Unions party like it’s 1886

Court Ruling Clears Way for Permanent Implementation of San Diego Pension Reform Initiative

Union In The News – Weekly Highlights

Gerawan Farming settles 2013 labor charge with UFW
By Robert Rodriguez, October 24, 2016, Fresno Bee
Gerawan Farming, the United Farm Workers union and the Agricultural Labor Relations Board have entered into a settlement agreement over a 2013 charge that the Fresno County farming company violated state labor law. The Fresno County tree fruit grower has been at odds with the union over representing its workers. In 2013, the grower was accused by the UFW of not supplying accurate employee contact information to the union. A second and third complaint were later filed, accusing the grower of the same problem. The ALRB investigated the allegations and concluded Gerawan had violated the state Agricultural Labor Relations Act by not supplying accurate employee contact information. (read article)

California: Minimum wage hike, state-run retirement savings plan
By Mark Gruenberg, October 21, 2016, People’s World
A big minimum wage hike that will benefit one-third of the state’s workers and a state-run retirement savings plan that forces companies without pension plans or 401(k)s to enroll workers in retirement accounts head the list of California pro-worker legislation passed this year. The measures are important as the Golden State, which is home to one of every eight people in the U.S., is often a trend-setter for the rest of the country. And the California Labor Federation’s legislative success there shows what can aid workers when they join together to elect pro-worker governors and legislators. They’re also continuing to do so. Despite lopsided pro-worker majorities in the state Assembly and the state Senate, they’re not veto-proof, and the state fed wants to make them that way. (read article)

Why business groups aren’t fighting California’s tobacco and income tax hike initiatives
By Liam Dillon, October 20, 2016, San Diego Union Tribune
Four years ago, business leaders financed a multimillion-dollar campaign to oppose an initiative to raise income taxes on California’s highest earners. The same year, the California Chamber of Commerce was featured prominently in television advertisements against a ballot measure to increase the cigarette tax. Now, with new versions of both the income and tobacco taxes on the statewide ballot, money from the business community isn’t there and neither is the same level of opposition. Instead, many business groups are reluctantly resigned to an extension of the higher income tax rates and, in some cases, are even promoting the cigarette tax hike. (read article)

California’s largest state worker union to vote on strike
By Adam Ashton, October 19, 2016, McClatchy Washington Bureau 
State government’s largest union is edging closer to a strike. SEIU Local 1000 President Yvonne Walker has called for a strike vote of the union’s 95,000 members beginning next week, according to a statement on the union website. The union is trying to get a bigger raise than the 2.96 percent pay hike Gov. Jerry Brown’s administration is offering. Brown’s proposal would raise SEIU salaries by 12 percent over four years, but also require its members to begin paying a contribution toward their retiree health care costs. “We still believe the state can do better,” Walker wrote in a message to SEIU members. Walker wrote to union members that SEIU has been in negotiations with the state for the past six months. In July, union leadership voted to authorize a strike vote. The next step toward a strike would be a vote by union members. (read article)

Can Teachers Unions Bargain for Better — or Fewer — Charter Schools?
By Rachel M. Cohen, October 18, 2016, The American Prospect
In cities across the country, teachers unions have been strategizing ways to broaden the demands they bring to the negotiating table. Organizing under the banner of “bargaining for the common good,” educators and their community allies have started to challenge a legal regime that for too many years left unions solely focused on wages and benefits. One window of opportunity that teacher unions are exploring is charter authorizing—the process of opening, closing, and monitoring charter schools. Though laws vary from state to state, 90 percent of the nation’s roughly 1,000 charter authorizers are local school districts. (read article)

Labor unions, tech firms step up political spending, far more than 2012
By Gina Hall, October 18, 2016, Orlando Business Journal
Labor unions and Silicon Valley have stepped up spending in Washington, D.C. at a remarkable rate during the past year. Labor unions contributed almost $110 million in election spending from January 2015 through August 2016. That marks a 38 percent increase from $78 million at the same point in the 2012 election, and double the 2008 total during the same time frame, according to The Wall Street Journal. The union donations are largely headed to the Clinton campaign and to races that would give Democrats a majority in the Senate. Almost every major union is contributing to the cause. The AFL-CIO spent $11.4 million funding outside political groups so far this election cycle, compared to $5 million at this point in the 2012 election, according to the nonpartisan Center for Responsive Politics. The National Education Association has spent $14 million, up from $7.7 million in 2012. (read article)

