US Cities Can't Give In To Protection Racket

City governments in the US are bleeding red ink, largely due to the salaries and benefits their unionised employees are paid. With high unemployment, falling property values and sinking tax revenues, these salaries and benefits can't be sustained, says Bruce L. Benson, a senior fellow with the Independent Institute.

Decisions to lay off or furlough employees, reduce benefits or curtail promised pay raises typically produce highly publicised threats to cut services. Cities and their citizens should consider responding to such threats by laying off even more employees, says Benson.

Most public employees don't do anything that can't be done at lower cost by employees of private firms, from filling out incident-report forms to protecting the public. Consider the case of Anthony Batts, the police chief of Oakland, California:
 

• He has announced that his department will no longer respond to citizen calls on 44 criminal and noncriminal matters typically handled by the police, including grand theft, burglary, embezzlement and auto accidents.
   
• This was Chief Batts' response to Oakland's decision to lay off 80 police officers.
  
  The city is trying to deal with an approximate $30 million budget deficit. As in most cities, expenditures for police account for a significant portion of Oakland's budget, says Benson:
   
• With a 776-person force, it spends about $250,000 per officer per year, including salary and benefits.
   
• Salaries alone average $95,000; the benefits include an extraordinarily generous pension plan, which can exceed 100 per cent of final pay for career officers.
  
  Unlike many other public employees, Oakland police officers don't contribute to their pensions; taxpayers bear the full cost. When the city asked the police to contribute 9 per cent of their salaries to their pensions, similar to the San Francisco and Los Angeles police, their union said no – unless the city guaranteed no layoffs for three years. The current mess ensued.
  
  In Oakland's case, the City Council belatedly recognised this and has voted to hire a private security firm, International Services Inc., to patrol high-crime areas. Four private patrolmen will cost the city about $200,000 a year – a fifth of what four city police officers would cost. It's a small, but important step forward, says Benson.
  
  Source: Source: Bruce L. Benson, Cities Can't Give In To Protection Racket, Investors.com, August 16, 2010.
  
  For text: http://www.investors.com/NewsAndAnalysis/Article/543937/201008161858/Cities-Cant-Give-In-To-Protection-Racket.aspx
  
  For more on Unions: http://www.ncpa.org/sub/dpd/index.php?Article_Category=43
  
  First published by the National Center for Policy Analysis, United States
  
  FMF Policy Bulletin/ 24 August 2010