Public Sector Employment Under Siege
This article was prepared for a symposium at Indiana University Maurer School of Law on Labor and Employment Law under the Obama Administration. The article analyzes the current spate of attacks on public employees with particular reference to three sub-topics: teacher tenure and evaluation “reform,” the periodic cycles of public sector fiscal crises, and the unilateral modification of public sector collective bargaining agreements. The article concludes with the assessment that cyclical attacks on public sector workers reflect a skewed viewpoint that public employees owe first-class obligations but possess only second-class rights.
THE RESPONSE OF STATE-LOCAL GOVERNMENT TAXATION TO FISCAL CRISIS
EVEN local a government casual observer tax of scene the state must and be local ent tax scen mus be impressed by the tempo of activity in recent months. Between January 1, 1982 and January 1, 1983, there were 43 state tax rate increases designed to raise some $4 billion of net additional revenue, following in the wake of 1980 net increases of $3.8 billion.1 In December, 1982 alone, five states (Indiana, Minnesota, Mississippi, Nebraska and New Jersey) raised one or both of their income and general sales taxes. Since the first of this year, 12 states have already increased either sales or income taxes and 13 other states have opted for higher selected excises. And the curtain remains open. Several states, including Connecticut and Illinois, are currently debating the question of the specific types and magnitudes of tax increases, not whether an increase is necessary. On the whole, these tax adjustments have not been minor nor have they represented a first-course response to fiscal distress. They have come after spending cuts, the depletion of accumulated surpluses, resort to expanded user fees and miscellaneous excises, and increased local property levies. In the fiscal year 1982, local property tax increases outdistanced state tax revenues by a substantial margin for the first time in many years (12.7 percent for the former compared to 8.3 percent for the latter). And the outlook for more state-local tax activity at least for the near and intermediate term, is a certainty. Comparatively low rates of economic growth and high unemployment combined with a dangerously deteriorating infrastructure portend modest builtin tax yield responses from existing tax structures and mounting pressures for spending increases. In short, state and local governments will probably continue
IMPACT OF ECONOMIC FLUCTUATIONS ON MUNICIPAL FINANCE
state and local governments will be conducting their finances over the next decade will almost certainly continue to be characterized by fluctuations in the level of employment, incomes, and prices. In the past the impact of fluctuations has compelled recurrent compromises with budgetary objectives and frequent resort to revenue measures of an emergency nature. The cumulative effects of this mode of adjustment are inevitably a distorted financial structure and a generally inferior quality of service by local government at least as compared with what might have been done were events more carefully anticipated and planned for. The traditional approach for dealing with fluctuations at the state and local