Last Tuesday, the Assembly was wrapping up the second of two ordinances dealing with Ordinance 37 – a labor law rewrite that has been in news headlines since its introduction back in February. One proposal sought to place a repeal vote on the regular municipal ballot in April, respecting the 22,000 qualified voters who lent their signatures as a request to weigh in. Another sought to skip the vote altogether and repeal the law outright.
Both measures passed. Both were immediately vetoed by Mayor Dan Sullivan.
Now, the superior court will weigh in on whether or not the mayor has the power to “exercise the veto power to control or manipulate the election date for when a referendum will appear on the ballot,” as Assembly attorney Julie Tucker phrased it.
Before the second round of voting took place, Chair Ernie Hall took to the microphone to offer a final defense of the labor law he sponsored. His concluding remarks began with a defense of character.
I think I’m an entity that has been well known in this community for a long time. I was convinced to engage in politics three years ago. I’m a half a year into my fourth [year]. And, yes, I acknowledge that it was a close call. There was a tremendous amount of effort churned out to try to make sure that I wasn’t successful in being reelected. Prior to that, I had a community that was pretty proud of what I had done. I’m proud of the fact that I was the guy that [ran] the campaign to buy the current Food Bank building. I’ve served on just about every board that’s in this community. I rolled up my sleeves and went in and worked hard to try to bring Fur Rondy back when it was on the brink. No job – none of those that I ever did that had compensation. I’ve championed education my entire life in this community. My kids have all gone through this public education system. And I have an incredible ownership in this community.
This is all true. And completely irrelevant.
Hall has enjoyed popular name recognition in Anchorage for all of the reasons he listed. And, while all are commendable efforts, they have absolutely nothing to do with this particular law, the process that led to its passage, and the failure to commit it to a ballot – all actions that happened under his oversight as the body’s chair.
The fact that his children went to public schools has no influence on the legislation with his name on it.
The closeness of his election, despite facing a relatively unknown write-in challenger, is evidence that a healthy minority of his constituents are unhappy with his actions. That’s what elections are supposed to be: evaluations of current job performance followed by a decision regarding retention or replacement.
Hall apparently felt the backlash wasn’t justified and rejected warnings of the ordinance’s impacts.
I want to share with you about this being economic devastation to you. We fought hard to make sure that you had no pay cuts in AO37. How many people in this room, since AO37 passed, has had a reduction in your check? You’re not going to see that happen.
Hall is right. Anchorage public workers have not seen a pay cut in the seven months since the passage of AO37. That’s because unions are currently operating under preexisting contracts. But, more importantly, AO37 is not law yet. When the repeal effort collected enough signatures to put a referendum on a ballot, that suspended the law from taking effect. That was an incredibly dishonest move.
Let me tell you, it’s devastating to me when I have to talk to retired citizens on a fixed income, that call me every tax season and pray ‘please don’t raise my taxes, I’m on the verge of losing my home now.’ And then when we add utility increases, and they’re paying what they’re paying to go fill their gas tank up. The majority of this community, and I genuinely believe that, are struggling every day to survive. I want you to be well compensated, I truly do. But, by the same token, there is a huge part of this community that are struggling and having extremely difficult times and they’re on the cusp of being homeless. And that’s another issue that we can’t seem to rally this community for. My own neighborhood, we looked at a possibility of creating a [homeless] campus, and the turnout – 250 people at the community council meeting – absolutely not hear [it as an option.] Well, I had to ask them, ‘if not in our neighborhood, then where?’ We’ve got some real needs in this community, and those needs are by people that are struggling to survive.
We do have real needs in Anchorage. But, I’m struggling to see how curbing collective bargaining saves the elderly from losing their house, or provides shelter to our city’s homeless.
Hall referenced elderly property owners as a “silent majority” facing losing their homes if we don’t penalize city workers. He did not mention the municipality’s senior citizen property tax exemption, which exempts up to $150,000 of the assessed value of a property owned by residents aged 65 and over. He glossed over the fact that utility rates and gas prices aren’t exclusively shouldered by the elderly. He would go on to lament about how little social security pays out, ignoring how social security kept 16,000 Alaskans out of poverty last year.
Money “saved” through AO37’s changes to labor laws won’t free up funding to combat homelessness. Every year of the Sullivan administration has seen reduced funding for social services. The municipality’s tax cap then mandates even less available funding the following year. Hall painted an image of funds moving from one pot to another; the reality looks much more like circling the drain.
Anchorage does have high property taxes when compared to other cities, because we don’t have any diversity in our tax structure; no sales or income tax. When running for the assembly the first time, in 2010, Hall advocated having a community discussion about a sales tax. A full term later, he decided to take the easy route and offset property taxes by going after city worker pay, threatening that without AO37, grandma will be forced out onto the streets.
Statistics tell a different story. One major reason that Anchorage frequently tops “Best Place to Live” lists, despite the high property tax value and cost of living, is the high median household income, measured at $75,485 – 30 percent above the national average. Those high wages are propped up by over-20,000 public sector jobs.
The labor law threatens that median income level propping up the middle class through the introduction of “managed competition.” This new practice would allow private sector contractors to bid on historically public sector jobs. It was an option Hall disagreed with as a candidate, but defended at Tuesday’s meeting, in an argument that, ironically, makes clear the negative impacts it could have on Anchorage’s economy.
I hear the comparison of public employees to private employees. I encourage you to go out and chat with the people at Walmart, Costco, the ones that are going to be working at the Bass Pro Shop; restaurants all over this town.
If we could mandate that all Costco’s corporate peers followed their exemplary pay standards of a $20.89 hourly wage, we could have a healthy discussion about the room for “managed competition.” But Walmart serves as a convincing argument against the practice.
The Assembly introduced “managed competition” as a way to find cheaper services, similar to the way Walmart hires employees and offers sub-poverty level pay (on average, $20,744 annually). Studies have shown that taxpayers end up having to subsidize those wages through funding of food stamps, medicaid costs, housing, school meals. In seeking private sector contracts based exclusively on up-front cost and not quality, Anchorage risks paying a much bigger price. Similarly, the move to limit public sector pay increases to one percent of the Consumer Price Index – which doesn’t catch up to the 2.2 percent rate of inflation this year alone – reduces the purchasing power of the middle class.
Chair Ernie Hall’s condescending lecture was a surprisingly frail collection of thin arguments and false equivalencies. Nothing he said debunked the looming effects of his bill. It was dismissive of constituents, it was lacking in accuracy, and it was bad politics. Anchorage residents want smart government, competitive public sector compensation, and a strong economy, and AO37 accomplished none of that. That’s why over 22,000 municipal residents asked for the opportunity to vote it down.
That, somehow, never came up in Hall’s speech.