The Fiscal Sustainability Report Describes a Bleak Austere Future for Everett
The Republican-led Fiscal Sustainability Committee, appointed by Mayor Franklin, recommends everything from ending pensions, to busting union jobs, to... economic synergy with large businesses?
Welcome back to Local Crank. Meetings this week—
In June 2020, Mayor Franklin appointed the Fiscal Sustainability Advisory Committee to help address the city’s structural deficit. While this isn’t the first time Everett has convened one of these committees, the situation we find ourselves in is far more dire than at times in the past. However, for those hoping for recommendations that significantly transform our city for the better, strap in. To set the tone for their final report, consider this:
Mayor Franklin appointed not one single representative from organized labor. Not one. But, she did appoint a bank CEO, a hospital CEO, a local real estate mogul, and president of a car dealership. This committee of capitalists were chaired by Dan Leach, a financial consultant and Republican donor.
After six months of discussion, the committee issued its final report on December 2nd, which will be presented to the City Council on December 16th. It doesn’t look good. Here’s are some highlights of what they are seeking to accomplish:
Picking a fight with labor: rolling back benefits for workers.
Right off the bat, the committee considered eliminating worker pensions and replacing them with 401(k) financial products. While this would save the city $5.1 million, it would mean the death of an important staple to public service employment: the pension. This is exactly what fellow capitalists did at Boeing in 2014. At that time, the union fought back and even rescinded the endorsement of Rep. Rick Larsen for taking Boeing’s side.
Sure, the City of Everett isn’t a multinational corporation reaping billions in profits, but will unions still show opposition to this idea or play along? Only time will tell.
Going further, the capitalists on the committee next took aim at healthcare. “We also noted that the City's healthcare benefits exceed what is typically provided in the private sector,” the committee said, ”While the City is limited in its ability to negotiate compensation and benefit reforms, we encourage all parties to come together to help our community achieve a fiscally sustainable path”. This is just the first time in this report where the committee will awe at the benefits public employees get from their union, and grit their teeth that they cannot exercise more austere punishments in order to achieve “sustainability”. I attribute this thirst to go after labor to the fact that Mayor Franklin appointed not a single union representative on the committee. If one were present, I’m sure they would have strongly objected to the prominent suggestions of deeply cutting back pensions and healthcare benefits.
But what does Mayor Franklin care? She already laid off dozens of organized workers and was condemned by their union for it. To date, she’s paid no political price. Why not go further? If Franklin wanted to, she would have support from the capitalist class and this report to fall back on if there was any blowback.
Notably the Everett Police Officers Association, a Franklin campaign contributor, announced last month cuts to their healthcare benefits much like how the committee suggested. In encouraging other unions to follow suit, the EPOA is seemingly unaware of how incredibly tone deaf that is. Whereas other unions had to experience draconian layoffs, Everett cops only have suffered one civilian role cut—not including all the other new hires gained from recently-awarded federal grants. Therefore it’s no wonder the EPOA felt like they could earn political capital by releasing a press statement lauding their apparent selfless contribution towards fiscal sustainability.
To achieve rollbacks in labor benefits, the committee recommends the city “track and increase transparency of wage, benefit and diversity comparisons between City employees and the Everett general population”. The purpose of this effort is so that the capitalist class can get the data they need to run campaigns pushing for further austerity by “making visible and front of mind for City leaders the need to control the growth of City labor costs”. By that, the committee means slashing benefits, laying off workers, and privatizing operations.
“In terms of benefits, private sector employer offerings are rarely as generous as those in the public sector,” business owners on the committee admitted.
Protecting the hoard: strongly cautioning against taxes.
But just as a similar committee recommended in 2010, the only way short of an “economic miracle” out of a structural deficit is through raising revenues. This commitee of capitalists gets right to work crushing those ideas. On page 10 the committee says “members see the current business climate in Everett as fragile. Many of us operate businesses in the community and are particularly concerned about the detrimental impact that higher ... tax rates could have”. The group of wealthy business executives go on to say that higher taxes would hurt Everett's ability to “attract and sustain economic development, which in turn, support vital services and programs”. This is basically a reframing of the arugment from capital that governments must keep taxes low to attract business, which will pay for itself with all the newly attracted business. A theory that doesn't have a lot of great supporting evidence.
