Ide­ol­ogy can be a costly in­dul­gence

Palm Beach Daily News - - OPINION -

The re­cent news that the Town Coun­cil ap­proved a bud­get in­clud­ing funds to ad­dress the town’s pen­sion short­fall brought to mind a Palm Beach Daily News car­toon that ran on March 18, 2012. It re­ferred to re­marks that Wis­con­sin Gov. Scott Walker made at the Town Coun­cil meet­ing when in­vited by coun­cil Pres­i­dent David Rosow.

As a no­to­ri­ous Repub­li­can union buster who was fac­ing a re­call elec­tion over quash­ing pub­lic em­ployee col­lec­tive bar­gain­ing in Wis­con­sin, Walker’s ap­pear­ance dur­ing the fi­nal stages of dras­tic cuts to Palm Beach em­ployee ben­e­fits was bla­tant ide­o­log­i­cal blus­ter. Get­ting an “at­taboy” from Walker reeked of pub­lic gloat­ing, which cer­tainly didn’t help al­ready dev­as­tated em­ployee morale.

To be fair, there were no easy so­lu­tions to

Palm Beach’s em­ployee pen­sion sit­u­a­tion. The town’s pen­sion-re­lated costs were spi­ral­ing out of con­trol af­ter 9/11, and ben­e­fits and salaries had in­creased sig­nif­i­cantly.

Com­bined with pen­sion fund losses and de­creased prop­erty tax rev­enue due to the re­ces­sion of 2008, a per­fect storm was brew­ing fis­cal dis­as­ter on the hori­zon.

In 2009, the coun­cil di­rected then Town Man­ager Peter El­well to de­velop a re­vised em­ployee ben­e­fits strat­egy. The re­sult­ing plan scaled back de­fined pen­sion ben­e­fits in fa­vor of a sav­ings plan sim­i­lar to pri­vate com­pa­nies. It also called for freez­ing em­ployee pay for three years and re­duced pay in­creases go­ing for­ward. Au­to­matic sur­vivor ben­e­fits and cost-of-liv­ing in­creases also were elim­i­nated.

Most ev­ery­one — even the Palm Beach Daily News ed­i­to­rial board — agreed that Mr. El­well’s plan was dras­tic but nec­es­sary in light of the new eco­nomic re­al­ity. Other mu­nic­i­pal­i­ties had sim­i­lar loom­ing short­falls, so the coun­cil dis­missed com­pet­i­tive­ness as an is­sue. Mr. El­well thought he could get em­ploy­ees on board for the greater good. All were wrong.

For three con­tentious years, po­lice and fire-safety union of­fi­cials tried to ne­go­ti­ate a bet­ter out­come, but were re­peat­edly sent pack­ing by a coun­cil that knew it had ab­so­lute le­gal author­ity. If ever there was a rea­son to cover costs by rais­ing taxes, it would have been the re­ces­sion­ary pres­sures be­tween 2009 and 2012, but this coun­cil was ide­o­log­i­cally op­posed to the idea.

Upon fi­nal­iz­ing the new plan, Mr. Rosow said he felt bad for the em­ploy­ees, blam­ing pre­vi­ous coun­cils for lead­ing them down a gar­den path. But dev­as­tated em­ploy­ees no doubt re­called his gloat­ing with Gov. Walker.

Morale took a nose­dive and a mass exodus of pub­lic safety em­ploy­ees en­sued that has had town of­fi­cials scram­bling to pro­vide ser­vice ever since.

As a re­sult, Mr. El­well’s plan was scrapped in 2016 and the town re­verted to a more tra­di­tional and com­pet­i­tive de­fined ben­e­fits pen­sion plan. Un­for­tu­nately, the dam­age to pub­lic safety depart­ment re­cruit­ing and re­ten­tion ap­pears to be last­ing.

Gen­eral con­sen­sus in hind­sight is that the 2012 pen­sion cuts were too dras­tic and non­com­pet­i­tive.

But one won­ders if more last­ing ef­fects of the blun­der could have been avoided with a process that in­cluded a lit­tle def­er­ence and less bel­li­cose ide­ol­ogy.

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