One has collective bargaining for government employees, the other doesn't. Guess which one is in better shape?
Here’s an interesting and illustrative article in last Sunday’s Washington Post comparing Montgomery County in Maryland with Fairfax County in Virginia. (Hat tip to Mary Katherine Ham at the Weekly Standard.) Montgomery and Fairfax are very similar — both are in the suburbs of Washington DC, both have around a million in population, both have prospered by drawing professionals from the capital, both have atrocious rush-hour traffic — but in terms of how local governments have weathered the recession, the two counties diverge. Montgomery County is required to bargain with many of its government employees under Maryland state law and is having difficulties dealing with declines in tax revenues. Public-sector collective bargaining is barred in Virginia, and Fairfax is in better shape.
The Post calls attention to the association between collective bargaining and spendthrift public officials. During the fat year of 2006, Fairfax increased its spending by a “robust” (the Post’s word) 6 percent, an action that would look like fiscal recklessness anywhere in Michigan. But in Montgomery, “County Executive Douglas M. Duncan, a career politician then running in the Democratic primary for Governor, pitched a gold-plated, pork-laden grab-bag of political largess that drove county spending up by 11 percent.” (Again, those are the Post’s words, not mine.) The Post goes on to note how when the economic storms arrived in 2008, Fairfax was able to adjust quickly, freezing government employee salaries “with little ado,” while in Montgomery County, attempts to control spending have led to conflicts and confusion, including “phantom COLAs” — pension benefits based on cost-of-living payments that the county never made. The Post also notes the abuse of privileges and exploitation of disability retirements.
The Post ended its commentary by calling on officials in Montgomery County to forswear union support and refuse to answer union questionnaires that might commit them to unrestrained spending. These are good steps, but the Post wimps out when it absolves government employee unions of responsibility. “The primary culprits here … are not the unions, which are supposed to represent their workers energetically, but county leaders” the paper asserts. While it is certainly appropriate to fault elected officials for allowing themselves to be bullied, none of that absolves the bullies themselves of blame. Collective bargaining gives unions real power, and with power comes responsibility; when unions abuse their authority, they should be held accountable for that. Having highlighted the effects that collective bargaining has had on government finances, the Post writers should have been brave enough to ask the next question: Is collective bargaining appropriate for government employees? And if so, under what rules? Backing away from scrutinizing Maryland’s collective bargaining law does the Post no credit.
But the story of Fairfax and Montgomery counties is still an enlightening one for Michigan as well. Here we have two very similar, fairly wealthy counties; one engages in collective bargaining with its employees on rules similar to Michigan’s Public Employment Relations Act, the other doesn’t. One is coping with the recession well, the other is struggling with political infighting. The implications for Michigan are hard to miss: A lot of local governments in Michigan would be better off without collective bargaining.