Carter Bundy of the AFSCME government employee labor union hit back today at a recent column written by Tom Molitor, and Adjunct Scholar at the Rio Grande Foundation.
While Bundy relies on a great deal of hyperbole in his article, he does make some substantive points that are worth a response.
1) Bundy notes that AFSCME was supportive of reform legislation relating to government pensions in a recent legislative session. He implies that his favored solution would solve the problem. The problem is that it won’t (as I pointed out some time ago). For starters, the Government Accounting Standards Board assumes an 8 percent rate of return for pension investments. That is not happening these days. Any pension system that relies on assumptions of 8 percent returns is not solvent.
2) According to Bundy, the size of New Mexico government has shrunk in real terms since 2003. No thanks to AFSCME of course, but it is true. The economic crisis and the fact of the economic crisis has reduced the size of government in the aggregate.
3) Bundy notes that states have not declared bankruptcy, but Molitor never asserts that they have or are. He states that they are hovering close to it. These are unprecedented times. Several bigger states like California and Illinois have been driven to the wall by public employee unions. We’ll see what happens when they can’t pay the bills.
4) Bundy notes that the Democrats cut taxes under Richardson. He is right. This was the “man bites dog” of tax cuts and illustrated just how seriously New Mexico’s tax policy had been screwed up before. But, in the aftermath of those tax cuts, those same AFSCME-backed politicians started trying to repeal those tax cuts.
5) Lastly, Bundy is correct about the illegality of strikes by public workers in New Mexico and many other states. Molitor was stating a general principle that is accurate insofar as government workers having the monopoly advantage, but his point seemed to imply that government employee strikes have happened in New Mexico. To my knowledge, they haven’t, but that doesn’t mean that public employee unions don’t disobey state laws against strikes as this article notes.
Bundy is a lawyer and a sharp guy. He makes it sound like the article is out of left field. It isn’t. Just because a state hasn’t gone bankrupt yet, doesn’t mean that it can’t happen. Just because New Mexico has a law on the books prohibiting strikes, doesn’t mean they haven’t happen in other states with the same laws on the books.