Rioting Teamster strikers arrested by police

About 40 Somerville (MA) police and regional officers in riot gear stormed a labor protest in Somerville yesterday after an overnight picket at a garbage disposal company threatened to block trash pickup on city streets.

Members of Teamsters Local 25 who gathered outside F.W. Russell & Sons Disposal on McGrath Highway alleged that police roughed them up to clear the way for the disposal company, which has a contract for trash collection on Somerville streets. F.W. Russell also hauls residential trash for Cambridge and eight other cities and towns.

Captain Paul Upton, public information officer for Somerville police, said officers were not aggressive but had to open the picket line so trash trucks could leave the yard.

"My guess is they [the Teamsters] weren't happy about that," Upton said. "Our only role here is to try to keep the peace. The picketers have a First Amendment right to picket and to make their voices heard, but they don't have a right to disrupt the business."

Footage aired on Fox-TV in Boston showed police pushing picketers to the ground and restraining them. Ten people were arrested on disorderly conduct charges, Upton said.

Teamsters aiming to organize garbage truck drivers at F.W. Russell began picketing with signs at about 1 a.m. yesterday. By about 8 a.m., up to 100 workers had assembled at the McGrath Highway facility and at an F.W. Russell site on Broadway.

Acting Police Chief Robert Bradley went to the protest in the early morning and decided to keep his entire night shift on overtime and bring in the day shift and the North Eastern Massachusetts Law Enforcement Council's rapid response team, said Tom Champion, spokesman for the city of Somerville.

"Officers were pelted with stones," Champion said, "and our police officials reported that a small but very vocal group of demonstrators was abusive and confrontational and exhibited violence."

Charles Carneglia, owner of F.W. Russell, said Teamsters have been picketing for three weeks and using hardball tactics in trying to persuade workers to unionize against their will. "The union guys were trying to bully them not to go to work," he said.

Sean M. O'Brien, Teamsters Local 25 president, did not respond to requests for comment.


Workers file petition for divorce from AFSCME

Orland Park (IL) police dispatchers, the coolheaded voices on the other end of the phone when you call the cops, are in a bind of their own: The village’s 17 dispatchers are trapped in a union that, they say, doesn’t represent their interests.

“We just can’t live together,” said Paula Kirkland, who has served as an Orland Park police dispatcher for 24 years. “But AFSCME won’t let us out.”

Local 386 of the American Federation of State, County and Municipal Employees covers the dispatchers and the village’s public works employees, which number about 60 people, Kirkland said.

Unease between the two factions has simmered for eight years and came to a boil last spring, when the union vetoed a new contract because it too heavily favored the dispatchers, Kirkland said.

Orland dispatchers have historically been paid $5,000 to $6,000 less than other towns’ dispatchers, Anello said. Kirkland estimated the pay difference to be $3,000 to $4,000. The proposed contract took steps to close this gap, providing dispatchers an immediate, one-time $1,000 pay raise.

Because that raise was such a sweet deal for the dispatchers, public works employees — desirious of a better deal for themselves — rejected the contract, Anello and Kirkland claim.

The dispatchers have worked without a contract since May, said JoAnne Anello, who has served as an Orland Park police dispatcher for 13 years.

Besides disagreeing over financial matters, the union fight also has strong element of sexism, Kirkland says. The public works employees are overwhelmingly male and the dispatchers, known formally as “telecommunicators,” are mostly women. Kirkland claims public works employees have repeatedly used sexist and offensive words around her.

Union president Mike Wick did not return a call for comment. But Anders Lindall, a spokesman for the AFSCME Illinois, said that the union has a “record of strong representation, strong contracts and real gains.”

Lindall wouldn’t say why AFSCME insists on holding the dispatchers against their will.

“Any time you have negotiations you can have complaints, miscommunication and hard feelings,” he said. “That shouldn’t be allowed to reflect the views of everyone.”

In an effort to withdraw from the union, the dispatchers have filed a motion with the Illinois Labor Relations Board, Kirkland said.

AFSCME is preparing a response to the motion to separate, Lindall said.

Kirkland and Anello are not hopeful that state board will let them separate.

Meantime, the dispatchers and public works employees continue to work without a contract. They can’t negotiate a new one until the labor board decides the fate of the union, Lindall said.

The petition is being reviewed by an administrative judge, who will decide if the case needs to go to a hearing, said John Brosnan, executive director of the Illinois Labor Relations Board.

