Bloomberg Businessweek, September 9, 2010, Thursday

Bloomberg Businessweek

September 9, 2010, Thursday

Bloomberg Businessweek

Sounding the Alarm for Firefighters' Pay

Union President Harold Schaitberger is trying to protect pay and benefits threatened by strapped municipal governments By William Selway and Holly Rosenkrantz

The Obama Administration had a choice: It could send Cabinet secretaries to the June 2009 U.S. Conference of Mayors meeting in Providence or skip the gathering to please the International Association of Fire Fighters. The mayors lost. The Administration bowed out after the firefighters union's president, Harold Schaitberger, placed a call to Vice-President Joe Biden's office to say the union planned to picket the event in support of Local 799's six-year contract fight with the city. Schaitberger is "an eloquent, masterful advocate for the work that we do," says Paul Doughty, who heads the local. The White House declined to comment.

A former lobbyist, Schaitberger, 64, has become one of the most powerful labor leaders in Washington, and he will need all of his string-pulling prowess in the months ahead. Facing severe budget pressure and underfunded public pension systems, local government officials are laying off firefighters, skirmishing with the 300,000-member firefighters union over pay and benefits, and seeking to roll back compensation they say taxpayers can no longer afford. Schaitberger says that he understands cities' hardships. "Our future is only going to be as good as our employers are healthy," he says. "I'm concerned about never wanting to kill the Golden Goose."

The union faces multiple challenges. More than one-fifth of U.S. cities surveyed by the National League of Cities, a lobbying group, have reopened contracts to claw back compensation from public employees, including firefighters. Miami city officials have approved across-the-board cuts of $76.9 million in salary and benefits, and the IAFF and police union have filed three lawsuits to block the move. Of 669 Miami firefighters, 115 received more than $150,000 in pay, overtime, and bonuses last year, according to city figures.

Los Angeles, Philadelphia, and Milwaukee have resorted to shutting fire stations temporarily or taking trucks out of service to cut costs. Philadelphia's closings, which began last month, are intended to save $3.8 million, mostly by cutting overtime. Firefighters' pay played a key role in the 2008 municipal bankruptcy of Vallejo, Calif., a city of 115,000 near San Francisco. Its fire and police contracts called for raises of more than 10 percent just as the housing crash hammered tax collections. The average firefighter's pay and benefits were set to hit $193,000 a year before the town went bust.

Such pay levels are creating a national backlash, says Lee Adler, a professor of labor law at Cornell University, who has worked on behalf of unions. "You create a bit of jealousy from that," he says. Schaitberger says the big paychecks reflect overtime pay and that cities would rather pay more to existing employees than hire new ones and assume higher benefit costs.

Schaitberger became a firefighter in 1966 and was elected IAFF president in 2000. He has learned how to deploy his union's political muscle when necessary. "The firefighters' endorsement is one of the most sought after—if not the most sought after—on the labor front," says Chris Lehane, a Democratic political consultant who worked for former Presidential candidates Al Gore and John Kerry. They provide candidates with thousands of volunteers, and they're regarded as heroes after September 11, Lehane says.

The IAFF's political action committee led all public-sector unions with $2.7 million in contributions to federal candidates during the 2008 election cycle, according to the Center for Responsive Politics. "We live and die by politics," Schaitberger said. In 2007 and 2008 the union spent $323,000 against Republican Presidential candidate Rudolph Giuliani, according to Federal Election Commission records. Schaitberger says the former New York mayor left the city's fire department ill-prepared for September 11 and decided to reduce the recovery operations at Ground Zero too soon. "We are willing to hold our friends high and to go after our enemies," he says.

Schaitberger says his union hasn't ignored the fiscal crunch facing cities, pointing out that union members have accepted unpaid furloughs. At the same time, he is pushing for national legislation requiring U.S. states and municipalities to grant police, firefighters, and emergency medical personnel collective bargaining rights.

Ellis Hankins, executive director of the North Carolina League of Municipalities, says such a law would increase the financial pressure on cities. "When it's time to cut the budget, these long-term agreements just box in elected officials," Hankins says.

Schaitberger says Senate Majority Leader Harry Reid (D-Nev.) has assured him he'll try to pass the measure, which the Senate stripped from a supplemental war-funding bill that the House approved in July. Regan Lachapelle, a spokeswoman for Reid, declined to comment. Still, it's a safe bet that Schaitberger won't be letting the subject drop anytime soon.

The bottom line: Firefighter union chief Schaitberger is fighting to protect pay and pensions from city budget cuts.

Selway is a reporter for Bloomberg News. Rosenkrantz is a reporter for Bloomberg News.