Leveling the Playing Field

Reasonable and balanced legislation will bring long overdue changes to the almost half-century-old Act 111, which governs the binding arbitration process for public safety personnel contracts and pension benefits. It’s not fair to today’s municipalities and if left unchanged, it will continue to tap the taxpayer to pick up more and more of the unpaid tab.

What’s the problem with Act 111?

Keeping it in place as it is right now is essentially a vote in favor of raising taxes on local residents. It was drafted more than 45 years ago, long before police and fire pension costs began to spiral out of control. Under the current Act 111, local municipalities’ hands are tied once pension and salary negotiations enter binding arbitration. Currently, arbitration decisions do not have to account for a municipality’s fiscal stability or the negative impact the award could have on its ability to keep providing adequate local services. Decisions are almost always made in favor of more benefit and salary increases, which are passed on to the taxpayer.

Who has the power now under Act 111?

Arbitrators from outside the municipality currently have the final say, sometimes taking months–even years–to render a determination. These decision makers are not elected by or answerable to taxpayers. In the meantime, cash-strapped communities wait in limbo, unable to accurately allocate their resources or complete their budgets until they receive what is most likely an unworkable decision.

Is it really that serious a problem?

Yes. The single biggest threat to fiscal stability for many municipalities in Pennsylvania is the escalating pension costs associated with uniformed personnel contracts. It cuts deeply into every other segment of a community’s annual budget and perpetuates an unsustainable climate of ever-increasing costs that must be shouldered by taxpayers or kicked down the road.

Shouldn’t binding arbitration be a careful, deliberative process?

Yes, but when it drags on and municipalities can’t budget accurately for their most basic expenses, it’s a problem for everyone. It’s also a problem when a community’s current financial state is not considered, no matter how serious. No business or individual would tolerate such constraints when making a large purchase or creating a budget, so why are local municipalities expected to?

Is this an anti-union initiative?

This is not about union rights or the right to collectively bargain. Those rights will remain unrestricted and uninhibited after SB 211 passes. Instead, this is about the state legislature leveling the playing field so municipalities can control their financial futures.

How will these new amendments help?

They will help in several significant ways without hindering the established process. They will require the union and municipality to share the cost of the arbitrator. They will allow both sides to openly present their case to the public. They will then require the arbitrator to base his award on the facts and evidence that have been presented. Additionally, they take pensions off the table prohibiting an Act 111 award from awarding or modifying benefits.