Labor Leaders Support the Dakota Access Pipeline—But This Native Union Member Doesn’t
By Brooke Anderson, October 18, 2016, YES! Magazine
As clashes over the construction of the Dakota Access pipeline continue in North Dakota, a related battle is brewing in the halls of organized labor. In a statement issued September 15, the nation’s largest federation of trade unions threw in its support for the controversial oil pipeline.  Thousands of people, including members of over 200 tribes, have been camped at the construction site for months to stop the pipeline, which would move 500,000 barrels of crude oil a day across four states, threatening the water supply of the Standing Rock Sioux Reservation. As the controversy heated up, four unions representing pipeline workers denounced the water protectors, claiming they were illegal protesters who were committing dangerous actions while Illegally occupying private land. The AFL-CIO, which represents 55 unions and 12.5 million members, quickly followed suit. (read article)

Unions bet big on the Senate
By Gigi Douban, October 18, 2016, Marketplace.org
There’s been big spending by labor unions in this election — and even more in the last couple weeks. The powerful AFL-CIO has spent millions on 2016. Of course, labor unions have long supported Democrats, but this year they’re looking beyond the presidential race to the Senate and even farther down the ballot. Union reps are already in battleground states from Ohio to Wisconsin doing what they do best: knocking on doors, making calls, handing out leaflets at factories. And over the coming weeks, voters in those states can expect an even bigger push. (read article)

Four East Bay construction unions oppose project approvals in bid for developer concessions
By Roland Li, October 18, 2016, San Francisco Business Times
Members from four East Bay construction labor unions have united in an attempt to block at least five approved Oakland projects unless developers agree to implement local hiring requirements, commit to paying union wages and provide other concessions. The new group, East Bay Residents for Responsible Development, won a victory on Tuesday as the Oakland City Council is set to delay a vote for a second time on an appeal of developer Wood Partners’ 262-unit housing project at 226 13th St., according to multiple sources. Construction unions are frequently allied with developers and depend on project approvals to stay employed. But members of the new group feel that the region’s economic boom hasn’t benefitted them. The group has over 100 members who see developers shipping in workers from outside the Bay Area and paying wages that they say aren’t enough to live in the region. (read article)

CTU Delegates Overwhelmingly Support Tentative Labor Agreement
By Matt Masterson, October 18, 2016, Chicago Tonight
The Chicago Teachers Union’s House of Delegates on Wednesday evening overwhelmingly recommended a tentative labor agreement with Chicago Public Schools, paving the way for the union’s full membership to issue a binding vote on the deal next week. Nearly 500 CTU delegates participated in a non-binding advisory vote Wednesday at the River North Holiday Inn. Of those, approximately 350 stood in favor of the labor contract, according to union President Karen Lewis. “We have a completely bona fide process,” she told media following the vote, “and there’s always discussion, there’s always people that have completely different points of view, but the key is that we acknowledge that.” With Wednesday’s recommendation, the contract will now be reviewed and voted on by the union’s full membership for final approval. That will take place inside CPS schools on secret ballots Oct. 27 and 28. (read article)

Labor Unions Step Up Presidential-Election Spending
By Brody Mullins, October 18, 2016, The Wall Street Journal
U.S. labor unions are plowing money into the 2016 elections at an unprecedented rate, largely in an effort to help elect Hillary Clinton and give Democrats a majority in the Senate. According to the most recent campaign-finance filings, unions spent about $108 million on the elections from January 2015 through the end of August, a 38% jump from $78 million during the same period leading up to the 2012 election, and nearly double their 2008 total in the same period. Nearly 85% of their spending this year has supported Democrats. Almost every large union is spending more than has been seen in modern elections, financing rallies, canvassing efforts and ad campaigns to bolster Democrats. (read article)

Election Integrity and the Power of Unions

During the 2004 Presidential election there were allegations of voter fraud; the 2000 Presidential election was alleged to have been “stolen” by the Republicans. If you go further back in history, you can point to evidence the Democratic machine in Chicago manipulated election results to throw the 1960 Presidential election victory to Kennedy. A close reading of American history would reveal election fraud as a challenge to our democracy from the very beginning, and in every decade since then. It’s no surprise that we’re discussing it again.

What is a surprise is the opportunities for voter fraud, in this age of biometric identification technology and total information awareness, are actually greater than ever. Using California as an example, here are some of the reasons why:

Voters are not required to present a verifiable photo identification when they vote, and if they wish, voters don’t even have to show up at the polling place, they can vote by mail. Voting by mail causes a variety of problems – first, it precludes anyone showing an identification, and second, it prolongs vote counts after the election as workers tabulate the ballots. And the greater the number of ballots requiring post-election, manual counting, the more opportunities there are for political operatives who have infiltrated our election workforce to manipulate results. And because voting by mail is done outside of the controlled environment of the voting booth at the polling place, there is even less guarantee that these ballots are not filled out by someone other than the person supposedly voting.

And as reported by the Election Integrity Project in 2013, “California Suspends A Critical Method To Prevent Voter Fraud,” buried in the 2013 budget bill was suspension of the requirement that signatures on provisional ballot envelopes be compared against the voters’ registration signatures to determine voter eligibility. Should anyone doubt that election integrity is a bipartisan problem in 2016, consider this article, and this one, among a host of such online reports that allege ballot fraud erased a Bernie Sanders June 2016 primary victory in California.

