Monday, May 14, 2007
Gutting Act 47
House Bill 1222 would amend Act 47 to allow a distressed municipality to keep committing the same type of behavior that got them into financial distress in the first place.
How does that happen? Simply by amending the Act 47 language that governs the execution of labor contracts after Act 47 status has been granted. Where the language presently states that a contract negotiated after the adoption of a plan “shall not in any manner violate, expand, or diminish its provisions”, the new language would allow the contract to “deviate from” the plan. It also permits a contract not consistent with the plan if the coordinator feels the revenues under the plan will be sufficient to pay for the costs.
Ironically the bill also adds new language on police and fire arbitration that mandates the consideration of “the financial ability of the distressed municipality”.
So, if the changes happen, what’s the point of the plan in the first place? The law is supposed to give a municipality help with its financial problems through technical expertise and much of that comes with the ability to control costs, labor being a major one. The state won’t permit municipalities to declare bankruptcy, break its contracts, and go out of business, so it has substituted Act 47 in its place.
The bill’s sponsor has stated that “as it stands now, Act 47 hurts our unions and our ability to negotiate with unions”. This might make things better for unions, but not anyone else. We have already seen that larger cities like Pittsburgh often dictate to the recovery team how things will operate. Now any tough medicine on the labor costs would also be gone as a result of this amendment.
How does that happen? Simply by amending the Act 47 language that governs the execution of labor contracts after Act 47 status has been granted. Where the language presently states that a contract negotiated after the adoption of a plan “shall not in any manner violate, expand, or diminish its provisions”, the new language would allow the contract to “deviate from” the plan. It also permits a contract not consistent with the plan if the coordinator feels the revenues under the plan will be sufficient to pay for the costs.
Ironically the bill also adds new language on police and fire arbitration that mandates the consideration of “the financial ability of the distressed municipality”.
So, if the changes happen, what’s the point of the plan in the first place? The law is supposed to give a municipality help with its financial problems through technical expertise and much of that comes with the ability to control costs, labor being a major one. The state won’t permit municipalities to declare bankruptcy, break its contracts, and go out of business, so it has substituted Act 47 in its place.
The bill’s sponsor has stated that “as it stands now, Act 47 hurts our unions and our ability to negotiate with unions”. This might make things better for unions, but not anyone else. We have already seen that larger cities like Pittsburgh often dictate to the recovery team how things will operate. Now any tough medicine on the labor costs would also be gone as a result of this amendment.