Brosnan said that eight to 10 union factions try to dissolve each year on the grounds that they’re not being represented fully but that these groups rarely if ever succeed.

The reason the labor board refrains from granting freedom to unhappy union members? Keeping unions larger brings a “certain amount of stability to collective bargaining,” Brosnan said.

“Once you have a collective bargaining unit and work is stable, the board usually doesn’t like to pull those units out,” he said.

For a segment of a union to be able to withdraw, it typically must show that it is being discriminated against, Brosnan said. He acknowledged that sometimes, what’s best for a union as a whole isn’t best for some of its members.

“It’s like any other organization,” he said. “The majority of a union ends up ruling. But they can only go so far.”


Change to Win's nationwide racketeering campaign

Want to understand why Bashas’ just slapped the United Food and Commercial Workers union with a defamation lawsuit? Look at what the union is doing not just in Arizona, but all across the nation.

For more than a decade, UFCW attempted to unionize non-union employees at places like Bashas’ and Wal-Mart the old-fashioned way — persuading employees and filing for secret-ballot unionization elections with the federal government — all to no avail. UFCW’s failure to win elections at Wal-Mart and other targets prompted union president Joe Hansen to lament: “We can’t win that way anymore.”

So the union tried a new tactic.

Once it became apparent the union couldn’t win an election with confidential voting at Wal-Mart, it decided in 2005 to form Wake Up Wal-Mart, a non-profit with a rousing name aimed at making people think the retailer is bad for America. The goal was to drive away business and “encourage” the company to support the unionization campaign.

Having cut its teeth attacking Wal-Mart’s reputation, a year later UFCW launched a similar campaign against Smithfield Foods in North Carolina, the nation’s leading pork processor. The union is again attacking a company’s reputation with phony claims until it agrees to an organizing method slanted in the union’s favor, and against employee rights.

The union has an equally cynical campaign against Bashas’ — with an equally cynical name: “Hungry for Respect.” But now UFCW’s hunger for member dues money has taken it to the courtroom. Again.

Instead of limiting itself to defending against UFCW’s endless smears on the public relations battlefield, Smithfield made the decision to file suit under the federal Racketeer Influenced and Corrupt Organizations Act. So, too, Bashas’ has gone to court, charging the union with defamation and interfering with the company’s operations.

To understand how UFCW’s actions could live up to these charges, consider some history. For more than a decade, the union tried (and failed) to organize Smithfield’s North Carolina workers with traditional secret-ballot elections. Unable to “win that way anymore,” the union tried to get Smithfield to agree to an alternative process called “card check,” where union organizers encourage employees to sign cards that are equal to a vote. No hanging chads here; the union organizer will know instantly if an employee votes “yes” or “no.” The union’s intentions for “card check” at Bashas’ are no different.

Of course, traditional elections use secret ballots for a reason: to protect employees from any outside pressures, whether from employers or from union organizers confronting them for their signatures. Every employer UFCW has targeted — including Bashas’ — has offered the union a secret ballot election. But UFCW can’t get what it wants under a fair election, so it’s engaging in shakedown tactics instead. Hence the lawsuits.

Smithfield’s suit details, among other things, how UFCW has disrupted Smithfield’s shareholder meetings, concealed its financial connections to “expert” witnesses who testified against the company in public hearings, and filed frivolous safety complaints with the federal government.

Meanwhile, Bashas’ has accused UFCW of planting outdated baby formula in the company’s stores, a claim which echoes the union’s conduct in a similar pressure campaign against the non-union Food Lion supermarket chain. UFCW’s “story” of food mishandling and unfair labor practices at the chain was fed to ABC News for a 1992 story — which cost the network a massive lawsuit after a judge found no evidence of wrongdoing by the company.

And it is not just Smithfield, Food Lion, Wal-Mart, or Bashas’ that experience shakedown campaigns. Other unions — members of the Change to Win labor coalition along with UFCW — are launching similar wars against employers who appear union-proof (if an employee secret-ballot vote is the metric).

UNITE HERE, for example, fooled expecting mothers in Northern California into believing a union-targeted hospital chain was using unclean linens in its maternity wards. That little fairy tale cost the union (and its current members) $17 million for defamation. And in Los Angeles, the Teamsters are working hand-in-glove with environmentalists to customtailor port regulations that will make it nearly impossible for non-union truckers to do business on the docks.

UFCW’s lawsuit count may be unusual, but its methods aren’t. If labor organizations keep trying to force business owners to help extort union dues from their employees, the racketeering and defamation charges will keep piling up. And organized labor will once again start to look more like organized crime.