Six years ago, RedState.com published a report entitled “How Unions or Their Allies Could be Stealing November’s Election Right Now,” alleging massive, systemic, union-orchestrated fraud has been implemented across the U.S. Whether or not this is true, or true at the scale being alleged, should not deter any concerned citizen from considering these charges, because they expose serious weaknesses that challenge the integrity of our voting process. Here are some of the allegations:

The SEIU and others funded the “Secretary of State Project” in 2005, pouring money into races to elect “reform minded” Secretaries of State in battleground states. In nine states since then they have successfully elected their candidates. Since the Secretary of State oversees elections, who sits in that position can potentially have a corrupting influence on election outcomes when there are recounts – or when there is a high percentage of mailed absentee ballots. In California, the employees who count and verify ballots are members of the SEIU. Is this appropriate? Are these people disinterested parties to election outcomes?

The report went on to claim the SEIU has been attempting to manipulate the electoral system across the United States, engaging in actions ranging from submitting forged initiative signatures, to invalid voter registrations, to hacking into voter machines, to destroying evidence of hacked machines. The report discusses how fake IDs are being used to exploit lax voter registration procedures, that illegal immigrants are being signed up as “permanent absentee voters,” and that early voter “rallies” are being held where voters are instructed, as a group, how to mark their mail-in ballots.

Is all of this true? Are unions such as the SEIU the biggest players, engaging in electoral manipulation that eclipses any potential manipulation by the other side? One thing is certain, they certainly have the financial power to do this. Unions, who compel employees to join their ranks and pay them mandatory dues, exercise financial clout that can overwhelm most other special interests, particularly when most other special interests are either terrified of unions or working with them. It is naive to dismiss the idea that big labor, big business, and big government would not have a common interest in colluding to squelch competition by emerging entrepreneurs and disruptive technologies.

Whether or not unions fraudulently manipulate our election results, they certainly buy them. Any reforms to improve the integrity of our elections or impose yet another restriction on campaign finance must first address this fact – unions compel millions of American workers to become members, impose upon them mandatory dues, and use this illegitimately acquired wealth to exercise far too much influence on our democracy.

Local Governments Rigging Elections – Again

With all the state and local taxes on the November ballot, one would think that government at all levels in California was starved for revenue. But even a cursory review of the Golden State’s “tax machine” reveals that the tax burden is already too heavy for many to bear. California has the highest income rate in America (likely to be extended for another 12 years) and the highest state sales tax rate. And despite Prop 13, our per capita property tax collections ranks no lower than 14th in the nation.

In the June primary, voters already passed 29 out of 40 local tax increases. But those taxes register as barely a blip compared to the earthquake confronting voters in less than three weeks. According to the California Taxpayers Association, there are 228 local tax measures representing a cumulative tax increase of more than $3 billion per year, along with 193 bonds (more than $30 billion’s worth) that would dramatically increase annual property taxes.

After the June primary, this column observed that the high rate of passage reflected not so much a love for higher taxes as it did the fact that the tax raisers have become experts at gaming the system to pass tax and bond measures. Highly paid political consultants tell local officials not to publicize tax elections to the entire community, but to target only their supporters. This means running stealth elections, communicating (in the case of school bonds) with only administrators and construction firms who are always more than willing to finance political campaigns and, of course, public employee unions who never met a tax they didn’t like.

The strategies that the pro-taxers employ to extract money from an unsuspecting citizenry are endless. For example, many school boards, cities and counties do all they can to time elections so that potential opponents have inadequate time to mobilize. The ultimate goal is to prevent an opposition argument from even appearing in the ballot pamphlet. On countless occasions, taxpayer advocates have been blindsided by proposed tax increases because they were only afforded a few precious days to submit an argument. And when it is too late, there are few legal remedies.

The ultimate insult to taxpayers, of course, is when local governments use public dollars to engage in political advocacy to influence an election. In theory, it is illegal for officials to use public resources (including public funds) to urge a vote for or against a political issue. But, in practice, it happens all the time. Two weeks ago, both the Howard Jarvis Taxpayers Association and the Central Coast Taxpayers Association filed a complaint with the Fair Political Practices Commission alleging campaign reporting violations of the Political Reform Act by the County of San Luis Obispo, the San Luis Obispo Council of Governments (SLOCOG) and the Yes on Measure J Committee, a group pushing a local transportation tax. These government entities have spent nearly a quarter of a million taxpayer dollars on promotional materials and government employee and contractor compensation supporting Measure J.

