How Can Local Officials Prepare for the Upcoming Janus vs AFSCME Ruling?

“A public employer shall provide all public employees an orientation and shall permit the exclusive representative, if applicable, to participate.”
– Excerpt from California State Assembly Bill AB 52, December 2016

In plain English, AB 52 requires every local government agency in California to bring union representatives into contact with every new hire, to “allow workers the opportunity to hear from their union about their contractual rights and benefits.” What’s this all about?

As explained by Adam Ashton, writing for the Sacramento Bee, “New California government workers will hear from union representatives almost as soon as they start their jobs under a state budget provision bolstering labor groups as they prepare for court decisions that may cut into their membership and revenue.”

Ashton is referring to the case set to be heard by the U.S. Supreme Court early next year, Janus v. American Federation of State, County, and Municipal Employees. A ruling is expected by mid-year. It is possible, if not likely, that the ruling will change the rules governing public sector union membership. In pro-union states like California, public sector workers are required to pay “agency fees,” which constitute the vast majority of union revenue, even if they laboriously opt-out of paying that portion of union dues that are used explicitly for political campaigning and lobbying.

Needless to say, this law is designed to allow union representatives to get to newly hired public employees as soon as they walk in the door, in order to convince them to join the union and pay those dues. But can anyone argue against union membership?

The short answer is no. To deter such shenanigans, SB 285, thoughtfully introduced by Senator Atkins (D-San Diego), adds the following section to the Government Code: “A public employer shall not deter or discourage public employees from becoming or remaining members of an employee organization.” Governor Brown signed this legislation on October 9th. So much for equal time.

So what can local elected officials do, those among them who actually want to do their part to attenuate the torrent of taxpayer funded dues pouring into the coffers of public employee unions in California? Can they provide the contact information for public employees to outside groups who may be able to provide equal time?

Once again, the answer is no. To deter access even to the agency emails of public employees, a new law bans public agencies from releasing the personal email addresses of government workers, creating a new exemption in the California Public Records Act. Those email addresses could be used by union reformers to provide the facts to public employees. How this all became law provides another example of just how powerful public sector unions are in Sacramento.

In order to quickly get the primary provision of AB 52 enacted, which allows union representatives into new public employee orientations, along with a provision to deny public access to public employee emails, both were added at the last minute to the California Legislature’s 2017-2018 budget trailer bill, AB 119. The union access to new employee orientations is Article 1. The denial of email access is Article 2.

So how are the unions preparing for the Janus ruling? By (1) making sure the union operatives get to new employees as soon as they begin working, (2) by preventing agency employers from saying anything to deter new employees from joining the unions, and (3) by preventing anyone else from getting the official agency emails for new employees in order to inform them of their rights to not join a union. That’s a lot.

So what can you do, if union reformers control a majority on your agency board or city council, and you in a position to try to oppose these unions?

First, examine the legal opinions surrounding the wording of SB 285, “A public employer shall not deter or discourage public employees from becoming or remaining members of an employee organization.” The words “deter” and “discourage” do not in any way preclude providing facts. Consider this preliminary opinion posted on the website of the union-controlled Public Employee Relations Board:

“One major concern I have is that the terms “deter” and “discourage” are not defined. What if an employee comes to an employer with questions about what it means to be a member of the union, and the employer provides truthful responses. For example, assume that the employer confirms that being a member will mean paying dues. What if that has the effect of deterring or discouraging the employee from joining the union?”

It is possible for employers to present facts regarding union membership without violating the new law. Find out what disclosures remain permissible, and make sure new employees get the information.

Another step that can be taken, although probably not by local elected officials, is to challenge the new law that exempts public agency emails from public information act requests. And apart from accessing their work emails, there are other ways that outside groups can communicate with public employees to make sure they are aware of their rights.

California’s public employee unions collect and spend over $1.0 billion per year. If the Janus vs AFSCME ruling takes away the ability of government unions to compel payment of agency fees, and imposes annual opt-in requirements for both agency fees and political dues, these unions will collect less money. How much less will depend on courage and innovative thinking on the part of reformers who want to rescue California from unionized government.

REFERENCES

Get a state job and meet your labor rep: How state budget protects California unions, Sacramento Bee, June 21, 2017
http://www.sacbee.com/news/politics-government/the-state-worker/article156146364.html

AB 52, Public employees: orientation and informational programs: exclusive representatives, California Legislature
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB52

Janus v. American Federation of State, County, and Municipal Employees, Supreme Court of the United States Blog
http://www.scotusblog.com/case-files/cases/janus-v-american-federation-state-county-municipal-employees-council-31/

SB 285, Atkins. Public employers: union organizing, California Legislature
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB285

2017-2018 budget trailer bill, AB 119, California Legislature
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB119

California Public Records Act, Office of the Attorney General
http://ag.ca.gov/publications/summary_public_records_act.pdf

Fact Sheet – AB 52 (Cooper) & SB 285 (Atkins), California Labor Federation
http://calaborfed.org/wp-content/uploads/2017/04/2-AB-52-Cooper-and-SB-285-Atkinsweb.pdf

Legislative Bulletin – California School Employees Association
http://www.csea.com/web/portals/0/csea_pdf/leg_rpt.pdf

SB 285: Public Employers Cannot Discourage Union Membership, Public Employee Relations Board
http://www.caperb.com/2017/04/04/sb-285-public-employers-cannot-discourage-union-membership/

Public employee unions wield hefty Atkins stick [SB 285], San Diego Reader
https://www.sandiegoreader.com/news/2017/aug/28/ticker-public-employee-unions-wield-atkins-stick/#

Jeff Morales defends California High-Speed Rail to a Santa Clarita delegation at the California State Capitol, March 15, 2015.

Is the California High-Speed Rail Authority Paying for Legendary Leadership?