- Jonathan Berry is senior research analyst at the Center for Union Facts.


AFSCME tries to duck FEC 'coordination' probe

The New York Sun has located the mysterious online component of the American Federation of State, County and Municipal Employees' campaign against Senator Obama's health care plan.

It can be viewed here. The site was paid for by AFSCME People, a so-called independent expenditure campaign funded by donations from union members.

In a report filed with the Federal Election Commission late week, the labor-backed group reported spending about $5400 to set up the site. The criticism of Mr. Obama tracks with that in mailers the same AFSCME entity has sent to voters in New Hampshire and Iowa.

At the national level of the union, AFSCME has endorsed Senator Clinton, but some locals who back Mr. Obama are upset about the criticism of him.

As for coordination with Mrs. Clinton's campaign, it doesn't look too tight since (as of this moment) her first name is misspelled on the site.

UPDATE: Another weird thing: the site links to an AFL-CIO prepared chart about the candidates' health plans. The chart says Mr. Obama's plan would cover everyone, which is precisely the opposite of AFSCME's key contention about the Illinois senator's proposal.


SEIU's nationwide election violations exposed

John Edwards, who has long railed against the influence of special interest groups in campaigns, came under heavy fire as the New York Times reported today that Edwards campaign officials had contact with officials at a 527 group planning a major advertising blitz on the former Senator's behalf.

An email obtained by the Times, sent from the head of a Washington State local of Service Employees International Union, describes plans to contact the campaign to determine what level of support Edwards advisers would hope for. The email listed meetings including with Edwards campaign manager David Bonior and top SEIU officials.

Questions about the coordination between Edwards' campaign and his SEIU backers were initially raised this week as Chris Cillizza reported the union group, officially known as the Alliance for a New America, was being advised by top Democratic strategist Nick Baldick. Baldick managed Edwards' 2004 race, and many saw his involvement as evidence that coordination, prohibited under federal campaign law, occurred. The group has spent about $600,000 on radio ads in Iowa backing Edwards and plans to spend $750,000 on television ads in the final week and a half before the Iowa caucuses.

Baldick is not the only former Edwards aide now helping the Alliance for a New America. FEC filings show ex-Edwards staffer Katherine Buchanan is the group's "custodian of records," responsible for signing finance reports. Buchanan was previously employed by Edwards' One America PAC as late as December 30, 2005, as well as by Edwards' Senate campaign committee.

Spokespeople for both the Edwards campaign and SEIU deny wrongdoing and insist the two did not coordinate anything beyond a rollout of endorsements, which is legal under FEC rules. "The email put forth by a rival campaign is an internal SEIU email about internal SEIU discussions and has nothing to do with the Edwards campaign," spokesman Eric Schultz told The Page. "Apparently, based on the email we received from a reporter, SEIU officials were having two separate conversations - one with the Edwards campaign to discuss perfectly legal member-to-member activities and another one internally about their own activities - to try and link the two conversations together is false and misleading."

Schultz said both SEIU and the campaign have prohibited communications between certain staff members that might appear improper. "We stand by our strong position that 527s should have no role in the political process," he said.

Edwards has been attacked recently by Barack Obama for backing he is getting from the outside groups, including during a speech today in Des Moines. Obama has suggested that the backing Edwards gets from outside groups is hypocritical, given Edwards' stance against taking money from lobbyists and political action committees. The two campaigns have engaged in a running battle this week, as both fight more openly for the right to hold the anybody-but-Clinton mantle.

While Edwards' campaign is likely not in legal jeopardy because of the SEIU official's email, the revelations could tarnish his squeaky-clean image. The incident, one Democratic operative backing another candidate says, "severely undermines his 'I'll fight them all back to hell' message. But, more dangerous for Edwards is if this is seen as part of a pattern that confirms the story line that's been setting in over the course of the campaign -- that he's not genuine and he'll do and say anything to get elected."

"Not only is he going to have to explain to Iowans why he loses his itch to fight the corruptive influence of the system when the system is benefiting him," the operative continued, "but more fundamentally he'll have to explain why they should trust him. That's a bad place to be going into the final week for a guy running as a populist."

With just a week to go before voters in Iowa caucus, the timing could not be worse: Many agree that Edwards must win the lead-off state, in which he has invested huge amounts of time and money, in order to have a shot at the Democratic nomination.