As the November election draws near, the complaints about government interference in elections have ramped up dramatically. In Sacramento, the Sacramento City Unified School District used “robocalls” to contact thousands of parents with “important information” about the benefits of a parcel tax as well as statewide Proposition 55. According to the Sacramento Bee, the district sent the scripted messages recorded by five district trustees through its automated telephone message distribution system, explaining how the two tax measures would raise money for school programs and services that otherwise could be slashed. (This despite the fact that education spending in California has exploded since 2010).

Such communications are neither information nor balanced. They are always one-sided puff pieces designed solely to extract yes votes from uninformed voters.

California voters need to be alert to the lies, distortions and illegal expenditures of taxpayer dollars when considering any request for higher taxes. Yes, government services require public dollars. But before voting yes on any tax increase, ask yourself why is it that other states have markedly better public services without the high price tag.

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.

American Federation of Teachers Costly Staff Spending

Dropout Nation recently reported on the American Federation of Teachers’ 2015-2016 financial disclosure to the U.S. Department of Labor. As you would expect, the nation’s second-largest teachers’ union spent big on influencing Democratic presidential nominee Hillary Clinton and her apparatchiks, as well as pouring heavily into what should be like-minded advocacy and nonprofit groups.

But AFT’s big spending doesn’t just end with political campaigns and co-opting minority as well as hardcore progressive groups. The union even spends big on its own staff and operations.

Start with AFT President Rhonda (Randi) Weingarten, whose paychecks put her in the top five percent of the nation’s income earners even as she engages in class warfare rhetoric. The union paid Weingarten $497,311 in 2015-2016, just a couple hundred dollars more than she pulled down in the previous year.

Also well-paid by the union is Loretta Johnson, who serves as its secretary-treasurer; her $358,225 in 2015-2016 was a grand or so higher than in the previous year. Meanwhile Mary Catherine Ricker, the former Saint Paul Federation of Teachers boss who now serves as the union’s number two (and in the process, serving as an obstacle to United Federation of Teachers boss Michael Mulgrew’s ambitions to succeed Weingarten as head of the national union), was paid $311,311, a 5.4 percent increase over her pay in 2014-2015.

Altogether, the AFT’s top three leaders collected $1.2 million last fiscal year, a slight increase over the $1.1 million paid to them by the union in 2014-2015.

Also making bank are AFT’s staffers, though there are slightly fewer of them this time around. Two hundred twenty-two staffers earned more than $100,000 in 2015-2016, seven fewer than the 229 in the previous year. Three out of every five staffers at AFT national headquarters earn six-figure sums. Among the union’s high-paid mandarins: Michelle Ringuette, the former Service Employees International Union staffer who is now Weingarten’s top assistant, made $230,736, while Michael Powell, who serves as Weingarten’s mouthpiece, earned $240,647. Kristor Cowan, the AFT’s chief lobbyist, earned $186,293, while Kombiz Lavasany, another operative who oversees Weingarten’s money manager enemies’ list, earned $184,158.

Supporting these high salaries is an ever-declining rank-and-file base. AFT counts 675,902 full-time rank-and-filers on its roster in 2015-2016, a 3.4 percent decline over the 699,739 members on the roster in the previous fiscal year. [Dropout Nation does not call them members because in  nearly every case, AFT and its affiliates use state laws to force teachers to join.] This marks the third straight year of declines and the fifth year of decline within the past six.

The union also experienced a 1.5 percent decrease in the number of half-time rank-and-filers (or school employees making less than $18,000 a year); a seven percent decline in one-quarter rank-and-filers (nurses and state government employees whose unions are affiliated with AFT); and a 2.7 percent decline in the number of one-eighth rank-and-filers. Seems like the union’s once-successful effort to strike affiliation deals with nursing and other government employee unions, an effort that put it in competition with the much-larger Service Employees International Union, has fallen to seed.

Even worse for AFT: Its effort to increase the number of so-called associate members who pay directly into national’s coffers, continues to be in free-fall. AFT counts just 49,984 such members on its rolls in 2015-2016, a 14.5 percent decline over the previous year. This shouldn’t be shocking. After all, AFT cannot provide associate members any real assistance in terms of negotiating teachers’ contracts or addressing work rules. Besides, the associate members can’t even vote in union elections.

As a result of these declines, AFT’s counts just 1.5 million rank-and-filers and voluntary members, a 4.3 percent decrease over the previous year.

The good news for AFT is that the death of U.S. Supreme Court Associate Justice Antonin Scalia earlier this year assured that there was a tie vote on Friedrichs vs. California Teachers Association; his vote would have likely led to the overturn of Abood v. Detroit Board of Education, the five-decade-old ruling that gives AFT the ability to compel teachers pay dues regardless of their desire for membership. As your editor noted two years ago, the end of compulsory dues laws could cost AFT 25 percent of its membership and $36 million in revenue (based on 2012-2013 numbers), a hit for which the union isn’t likely ready to address.

