Thursday, September 02, 2010

Anchorage Mayor Dan Sullivan Calls For Union Concessions To Resolve An Expected $18 Million Budget Gap, But Offers 162 City Executives 3 Percent Raise

Update: Title of post changed after publication of story revealing that 162 city executives would get a three percent pay raise.

These are the type of stories that can drive otherwise perfectly sane Republicans straight into the arms of the Democratic Party, such as what happened in November 2008 when by a world-class fluke, Barack Obama was elected President of the United States. To help resolve a prospective $18 million municipal budget gap, Anchorage Mayor Dan Sullivan is calling on the public sector unions to make a fresh round of concessions in wages and/or benefits, otherwise the alternative will be to hike property taxes. But he's also calling for pay raises for 162 city executives, a decision that the Anchorage Daily News now claims will cost the city $456,260 in 2011. Media stories by the Anchorage Daily News and KTVA Channel 11. An updated ADN story reports that 162 executives will be affected.

It should be noted that current Senator Mark Begich, when he was mayor, set this entire chain of events in motion by giving the unions sweetheart deals.

Mayor Sullivan made his proposal in preparation for the municipal budget to be submitted to the Assembly on October 1st. Sullivan is proposing that the unions agree to either reduce their work weeks from 40 hours to 37.5 hours for less pay to give up performance incentive pay, or even forgo contractually-embedded pay raises. And there is legitimate wiggle room for the unions. As Dan Fagan points out in The Alaska Standard, city workers are clearly overpaid and overbenefited when compared to many private sector workers. For example, APD officer Thomas Gaulke has earned $265,190.87 in salary and benefits (much of it undoubtedly in overtime pay). IBEW union member Robert Reese, who works for the city-owned Municipal Light & Power, is paid $210,639.38 in total compensation. Fagan claims that while the average Anchorage private sector worker earns $48,087 a year, the average full-time city employee costs taxpayers $118,065 every year.

Yeah, I'd say there's a HELL OF A LOT of wiggle room for the unions to make concessions.

But then Dan Sullivan knocks the wind out of his own sails by proposing that city executives get a three-percent pay increase. Wait a minute...we're getting ready to ask labor to make concessions, but then offer pay raises to management? What gives here? To be fair, here's the full explanation published by mayoral spokeswoman Sarah Erkmann:

Upon my coming into office, executives took immediate five percent, across-the-board salary reductions. Since that time, they have worked diligently to find efficiencies and savings within their respective departments. Many have done so successfully. It is only fair to allow them to recoup a portion of their initial salary losses with this modest three-percent increase. This is possible only because of the savings that executives have found within their existing 2010 budgets; no new funds are available, and costs will be absorbed within their existing budgets. In examining department expenditures to date, all budgets are being managed so that this increase will be covered. I believe in performance-based recognition, and that is exactly what these increases represent. It is worth pointing out that these same executives remain at a deficit from where they started since taking their initial salary cuts, while many other municipal employees have received much larger increases during that same time period, mostly due to contractual obligations.

O.K., there's some logic there. The executives took a five-percent cut, performed better than expected, so now Sullivan wants to give them back part of that cut. But you don't propose pay raises for executives at the same time as you ask labor to take cuts. You share the sacrifice.

Anchorage Assembly Chairman Dick Traini, who occupies the same part of the political spectrum as Lisa Murkowski, is scratching his head over the deal. "I just find it odd timing when we are telling unions, that have binding labor contracts with the city, this summer their employees may be laid off [and] that we are going to [give] pay increase[s] to the executive staff doesn't make a lot of sense," said Traini. Even the conservative Anchorage Daily Planet now questions this move, saying "If the city is at least $18 million in the hole, and the administration is about to ask workers to reduce their hours to make ends meet, why is anybody in city government - union or executive - getting a raise?"

Traini's right -- it doesn't make sense. But it's a continuation of the "celebrity economy" we've run for over 20 years. The application of prosperity theology to the economy has destroyed the once-careful balance that existed between Wall Street and Main Street, which afforded prosperity to the maximum number of Americans. Fifty years ago, an American with limited formal education and without reams of identity documentation could walk into a plant, get an AFFORDABLE job, and proudly call himself a worker, not only paying his own way, but accruing savings as well. Those days are gone, buddy, thanks to outsourcing and international labor arbitrage. That economy has become grossly distorted in favor of Wall Street, which demands we subsidize success, and which has encouraged illegal aliens to flood our country, driving down the value and compensation of jobs. We saw CEOs get million-dollar performance bonuses for laying off thousands of workers in one fell swoop. Republicans promoted this activity, and what did the Democrats offer in response? Affirmative action programs and the creation of protected classes out of every American who wasn't a White male. Democrats for the most part promoted polarization and division.

These are NOT conservative values, people. Plutocracy is NOT a conservative value. Lisa Murkowski didn't understand this, voted for TARP, and it cost her. Dan Sullivan needs to reconsider his proposal for executive raises, and to abandon it. Let the sacrifice be shared.


  1. KCAW(Sitka) should be added as a link under Alaska Media

  2. Considering that Scott McAdams comes from Sitka, you make a good point. Have added it - thanks for bringing it to my attention.

  3. This indicates a growing trend from the far right. Anti American worker.


    This is playing out in both local and state governments but also in major corporations.

    A prime example is the Mott's strike in New York. That company is not in any financial trouble. In fact it's loyal workers helped bring them back from a $300 million loss last year to a record $500+ million profit this year. Their reward? The company decided to try to squeeze their employees in order to increase their profits even more.

    "Free Market" has it's draw backs when it comes to undermining the American middle class to move more of our meager wealth up to the pockets of those who already own 90% of everything. Once gone we will never get it back and we may find Americans hopping the fence into Mexico seeking work in an American owned factory that used to be in the US.

    As the middle class we cannot afford to commit suicide this November by handing the keys back to the same people who brought us "Recession '08"

    You do so at your own peril.