Monday, February 21, 2011

Nollan & Dolan as Wisconsin's Future?

Like Mark, Ricks Hills over at Prawfs sees the fight in Wisconsin through a property lense.  Hills compares the governor's proposal to limit public sector collective bargaining to Nollan-Dolan's attempt to scale back exactions imposed on developers. He argues that both initiatives fail because they curtail freedom of contract and efficient bargaining:

Governor Walker's proposals to limit scope of bargaining strike me as pointless. The Nollan-Dolan line of cases in land use regulation tells us why. Nollan-Dolan ostensibly limit the power of government officials to demand conditions for land-use development. . . . Of course, as any serious landuse lawyer knows, this doctrine has imposed no serious constraint on what local governments exact from developers. . . . Why? Because such limits on the scope of bargaining are senseless impediments to efficient freedom of contract. Developers do not sue to enforce such Nollan-Dolan limits, because they interfere with a deal that the developer wants to close. [M]y my prediction is that limits on the scope of collective bargaining will be just as pointless, wasteful, and ultimately unenforced as Nollan-Dolan.

I'm not sure that the comparison is on all fours.  First, the ideological nature of union issues makes people act and bargain in less than rational ways.  Second, the wink-wink-nudge-nudge agreements that drive local development work so well because both sides get what they want in a limited time-frame (developers get permits, local government get exactions).  The backdoor/handshake agreements over long term benefits could easily break down as the composition of the legislature changes.  

Hills' solution to this issue, buried at the end of a long post, strikes me as the best part of the piece.  He writes, "Allow unions and government to bargain over [long term benefits like pensions and health plans], but make sure that the ultimate agreement is ratified in a highly salient, public way -- a referendum, for instance. This procedural solution would reduce the real "agency cost" danger that politicians will give away the store when negotiating future liabilities. But the procedural solution avoids the silliness of taking obviously relevant issues off the table."

Steve Clowney

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