San Jose Mercury Editorial Calls State Ballot Prop. 32 a “Scam”
by Editor
September 3, 2012

San Jose Mercury Editorial Calls State Ballot Prop. 32 a “Scam”

On August 31st the San Jose Mercury’s editorial board saw fit to denounce Prop. 32, a California citizen’s initiative that will appear on the state ballot in November, as a “scam,” because the initiative would ban payroll deductions for political contributions (ref. “Deceptive Prop. 32 would worsen campaign finance mess“). The editors reason that since corporations secure most of their political funds “straight from the treasury or executives,” whereas “union paycheck deductions are the primary method California’s 2.5 million union members use to fund political spending,” then unions are unfairly targeted. Why any employer should be permitted to act as the collection agent for a political organization is an argument apparently lost on the San Jose Mercury, but throughout, their editorial relies on select facts and flawed logic. For example, Prop. 32 does not affect private sector unions, only unions of government employees. Is there no difference between the two?

In California, the real money in politics is spent at the local level. When you consider the size of the budgets controlled by the state government – about $100 billion per year, vs. the budgets controlled by local cities, counties and other non-federal government agencies, about $400 billion per year, that fact should be obvious. Political contributions follow the money, and far more money is spent by our local governments than by the state governments. For the San Jose Mercury to claim there is a disparity in political spending at the state level between corporations and unions is to ignore where most of the influence is purchased.

And who makes political contributions at the local level? Primarily real estate developers and public employee unions. Prop. 32 bans direct contributions to candidates by corporations, government contractors (i.e., ALL developers, no matter whether they’re a corporation, an LLC, or a sole proprietorship), and unions. And the consequences of union spending on California’s local and state finances is obvious. The agenda of corporations are narrowly restricted to their respective industries – they oppose taxes, they fight for favorable regulations, and they fight and compete with each other, which cancels out much of their spending. But public sector unions want one thing – more pay and benefits, and more government workers to join their ranks. Two studies by the California Public Policy Center, “Public Sector Unions and Political Spending” (Sept. 2010) and “Understanding the Financial Disclosure Requirements of Public Sector Unions” (June 2012), both conservatively estimate California’s public sector unions spend over $250 million per year on political campaigns, lobbying, and other explicitly political activities. And it is difficult to explain how any spending by a public sector unions is not political, since their entire agenda is to influence how we administer our government institutions.

This relentless onslaught of government union money in politics has lead to excessive pay and benefits for local government employees, which has put our cities and counties, all of them, on the brink of bankruptcy. Even the union spokespersons now acknowledge that about 70% of municipal spending is for payroll. Here is a study, using actual payroll data from the city of San Jose (you can even download the same spreadsheet that the city’s payroll department provided to the researchers, if you doubt the findings), that calculated that the AVERAGE total compensation for a worker for the city of San Jose in 2011 was $149,907. Lest anyone suggest that highly compensated managers for the city skewed the average upwards to a non-representative amount, the MEDIAN total compensation for a worker for the city of San Jose was $139,634 in 2011.

Here is a link to this study:

And here’s what the data showed by job classification:

Police, average = $178,821, median = $189,411

Fire, average = $203,098, median = $205,557

Rest-of-Workforce, average = $120,092, median = $114,923

One must always remember when viewing these figures, shocking as they are, that if San Jose’s city worker pension funds were receiving the contributions necessary to remain solvent under realistic rates of return – not the obscenely unattainable 7.5% that the Wall Street “wizards” who run these firms still fraudulently claim they can achieve, you would have to raise these average rates of total compensation by somewhere around $40,000 per year on average. Because for every 1.0% the rate of return for these funds drops, you have to increase the annual contribution by at least 10% of base salary.

The San Jose Mercury News calls Prop. 32 a “scam,” even though (1) it makes even-handed reforms that still fall within the constraints of the California and U.S. Constitutions, and (2) it should be obvious to any rational person that public sector unions are the primary cause for public employee compensation rising to completely unfair and unaffordable levels. This lack of objectivity can only be the result of intense union lobbying – if not outright intimidation – of the San Jose Mercury editorial staff, or a shameful lapse of reasoning.

Almost too obvious to mention, yet also lost on the San Jose Mercury editorial staff, is the fact that these “working people” who make on average $150,000 per year, represented by the public sector unions, have already raised $25 million to annihilate Prop. 32, whereas those “millionaires and billionaires” in favor of Prop. 32 have raised an eye-popping $3.5 million. To-date, Prop. 32 proponents are outgunned 8-to-1 by opponents.

Perhaps, despite the fact that Prop. 32 treats unions and corporations in precisely the same way, and enacts aggressive reform within the bounds of current constitutional law to curb excessive money in politics, it can be argued that Prop. 32 affects public sector unions more than corporations. So what? Public sector unions have driven California into the ground. They are a menace to our economic health and a threat to our democracy. And even a liberal – at least one with a brain and a heart – should be able to see that because we are paying our unionized government workers far, far more than we can afford to pay them, we have no money left to do anything else of any public worth.

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