Union-Owned Non-Profit Affordable Housing Development Active in San Diego County Politics

A non-profit affordable housing complex located in National City, California has become a major political force in San Diego County.

Since 2010, the “San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments” has donated about $800,000 directly to campaign committees, most of them based in San Diego County. It has been a top donor in 2016 to campaigns to pass bond measures for San Diego County community college and school districts where construction contractors are required to sign Project Labor Agreements (PLAs).

For example, this “low to moderate income apartment community” in National City has given $50,000 to the campaign to pass Measure X, which authorizes the Grossmont-Cuyamaca Community College District to borrow $348 million via bond sales to investors. In addition, it helped to pay for polling services on behalf of the college administration. (The polling results had to be obtained from the college through a public records request.) It also gave $50,000 to the campaign to pass Measure Z, which authorizes the Southwestern Community College District to borrow $400 million via bond sales to investors.

National City Park Apartments

National City Park Apartments

This money is obtained through rental payments of apartment tenants. Built in 1968 with US Department of Housing and Urban Development funds, the National City Park Apartments have apparently been owned and managed by the San Diego County Building and Construction Trades Council since their construction. The head of the Trades Council – Tom Lemmon – is chairman of the Board of Directors for the San Diego County Building Trades Council Family Housing Corporation and receives some compensation from the Corporation. He also lived there as a boy. In 2008, the Trades Council paid off the loans from its purchase of the apartment complex.

The payoff of those loans may have triggered the decision to start getting the affordable housing complex involved in politics in 2010. Another inspiration may have been the Citizens United decision issued on January 22, 2010 by the U.S. Supreme Court. That controversial decision extended certain political speech rights to non-profit organizations classified under Internal Revenue Code section 501(c)(4) as “operated exclusively for the promotion of social welfare . . . the net earnings of which are devoted exclusively to chari­table, educational, or recreational purposes.” The San Diego County Building Trades Council Family Housing Corporation tells the IRS that its purpose is “to provide affordable rental housing for low to moderate income families.”

Below is a list of ways that the National City Park Apartments are providing “affordable rental housing for low to moderate income families.”

Political Contributions of San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments and Affiliated Entities, 2010-2016

Election Recipient of Contribution Amount
2010 Yes on Prop J (San Diego Unified School District parcel tax) $50,000
2011 No on Prop A and Prop B (City of San Diego Project Labor Agreement ban and pension reform) $5,000
2011 Californians Against Identity Theft and Ballot Fraud (radio ads to discourage people from signing petitions for PLA bans and pension reform) $25,000
2012 A Better San Diego Issues Committee, a Sponsored Committee of the San Diego and Imperial Counties Labor Council, AFL-CIO $100,000
2012 Kids First/Yes on Prop Z (San Diego Unified School District bond measure) $85,000
2013 David Alvarez for City of San Diego Mayor (after Bob Filner resignation) $75,000
2014 San Diego County Democratic Party (for David Alvarez for City of San Diego Mayor, after Bob Filner resignation) $12,500
2014 Yes on Prop 41 (Coalition for Veterans Housing, to pass California Veterans Housing and Homeless Prevention Bond Act) $5,000
2014 San Diego County Democratic Party (for November 2014 Election) $47,500
2014 Escondido Taxpayers Association (opposing ballot measure to enact charter for City of Escondido) $10,000
2014 Chula Vista Voters Against Corruption (committee formed to oppose John McCann for Chula Vista City Council) $25,000
2015 San Diego Works! sponsored by San Diego Imperial Counties Labor Council, AFL-CIO $15,000
2016 Contribution to independent expenditure committee primarily formed to support Proposition I, Barbara Bry, and Justin DeCesare, sponsored by Alliance San Diego Mobilization Fund (preserve San Diego High School in Balboa Park, elect Bry and DeCesare to San Diego City Council) $25,000
2016 San Diego County Building and Construction Trades Council Political Action Committee $25,000
2016 San Diego County Democratic Party $10,000
2016 South Bay Parents and Community for Quality School Construction (Sweetwater Union High School District bond measure)* $73,650
2016 Rendon Ballot Measure Committee to Keep California Competitive (committee under control of California State Assembly Speaker) $10,000
2016 San Diego County Democratic Party $7,000
2016 Educators & Parents for Great Schools to Support Whitehurst-Payne for School Board 2016, sponsored by San Diego Education Association (independent expenditure committee primarily formed to support Sharon Whitehurst-Payne; Board Member; San Diego USD) $10,000
2016 Teachers and Parents Putting Kids First Supporting Kevin Pike 2016 (independent expenditure committee primarily formed to support Kevin Pike; Board Member, Sweetwater Union HSD) $8,000
2016 South Bay Families for Affordable College – Yes on Z (Southwestern Community College bond measure) $50,000
2016 Rodriguez for City Council 2016 (Jose Rodriguez, National City Council) $1,000
2016 Rodriguez for City Council 2016 (Jose Rodriguez, National City Council) – office space $2,700
2016 Irene Lopez for San Ysidro School Board 2016 $1,000
2016 Tremper for Chula Vista School Board 2016 (Glendora Tremper for Chula Vista Elementary School District board) $2,000
2016 Careers & Affordable Education for East County – Yes on X (Grossmont-Cuyamaca Community College District bond measure) $50,000
2016 San Diegans for Full Voter Participation, Yes on K and L, Sponsored by Community and Voter Rights Organizations (City of San Diego ballot measures to shift election significance from June to November, when more people vote) $75,000
2016 Careers & Affordable Education for East County – Yes on X – polling (Grossmont/Cuyamaca Community College District bond measure) $1,875
TOTAL 2010-2016 $807,225
Political Contributions - San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

Click the chart to download an Excel version of “Political Contributions 2010-2016 from San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments”

* Campaign reports from South Bay Parents and Community for Quality School Construction indicate two $22,500 contributions on February 1, 2016 from the San Diego County Building Trades Council Family Housing Corporation that are not in the Corporation’s own campaign reports. Those contributions are included in this amount.

