The Connecticut Conference of Municipalities appreciates the opportunity to testify on the important issue of binding arbitration reform.

We thank the Committee for its decision to examine the Municipal Employee Relations Act (MERA) and Teacher Negotiation Act (TNA) processes.

CCM has long been in support of meaningful binding arbitration reform.

Connecticut towns and cities are going through very challenging fiscal times. As the need for services increases, state aid to towns and cities has not kept pace. This has resulted in increased property taxes and cutbacks in local services.

There is a mechanism that enables the State to provide much-needed relief to municipalities at no cost: reform of the binding arbitration laws for municipal employees and teachers. Reform can occur without compromising the integrity of the systems. It can be done in a way that is fair to both employees and employers.

Background

In 1975, the General Assembly mandated compulsory binding arbitration in collective bargaining impasses between municipalities and employee unions (Municipal Employee Relations Act – MERA, CGS Sections 7-467 through 7-478). In 1979, the mandate was extended by enacting a separate arbitration law for school board employees (Teacher Negotiation Act – TNA, CGS Section 10-153).

These laws were designed to provide finality to collective bargaining impasses while avoiding public employee strikes and disruption of services.

Under these two laws, decisions of an arbitration panel are binding upon the parties involved. Towns and cities must appropriate funds necessary to comply with a panel’s decision.

In 1992, the General Assembly made several changes to the two laws including, (1) providing local legislative bodies the one-time authority to reject, by two-thirds vote, teacher and municipal employee arbitration awards, and (2) allowing consideration of other demands on the financial capability of the municipal employer when determining ability to pay awards (in addition to considering the public interest and simple financial capability of the public). These reforms provided some relief, but more needs to be done.

Compulsory binding arbitration is an impasse resolution procedure designed to bring labor negations or disputes to a conclusion without public employee strikes and service disruptions. And, in these regards, the laws have been successful. However, the cost of this labor peace to residential and business taxpayers is seen by many as excessive. Municipalities are at times pressed into agreeing to higher contract agreements during regular negotiations out of fear of being burdened with even larger and more costly awards through the binding arbitration mandate.

The current process does not pay adequate attention to the fiscal health of municipalities, that is, whether it’s residents and businesses can afford these arbitration awards. In addition, the State has mandated that towns and cities follow one process, while the State itself follows another. After the State rejects an award, the parties go back anew to the bargaining table. CCM seeks changes to add fairness, transparency and consistency to the local and state binding arbitration process.

CCM Proposal

CCM recommends a much-needed “Fresh Start” approach to the municipal binding arbitration process. CCM proposes the following reform:

Modify the binding arbitration law under the Municipal Employee Relations Act (MERA) and the Teacher Negotiation Act (TNA) by providing a measure of parity with the state system:

• It creates a binding arbitration system that is consistent at the state and local levels.
• A two-thirds majority vote is difficult to achieve in any legislative body. It sets a very high bar to overcome. Of course, collective bargaining votes are on the record, oftentimes in rooms crowded with interested parties. This scrutiny ensures that serious consideration is given to both sides for all awards. It also ensures a proper system of checks and balances – a standard to which the state legislature has adhered.
• Provides that municipal elected officials, representing the residents of communities, be accorded a reasonable opportunity to ensure that the taxpayers’ interest is given adequate consideration.
• It makes the decision-making process transparent and open to public input and scrutiny. In addition, the proposal ensures that both parties get a fresh start by requiring that negotiations begin anew. It encourages both parties to work together until there is a resolution that is mutually acceptable to the parties.

Remember, an arbitrator’s decision now constitutes a state mandate on the community, and can force substantial changes in municipal taxation, municipal service levels, policy priorities, and the ability to manage the work force. Arbitrators are unelected and usually not residents of the communities that their awards impact.

The reforms proposed by CCM would help restore balance to the system. They would maintain the essential components of the present compulsory binding arbitration mandate, but empower the local elected representatives of the residents and businesses that pay the bills to start the process anew if they determine the municipality can't afford an arbitrator's award. In tight economic times such as these, it is more important than ever to protect the public interest.

If you have any questions, please call Ron Thomas, Bob Labanara or Jim Finley of CCM, at (203) 498-3000.