Chicago Mayor Richard Daley and New Bedford Mayor Scott Lang are both worried about the sustainability of municipal employee and retiree costs. Lang argues for a "new public employment covenant." Conservatives and state and federal-level Republicans should recognize that there is room for creative alliances with elected municipal officials (many if not most Democrats) and urban property tax payers. These alliances could go a long way to making government both more efficient and sustainable at every level. The key to the success of such alliances will be in conservatives offering constructive policies in non-alienating language.
One place where there is potential room for cooperation between conservatives, municipal officials and urban tax payers is municipal employee health care costs. Rising municipal employee health care costs are damaging the ability of towns to pay for public services without ruinous tax increases. This is where a conservatives could come in. Indiana's state government managed to save 11 percent on its health care costs by introducing and HSA/catastrophic coverage option for state employees. Such savings would no doubt sound very attractive to both mayors and urban tax payers who are trying to maintain public services without tax increases. It also helps that most Indiana state employees seem to like HSA/catastrophic coverage option. The widespread adoption of HSA/catastrophic plans by municipalities would have the added benefit of increasing the number of people on consumer-driven health insurance plans and make it tougher to enact a full government takeover of the health care sector.
There would have to be a division of labor between state and federal-level Republicans (and sympathetic Democrats) and municipal officials. State and federal-level legislators and state governors will have to pass laws to make such plans legal and allow municipalities to offer such plans. Municipalities would then have to enact those plans. There will be coalitional tensions. Conservatives will have to resist the temptation to demonize public employees or cast their program as some kind of revenge or punishment on a large constituency. Reformist conservative policy is good policy because it saves the tax payers money, maintains public services and maintains the health care security of public employees - not because it is a chance to settle scores. The main opponents of an HSA/catastrophic health care coverage option for municipal employees are likely to be some union leaders and especially liberals who recognize that expanding the number of Americans on market-driven health insurance policies threatens he dream of government-run medicine. This is a fight conservative can win if we pick our allies and our arguments wisely.