Lobbying and Policy Activity

The San Diego County Building Trades Council Family Housing Corporation also provides funding and support for labor union activism and allied causes. Some examples:

  • Since 2011 the San Diego County Building Trades Council Family Housing Corporation has employed Murtaza Baxamusa as Director of Planning and Development. Baxamusa is a union-oriented economist involved in many policy debates in San Diego County going back to his previous position with a San Diego-based union-oriented think tank called the Center on Policy Initiatives. He is a leader of the Middle Class Taxpayers Association, a union front group that is displacing traditional fiscally-conservative taxpayers associations as the statutorily-required taxpayers representative on local government bond and tax oversight committees.
  • It provides grants to organizations such as the Center for Policy Initiatives, Cesar Chavez Service Club, and the Gay & Lesbian Victory Fund.
  • It sponsored a lunch in 2016 at the San Diego Housing Federation 25th Annual Affordable Housing and Community Development Conference. The San Diego County Building and Construction Trades Council is among the highest-status members in this organization.
  • It uses the legal services of Ricardo Ochoa, a union lawyer. Ochoa represented the San Diego County Building Trades Council Family Housing Corporation No. 1 for its defense of a civil rights lawsuit for housing and accommodations (Gash v. San Diego County Building Trades Council Family Housing Corporation No. 1). Ochoa also represents school and community college district faculty unions in San Diego County. Recently he filed a lawsuit on behalf of a coalition of unions and other groups called “Quality of Life Coalition” – with the political director of the International Brotherhood of Electrical Workers Local 569 as lead plaintiff – to challenge the ballot arguments in support of a transportation investment plan and sales tax (Measure A) on the November 2016 ballot. During the development of the transportation plan, unions had demanded that the San Diego Association of Governments (SANDAG) mandate a Project Labor Agreement on construction contracts funded by the tax.

It’s all about providing affordable rental housing for low to moderate income families.

CAMPAIGN CONTRIBUTIONS – SOURCES

2010 Election Political Campaign Contributions – San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2011 Political Contributions – San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2012 Political Election Campaign Contributions – San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2013-2014 Political Special Election Contributions for San Diego Mayor – San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2014 Primary Election Political Contributions San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2014 General Election Political Contributions San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2015 Election Political Contributions San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2016 Primary Election Political Contributions San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments

2016 General Election Monetary and In-Kind Contributions San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments (as of October 26, 2016)

OTHER SOURCES

IRS Form 990 2014  San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments Nos. 1 2 3

The Local Affordable Housing That Labor Built – commentary by Tom Lemmon – San Diego Union-Tribune – June 3, 2011

San Diego County Building Trades Council Family Housing Corporation dba National City Park Apartments website

2013 “San Diego Housing Video” posted by the International Brotherhood of Electrical Workers (IBEW) and featuring the National City Park Apartments

San Diego Housing Federation 25th Annual Affordable Housing and Community Development Conference

Building Trades’ Family Housing Corporation Re-Elects Board MembersSan Diego Reader – February 8, 2012

San Diego County Building Trades Council Family Housing Corporation Hires Policy Director for Redevelopment – February 16, 2011


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Unions Foiled in Plot to Evade Open Government Law

It’s rare to see a California local government rescind a vote. But on October 4, 2016, the San Joaquin County Board of Supervisors voted 5-0 to rescind a controversial and probably illegal vote taken three weeks earlier to satisfy the political demands of construction unions.

Rescind Project Labor Agreement Vote - San Joaquin County Board of Supervisors - October 4, 2016

Rescind Project Labor Agreement Vote – San Joaquin County Board of Supervisors – October 4, 2016

On September 13, the board had voted 3-2 to direct staff to negotiate a Project Labor Agreement (PLA) with construction trade unions for a $41 million county hospital expansion. Organizations that defend fair and open bid competition for public contracts were caught by surprise. There was nothing on the September 13, 2016 meeting agenda to indicate board discussion – let alone action – concerning a government-mandated Project Labor Agreement.

But some people seemed to know a vote would happen. Union officials and activists attended the September 13 meeting and called on the Board of Supervisors to negotiate a Project Labor Agreement. At least one Supervisor was ready to make a motion for it even though the proposal was introduced to the board via public comment.

In addition to undermining the public interest, the vote appeared to be illegal. Under the California Ralph M. Brown Act, an elected governing board cannot vote on items without notifying the public in advance that such items will be considered for action. This is a basic principle of open and transparent government.

But having a law and actually enforcing it are sometimes two different things. Frequently the public encounters insurmountable challenges in making California local governments accountable for violating what’s commonly called “the Brown Act.” In this case, opponents of government-mandated Project Labor Agreements needed persistence and determination to confirm the illegal action and get it rectified.

A video record of the meeting posted on the county website after the meeting strangely cut off before the vote, thereby depriving the public of a source to prove what had happened. A reporter who covered the September 13 Board of Supervisors meeting for the local newspaper insisted that the board had not taken a vote to negotiate a Project Labor Agreement. Members of the public trying to obtain draft meeting minutes were frustrated by what seemed to be bureaucratic delays.

Yet there was one reliable witness at the meeting who was paying close attention to the proceedings. This witness was sure that a 3-2 vote had been taken specifically to authorize staff to negotiate a union Project Labor Agreement to include as a bid specification for the San Joaquin General Hospital Phase 2 Acute Care Patient Wing Expansion Project.

