Scranton, Pa., has run out of money to pay its employees thanks in large part to a state supreme court ruling last year that forced the city to adhere to a binding arbitration award that it couldn't afford. Scranton becomes yet another place sunk by arbitrators and courts who make large settlements that ignore fiscal reality. Some states have finally moved to fix the system or simply eliminate it, but not Pennsylvania.
Scranton has been financially distressed for years. Under state law meant to ease the burden on struggling cities, Scranton did not have to adhere to binding arbitration rulings over pay and benefits for its workers. At least that's what the city thought until the supreme court last October ruled that the state's distressed cities law didn't supersede binding arbitration. The court forced the city to accept an arbitrator's award that cost the city an additional $30 million in pay that it doesn't have.
Unions have learned to use the binding arbitration system to their advantage by refusing to cement deals with elected officials, then going to arbitration with big salary demands. Even when arbitrators don't give then everything they want, union officials often get more in arbitration than they would otherwise from elected officials. Some state laws even force arbitrators to disregard a city or town's ability to afford arbitration awards.
A number of states have reformed binding arbitration laws in the wake of the continuing fiscal crisis that their cities are facing. New Jersey, for instance, put a cap on arbitration awards.
A number of Pennsylvania mayors including John Callahan of Bethlehem and Sal Panto of Easton have called for arbitration reform in their state. But even Scranton's fiscal distress didn't move the state legislature to reform its law.
Unions have learned to use the binding arbitration system to their advantage by refusing to cement deals with elected officials, then going to arbitration with big salary demands. Even when arbitrators don't give then everything they want, union officials often get more in arbitration than they would otherwise from elected officials. Some state laws even force arbitrators to disregard a city or town's ability to afford arbitration awards.
A number of states have reformed binding arbitration laws in the wake of the continuing fiscal crisis that their cities are facing. New Jersey, for instance, put a cap on arbitration awards.
A number of Pennsylvania mayors including John Callahan of Bethlehem and Sal Panto of Easton have called for arbitration reform in their state. But even Scranton's fiscal distress didn't move the state legislature to reform its law.
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