State Representative Martin J. Walsh has asserted that an arbitration bill he has been pushing for a decade on Beacon Hill would install more financial safeguards for cities and towns during labor disputes. But government watchdogs argue that Walsh’s proposal would actually do the opposite, by eliminating the requirement that the city council approve arbitration awards for police and firefighters.
The ruling of an arbitrator would be final and binding under the bill from Walsh, who is a finalist in the race for mayor of Boston. In an interview this week about the proposed legislation, Walsh said that “the biggest piece is the fiscal piece, which is not in the current structure.”
“Today, the award is voted up or down” by the city council, Walsh said. “Binding arbitration would give us the ability when an award comes out to see whether a city or town would be able to sustain the increase.”
Under current law, arbitrators must consider what a municipality can afford. Walsh’s bill includes that same provision, but his campaign could not identify any new fiscal safeguards in his legislation.
The campaign maintained that the threat of binding arbitration could force compromise. But the campaign could not explain how the shift would better ensure that a community could pay for an arbitration award. Under Walsh’s proposal, an arbitrator’s ruling would be final, and the city council would have no say.
“That’s a major difference from current law,” said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, a budget watchdog funded by businesses and nonprofits.
“Taking the city council out of the equation gives much more power to the arbitrator. It’s really a step backward for financial accountability to the taxpayer. It would seriously weaken the city’s hand.”
That view was shared by three other specialists in government and municipal finance who would speak only to supply background information and without attribution.
Walsh wrote the bill with the state firefighters union and first filed it in 2002, according to his campaign. The measure has never gained traction on Beacon Hill, although Walsh has refiled it five times, most recently in January. The firefighters union, which has been one of the staunchest supporters of Walsh’s mayoral campaign, put forward a virtually identical proposal as a statewide referendum that never made the ballot.
Critics have questioned whether Walsh could fairly negotiate union contracts. He is a longtime labor leader, and unions have spent at least $872,000 on his mayoral bid, according to the Office of Campaign and Political Finance. But Walsh has said he would have the upper hand in labor negotiations because unions listen to their own.
His proposal to change the state’s arbitration system came under scrutiny this week after a panel ruled that Boston Police patrol officers deserve a six-year contract that city officials say would amount to a 25.4 percent pay hike.
The issue highlights a stark philosophical difference between Walsh and his opponent, Councilor at Large John R. Connolly, and Mayor Thomas M. Menino.
Connolly and Menino have called on the Boston City Council to exercise its authority under the law and vote against the award, forcing both sides back to the bargaining table.
In a follow-up statement Thursday, Walsh’s campaign reiterated that he believed arbitration should be a last resort and pledged that as mayor he would do everything possible to avoid it. He has called the patrol officers’ pay hike “out of line” and urged both parties to voluntarily return to negotiations.
But Walsh has not called on the City Council to reject the arbitration ruling, suggesting that it would violate a basic tenet of collective bargaining. Asking the City Council to vote against the award would be contrary to the proposal he has been pushing on Beacon Hill.
The overwhelming majority of union contracts are settled voluntarily, said Ira Sills, a prominent labor lawyer who represents predominantly private-sector unions, including some at the Globe. The prospect of binding arbitration, he said, could encourage labor and management to reach an agreement and eliminate political theatrics.
“City councilors are not experts in the details of collective bargaining,” said Sills, who also teaches at Northeastern University School of Law. “They are in practice driven by political considerations.”
Current state law delineates 11 factors arbitrators must consider, including a city’s ability to pay for the contract. Walsh’s bill has almost the same list.
“His bill has only 10 factors,” said Samuel R. Tyler, president of the Boston Municipal Research Bureau, a fiscal watchdog funded by business and nonprofits. The factor Walsh cut would effectively clear the way for binding arbitration. The city council would no longer have a say.
Harvard Law School professor Arnold M. Zack agreed that the threat of binding arbitration can encourage both sides to settle voluntarily, which is always the goal.
But Zack was troubled by another significant change contained in Walsh’s proposal. The bill would require arbitrators to choose between the last offer made by a union or the last offer by the city, instead of splitting the difference.
“The last best offer is striking because it increases hostility between the two parties,” said Zack, a past president of the National Academy of Arbitrators, who has mediated about 5,000 labor-management disputes since 1957. “It gives a victory to one side or the other when the outcome ought to be compromise.”
Sills, the union lawyer who teaches at Northeastern, had a different perspective. He said that a last-offer provision can discourage unreasonable proposals and bring parties closer together.
The two main elements of Walsh’s bill — last offer and binding arbitration — were once used in Massachusetts to settle labor disputes with police and fire unions.
In 1980, voters approved a sweeping initiative known as Proposition 2½, which restricted how much cities and towns can increase property taxes each year. To help control costs, Proposition 2½ ended last-
offer and binding arbitration.
A subsequent law restored limited arbitration rights, but it required that any award be approved by a city council or other local legislative body to ensure the city or town can pay the bill.
In 2010, the Boston City Council threatened to reject an arbitration ruling that would have given firefighters a 19.2 percent pay hike over four years.
Firefighters returned to the bargaining table and ultimately agreed to a lengthier deal in which they made some concessions.
In 2012, the Holbrook Town Meeting rejected an arbitration award for its fire union, and Saugus voters rejected an arbitration ruling for police.
Earlier this year in Northampton, an arbitrator’s ruling would have given roughly 50 firefighters a 7 percent pay hike over three years.
Voters had just approved a property tax override to close a budget gap that would have forced the town to lay off four police officers and almost a dozen teachers and would have closed the public pool on summer weekends.
The Northampton City Council rejected the arbitration award, forcing the mayor and firefighters back to the bargaining table. They agreed to a deal for an 8.5 percent pay hike over six years.
Northampton city councilor David Murphy bristled at Walsh’s proposal to eliminate the council vote and give ultimate authority to an arbitrator.
“They don’t have to pay the bills; we do,” said Murphy, who heads the council’s Finance Committee. “We know what we can afford and what we can’t.”