Health System Over the Last

¶ … Health System Over the last several years, a variety of states and local governments have been facing a tremendous amount of financial challenges. Part of the reason for this, is because public administrators were not focused on how they could provide the best services for the least cost to tax payers. This meant that during those times when the economy was performing well (such as: 2002 to 2007) they were not focused on these objectives (which caused many states to run budget deficits).

Once this began to occur, it exposed many different governments to sudden shifts that were taking place in the economic cycle. This created a situation where administrators no longer had enough tax revenues to support the various programs of the past and they were unable to pay for large public infrastructure projects. (Luhby) A good example of this can be seen with cities like Detroit or Harrisburg.

In both cases these cities were wrestling with declining populations over the course of many decades, because of a loss of jobs in the manufacturing sector. However, during the early 2000's they were trying to use different strategies to help diversify the local economy such as legalized gambling. This was designed to help balance the economy over the long-term. The problem was that many administrators encouraged local governments to take on large debt loads to: help finance these projects and encourage businesses to relocate to a community.

At the same time, the tax revenues that they were receiving were not being used to: pay down the outstanding debt and administrators had no effective budgetary controls in place. Once the economy began to slow, is when cities like Detroit and Harrisburg began to face severe budgetary shortfalls. As, they were wrestling with: a mountain of debt and declining tax revenues.

These two factors have placed many local governments are on the verge of being forced to: file for bankruptcy protection or seek some kind of creative solutions to address these challenges. ("Three American Cities on the Verge of Going Bankrupt") ("Casinos") This is significant, because it is showing the underlying problems facing many different public administrators. As they are forced to make dramatic cuts to a wide variety of programs to address these underlying issues.

Collective Bargaining At the heart of many different disputes, are the various collective bargaining agreements that states and local governments have with public employees unions. Simply put, collective bargaining is when there was a formal agreement that was negotiated between an employer and its employees. It spells out a number of different provisions of the labor contract to include: hours, wages, benefits, promotions, terminations and other issues inside the workplace.

The problem with many of these different agreements is that they have been restricting the ability of administrators to make adjustments to kinds of services that they are providing. ("Collective Bargaining") This is because; many administrators believe that many of these contracts are so strict that they make it difficult to: conduct layoffs, furlough employees or terminate an individual. Over the course of time, this makes it more challenging in being able to deal with a variety of problems effectively.

(Luhby) The Challenges To address this issue numerous states have been introducing bills in their legislatures that will strip public employees of their collective bargaining rights. This is because, many states and local governments have been facing tremendous challenges from: these agreements and the kind of benefits they are forced to provide. One of the most notable is health care costs, as they have been affecting 44 states and Washington DC.

According to the Centers on Budget and Policy Priorities, they estimate that in fiscal year 2012, these governments will face $125 billion shortfall from rising health care costs. During a time of severe economic challenges, the increasing costs of employee health care benefits have meant that administrators need to have greater control to address these issues. (Luhby) As a result, a variety of states such as Wisconsin and Ohio have passed legislation that will restrict the collective bargaining rights of public employee unions.

At the same time, it is seeking to give administrators greater control over how to provide different services to communities (with the limited resources that they have available). According to James Shrek of the Heritage Institute, "The current legislation gives state and local officials more control over the costs of employing government workers. In many places, public officials have little leverage to lower these costs because they are set in union contracts.

If benefits were removed from the collective bargaining process, states and localities could change them without having to negotiate with the unions, a process that can drag on for months or even years." (Luhby) This is significant, because it is showing how these kinds of changes will become more common in the future. The reason why, is because many of the issues facing states and local governments are long-term problems. This means that administrators and public officials will need greater amounts of flexibility when dealing with these issues.

At the same time, some states have been taking these kinds of laws one step further. In states such as Ohio, new regulations have been enacted to restrict the number of public sector employees who are allowed to join a union. (Luhby) This is a major development, because many public sector employees have often been organized as a closed shop. This means that anyone who works for a particular employer must join the union (regardless if they want to or not).

Part of the reason why this has been taking place, is because administrators want to: have greater control over labor costs and how they are able to adjust the number of employees working for the government. As, this will give them greater flexibility in: moving employees around the different departments and they can make adjustments quickly during severe financial challenges. (Luhby) Over the course of time, this will reduce the power of the unions and it will help to make the government more responsive to the needs of people.

This is significant, because it is showing how.