Earlier this week the California Public Policy Center (CPPC) released a study entitled “Understanding the Financial Disclosure Requirements of Public Sector Unions.” The study found that the financial reporting requirements of state and local public sector unions are far less extensive than federal worker unions or private sector unions, and not remotely on par with the reporting requirements of publicly traded corporations. For example, publicly traded corporations must report their quarterly financial statements within 45 days of each calendar quarter. Anyone wishing to view the financial activities of a publicly traded corporation can find detailed current and historical data within minutes using the internet. Even private sector unions and federal worker unions are required to file annual financial reports with the Dept. of Labor, where they are posted online and searchable with relative ease.
In the case of state and local public sector unions, however, the only reports they file are federal 990 forms with the IRS. They are virtually exempt from public oversight. While watchdog sites exist that obtain and post these annual 990 reports, they are in PDF format where the data cannot be efficiently consolidated, the line items in these standard reports provide very few details into their operations, and there are literally thousands of independent local and state union chapters that all file separate reports. Compiling detailed information on the financial activity of state and local government worker unions is virtually impossible.
It wouldn’t really matter if the thousands of state and local government union chapters active in California were not, in sum, among the most powerful political players in the state, if not the most powerful. But this CPPC study compiled 990 data on just 16 of these unions, including most of the biggest ones, but ignoring thousands of others. These 990 reports showed that at the end of 2010, these 16 unions, including the state chapters of the CTA, CCPOA, PORAC, CSEA (State), CSEA (Schools), and CPF, had over $100 million in cash and cash equivalents, and during 2010 had spent well over $400 million. Included among these 16 was SEIU Local 1000, but not the other 20 public employee SEIU locals in California. Included among these 16 were three AFSCME chapters, representing Sacramento, Oakland and San Diego, but not the other 39 AFSME locals in California. And while the financials for the CTA’s main chapter were included in the analysis, the other 1,300 of California’s CTA locals were not; nor were the hundreds of CPF (Firefighter) locals, or the 45 AFT locals, or the several hundred CSEA (School Employees) locals.
The CPPC study estimated that at the end of 2010, the cash available to all the state and local public sector union chapters in California combined would probably have been over $200 million, and their combined expenditures would have been at least $750 million. This is consistent with our UnionWatch post of Sept. 2010 “Public Sector Unions & Political Spending,” where, using available data on membership and average annual membership dues, we estimated California’s state and local government unions would spend $750 million per year. It is easy for the other side to debunk these claims, since they have made the actual data nearly impossible to compile, but a top-down UnionWatch analysis from 2010 combine with a more recent CPPC analysis of select core data from 2010 to get the same number. Using conservative assumptions, California’s state and local public sector unions deploy at least $750 million per year to pursue their agenda. The real number is probably over $1.0 billion per year.
It is important to put this information in context. Everything a government worker union does is intrinsically political. If they aren’t spending this billion per year in California on collective bargaining over how to run our government – i.e., how much to pay workers, how to define worker’s jobs, how to discipline, promote, hire and fire workers, how to organize departments, how to manage worker benefits – government workers – then they are managing educational campaigns designed to influence their members (including teachers), influence the public, and influence policymakers. Or they are paying for voter registration and get-out-the vote drives, officially considered “non-political” expenditures, but carefully targeted efforts designed to benefit their political agenda. Or they are actually spending money on reportable political activities. But that explicitly political spending – overwhelming in its impact – is built on a foundation of total spending that is entirely calculated to advance the political agenda of public sector unions.
It is also important to understand that the political spending of public sector unions, and the agenda of public sector unions, is a monolithic, single issue program, with no source of organized opposition remotely comparable in terms of financial power or political focus. Public sector unions claim that they are necessary to protect the middle class from corporations, but the facts speak otherwise. Corporations pursue diverse political agendas specific to their particular industries, and often compete with each other. Their political giving is balanced among political parties. Corporations have no interest in opposing the political agenda of public sector unions, and with rare exceptions, they don’t.
Finally, public sector unions claim they are protecting the middle class, but the “middle class” they are protecting is government workers. The average total compensation for California’s state and local government workers, even if you don’t add to the average the true costs to fund their retirement health and pension benefits at realistic rates of investment returns, is well over $100,000 per year. The average total compensation for a private sector worker in California is half that. No educational disparity or risk premium can justify government workers making twice what private sector workers make. No amount of taxing the rich can pay for this. It is completely unsustainable, and the privileged status of government workers constitutes not protection, but oppression of the genuine private sector middle class.
The reason there has not been government reform in California is because of the financial power of public sector unions. Returning to the CPPC study, if California’s public sector unions were sitting on over $200 million in cash at the end of 2010, immediately after completing the bruising 2010 election cycle, one can only imagine how much cash they were sitting on at the end of 2011 (they almost all file for extensions, so we won’t see their 2011 990 forms until later this year). It would not be implausible that, entering 2012, California’s state and local public sector unions already had a war chest of around a half-billion dollars. And Californians should remember that the billion per year in public sector union revenue comes straight from their taxes, and is used by government worker unions to pay for the best lawyers, PR firms, spin doctors, academic studies – and politicians – that money can buy.
If truth were a commodity as readily purchased as perception, there would be no hope.