Understanding union, politician, government cabal

Former county manager-turned-author takes on public employee pensions in new book

Whenever we write about the compensation of county firefighters (the current average is about $175,000), someone chimes in that it’s unfair to add pension contributions to the total. Adding money that firefighters won’t see until they retire is misleading, they contend, making it look like they take home much more than they actually do.

The truth is, according to a new book by former Clark County Manager Thom Reilly, too little focus has been put on the hidden costs of pensions. So little, Reilly says, that pension expenses soon may bankrupt many governmental bodies across the country if something isn’t done.

What’s this new book? And what gives a former county manager the expertise to write such a thing?

Reilly was Clark County manager from 2001 to 2006. He’s now a professor of social work at San Diego State University and president/CEO of the Reilly Group Inc., a consulting firm to public, private and nonprofit/nongovernmental organizations.

Reilly’s book, which he spent about a year writing, is “Rethinking Public Sector Compensation: What Ever Happened to the Public Interest?” (M.E. Sharpe, publisher). The cover of the book shows a balloon carrying away a piggy bank.

What prompted his writing of the book?

Life. Reilly was the county manager at a time when the Las Vegas area was booming. Public employee salaries were skyrocketing. He wanted to talk about the long-term costs, he said last week, but few others did. “When I brought up issues of public pay, I was out there alone,” he said.

The Great Recession brought public compensation to the forefront as tax revenues plummeted. Reilly says the media forced politicians to face the issues, even though politicians wince because solutions often mean unpopular cuts in services and/or raising taxes.

The book, by the way, is easy to read, even for a journalist; Reilly’s mom was one of his proofreaders.

How did it get this way?

Reilly calls it the Iron Triangle of Closed Policy Making, with three entities involved: unions, government managers and politicians. Oftentimes, the same government managers negotiating with public unions receive benefits identical to those of union employees. So, it’s safe to say the incentive to be a tough negotiator flies out the window. Then politicians, who give the thumbs up or down to those contracts, face this dilemma. If they say no, they are saying no to unions that can rustle up plenty of voters to throw them out of office. That triangle over many years led to lavish contracts for public-sector employees.

Reilly is only partially joking when he says he envisions governments without enough employees to meet service demands because wages are so high, government can’t afford to hire more people. (It is often noted, by the way, that Nevada’s public employees are among the highest paid in the country, and we have fewer of them per resident than most states.)

Are unions Reilly’s devil?

He laughs and says he’s certain union members will see it that way. He sees a great need for unions in the private sector because of the potential for unchecked abuses by corporations. But civil-service hiring provides a degree of protection for public employees that, he believes, makes unions less necessary in the public sector.

What does he suggest to offset potential disaster?

Change pension and other post-retirement benefits like subsidized retiree health care. More specifically, public employees need to contribute more to their pensions; maybe government needs to set employees up in 401(k)s, like many of those in the private sector. And he is big on transparency. That means opening contract talks to the public. It means pension costs have to be front and center of budget talks. He dismisses as nearly meaningless media stories about some union giving up cost-of-living increases because the amount of money is minuscule compared with pension costs.

What’s Reilly say about what’s going on in Clark County?

Clark County is hardly unique. What happened here with public employee contracts happened across the country. But as the former manager, he keeps tabs on the county. He points to Commissioner Steve Sisolak — who, it’s safe to say, is hated by firefighters — as almost a lone voice for transparency regarding employee wages and benefits here.