Eventually, the county was able to restore the video to completeness and provide the order of the board. It was indeed a vote directing staff to negotiate a Project Labor Agreement with unions, with the agreement to come back for ratification at the September 27 board meeting. (Allowing only two weeks for “negotiations” of a major labor relations contract suggests that union officials and some county supervisors were going to pressure staff to hastily sign off on a standard boilerplate agreement that unions typically introduce at the start of negotiations.)

The plot was now proven. A coalition of organizations banded together and hired a law firm to send a letter to the Board of Supervisors demanding that the vote be nullified. Meanwhile, the Board of Supervisors cancelled its September 27 meeting for unknown reasons. Then the Board of Supervisors scheduled an agenda item at the October 4 meeting to rescind the original September 13 vote.

San Joaquin County Administration Building Evacuation - October 4, 2016

Evacuating the San Joaquin County Administration Building on a beautiful fall day.

But supporters of fair and open bid competition on taxpayer-funded contracts even struggled at the October 4 board meeting to get that 5-0 vote to correct the apparently illegal action. Hundreds of Service Employees International Union (SEIU) activists repeatedly disrupted and delayed the meeting to express displeasure with their own contract negotiations. When a representative of the Coalition for Fair Employment in Construction was speaking during public comment to urge the board to rescind their Project Labor Agreement vote, someone set off the fire alarm, resulting in the evacuation of the building.

In the past 20 years, the militant union activism and underhanded political tricks formerly concentrated in a few urban centers of California have rippled out 75 miles to places such as San Joaquin County. While many fiscal conservatives are fleeing the state or dying, those who choose to remain in California must monitor their local government agendas and make elected officials accountable when they violate the law for a special interest group.

Sources

September 26, 2016 Letter to San Joaquin County Board of Supervisors – Brown Act Violation – Project Labor Agreement Vote

October 4, 2016 San Joaquin County Board of Supervisors Meeting Agenda Item – Rescind Vote to Negotiate Project Labor Agreement

Union Creates Bedlam at San Joaquin Supervisors Meeting – Stockton Record – October 4, 2016


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

California Needs Infrastructure, and Unions Should be Helping

“Infrastructure” is a perennial topic that enters and leaves California’s public consciousness in the following manner: A politician says “we must rebuild our crumbling infrastructure,” journalists report it, almost nothing is done, and the infrastructure continues to crumble. The talking point is made. Check the box. Repeat. Decades pass.

If you’ve driven west on Interstate 580 from California’s central valley into the San Francisco Bay Area, “infrastructure” becomes more than a hard-to-pronounce, sort of awkward sounding four syllable word that emanates from the mouths of politicians every election cycle. Because the divots, pot-holes, fissures and bumps on Interstate 580 west are impossible to ignore. The road is literally falling apart.

It isn’t enough to marvel at how Californians tolerate this negligence. Because it harms our quality of life. Today the failure is measured in terms of how many cars and trucks require far more frequent maintenance to repair their battered suspensions because we can’t fix our roads. Today it’s short showers and annoying light switches that turn off automatically because we won’t build new water and power infrastructure. But tomorrow it could be a catastrophe, as entire regions are potentially denied water, power or transportation, because over time, less and less viable infrastructure became critical to supporting more and more people.

Why? Why have California’s policymakers paid lip service to infrastructure for the last 20-30 years, all the while watching it crumble? Here are three reasons:

(1) Environmentalists provide the moral cover for neglect. There isn’t a road, a bridge, a power plant, a port upgrade, new housing, a water treatment plant – not one scratch in the ground that isn’t bitterly contested by the environmentalist lobby. Powerful environmentalist organizations, often receiving government funds, with opportunistic trial lawyers populating their boards of directors, have an incentive to tie every possible infrastructure investment up in knots. While some environmental oversight is necessary, the challenge of complying with every environmentalist objection deters all but the wealthiest corporations, and creates costly delays that last for decades.

(2) Many corporate special interests benefit from neglect. Corporations who own existing sources of supply can charge higher prices and generate higher profits. Utilities are the obvious examples of this – ever since “decoupling” legislation was passed in California, the only way utilities can generate higher profits is to raise unit costs, since unit output and profit percentages are fixed by law. So if water costs $2.00 per CCU instead of $0.25, or if electricity costs $0.50 per KWH instead of $0.05, utility companies make a killing for their shareholders. Similarly, owners of land that has finally been approved for development, or quarries that got operating permits before the regulations made them prohibitive, are able to sell their inventory at fantastic markups.

(3) Public sector unions also benefit from infrastructure neglect. Taxpayer funds that ought to be paying to construct and upgrade roads and bridges end up being allocated instead to pay government workers higher salaries and fund generous pensions. These unions also benefit from the legislated and entirely artificial scarcity that drives up prices for land and homes, because it increases property tax revenue. And of course, every additional environmentalist inspired regulation and code means more unionized government inspectors and enforcement officers can be hired. Government over-management and mismanagement always benefits public sector unions.

So where is California’s private sector labor movement when it comes to infrastructure? Here is a quote from the California Labor Federation’s website, under “Advocacy / Key Issues.” Revealingly, this is number ten of ten on their “issues” page:

“Invest in California’s Infrastructure: We must have a comprehensive strategy for making investments in infrastructure and a sustainable, equitable way to finance them. We need to restore our public transportation systems, modernize our rail system and rebuild our roads and waterways. We must double our efforts to build high speed rail in California.”

Apart from “high speed rail,” a project that fails to justify itself under any rational cost/benefit analysis, this all sounds good. But where’s the follow up?

When scoping meetings are held to approve infrastructure projects, whether it is widening a highway, approving a new subdivision, repairing a bridge, or building the Temperance Flat or Sites reservoirs, where are the unions? Why aren’t hundreds of them showing up two hours early to these meetings, elbowing the environmentalist trial lawyers and their zealous puppets out of the room? Why aren’t they packing the out-of-control California Air Resources Board meetings to show solidarity with the workers in dairies, agriculture, manufacturing, mining and timber, trucking, and countless other industries who employ hundreds of thousands of Californians?

