T-PAW'S PATCO MOMENT:

Pawlenty’s Transit Strike: Facing unsustainable union retirement benefits, Pawlenty chose to fight. (Katrina Trinko, June 9, 2011, National Review)

Peter Bell, a Pawlenty appointee, is chairman of the Metropolitan Council, charged with overseeing public transportation in the Minneapolis–St. Paul metro area. Bell recalls that “the heart of the issue was retiree health-care benefits.” Some workers were eligible for lifetime health-care benefits as soon as they had worked as little as ten years and were 55 or older. Bell, with Pawlenty’s approval, wanted to start requiring those already working for the transit system to be employed for 17 years before they were eligible for any retirement health-care benefits. For new employees, he wanted to eliminate retirement health-care benefits entirely.

Compensation and current health-care benefits were also matters of dispute between the union and the Council. But behind it all was the unfunded liability of $255 million caused by the retiree health-care benefits. “This unfunded liability was really the Pac-Man in our transit budget,” Bell says. “It was going to eat up all our resources.” [...]

In the end, partially thanks to the money saved by not running the buses for a month and a half, the bus drivers were given a more generous compensation package than the Council had originally offered. But the union compromised, too. On retiree health-care benefits, the status quo remained in place for current employees, including lifetime benefits after ten years of service. For new hires, though, there would be no retirement health-care benefits, a major defeat for the union.

On current health-care costs, the union got a better deal, winning the fight over whether to retain the existing health-care plan and premiums. (The new premiums were slightly lower, offset by new doctors’-visit co-pays and a hike in drug co-pays.) On wages, the Council agreed to a slightly higher raise than originally offered, and agreed to give employees a one-time bonus.

Ultimately, Bell says, “we got what we needed to get.”

Pawlenty was also pleased with the outcome. “The [bus] drivers were well-meaning people,” he wrote in Courage, “but over the years management and labor officials had enabled them, and each other, to create a system with a benefit that was excessive and unsustainable. The gig was up, and it had to change.”

“The union understood,” he added. “Crisis over. The buses started rolling again.”

Mitch Pearlstein, president of Center of the American Experiment, a Minnesota think tank, says that Pawlenty “prevailed.”

“You’re never going to get everything,” Pearlstein acknowledges, but speaks favorably of what Pawlenty did achieve. “He took a long strike that was very inconvenient for a lot of people and . . . he clearly won.”

Follow @brothersjudd