Collective Bargaining and Municipal Distress

State Problem, State Solution

Abstract

The limited authority that municipalities have over the costs of police and fire personnel is a primary cause of fiscal distress in local governments in Pennsylvania. This article argues that the state legislature must amend Act 111 to give local governments and uniformed-employee unions equal standing under the law. The currently inequitable standing between a police or firefighters' union and a local government during negotiation and arbitration is the flaw in Act 111. The root of this flaw lies in the historical relationship between the state legislature and local governments and the parallel history that led to the passage of Act 111 in 1968. The defect in Act 111 is a prime cause of the substantial growth in the cost of local governments' municipal police pensions. The state legislature recognized the legal deficiency of Act 111 by enacting the Municipalities Financial Recovery Act, known as Act 47, which is the state program for municipal bankruptcy. To curtail the pending municipal fiscal crisis, the state legislature must amend Act 111. The amendments proposed in this article would correct the defect in Act 111 by granting equal standing under the law to local governments and police and firefights' unions.