The other good news for AFT is that it hasn’t affected revenue. The $192 million in dues and other agency fees (in the form of a so-called per-capita tax collected from locals and affiliates) generated by the union in 2015-2016 is 21 percent higher than in the previous fiscal year. AFT’s overall revenue of $328 million (including loan proceeds) is unchanged from 2014-2015.

This time around, the union didn’t have to borrow as heavily as it has in previous years to keep operations afloat; it borrowed just $55 million in 2015-2016, half the level of borrowing in the previous year. Overall, the union has borrowed $477 million over the past five years. The union did sell more of its investments in order to make due; the union sold $29 million of its portfolio in 2015-2016, more than double the investment sales in the previous year. Without the loans and investment sales, AFT’s revenues were just $244 million, a 15 percent increase over levels in 2014-2015.

But the bad news is that AFT may still lose revenue. One reason: The abolishing of collective bargaining and forced dues collections in Wisconsin, Tennessee, and Michigan. This has resulted in AFT losing teachers who realize that they don’t have to pay into unions that don’t represent their interests.

Another problem for the union: More of its affiliates and locals are either merging with those of the National Education Association or striking affiliation agreements with it. Membership declines forcing such mergers is one reason. But as seen in California, where the AFT’s United Teachers Los Angeles has struck a joint affiliation deal with NEA, the AFT’s larger locals are realizing that such triangulation gives them stronger influence over education policy at state and local levels.

But the gains for the big locals (who honestly don’t need AFT affiliation anyway) means both lost revenue for AFT as well as the ability to keep locals from straying away from the party line. [There’s also that pesky matter of being forced into a merger with NEA, a matter long-discussed among hard-core traditionalists.] Given the rancor from AFT rank-and-filers over strong-arm moves by national to remove wayward leaders in locals such as Detroit, expect more large locals to strike joint affiliation agreements or even break away from the national union in the near-future.

The consequences of efforts to abolish collective bargaining and joint affiliations by locals don’t just hurt AFT’s ability to use money to preserve influence. It also harms its ability to pay for the high costs of employing so many six-figure staffers.

While benefit costs have barely budged (remaining at $17 million), AFT’s general overhead costs increased by 4.8 percent within the past year. The good news for AFT is that it was able to offset some of those expenses with a 10.8 percent decrease in so-called union administration expenses. Meanwhile AFT’s post-retirement obligations increased by six percent (to $38 million) in the past year.

Luckily for the AFT, its staffers and leaders pay into definedcontribution retirement plans used by the rest of the private and nonprofit sectors. A funny thing given its opposition to efforts by school reformers and others to move away from the virtually-insolvent defined-benefit pensions championed by Weingarten and the union. Hypocrisy is like that sometimes.

About the Author: RiShawn Biddle is Editor and Publisher of Dropout Nation — the leading commentary Web site on education reform — a columnist for Rare and The American Spectator, award-winning editorialist, speechwriter, communications consultant and education policy advisor. More importantly, he is a tireless advocate for improving the quality of K-12 education for every child. The co-author of A Byte at the Apple: Rethinking Education Data for the Post-NCLB Era, Biddle combines journalism, research and advocacy to bring insight on the nation’s education crisis and rally families and others to reform American public education. This article originally appeared in Dropout Nation and is republished here with permission from the author.

Put Public Employees on Secure Choice and Social Security

“The state shall not have any liability for the payment of the retirement savings benefit earned by program participants pursuant to this title.” – California State Senator Kevin De Leon, August 7, 2016, Sacramento Bee

This quote from Senator De Leon, one of the main proponents of California’s new “Secure Choice” retirement program for private sector workers, says it all. Because De Leon’s comment reveals the breathtaking hypocrisy and stupefying innumeracy of California’s legislature.

Let’s start with hypocrisy.

De Leon is careful to protect private sector taxpayers from having to bail out their new state administered “secure choice” retirement plan, but no such safeguard has ever been seriously contemplated for the state administered pension plans for state and local government workers. These plans, using official numbers, are underfunded by about $250 billion. If you don’t assume California’s 92 state and local government worker pension systems can earn 7.5% per year, they are underfunded by much more – at least a half trillion.

Underfunded government worker pensions are the real reason why Prop. 55 is offered to voters to extend the “temporary” “millionaires tax” till 2030. That will raise about $6 billion per year. Underfunded local government worker pensions are also the reason for 224 local tax increases proposed on this November’s ballot, which if passed will collect another $3.0 billion per year. And it isn’t nearly enough.