Instead California’s labor unions typically resort to “greenmail,” a tactic that goes as follows: Pick a project that the environmentalist lobby doesn’t actually object to, then sue the developer on environmentalist grounds until they concede to enact a project labor agreement, than drop the lawsuit.

Is this the best they can do?

California’s private sector labor movement should consider how environmentalism, married with the special interests of monopolistic corporations, allied with government labor whose agenda is utterly different than their own, have destroyed literally millions of good jobs in this state. They should consider how close California is to becoming an authoritarian wasteland, where land, water, energy, housing and transportation are cynically rationed by this alliance of oligarchs and elitists. They need to wake up and fight for their core principles – the welfare of workers and their families.

An essential point that union leaders and their members ought to understand is the cost of building infrastructure in California is prohibitive for reasons that go far beyond paying a prevailing wage, or even the cost of hiring a few extra employees on a project to comply with union work rules. The costs are prohibitive because oligarchs and elitists have colluded to make every element of a project more expensive – the land, power, materials, transportation, staging, permits, and time-delays. The compounding effect of these pernicious barriers have enriched oligarchs, government workers, and the trial lawyers representing the environmentalists. They’ve made the rest of us poorer, and they’re the real reason we don’t have more good jobs.

To take one dramatic example, consider the Carlsbad desalination plant, which – not even including distribution pipes to move the water into the municipal supply – was built at at a capital cost of $12,733 per acre foot of annual capacity. Compare that to the Sorek desalination plant, completed in Israel in 2013 at a capital cost of $4,111 per acre foot of annual capacity, less than one-third as much! This was accomplished in a nation where labor is not cheap, nor is the government a paragon of free market deregulation. This is not an isolated case.

It is a crime against all Californians that other developed nations can build infrastructure for less than one-third what it costs here, and that other states in the U.S. can build infrastructure for less than half what it costs in California. Labor costs occupy a dwindling percentage of what infrastructure projects cost, which means that unions should start lobbying aggressively for infrastructure investment, instead of playing petty greenmail games. They may not win every project labor agreement battle. But they will win the war to create millions of good new jobs, and change California from a land of authoritarian scarcity back into a land of opportunity and abundance.

 *   *   *

Ed Ring is the president of the California Policy Center.

RELATED ARTICLES

California’s Misguided Water Conservation Priorities, August 17, 2016

Government Unions Benefit from the Asset Bubble that Harms Workers, July 19, 2016

How Gov’t Unions and Crony Capitalists Exploit Global Warming Concerns, June 21, 2016

The Alternative to Crony Capitalism and Phony Shortages, June 15, 2016

Government Unions and the Financialization of America, May 24, 2016

California’s Economically Illiterate Legislature, April 5, 2016

Practical Reforms to “Right-Size” Government Unions, March 29, 2016

Investing in Infrastructure to Lower the Cost of Living, March 14, 2016

The Future of Unions in the Post-Scalia Era, February 16, 2016

In Search of a Legitimate Labor Movement, January 19, 2016

The Alliance Between Wall Street and Public Unions, December 1, 2015

Why Aren’t Unions Fighting California’s Bullet Train Boondoggle?, November 24, 2015

When Will Unions Fight to Lower the Cost of Living?, October 27, 2015

Why Pension Reform is Inevitable, and How Reforms Can Benefit the Economy, July 21, 2015

Libertarians, Government Unions, and Infrastructure Development, May 5, 2015

Desalination Plants vs. Bullet Trains and Pensions, April 7, 2015

Raise the Minimum Wage, or Lower the Cost of Living?, March 31, 2015

The Abundance Choice, December 24, 2014

An Economic Win-Win For California – Lower the Cost of Living, December 3, 2014

How to Create Affordable Abundance in California, July 1, 2014

California’s Green Bantustans, May 21, 2014

High Speed Rail Is ‘On Track’ to Incur Billions in Overruns

Editor’s Note: This article by Jon Coupal provides an update on what has to be one of the biggest con jobs ever perpetrated on California’s voters – “High Speed Rail” that will never make a profit, will never move significant numbers of people, will not even be “high speed” in many sections of track, cannot integrate with other rail assets (different track gauge), and is going to cost at least $50 billion more than they said it would. So why are we still doing this project? One significant reason is the political support it gets from organized labor. Rather than fight for projects that would actually improve the lives of millions of Californians, such as better roads, refurbished bridges, upgraded ports, new power stations, and sorely needed water infrastructure, California’s labor movement backs high speed rail. And the reason they do that is because they don’t want to fight the powerful environmentalist lobby. This is a failure of vision and it is a failure of courage. And it is difficult to overstate how much this fails the ordinary working families that organized labor purports to support above all else. Read on.

High-speed rail continues to be an expensive, sick joke for California. Under the current plan, it is no longer “high-speed” and projected costs, which seem to change almost daily, appear to be doubling.

In the latest news, the nascent California high-speed rail system is running $50 million over budget for a two mile stretch in Fresno.

Let that sink in for a moment.

$50 million, over budget, for just a two mile stretch.

Let’s see, HSR has a $50,000,000 cost over run on 2 miles of a 32 mile job. Does that mean we can expect total cost overrun of $25 million per mile times 32 miles or $800,000,000?

Better yet, let’s extrapolate that to the entire project. You know, the one sold to voters. According to High Speed Rail Authority itself, over 800 miles of track are needed. So, at $25 million of cost overruns per mile, that works out to $20,000,000,000. That’s $20 billion in cost overruns!

