Shhh! Mun⁠i⁠c⁠i⁠pal Pens⁠i⁠on Secre⁠t⁠s

By: The James Madison Institute / March 15, 2011

The James Madison Institute


March 15, 2011

By Robert F. Sanchez, JMI Policy Director
A recent JMI study by Dr. Randall Holcombe focused a spotlight on a grave problem facing some of Florida’s largest cities: They’re stuck with costly pension obligations that they simply can’t afford – even if they continue the long-term trend of paring services and providing their residents with less bang for the buck. How did these cities get into this mess? They negotiated sweetheart deals with the public-employee unions whose campaign money, political endorsements, and election-day legwork helped to pick the very city officials who signed off on those deals.Why were so many of these cities’ residents blissfully unaware of what was happening? Here’s one factor: The news media haven’t been paying attention – especially in urban counties such as Miami-Dade, Broward, and Palm Beach, which together are home to more than 100 of Florida’s 400+ municipalities. In those three counties, the financially troubled daily newspapers have severely reduced their coverage of local government. They never covered the smaller cities very well anyway, and now they lack the staff to dig into mundane but important municipal issues such as budgets, bond issues, and labor deals.As for TV, which surveys suggest most Americans regard a their primary source of “news,” a recent University of Southern California study of  TV news in the Los Angeles market revealed that local newscasts included an average of only 22 seconds of local government coverage per half hour. Rest assured that those 22 seconds were not devoted to the meat-and-potatoes of local government. A story about a police standoff or a minor city hall scandal is far more likely to be fodder for TV than a story about the aforementioned city budgets or bond issues.Or their labor deals. Although much of the collective bargaining for Florida’s local government employees occurs behind closed doors, final approval must occur in open meetings following public hearings. Therefore, most of these problems are “hiding in plain sight” of the public. The trouble is that practically nobody is paying attention. These troubled cities’ hard-working residents – struggling to earn a living, raise their kids, and pay their taxes – are generally too busy to attend budget hearings held at inconvenient times.Meanwhile, the labor deals attract media attention only if there’s a made-for-TV moment such as dissatisfied employees picketing city hall or showing up en masse at a budget hearing to intimidate taxpayers who might question the level of taxes and spending. So, with the public and the news media generally AWOL from these proceedings, the result in too many of Florida’s major cities is that pension problems have festered for years and now are approaching a tipping point. Indeed, the Legislature and some in the news media finally have been forced to pay attention.They’re learning that public-employee unions and compliant elected officials in some of Florida’s major cities have quietly negotiated fiscally ruinous labor deals under which some city governments increasingly exist more for the benefit of the governing than for the benefit of their residents. The question now is what can be done to solve the many problems that this dysfunctional dynamic has spawned. On that score, Dr. Holcombe’s study “Protecting Florida’s Cities through Pension Reform” includes some helpful findings and recommendations.