The following table, excerpted from a recent California Policy Center study, shows how much California’s state and local government pensions systems have to collect per year based on various rates of return. At the time of the study, the most recent consolidated data available was for 2014. As can be seen – at a rate of return of 7.5% per year, state and local agencies have to put $38.1 billion into the pension funds. And at a rate of return of 6.5% per year, which CalPERS has already announced as their new “risk free” target rate, they have to turn over $52.3 billion per year. How much was actually paid in 2014? Only $30.1 billion.

20160516-cpc-ring-pension-liabilities

To summarize, in 2014 the pension funds collected $8.0 billion less than they needed if they think they can earn 7.5% per year. But following CalPERS lead, they’re lowering their projected rate of earnings to 6.5%, which means they were $22.2 billion short. There are 12.8 million households in California. That equates to at least $1,734 in additional taxes per household per year just to keep state and local pensions solvent.

And it gets worse. Because in order to ensure this new “Secure Choice” program doesn’t get into the same financial predicament that California’s government pension systems confront, the “risk free” rate of return they intend to project is not 7.5%, or 6.5%, or even 5.5%. No, they intend to initially invest the funds in Treasury Bills, which currently pay at most 2.5%. In an analysis of Secure Choice’s proposed costs and benefits performed last April, we express what using a truly “risk free” rate of return portends for California’s private sector workers vs. public sector workers. These estimates are based on all participants, public and private, contributing 10% to the fund via withholding.

Public sector:  Teachers/Bureaucrats, 30 years work  –  pension is 75% of final salary.

Public sector:  Public Safety, 30 years work – pension is 90% of final salary.

Private sector:  “Secure Choice,” 30 years work – pension is 27.6% of final salary.

There are two reasons for this gigantic disparity. First, public pension funds collect far more than 10% of salary. While the employee rarely pays more than 10% via withholding, the employer – that’s YOU, the taxpayer – typically kicks in another 20% to 40% or more, that is, a two-to-one up to a four-to-one employer matching contribution. Second, to justify the optimistic projections that make such generous pensions appear feasible, public pension funds have assumed a “risk free” rate of return of 7.5% per year.

Which brings us to innumeracy.

During the fiscal year ended 6/30/2015, CalPERS earned a whopping 2.4%. That stellar performance was followed in fiscal year ended 6/30/2016 by a return of 0.6%. It doesn’t take a Ph.D economist to know that California’s pension funds are going to need to greatly increase their annual collections. It only takes horse sense. But even horse sense eludes California’s innumerate lawmakers.

So here’s a modest proposal. Why not freeze the employer contributions into California’s state and local employee pension funds at 20% of salary (that’s a two-to-one match on a 10% contribution via withholding), and then, constrained by those fixed percentages, lower all benefits, for all participants, on a pro-rata basis to restore solvency. Better yet, why not enroll every state and local government employee in the Secure Choice program? Either way, “the state shall not have any liability for the payment of the retirement savings benefit earned by program participants.”

Along with this modest step towards dismantling the excessive privileges of these unionized Nomenklatura who masquerade as California’s public “servants,” why not enroll all state and local government employees in Social Security? Because California’s public servants make far more, on average, than private sector workers, and because Social Security benefits are calibrated to pay relatively less to high income participants, this step will financially stabilize the program.

Senator De Leon, are you listening? When it comes to state administered programs, all of California’s workers, public and private, should get the same deal.

 *   *   *

Ed Ring is the president of the California Policy Center.

Vernon, California: More Public Employees Than Residents

Vernon, California is so famous for its history of corruption that it was the municipal star of season two of HBO’s “True Detective” series. Now the tiny L.A. County city can claim another achievement: Vernon is the only California city with more public employees than residents.

Vernon’s 210 residents are served by 271 city employees, according to data on the California state controller’s website.

No. 2 Irwindale is a distant second – though just a 30-minute drive (could be hours – depends on traffic in L.A.’s tortuous downtown) from Vernon. In that East Los Angeles County city, there’s one government employee for every one of Irwindale’s 1,415 residents. San Francisco is the only major city on the Top 10, with one government employee for every 22.7 residents.

Here’s the Top 10:

 

top10cities Most Public Employees

 

Public employees in Vernon earn an average of $107,848 (plus benefits of $37,571). That’s much higher than nearby hegemon, Los Angeles, where public employees average $83,356 (plus benefits of $12,620).

Several top Vernon officials earn salaries in excess of $300,000:
Mark Whitworth (City Administrator): $402,335
Daniel Calleros (Police Chief): $361,644
Michael Wilson (Fire Chief): $361,359
Carlos Fandino Jr. (Director of Gas and Electric): $324,354
Andrew Guth (Fire Battalion Chief): $304,243

While many of Vernon’s city employees continue earn six-figure salaries, the average city resident earns far less. Per capita income in 2010 was $19,973. Median household income in 2010 was $38,500 – down dramatically from 2000, when it was over $60,000. According to the 2010 U.S. Census, 5% of the population lived below the federal poverty line. In 2000, it was 0%.

