Carty’s $10 million-a-year mistakeWritten by Jim Harpen | | firstname.lastname@example.org
Toledoans can be accused of having very short memories, particularly when they step into the voting booth. But this is a story of events very few Toledoans ever knew about, events that have impacted and will continue to impact the quality of life in Toledo, events that could have easily been avoided.
Mayor Carty Finkbeiner is the target of continual criticism. Usually the criticism is about his management style, or his spending tens of thousands on pet projects. This is not about his style, and it’s not about tens of thousands of dollars. It’s about tens of millions of dollars in expenses that we taxpayers have been saddled with, because, many of those involved in the events say, the mayor blew it.
Carty’s 1996 mistake
“We gave away the store in ’96.”
— Betty Shultz,
Toledo City Council Member
In the summer of 1996, negotiators for the city and the city’s largest union, AFSCME Local 7, were hammering out the union’s next three-year contract. Staying within the parameters reportedly set by then first-term Mayor Finkbeiner, the parties reached an agreement that was acceptable to both sides.
But Finkbeiner said that agreement wasn’t good enough; never mind that it fell within the limits of what he told his negotiators to push for. One former city council member told me, “The original proposal was very livable for both sides, but Carty played the bluff with the fact-finder.”
Or, more accurately, we taxpayers lost, to the tune of $10 million a year.
Per the agreed upon procedure, the dispute went to a state-appointed fact finder — sort of a judge who looks at both sides’ arguments and says, “Here’s what you ought to do.” What the fact finder said the city ought to do was like a sucker punch to the 22nd floor of Government Center. The recommended 9 percent — 3 percent per year — pay increase to the AFSCME workers was manageable. But he also said the city of Toledo should eventually pay the union members’ entire contribution — a “full pickup” — to their state pension. That meant an increase over what the city had been paying. Back in 1996, that came to millions more taxpayer dollars per year. And that was just for the AFSCME Local 7 workers.
George Tucker was the chief union negotiator and regional director of AFSCME council 8 at the time. “If Carty would have agreed to it in the first place, we’d have had a contract without full [pension] pickup,” he said. And without the additional $3 million burden to the taxpayer each year.
The mayor tried to convince city council to reject the fact finder’s recommendation. Finkbeiner even tried to get the union to accept the first agreement that Finkbeiner himself had rejected.
“Carty came back and wanted a second bite of the apple,” AFSCME’s Tucker says. The union told the mayor to pound sand and ratified the agreement. City council, fearing the union would strike, approved the massive pension contribution increase.
“We didn’t feel there was an alternative,” Shultz said. “The finance director at the time said we were out of our minds. He felt we were setting a precedent that would lead us to financial disaster.”
Fast forward 12 years and welcome to the budget crisis of 2008.
The Cascading Effect
This is where a big mistake became a gargantuan mistake. Once AFSCME Local 7 got the multimillion dollar deal on the pension contribution, it was difficult for the city to deny the same deal to the police unions, the fire unions, the Teamsters and the smaller AFSCME local 2058.
Every unionized city employee got Toledo’s taxpayers to cover their full pension contributions.
This year, the city is paying $30 million into those pension plans. Because of that 50 percent increase in 1996, Toledo’s taxpayers are now shelling out $10 million more per year than they might if Finkbeiner had just agreed to the deal his own people negotiated in 1996 rather than, as the union called it, reneging on the deal.
“That was totally Carty,” Tucker said.
It doesn’t take a math genius — hell, it doesn’t take an abacus — to see that if the City of Toledo had been spared the additional $10 million a year for the past 10 or 11 years, Toledo wouldn’t be in the bind it is in now, slashing services, not replacing retiring police and firefighters, scrapping capital improvements projects, charging citizens for trash pickup.
What we could do if we had another $10 million each year.
So the next time you hear someone from the Finkbeiner administration blaming our current woes on the global recession or even the failing auto industry, remember where the big-buck financial fiasco really began, way back in 1996.
On the 22nd floor of Government Center, under Mayor Carty Finkbeiner.
E-mail columnist Jim Harpen at email@example.com.