In just 3 years, from the original passage of Proposition 1A authorizing about $10 billion in High Speed Rail bonds, the estimated cost for high-speed rail had gone from $40 billion to $98 billion, the amount that independent expert analysis had predicted prior to the bond’s being approved.

Responding to public outrage, the High-Speed Rail Authority came up with a plan costing “only” $68 billion. The new “blended” system would combine high and low speed rail, doubling the travel times as well as ticket prices.

Fearing a voter revolt, the High-Speed Rail Authority rushed to break ground, hoping that once they dug a hole, the pet project of Gov. Brown and the majority of Sacramento lawmakers, who receive backing from construction contractors and labor unions that expect to be the primary beneficiaries of billions of dollars of public spending, would be safe from outside interference.

By beginning a first segment between Merced and Fresno, the rail authority engaged in the classic Willie Brown strategy. The former Assembly Speaker, in a moment of candor, once told the San Francisco Chronicle, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Constant cost overruns and a lack of accountability plague California’s infrastructure projects. Perhaps, as a public service, it should be required that Brown’s words be reprinted in every ballot summary for every construction bond placed before the voters.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

How Gov't Unions and Crony Capitalists Exploit Global Warming Concerns

If anyone is looking for evidence that government unions use their immense influence to support the growth of an authoritarian state, look no further than their unequivocal support for global warming “mitigation,” and all attendant agencies and laws to support that goal.

In 2006 California’s union-controlled legislature passed AB32, the “Global Warming Solutions Act,” a measure that was touted as a trailblazing breakthrough in the dire challenge to avoid catastrophic climate change. The premise behind AB32 is that CO2 is a dangerous pollutant, and that eliminating CO2 emissions is necessary to prevent the planet’s climate from overheating, with all the apocalyptic consequences; rising oceans inundating coastal regions, epic droughts cascading through the world’s fragile forests and killing them, extreme storms, acidic oceans, collapsing agriculture – the end of life as we know it.

Maybe that’s true – and maybe not – but how it’s being managed is a corrupt, misanthropic, epic scam.

If anyone is looking for evidence that government unions and crony capitalists work together – contrary to the conventional wisdom that presents the appearance that they are in conflict – again look no further than their shared support for global warming mitigation, expressed in the legislative mandate to reduce CO2 emissions. AB 32 implements this by forcing industrial entities to purchase permits to emit progressively smaller quantities of CO2, via an auction process that is expected to raise $20 billion per year to finance renewable energy investments.

Think about how government unions will benefit from all this money:

  • Transit workers will claim a share because they will be getting cars off the road.
  • Firefighters will claim more fires are because of global warming and demand more funds – when in reality most severe wildfires are the result of decades of forest mismanagement and unwarranted wildfire suppression.
  • Cities will qualify for proceeds when they zone extremely high density housing.
  • Code enforcement officers will declare that the percentage of their jobs oriented towards conservation and energy/water efficiency qualifies them for a share of the proceeds.
  • Teachers will declare that the percentage of their curricula oriented towards climate education qualifies them for a share of the proceeds.
  • More generally, municipalities will collect more property tax as restrictive zoning elevates the cost of housing.

Think about how crony corporations and corrupt financial special interests benefit from this money:

  • Wall Street traders will set up new subsidiaries to traffic in carbon emission auctions and take a cut.
  • “Green” entrepreneurs will manufacture devices calculated to save energy and water – despite the fact that the shortages are contrived.
  • Producers of energy and water will sell at higher prices since competitive development of these resources is restricted.
  • Utilities whose profits are “decoupled” from the quantity of energy and water they deliver will increase revenue and hence their profit margins which are pegged to revenue, without having to increase services.
  • Manufacturers of noncompetitive products with no natural demand – high speed rail is a perfect example – are enriched via hundreds of billions of investment for their supposedly greener and cleaner solutions.
  • More generally, artificial scarcity causes asset bubbles which benefits wealthy investors and pension funds, but impoverishes ordinary workers.

Even if CO2 is a threat to life on earth, there is an alternative that merits discussion:

Instead of investing in “green” energy infrastructure and embedded surveillance systems to micro-manage energy consumption, California should be investing in natural gas and 5th generation nuclear power stations, desalination plants along the coast, liquid natural gas terminals, efficiency upgrades to existing high-voltage transmission lines, run-off harvesting and aquifer storage systems, upgraded aqueducts, comprehensive waste-water treatment and aquifer recharge, offshore drilling for oil and gas, widened roads and freeways, more airport runways, and buses for mass transit. These steps will result in energy, water and transportation costing everyone in California less. This will benefit businesses and consumers, and make California a magnet for investors and entrepreneurs all over the world.

And even if CO2 is a threat to life on earth, vigorous debate on that topic should be encouraged, not outlawed.

If you are an informed skeptic – something the axis of government unions and powerful financial special interests are trying to outlaw – it becomes tiresome to recite the litany of legitimate reasons that debate regarding the actual impact of anthropogenic CO2 is of critical importance. The primacy of solar cycles, the multi-decadal oscillations of ocean currents, the dubious role of water vapor as a positive feedback mechanism, the improbability of positive climate feedback in general, the uncertain role (and diversity) of aerosols, the poorly understood impact of land use changes, the failure of the ice caps to melt on schedule, the failure of climate models to account for an actual cooling of the troposphere, the fact that just the annual fluctuations in natural sources of CO2 emissions eclipse estimated human CO2 emissions by an order of magnitude. And let’s not forget – California only is responsible for 1.7% of global anthropogenic CO2 emissions. Does any of this matter to the California Air Resources Board?

Apparently not. Nor does it matter to California’s legislature, which recently stopped just short of passing Senate Bill 1161, the Orwellian California Climate Science Truth and Accountability Act of 2016. SB 1161 would have authorized prosecutors to sue fossil fuel companies, think tanks and others that have “deceived or misled the public on the risks of climate change.”

