HEALTHCARE UNIONS

 

FORUM

Last week Los Angeles' city council voted unanimously to reduce pensions for new workers by raising the retirement age to 65 and requiring greater contributions from workers. Judging by the protests at the city council meeting, you would have thought that pension Armageddon was raining down on the city. Hardly. The modest reforms will only save the city $30 million over five years because they apply merely to workers not yet hired. How minor is that? As the chart below shows, the city's pension payments are scheduled to rise over the next four years by some $375 million.

LA%20pensions.jpg
My story today digs into the pension fund sponsored by a union striking at five Connecticut nursing homes. In their 2010 report to members, the fund's trustees said it was 111 percent funded. The same year an IRS-mandated calculation put it at 54 percent funded. So which is it?
The California Nurses Association has pledged $1 million to the campaign for Proposition 30 (hat tip: Andrew Marcum). The union has also promised to use its ground game on the measure's behalf. So far it appears that the money raised for Brown's initiative has not surpassed Molly Munger's financing of a competing tax bill (Proposition 38). Munger is a civil rights lawyer and the daughter of Charles Munger, Warren Buffet's partner at Berkshire Hathaway. Proposition 38 would raise more money than Proposition 30--estimated at some $10 million over 12 years--by raising taxes across the board, not just on the affluent. Yet, recent polling, still shows slim majorities (56%) in favor of Prop. 30 and opposed to Pro. 38.
A new report by the National Governors Association and the Association of State Budget Officers shows that states will face another Total_and_State_Funds_Medicaid_Spending_Growth1.jpgterrible fiscal situation next year. Economic growth has not risen sharply enough to offset the loss of federal stimulus dollars and greater citizen demand for services, especially healthcare.

One of the biggest problems is that "spending on Medicaid is expected to consume an increasing share of state budgets and grow much more rapidly than state revenue growth, resulting in slow or no growth in education, transportation or public safety."  After federal stimulus wore off, the states increased their Medicaid spending by an average of 29 percent this year, according to the Kaiser Family Foundation.  Even though about half the states have taken steps to control Medicaid costs, many budget officials believe they haven't gone far enough.
In the wake of the defeat of Ohio Gov. John Kasich's reforms limiting collective bargaining rights and requiring greater contributions for health care for public sector workers, the governor warned that towns and school districts were going to have to do their best to balance their own budgets because there isn't much state money to bail out localities that can't negotiate concessions from local government unions. That won't be easy. Government has been one of the biggest boom industries in Ohio for decades now and it was the cost of a swollen public sector that Kasich was trying to restrain.

 

 

 

 
Subscribe to PSI Healthcare Unions feed

PSI ARTICLES


RESEARCH


more research on healthcare unions >>


ARTICLES


more articles on healthcare unions >>


PODCASTS


more podcasts on healthcare unions >>

 
PublicSectorInc.org is a project of the Manhattan Institute's Center for State & Local Leadership.
Copyright © 2013 Manhattan Institute for Policy Research, Inc. All rights reserved.
52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494