How does the city fund that dramatic gap in income? By taxing utilities for industry in the city. But because Vernon’s utility rates are among the highest in California, many businesses are moving out. That’s going to put pressure on city officials to trim public services – or to capitulate to the logic of history and become part of a neighboring city. How about Bell?

Conor McGarry is a fall Journalism Fellow at California Policy Center. Andrew Heritage contributed data analysis. Source: California state Controller’s Office.

Union In The News – Weekly Highlights

The state government pension crisis: You will be made to care
By Chuck Devore, October 11, 2016, Washington Examiner
California Gov. Jerry Brown just signed SB 1234, a bill that establishes the California Secure Choice Retirement Savings Trust, a state-run retirement fund for 7.5 million Californians. All firms with more than four employees will be forced to participate unless they already offer a retirement plan. Unless they opt out, private sector employees will see 3 percent of their salaries automatically deducted from their paychecks to be held in trust by a panel of politicians and political appointees. What could go wrong? (read article)

California Today: Should You Have More Say Over Megaprojects?
By Mike McPhate, October 11, 2016, New York Times
In most cases, California’s Constitution requires a thumbs-up from voters before issuing bonds for projects like freeway repairs and school gymnasiums. (See, for example, hundreds of revenue initiatives on the Nov. 8 ballot). One type of bond, however, is spared from that test. State law requires no voter approval to issue so-called revenue bonds. Those are bonds supported with revenue generated by the project itself — for example, tolls that help pay off bonds used to build a bridge. That’s where Proposition 53 comes in. The measure, backed by the state Republican Party and numerous groups focused on lowering taxes, proposes extending the voter requirement to revenue bonds for projects that cost more than $2 billion. (read article)

Berkeley nonprofit fails to resolve new contract with labor union

By Ashley Wong, October 11, 2016, Daily Californian 
Contract negotiations between the California Professional Employees Union and one of their employers — Berkeley nonprofit Building Opportunities for Self-Sufficiency, or BOSS — remained unresolved after the union refused to sign the new fiscal year contract during an unsuccessful mediation Sept. 27. These discussions have been ongoing since June, though the process began in March. The union’s field representative and campus alumni Christopher Graeber said during the mediation the union was unsatisfied with the negotiations because they wanted the contract to include a request for quarter-year financial reports from BOSS. (read article)

Nevada’s Largest Labor Union Comes Out in Support of Legal Marijuana
By Mike Adams, October 11, 2016, MerryJane.com
The largest labor union in Nevada has come out in support of a proposed ballot measure aimed at legalizing a statewide cannabis industry in a manner similar to what is currently underway in Colorado. On Monday, the Culinary Workers Union Local 226, an organization that looks after the labor interests of around 57,000 workers across the state, announced its support for Ballot Question 2 – a proposal that would allow adults 21 and over to purchase marijuana from retail outlets across the state. The union said it was endorsing the initiative because legal weed would take money out of the black market, create new jobs, and put more wages into pockets of regular, tax paying citizens. (read article)

Former labor union leader says every American aged 18 to 64 should get $1,000 a month from the government
By Kiri Blakely, October 10, 2016, Daily Mail
A former leader for one of the most influential labor unions in the country is speaking out to drum up support for a controversial idea that is beginning to gain ground once again – universal basic income (UBI). Andy Stern, the former head of the Service Employees International Union and author of ‘Lifting the Floor,’ gave a speech on Thursday in Denver in which he advocated giving every American citizen ages 18-64 a $1,000 a month supplemental income. He argues this would be cheaper for the government overall and would give people more discretion with how they spend their money while simultaneously lifting them above the poverty line. (read article)

Proposition 55: Should California extend ‘temporary’ income taxes on top earners?
By Jessica Calefati, October 8, 2016, The Mercury News
Four years after threats of teacher layoffs and massive cuts to social service programs followed Californians to the voting booth, the tax hikes on the wealthy they approved to bail out the state are back on the ballot. But gone is the fierce battle that pitted Gov. Jerry Brown against Republicans, business groups and even a national right-wing fundraising network that funneled millions of dollars in “dark money” into California. This year, the people fighting a 12-year extension of the tax hikes have raised only $3,000 — and the campaign is being run by an obscure public policy professor with no political expertise. (read article)

Teachers union meets with its bargaining unit as talks with CPS continue
By Juan Perez Jr., October 8, 2016, Chicago Tribune
Negotiators for the Chicago Teachers Union and Mayor Rahm Emanuel’s administration met for several hours Saturday at the downtown offices of a top school district labor attorney after the union had sat down with the bargaining unit that will play a key role in determining if a deal can get done before a threatened strike deadline. The CTU met with its 40-member big bargaining unit earlier Saturday at the Lower West Side headquarters of Service Employees International Union Healthcare. CTU officials said the meeting was to review its position on a potential contract. (read article)