In case opposition to raising revenue by the capitalist class doesn’t intimidate Franklin enough, they go on to say: don’t bother with higher taxes in Everett, we’re all too poor to afford them anyway! “The reality of Everett’s modest household income is in our view a blinking caution light when considering the need for new City revenues,” the committee points out. A few pages later they further discourage using the ballot to ask for new revenues saying “With household median income at $57,205 … it may be very difficult to build voter support for significant tax increases”.
I’m sure it would be difficult considering the capitalists on the committee would be the very same ones bankrolling opposition efforts to new taxes targeting business in any way!
However, later in the report they recommend exactly what they strongly are advising against: “We cannot climb our way out of the fiscal crisis and maintain an acceptable quality of life in Everett by cuts and efficiencies alone”. So, while they acknowledge the reality that more taxes are necessary, but they bury the urgent need in a few sentences near the end of the report.
Even when entertaining the idea of more revenues all the committee has the suggest are tepid property tax levies. Interestingly, Everett has not campaigned for a tax levy in over thirty years. Hm, wonder why? Could it be because its political class has been captured by the pressures from a group of local wealthy and powerful professionals and business owners for decades?
Kicking them while they’re down: lobby the state to weaken union protections.
You would think that this would be a natural impetus to pressure the state to work on amending the constitution to permit income taxes, right? Wrong! The committee instead recommends the overturning of I-747, which capped property tax increases at 1% per year. While this would certainly be a great development and would enable local governments to collect more revenue, the deeply regressive nature of property taxes would only exacerbate other tax structure issues.
That was only one of the two “Legislative Advocacy” suggestions the committee gives Mayor Franklin. The other is to lobby the legislature to weaken protections for union workers. “It is dismaying to us to see the disparity between the rules applying to private versus public employers,” the report says, “the limitations on the City’s ability to control wages, salaries, benefits and contract work”. The committee blames state law for most of these “limitations” that don’t enable them to lay off public workers to en masse with no regard for their dignity like some of the committee members do to their own private sector employees.
At a time of high unemployment, immeasurable human suffering, and historically weak unions, Everett’s captains of industry want to see the laws changed to make it even easier to make all of those things worse.
Keeping their eyes on the prize: privatize, privatize, privatize.
In her 2021 budget, Mayor Franklin already proposed the privatization of city programs like the senior center, recreation programs, and park facilities. The committee loved what they saw, and wishes to see more: “We strongly endorse the City’s recent action to issue a request for proposals seeking private entities to operate the City’s senior center. We hope this effort will come to fruition in the near term”. This follows their prevailing mindset that the City’s largest liability—and therefore biggest target—should be labor and the benefits they receive.
In fact, the committee dedicates the highest word count to labor in their “four significant barriers” to fiscal sustainability on page 14. Chastising the City for “perceived reluctance to address labor costs” the committee claims that “there is simply no choice but to re-examine labor contract terms”. I suppose to this committee the lay offs from the Franklin administration were too few, and demonstrated an apparent “reluctance” to go further.
There’s no mistaking what the plan is here: to weaken labor even more, to have private hands seize more public dollars. Though, these business owners paint it in a far more forgiving light. “It’s time to start a conversation with these [large] businesses to explore ways to build economic synergy between these private organizations and City (and County) government”. Looking forward to social programs being sustained with all the excess synergy that’ll be coming into the city’s coffers.
Imagine if we had a mayor in power that brought in representatives from labor instead of CEOs and car dealership executives? I bet their report would read very differently than the one we got!
Thank you for reading!
As we head into a pivotal election year following an unprecedented crisis, scrutiny of our city’s leadership is more important than ever. If you’re interested in following Everett’s city leadership and politics more closely, please consider subscribing, sharing, and following me on Twitter.