Gov't unions, Dems masquerade as 'independent'

So-called "independent groups" appear to be doing more heavy lifting in New Hampshire for two of the top Democratic candidates for president, with new mailers arriving today that focus on voter concerns about health care.

The first mailer landing in mailboxes this week appears as though it was sent directly by the John Edwards campaign. Edwards is pictured speaking at one of the largest New Hampshire medical centers, and the flyer includes almost verbatim language from Edwards' campaign material, such as: "John Edwards has a plan to make sure every American has quality health care. His plan will take on big drug and insurance companies to get it done."

But this mailer came from Alliance for a New America, an independent group financed by the Service Employees International Union, which has come under fire because it is headed by a former top Edwards campaign official, Nick Baldick.

The group's activity has been a big help to Edwards, who is the only top Democratic candidate who opted to take federal matching money, and so is limited to spending no more than about $800,000 on his New Hampshire campaign. That limit does not apply to outside groups campaigning on his behalf.

The second flyer, paid for by the American Federation of State, County and Municipal Employees, levels a direct attack on Sen. Barack Obama's health care plan and takes a veiled shot at the "change" theme of his campaign, saying his "band-aid solution is no change at all." The union is one of the largest independent groups that is backing Sen. Hillary Clinton, and is the same organization that has a radio ad in high circulation in New Hampshire right now. That ad also attacks Obama's health-care proposal.

AFSCME reported to the Federal Election Commission today that it spent $38,905 on the mailer opposing Obama.


UFCW gets low marks for tiresome racketeering

As 2007 comes to a close, it's time to tally up the zeroes and heroes, dole out the candy or coal. I'll not dwell on the biggest zero of them all, that grinning, clueless clump of White House foliage, because soon it will be 2008, the end of an error.

No, let's focus instead on the local level, where Pima County couldn't find elections efficiency with a compass, map and a flashlight. Having spent a good chunk of time, in print and in person, exhorting people to vote, I now find myself living in a county where the elections system is vulnerable to tampering and far from fail-safe. Lovely. A dump truck of the blackest coal to the county.

But candy filling 20 bags, paper and plastic, to Bashas' grocery chain for refusing to kowtow to a union and let its family name be slandered.

Bashas' now is suing United Food and Commercial Workers, which has been trying to bully not only our Arizona original grocers, but also little markets in California. UFCW is using the same claim on both chains that it also used on Food Lion in Virginia and North Carolina in the 1990s: selling outdated baby formula.

The union only makes that complaint about stores it has tried but failed to unionize.

UFCW should have listened to Eddie Basha in July: "They picked the wrong Marine."

Coal to the bureaucracy in Arizona's Child Protective Services, which didn't cause, but certainly enabled, the killings of three little Tucson children.

On a personal level, a tip of the hat and candy, too, to my fellow newsmen.
I have been blessed and humbled over the past 28 years to work with talented, ethical, creative and courageous people.

Now many newspapers are cutting back, as one-time readers rely on quickie TV news and the Internet.

That has left dozens of my former colleagues unemployed or underemployed from Florida to Colorado, California and Arizona.

They spent years delivering truth, enlightenment and entertainment to readers, who now seem to be abandoning us.

Nothing beats a newspaper, especially for company on a bus or plane, in a bathtub or in some doctor's waiting room.

I don't know how people survive without their paper; I only hope I never have to.
Kudos also to Southwest Gas Corp., which this year eliminated use of payday lenders to take cash payments from its customers.

The change was an admirable show of corporate responsibility and concern for consumers by Southwest Gas.

On another positive note, the hero halo goes to Tucson's only real candidate for sainthood, John Fife.

Lucky longtime parishioners at Southside Presbyterian Church got him for more than 35 years; he preached to me for less than a year, which explains a lot.

Fife took a felony conviction after Southside dived head-first into the sanctuary movement, saving Salvadorans and Guatemalans from genocide as the dictatorships roiled in insanity during the 1980s.

Now he takes constant flak for Samaritans, another group he helped start to rescue people from dying in our desert as they try to slip into our country.

So much for a cushy retirement. Fife's out there tramping the trails in the most extreme heat and cold, determined to save more lives.

He's probably traipsing through the desert as I write.

But through decades of selfless good deeds, he remains the most humble and modest of men.

Have a halo, buddy. And happy new year to all.


News Guild faces dues hit from Big Print decline

Seattle Times Publisher and Chief Executive Frank Blethen painted a dark picture of the newspaper's near-term future in a year-end memo sent Thursday to staff members, hinting at deep cuts without mentioning layoffs.