What California’s legislature ran up against, of course, was the U.S. Constitution. Perhaps they believe time is on their side. After all, even the Scalia court ruled in 2007 that CO2 is pollution, in one of the most frightening inversions of reality in U.S. history. Imagine what a court packed with Clinton appointees will come up with.

The failure to deploy clean fossil fuel solutions in the developing world, much less here in California, condemns billions of humans to further decades of poverty, misery, and unchecked population growth. Cheap energy equals prosperity equals population stabilization. Until a few years ago that hopeful process was inexorable. But in recent years, somewhere on the shores of Africa, cost-effective industrial development ran into global warming’s global mafia and was stopped in its tracks.

The consolidation of power inherent in government suppression of energy development and micromanagement of energy consumption is not only a recipe for a corporate union police state in America. It is a recipe for systemic oppression of emerging societies across the world. At the very least, the debate must continue.

 *   *   *

Ed Ring is the president of the California Policy Center.

"Other" in California Prevailing Wage Creeps Higher

The California Department of Industrial Relations does not determine state prevailing wage rates for construction trades by surveying contractors or workers or by using statistics gathered by the California Economic Development Department. By law, the state uses union agreements to set prevailing wages. Thus, the prevailing wage is always the “union wage.” And the geographical region of a prevailing wage is based on the jurisdictional boundaries of the relevant union.

Calculating a prevailing wage starts when a union official provides the Department of Industrial Relations with its master labor agreement negotiated with representatives of contractors signatory to the union. State personnel then review the union agreement and identify all of the payments an employer is required to make per hour worked by an employee represented by the union. Those payments are assigned to categories identified in state law and added up to determine the prevailing wage.

For example, the state calculates the prevailing wage for a inside wireman electrician working in Sacramento County by identifying and adding up all the payments made by a National Electrical Contractors Association (NECA) contractor per hour worked by an inside wireman represented by the International Brotherhood of Electrical Workers (IBEW) Local No. 340.

A prevailing wage determination includes a “Basic Hourly Rate” paid directly to the employee (from which union initiation fees and dues are deducted). Fringe benefits are categorized as “Health and Welfare,” “Pension,” “Apprenticeship and Other Training,” and “Vacation/Holiday.” There is also a Travel/Subsistence amount for workers who travel a certain distance from a certain location, as indicated in the master labor agreement.

Sacramento County Inside Wireman Prevailing Wage

Then there is the mysterious “Other,” comprised of payments to “worker protection and assistance programs or committees,” “industry advancement and collective bargaining agreements administrative fees,” and “other purposes” similar to those listed above. Basically, employer payments in master labor agreements that don’t fit in one of the direct employee fringe benefit categories get classified as “Other.”

“Other” was added to prevailing wage determinations on January 1, 2004 after the soon-to-be-recalled Governor Gray Davis signed the union-backed Senate Bill 868 in 2003. Union lobbyists and lawyers are very protective of this new category incorporated in prevailing wage rates and fought an effort in 2006 to impose regulations on it.

Federal and state law do not establish any specific regulations or reporting requirements for the trust funds that receive payments indicated in “Other.” Most of them file an annual Form 990 with the Internal Revenue Service, and they will file a Fair Political Practices Commission (FPPC) form when making a campaign contribution to a ballot measure. But union members are not informed about how these trust funds spend money, and these trust funds don’t need to file any reports with the federal Office of Labor-Management Standards (OLMS) or Federal Mediation and Conciliation Service (FMCS).

Sacramento County Inside Wireman Prevailing Wage - OtherDuring the past 16½ years, a little bit of taxpayer money has been diverted to these union-affiliated “Other” trust funds as workers represented by unions built government facilities and private developments with government funding. But now that “little bit” is becoming “quite a bit” in some cases.

On June 1, 2014, the master labor agreement for inside wiremen electricians in Sacramento County (and surrounding counties in the IBEW Local No. 340) increased Other from 47 cents to $3.47. On June 1, 2015, Other increased to $5.47. On June 1, 2016, Other increased to $7.47. The union informed the California Department of Industrial Relations that the money was going to “LMCT,” meaning a Labor-Management Cooperation Committee.

Sacramento County Inside Wireman Prevailing Wage LMCT Increase 2014IBEW Local 340 Wages as of June 1 2015Provisions in the IBEW Local No. 340 master labor agreement suggest this LMCC is the Sacramento Electrical Construction Industry Labor-Management Cooperation Committee. Gross receipts for this trust fund from June 1, 2014 to May 31, 2015 totaled $2,420,684. It gave a “distress grant” of $107,946 to the Shasta Butte Electrical Workers Training Fund. (94-2584061). It was also somehow “providing wage supplementation” to union employers to compete against non-union employers, perhaps through a program sometimes referred to as “job targeting.” No other specific expenditures are known.

Obviously “Other” is becoming a taxpayer-funded bonanza of millions of dollars to union-affiliated non-profit organizations that provide little information to union members, government, or the public. Consider the number of trades and the number of unions representing these trades in California. How much is being collected for “Other?” How is it being spent? Shouldn’t union members know where that money goes?

More relevant for the general public is knowing how much of that money goes to lobbying and campaigning. The California Department of Industrial Relations is supposed to exclude employer payments for political purposes from prevailing wage determinations. Perhaps the state needs to begin scrutinizing the expenditures of “Other” trust funds receiving $7.47 per hour on behalf of each worker.

