FPE/AFT task forces advance strategies for negotiations and legislation

It has been less than a year since the FPE/AFT embarked on a two-part mission of examining public employment and taxation trends with the goal of developing strategies to aid FPE/AFT affiliates in negotiations with management as well as state lawmakers.

As two task forces delved into the issues surrounding recruitment and retention in the public sector and revenue and taxation practices, a clear, yet disturbing, picture was painted about the politics of public employment--and public services. Those findings have been compiled in two reports, State Revenue and Taxation: Issues for Supporting Public Service in the 21st Century and The Quiet Crisis: Recruitment and Retention in the Public Sector.

Revenue and Taxation

Across the nation, FPE/AFT leaders walked into state capitols in January 2001 knowing they would have to fight to preserve the pay and benefits of the people they represent. In some cases, they had to fight to protect the services their members provide--services many Americans rely on. That was the scene in January 2001, despite record-breaking years of prosperity during the latter half of the 1990s.

Now, less than a year later, many states have gone from black to red on their balance sheets. The economic prosperity that took years of fiscal responsibility to generate has systematically been undermined, according to the FPE/AFT Revenue and Taxation Task Force, which set out less than a year ago on a project to analyze the structure of state revenue systems. The task force's findings, published in State Revenue and Taxation: Issues for Supporting Public Service in the 21st Century, are daunting considering the implications on public services--and public employee jobs. But its conclusion is simple: AFT leaders, members and staff must increase their knowledge of state revenue and tax policy issues and become advocates for an adequate and fair revenue structure.

"The prospect of budget cuts underscores just how crucial state revenues are as a source of funding for the services FPE/AFT members provide to the public," according to the report. "The quality of these services depends on adequate resources. Because this is as true in transportation as it is in healthcare, public safety, education, recreation or environmental protection, conflicts over budgetary resources are common among those concerned with the quality of public service. By working to ensure adequate revenues, it is possible to ensure that all public services will be adequately supported."

The downturn in the nation's economic forecast may be a reflection of the stock market, but the revenue problems facing the states are directly related to tax policies. For the past six consecutive years, state lawmakers opted to provide $28 billion in tax cuts instead of spending money to improve the quality of government services. But the six-year $28 billion revenue reduction is just pocket change compared to the money states stand to lose as a result of President Bush's $1.35 trillion federal tax cut enacted earlier this year.

While the Bush administration alleges the tax cut will jumpstart the slowing U.S. economy, the task force concludes the massive 10-year tax-cut plan seriously threatens economic growth and could severely undercut public services.

According to the task force report, states may lose as much as $37 billion a year by 2011 as a result of the $1.35 trillion tax "relief" measure. In short, states will lose money because their tax codes for such taxes as estate taxes and income taxes are linked to the federal system.

"The unprecedented prosperity that states have seen for the last six years has been squandered in the form of tax cuts that benefit primarily our wealthiest citizens," says Gary Feist, a corporate income tax auditor in North Dakota and a member of the task force. "As a result of these short-sighted cuts, working men and women will feel the pinch when states no longer have the resources needed to upgrade road infrastructures, improve healthcare, provide for the public's safety and protect the environment."

In addition to FPE/AFT activism on state revenue and tax policy issues, the task force recommends union support for e-commerce taxation (please see related story on page 5) and better regulation of corporate tax incentives for economic development, which total an estimated $16 billion a year.

The report is available on our Web site. 

Recruitment and Retention

The start of the 21st century marked the beginning of the 15-year baby boom exodus--otherwise known as retirement. With 42 percent of the 15.7 million people working in state and local governments in 1999 between the ages of 45 and 64, demographers have predicted that the baby boom retirements will hit the public sector the hardest. Filling their jobs will be difficult because the pool of workers ages 25 to 44 is expected to drop by 3 million by 2008.

Faced with these startling statistics, the FPE/AFT Recruitment and Retention Task Force set out to examine the tools state and local governments can use to attract and retain qualified workers in a tight labor market. The challenge: Making public sector pay and benefits competitive with the private sector.

"The number one recruitment and retention tool will always be salary," according to the task force's report, The Quiet Crisis: Recruitment and Retention in the Public Sector. "Unless you start on an equal monetary playing field with the private sector or other public sector employers, you are already behind the curve. Unfortunately, we are well aware that public employees rarely see pay or market equity with their counterparts in the private sector. In fact, some public employees earn as little as 75 percent of market pay while others qualify for food stamps and other public programs."

Because the impending labor shortage has been widely ignored by public sector employers, the task force urges FPE/AFT activism at all levels to promote employer use of both monetary and non-monetary recruitment and retention tools, including transitional retirement options that would allow employees to continue working after their retirement. The tools studied by the task force also include on-site fitness centers, employee attitude surveys, sabbaticals, professional development, telecommuting and child care subsidies.

"It is not going to be a one size fits all for every state," says Chris Runge, executive director of the FPE/AFT-affiliated North Dakota Public Employees Association and member of the task force, adding that recruitment and retention tools can be used to enhance employee benefits but not to supplant a good salary administration plan.

Bill Walling, vice president of the FPE/AFT-affiliated Maryland Professional Employees Council and a member of the task force, says governments have become "the employer of last resort" due to non-competitive salaries and the erosion of benefits. But he also says the negative portrayal of public employees by politicians has not helped.

"When I came to work for the state of Maryland, it was a good job," he says. "I was proud of the fact that I had a state job. I am not proud of that anymore."

Walling explains that political rhetoric denouncing the role of government and the size of its work force has taken its toll on public services. "It is going to be incredibly hard to overcome that stigma and hire highly qualified people to go to work for the government," he says.

To obtain a copy of the report, contact the FPE/AFT department at (800) 238-1133, Ext. 4549.