"The past several weeks your senior leadership group has been engaged in the most difficult and painful downsizing this company has experienced," he wrote.

"Until now we've been able to minimize some of the harm from the decade's downsizing. But, with the company at bare bones, these cuts will hurt deeply going into 2008 and the remainder of the decade."

Blethen said nothing specific about cost-saving measures The Times Co. may take. But in a Dec. 21 e-mail to members of the Pacific Northwest Newspaper Guild, which represents most of the editorial employees at The Times and the Seattle P-I, the union reported "speculation" about such measures.

That e-mail said Guild members were reporting to the Guild that The Times' East and North news bureaus would be consolidated into office space at the papers' shared Bothell printing plant, and that The Times' South King County and Washington, D.C., bureaus may be closed.

Larger and fewer newspaper-delivery routes may enable staff cuts, the union's e-mail said. And the Teamsters have said they plan to meet with Times management to consider a Times proposal to outsource all deliveries.

Times spokeswoman Corey Digiacinto said Thursday that the 2008 budget and "associated decisions" are still being finalized and that no announcements are likely until early 2008.

Thursday's five-page memo "is the first shoe, and the other will be dropping soon," said Guild administrative officer Liz Brown. She said that The Times' 2008 budget will likely be presented to the board of directors when it meets Jan. 17, and that any cuts will likely occur after that.

P-I Editor and Publisher Roger Oglesby said Blethen is "taking the appropriate measures." He acknowledged that nonnewsroom expense cuts made at The Times "very directly" affect the operation of the P-I, under the joint operating agreement that has governed the papers' business relationship since 1983.

"If you lose revenue, you have to do something to make up for it on the expense side," Oglesby said.

He said privately held Hearst Corp. does not release revenue figures. At the P-I, he added, "we've been trying to make expense cuts for some time, and we'll continue to do so."

P-I Managing Editor David McCumber said the P-I is routinely leaving job vacancies unfilled, cutting back on travel and selectively reducing the paper's size, all with an eye toward saving money.

"The economy is its own challenge and the state of our industry is another," he said. "The combination means it makes sense to be judicious about expenses."

Yoko Kuramoto-Eidsmoe, a Times features copy editor who is president of the Guild, said of Blethen's memo, "It sounds pretty bleak, but not really surprising given what's going on in the industry."

She continued: "Some people think it will affect the newsroom, some don't. It's encouraging Frank continues to be committed to good journalism, but who knows how much good journalism the company will decide it can afford?"

In his e-mail, Blethen said revenue from print ads will be down by about 9 percent in 2007, with a similar decline expected in 2008. For combined 2007 and 2008, print revenue losses will be about $33 million, he said.

In 2000, the paper booked $270 million in ad revenue, while in 2007, it fell below $200 million, he said.

"Our Seattle Times newspaper losses for the decade will exceed $40 million -- a staggering number," he wrote.

The publisher's senior leadership group has "found reductions of about $21 million" and needs to cut an additional $6 million "to ensure stability next year," Blethen said. Even saving $27 million "leaves a significant gap with the revenue losses," he said.

But, he said, if The Times can adjust to lower revenues, "I believe we are on our way to creating the metro newspaper model of the future."

That newspaper would appear in print and online, offering news, information and advertising, he said. Though online ad revenue is essential, it now equals only about 10 percent of The Times' print revenue, he said.

Blethen noted that the McClatchy Co., which owns 49.5 percent of the controlling stock of The Times Co., has twice written down the value of that holding.

The shares were valued at "well over $200 million" when the Sacramento, Calif.-based company acquired them through its $4.1 billion purchase of Knight Ridder Inc. in June 2006, he said. They were valued at "only $19 million" last month, he said.

Still, the Blethen family remains committed to journalism, he said. He laid out a 10-year plan calling first for a transformation from "the failing metro newspaper model," then for the "final hand-off" of the paper to the next generation, and finally to beginning to "grow value again" in 2017.


Journalist disgusted, ashamed by writers' strike

It's Christmas Day and there's a fire roaring nearby. I just spent a better part of the morning and afternoon volunteering at an Elk's Lodge in Lake Arrowhead, Calif., to feed hundreds of those who are far less fortunate than I this holiday season. It was a heartwarmingly gentile way for a nonobservant Jew to capture the Yuletide spirit. I heard no mention of "writers strike" or "failed negotiations." Instead, it was "more stuffing" and "give it gravy."

