent Projo article, it was pointed out that “…subjecting monetary issues to the binding-arbitration process would allow for quicker resolutions of contract disputes.” Perhaps so, but faster is not necessarily better. It is always faster to surrender than to fight, but that doesn’t necessarily make it the right decision.

In that same Projo article, Daniel Beardsley, Jr., executive director of the League of Cities and Towns was quoted as saying that allowing binding arbitration “…would put another half-dozen communities on the precipice of bankruptcy.” Agreed, and if bankruptcy were to be avoided, it would put such an increased burden on the taxpayers that more Rhode Islanders would be forced to leave the state in self-defense.

Another aspect of House bill 5700, in addition to the binding arbitration provision, is that contract benefits would automatically continue until a new agreement is reached. This is absurd! The taxpayers cannot afford what we have now, as evidenced by the red ink flowing everywhere. This continuation of salaries and benefits after a contract has expired renders it virtually impossible to ever reduce the pay and benefits of public-sector union workers. There is a business cycle, and labor is one component of the production of goods and services. If the cost of labor is only allowed to go one way – up, regardless of the economic environment, the inevitable consequence will be fewer goods and services. In the current economic environment, many private-sector workers have taken pay cuts, lost their health insurance coverage, or even lost their jobs. If we are all going to “share the sacrifice,” then workers in the public sector are going to have to make downward adjustments in their expectations as well.

The Rhode Island Republican Assembly urges, in the strongest possible terms, that the R.I. House, the representatives of all the people of RI, vote against House bills 5700, 5817, and 5961. Their passage would be a disaster both for the state and for the people.

Conservatively yours,

Raymond T. McKay
President, RIRA

Press Release from the Rhode Island Republican Assembly
Media Contact: president [at] ri-ra [dot] org or (401) 487-2514