Labor unions unleash attack on North Carolina senator
By Greg Gordon, October 7, 2016, Miami Herald
Two of the nation’s biggest labor unions unleashed a $1.8 million ad blitz attacking Republican Sen. Richard Burr of North Carolina Friday, assailing his support for tax breaks for the natural gas industry while he and his wife owned more than $100,000 in energy company shares. In sponsoring the ad, the 2-million-member Service Employees International Union and AFSCME, with 1.6 million members, sought to boost the campaign of Burr’s Democratic rival, former North Carolina state Rep. Deborah Ross, who has led the two-term senator in some polls. (read article)

Labor union fund trustees allege El Camino Paving Inc. refused audit
By Jenie Mallari-Torres, Ooctober 7, 2016, Northern Californian Record
The boards of trustees for several labor union funds allege a California employer has refused to submit to an audit per their bargaining agreement. The Board of Trustees, as trustees of the Laborers Health and Welfare Trust Fund for Northern California, Laborers Vacation-Holiday Trust Fund for Northern California, Laborers Pension Trust Fund for Northern California and Laborers Training and Retraining Trust Fund for Northern California filed a complaint on Sept. 27 in the U.S. District Court for the Northern District of California against El Camino Paving Inc. alleging breach of contract. (read article)

Labor unions backing some Republicans in fight over right-to-work
By Kurt Erickson, October 7, 2016, STLtoday.com
Gearing up for another fight with Republican majorities in the Legislature, the Missouri AFL-CIO unveiled a list of lawmakers it is endorsing in the Nov. 8 election. It includes 13 Republicans in the House and two Republicans in the Senate. The state’s largest labor organization also has sent out nearly 100,000 mailers seeking to boost Democratic U.S. Senate candidate Jason Kander and Democratic candidate for governor Chris Koster, as well as remind voters of its opposition to right-to-work. The push by the AFL-CIO won’t help Democrats come anywhere close to recapturing power in either the House or the Senate. But, it could provide enough support to offset business groups and individuals who have pumped millions of dollars into the campaigns of candidates who support making Missouri a right-to-work state. (read article)

Labor Department ‘Blacklisting Rule’ Weaponizes Frivolous Union Allegations
By Mark Mix, October 6, 2016, Investor’s Business Daily
An internal Labor Department memo leaked to the National Right to Work Legal Defense Foundation demonstrates the extremes to which the Obama administration is willing to go in its final months to assist Big Labor in forcing millions of American workers into union ranks. In August, the Federal Acquisition Regulatory (FAR) Council released the final rule implementing E.O. 13673, Obama’s cynically mislabeled Fair Pay and Safe Workplaces Executive Order. Concocted by Obama bureaucrats seemingly working in consultation with union lawyers, the rule puts intense pressure on federal agencies to blacklist federal contractors for resisting efforts to corral their employees into unions. (read article)

Charter school settles labor complaint, will pay $106,000
By Associated Press, October 6, 2016, Albany Times Union
A Detroit-area charter school operator has agreed to settle an unfair labor complaint by paying $106,000 to seven of eight teachers who were fired. The settlement closes a complaint at the National Labor Relations Board against Hamadeh Educational Services, which runs four schools. The eight teachers worked at Universal Academy in Detroit. They were not members of a union, but acted together to speak out about conditions at the school during the 2015-16 year. They were subsequently fired. The settlement document says Hamadeh will post a notice that says teachers won’t be disciplined for exercising their rights. The eight are being offered their former jobs, but decided not to return. (read article)

Labor unions talk about Right to Work vote
By Duke Carter, October 6, 2016, WSLS
Virginia is currently a right-to-work state and has been since 1947. This November, voters will have to decide if they would like to make Virginia an anti-union state. Members in unions like Volvo or Hubbel in Southwest Virginia said they like having protection against employers. “The union has supported me financially, which giving very little back,” Robert Patterson a union member said. Union leaders said having that protection is vital, it helps them fight employers for better pay. In November that could change, due to state leaders asking voters if Article 1 one of the Constitution of Virginia be amended to prohibit any agreement or combination between an employer and a labor union or labor organization. Supporters said voting yes would encourage future businesses to come to the area. (read article)

The Southern California Laborers’ Union Provides $207,500 in College Scholarships
By Chad Wright, October 5, 2016, Business Wire
he Southern California District Council of Laborers (SCDCL) awards scholarship money to the dependent children of Laborers’ International Union of North America (LIUNA) members in Southern California. Now in its 21st year, the Mike Quevedo, Sr. Scholarship Fund provided $207,500 in scholarship monies to 81 students for the 2016 academic year. The grand total in scholarships awarded for the 2016 year was the highest amount ever awarded in a single year. (read article)

 

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.