Here were people - proud people - simply looking to feed their families and make sure their kids walked away with a toy or two from Santa and the elves. Those were the only "residuals" on the table.

But enough with the sentimental stuff. We already know all too well that mainstream America has trouble understanding - or caring about - the knotty issues that separate the warring factions in this fractious labor dispute between the WGA and AMPTP. They, after all, don't have a horse in this race.

I don't either, but I'm close enough to the daily sturm und drang to be disgusted and ashamed for an industry that I have spent the better part of my adult life covering as a journalist.

The strike eventually will end. Showbiz life as we know it will go on. But I doubt it's ever going to be the same.

Not to sound naive, but I'm disgusted that this thing has degenerated into childish bullying and unseemly name-calling.

Why can't they all just be grown-ups about this and acknowledge there ain't no good guy or bad guy but two sides that fundamentally disagree and are reaching to uncover common ground?

I'll tell you why. It's because this thing long ago ceased to be just about holding down costs and/or landing the best residuals deal for the rank-and-file.

It's about boys and the size of their toys, and everyone else is unfortunate collateral damage.

When the smoke clears, it now seems likely that a TV season will be in ruins, that a pilot season will have been rubbed out, and that whatever trust once existed between scribes and the studios for whom they create will have been badly shaken. This is no longer a pessimistic view but a realistic one.

This column was originally going to look at the implications of the decisions by the late-night talk show hosts to sign agreements to go back to work next week. I was going to take them to task for undermining the WGA cause in the interest of serving more individual shorter-term interests.

But upon reflection, I now get it that Jay Leno, David Letterman, Jon Stewart, Stephen Colbert, Conan O'Brien and Craig Ferguson are simply doing what they have to do to survive in the every-man-for-himself world that this strike has revealed.

I believe them when they say this is about their staffers, who were about to be put out on the street, perhaps a month or two removed from being in line for an Elk's Lodge holiday meal.

The writers about to head back out onto the picket line need to understand this is no longer simply their fight but everybody's individual battle. Supporting the WGA cause isn't necessarily an investment in the working person's future anymore, because the future looks increasingly uncertain.

And as a result, solidarity's suddenly just another word for nothing left to gain.


Bankruptcy judge tilts to Clinton-crony, Teamsters

A bankruptcy judge has denied Interstate Bakeries Corp.’s request to order Yucaipa Cos. LLC to fill in details of its offer for the bankrupt baking company by Jan. 3.

U.S. Bankruptcy Judge Jerry Venters ruled last week that such an order “would be wholly unwarranted,” given that IBC established the schedule for the submission of reorganization proposals.

“For that reason alone,” Venters wrote, IBC was “in no position to complain about the absence of bids or proposals at this juncture, and they are certainly in no position to demand that potential bidders be put under an expedited and totally unreasonable deadline because of their frustrations with IBT (International Brotherhood of Teamsters).”

The deadline for reorganization or financing proposals is Jan. 15. Venters has scheduled a Jan. 29 hearing on the proposals.

Earlier this month, Los Angeles-based Yucaipa and the Teamsters said they might team up to submit a “possible plan of reorganization” for Interstate. The two said they would work together exclusively unless and until Yucaipa, which is headed by supermarket billionaire and Clinton-crony Ron Burkle, decided not to submit a plan.

IBC, however, complained that the proposal failed to disclose crucial details. The company wanted Venters to terminate the exclusivity arrangement between Yucaipa and the Teamsters so that the Teamsters would be free to discuss a reorganization plan with IBC or other parties.

IBC, which filed for Chapter 11 reorganization in September 2004, has submitted its own reorganization plan, but the plan relies on concessions from the Teamsters union, which represents about 9,000 of its 25,000 employees.

Venters said that while he recognized that IBC and its attorneys were exasperated by the exclusivity arrangement between Yucaipa and the Teamsters, the union was “entitled to pursue whatever strategy it deems best and to talk (or not talk) to whomever it pleases, just as other party or concerned group is entitled to do.”

IBC shares closed Thursday at 1 cent, down 1 cent.


Right to Work states advance

We had fog across the Midwest the day before Christmas, so TV news was full of airport interviews with families camping between flights in this concourse or that.

It's unscientific, but I can't help but get a little depressed about how the flying-in crowd seemed to skew about 20 years younger than the flying-outs. It's the look of a regional brain drain temporarily sloshing back for a harried little Christmas.