Sources

International Brotherhood of Electrical Workers Local 340 Master Labor Agreement 2014-2017

International Brotherhood of Electrical Workers Local 340 Wage Rates as of June 1, 2015

California Prevailing Wage for Inside Wiremen Electricians in Sacramento County as of February 22, 2016 (before $2.00 increase June 1, 2016 for Other)

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2015

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2014

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2013

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2012

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2011

Sacramento Electrical Construction Industry LMCC Trust – IRS Form 990 – 2010

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2015

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2014

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2013

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2012

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2011

International Brotherhood of Electrical Workers (IBEW) Local 340 USDOL LM-2 2010

 


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Resist the “Pothole Tax”

Last week, Will Kempton, Executive Director of Transportation California and former Director of Caltrans published a response to Jon Coupal, President of the Howard Jarvis Taxpayers Association, in a Fox & Hounds piece stating that, “…in spite of all the recent audits and criticism, the organization [Caltrans] employs competent people who want to serve the public well.”  In the same piece he highlighted the need to address California’s transportation funding crisis and provided one solution: Raise your taxes even higher.

There is no doubt that there are many fine and capable Caltrans employees who simply want to build and maintain our state’s highway system. What Kempton missed was the incredible dysfunction at Caltrans and tries to deflect any criticism of the department.  He of all people knows how bad it really is at Caltrans, and for those who are unaware of the facts, his echo to raise taxes for transportation spending might seem like the only viable option. However, reports concerning a very dilapidated Caltrans are replete with criticisms of its inability to provide details for budget reviews and audits by either the LAO or the State Auditor.

 

Will Kempton, Former Director of the Department of Transportation (Caltrans)

 

We’re told the Governor and the Secretary of Transportation are serious about fixing California’s roads, but can you mention one initiative to actually fix Caltrans?  All I hear is cries for more tax increases.

Allow me to review a few facts revealing the competency level at Caltrans:

Left up to the Governor and the legislature, it will be YOU, the taxpayer, who will be asked to fund a “pothole” tax. I hate to break it to you, but you’re being taken to the cleaners. You are the victim of intentional infrastructure neglect. This literally is “highway robbery.”  The fix is in.  And the answer is you and your wallet.

California’s leadership should be sincere in its pursuit of better roads.  Fix Caltrans. Taxpayers should expect no less.

I’m ready to #FixCaltrans.

Watch & Share this video: ‪bit.ly/FixCaltransVid 

About the Author: As a Certified Public Accountant and Certified Financial Planner, John Moorlach began his career in public service 20 years ago when he warned that then Orange County Treasurer-Tax Collector Robert Citron’s risky investment strategies would lead to bankruptcy.  Moorlach’s warnings proved true when Orange County filed for bankruptcy protection in December of 1994, becoming the largest municipal bankruptcy in U.S. history. John Moorlach was twice re-elected to County Treasurer-Tax Collector. In 2006, voters elected John to serve in his first of two terms on the Board of Supervisors, where he continued his focus on reforming the county’s budget practices and sounding the alarm on the county’s growing unfunded liabilities. He now currently holds office as the State senator for the 37th senate district.

High Costs of Pro-Union Agreements & Policies Negates Transportation Tax

According to my father, in the 1950s and ’60s, California had the best transportation agency in the entire world. But all that changed with the election of a new, anti-growth, small-is-beautiful governor by the name of Jerry Brown.

Now, fast forward 40 years. Governor Brown, version 2.0, proposes a budget that assumes a big increase in transportation taxes and fees. The California Legislature shouldn’t just say no, it should say hell no.

Where to start? First, let’s take judicial notice of the fact that California is already a high tax state with the highest income tax rate and the highest state sales tax in America. But more relevant for the issue at hand, we also have the highest fuel costs in the nation. This is because of both the 4th highest excise tax on fuel and the fact that refineries are burdened with additional costs to comply with California’s environmental regulations.

 

Despite analysis findings that Caltrans is overstaffed by 3,500 employees,  the California State Auditor & Senator John Moorlach conclude that the agency is both incompetent and inefficient in the maintenance of California’s roads and highways.

 

The high cost to drive in California might be understandable if we were getting value for our tax dollars. But we aren’t. A big problem is that Caltrans is dysfunctional, plain and simple. It has never fully recovered from the days when the agency was effectively destroyed by Gianturco. A report by the California State Auditor just a couple of months ago concluded that a primary responsibility of Caltrans – maintenance of our highways – is not being executed in a manner that is even close to being efficient or competent. Senator John Moorlach, the only CPA currently serving in the California legislature, reacted saying that “This audit reinforces the fact that our bad roads are not a result of a lack of funding. They’re a result of a lack of competence at Caltrans.” Moreover, a report by the Legislative Analyst concluded that Caltrans is overstaffed by 3,500 employees costing California taxpayers over a half billion dollars a year. All this compels the obvious question: Why, for goodness sake, do we want to give these people even more money?

Another unneeded and costly practice consists of project labor agreements for transportation construction projects. These pro-union policies shut out otherwise competent companies from bidding on projects resulting in California taxpayers shelling out as high as 25% more than they should for building highways and bridges.

Finally, California’s environmental requirements are legendary for their inefficiency while also doing little for the environment. Exhibit A in this foolishness is Governor Brown’s incomprehensible pursuit of the ill-fated high speed rail project. Not only has the project failed to live up to any of the promises made to voters, it is currently being kept alive only by virtue of the state’s diversion of “cap and trade” funds which are supposed to be expended on projects that reduce greenhouse gas emissions. But in the Kafkaesque world of California transportation policies, the LAO has concluded that the construction of the HSR project actually produces a net increase in emissions, at least for the foreseeable future.

No one disputes the dire need for improvements in California’s transportation infrastructure. But imposing draconian taxes and higher registration fees that serve only to punish the middle class while wasting billions on projects that don’t help getting Californians get to work or school cannot and should not be tolerated. Legislators who present themselves to voters as fiscally responsible need to understand that a vote for higher transportation taxes will engender a very angry response from their constituents.

About the Author: Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.