If I did have numbers on it, though, I don't think it would make a difference. Studies and rankings and polls and spreadsheets and all that the Census can disgorge add up to this: High-tax states in the Midwest are not attracting people and businesses nearly as well as moderately taxed states.

This doesn't make much of a dent in the region's prevailing faith in high taxes.

New numbers came out this month. Economists Arthur Laffer and Stephen Moore worked up a measure of states' competitiveness. As it turns out, high taxes correlated with poor economic performance, especially heavy outbound migration. States that did well, drawing lots of newcomers and employers, were predominantly places with low taxes and right-to-work laws. Who would have imagined?

Everyone, of course. Messrs. Laffer and Moore were working for a free-market think tank, but enough people around the Midwest have talked with sisters or nephews or former officemates who moved to Texas to know that our taxes are high and theirs aren't. Their population is soaring and ours isn't. And new car factories are going down there, not up here.

Those who argue against moderating our taxes are reduced to two points.

The first is to argue that how much we pay matters less than who pays. So in Wisconsin, a lawmaker from Green Bay is pushing to make companies declare publicly just what strategies they use to reduce, legally, the taxes they owe. State Senator Dave Hansen swears his bill, an idea from a think tank sponsored by public-sector unions, wouldn't raise taxes. On that count it's as innocent as a razor-wielding serial killer paging through an anatomy text: It seems like target refinement.

Meanwhile, there's a "conversation" going on — a series of public meetings around Wisconsin, as in other states, about replacing the property tax with other revenue sources. The campaign is organized by the teachers union, the road builders, and realtors and municipalities, an unsettlingly odd coalition. It leaves a sense of unease, just as with Hansen's bill, that people whose chief interest lies in plump government are looking to bypass taxpayer resistance by opening a new, unirritated vein.

The second response is simply to assert that how much we pay isn't as important as what we get. Wisconsin has high taxes, yes, but it's high-service, too. You hear the same thing in Minnesota: The taxes are vicious but, hey, the roads are paved. In Michigan, a group of universities, cities, and hospitals run a Web site claiming the state's undertaxed — even as it just agreed to a 22% surcharge on its business tax for the next decade.

This trade-off might make sense if it were true. But now Michigan contains the nation's chief example of a high-tax civic corpse, confiscatory Detroit, which scarcely manages to plow streets or keep crime in check. In Chicago, one of the nation's highest sales tax rates may have to rise still higher to keep the transit system merely functioning. The Wisconsin Taxpayers Alliance notes that the state's well-above-average taxes finance public employee benefits about 50% higher than what prevails among private employers, a premium well above average nationwide.

In short, the value equation dims even as we're told that our quality of life is great because our taxes are high. Believing this requires faith, especially after we hear reports back from former neighbors who note that they have schools in Texas and paved roads, too. And no income tax. The drawback for the Low Church of High Taxes is that the religion is voluntary. That's what Messrs. Laffer and Moore are pointing out: That not merely businesses are chased away but people are, too, just the kind a state would want to keep.

"The people who are motivated to move tend to be the entrepreneurial, high-wealth class," Mr. Moore says. What's left is an electorate more inclined to favor redistribution. But who are they to tax? The rich, he points out, "take their capital and businesses with them when they leave." Atlas isn't shrugging so much as just moving to Boise.

So others who can move do, too, chasing the departing economy. It is the most talented who are the most mobile, most able to opt for lower taxes. The tax competition between states, Mr. Moore says, is in the end a competition for people. While places like Wisconsin may do a fine job with their signature public service, schooling, it is an investment lost if, once educated, that human capital decides not to buy into the rest of the high-tax, high-pensions-for-DMV-clerks equation.

In the end, many stay in spite of taxes and because Mother needs her walk shoveled regularly. But net immigration seems a marginal signal for whether the customers of government think the price is right. It should chasten the true believers, as it dismays those who love these states for other reasons, that the price isn't right for so many.

- Mr. McIlheran is a columnist for the Milwaukee Journal Sentinel.


Gov't unions suspected in 27% property tax hike

At a special meeting on Thursday, the Towanda Borough (PA) Council adopted a $3.26 million borough budget for 2008 and approved a 27 percent increase in the borough property tax rate.

The council on Thursday set the borough property tax for 2008 at 14 mils, which is 3 mils higher than the current tax rate.

Towanda Borough Council member William Kovalcin Jr. said he was very reluctantly voting for the tax increase, which amounts to a 27-percent increase in the borough property tax rate. "There isn't any alternative" to the tax increase, said council President Jean Miller, who added that as a person on a fixed income, she wished it wasn't necessary.

Towanda Borough Manager Tom Fairchild Jr. reiterated that the tax increase was necessary to maintain the current level of services provided by the borough, while increasing the borough's fund balance to a healthier level of $75,000 at the end of 2008.

At the beginning of the special meeting, the council held a public hearing on the budget and tax increase, which lasted nearly an hour and a half. The public hearing mainly consisted of questions and comments made by resident Brian McDonald of State Street and borough resident Jo Rockwell. They explored many aspects of the borough's finances, looking for ways the borough could save money and avoid the 3-mil tax increase.

Among the proposals they and council member Bob McLinko made were to privatize borough services, end the borough's practice of paying the utility bills for the YMCA of Bradford County, and merge Towanda Borough with North Towanda Township to take advantage of the property taxes paid by DuPont and OSRAM Sylvania.

Privatizing the borough's vehicle maintenance operation, which McLinko suggested, would not save money, Fairchild indicated. He said that when the borough was temporarily without a mechanic in the past, it turned out to be more expensive to use outside garages for vehicle maintenance.

Kovalcin said the borough had sought bids in the past for contracting out the borough's lawn mowing operation, but that it would have been nearly twice as expensive as using the part-time casual laborers that currently do the job.
With regard to the borough's paying the YMCA's utilities, Fairchild said that over the past few years, there has been an arrangement where the YMCA has matched every dollar that the borough has paid for its utilities by spending a dollar of YMCA funds on capital improvements at the borough's S.C.I. Building, which is leased by the YMCA of Bradford County.

Councilman Rick Lewis said the YMCA also benefits the borough because it has also secured outside grant funds to improve the building.

Borough officials also said that residents in neighboring municipalities don't want to merge with Towanda Borough, because they fear it will cause their own taxes to go up.

Kovalcin said that among the reasons for the 3-mil tax increase are the increase in health insurance premiums, which have "gone through the roof" in recent years, and increasing fuel costs, which have "gone up tremendously in recent years."
Council member Keith Long said another reason for the 3-mil tax increase has been the failure to consolidate municipal services in the central Bradford County region.
"Over the last few years, there has been a lot of talk about consolidation of services, but we don't see it happening" Long said. Such consolidation of services "can save a lot of money," he said.

Borough officials also said that the fact that a large portion of the borough's property - 26 percent - is tax-exempt is another reason for the tax increase.
Fairchild said he has spoken to some of the owners of the tax-exempt properties about contributing payments-in-lieu-of-taxes to the borough, but that "it has not gone well." Among the main owners of the tax-exempt property are churches, the county and the state, he said.

Fairchild also said the borough has looked at obtaining its health insurance through a statewide association of municipalities, but that the cost to the borough was about the same as its current health insurance, which is through the Teamsters Union.

At the end of the public hearing, Rockwell urged the council to postpone its vote on the budget to that it could review it again to look for ways to reduce its size.
But council members said they had reviewed the budget at numerous budget meetings, and they went ahead with their vote on adopting the budget on Thursday.

"We've gone over and over this" budget, council member Ellen Lacek said.

Due to the tax increase, an average homeowner, who has a house assessed at $30,000, will see his annual borough property tax bill increase from $330 to $420, Fairchild said.

In Bradford County, properties are assessed at half their market value.
The only council member to vote against adopting the budget and approving the tax increase was McLinko, who had wanted to postpone the vote on the budget to look for cost savings.

Rockwell also said she has noticed that after moving back to the borough 10 years ago, borough services have gone downhill, except for the police service.
"You say the services are the same, but they are not at the same level and quality as when I came back to Towanda 10 years ago," Rockwell said.

She said the snow was not being removed from sidewalks downtown after the big snowstorms this year, leaving the area a mess, and that streets are not cleaned in a regular manner anymore.

"Some streets are in terrible shape," Rockwell said.

Fairchild said after the meeting that even with the 3-mil tax increase, the borough would have around the fourth-highest property tax rate among boroughs in the county, which he said is "remarkable" considering that so much of the property in the borough is tax-exempt.

Fairchild said that after the last large snowstorm, the borough did not remove snow from sidewalks on Main Street in Towanda as a money-saving measure. He said it is very expensive to remove large amounts of snow from downtown sidewalks.

He said this is the borough's first significant tax increase in many years.


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