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Can Public Sector Union Power Ever Be Stopped?

Imagine you’re hoping to support a candidate for local office who will enact reforms that will improve your city, maybe even save it. Someone who will fight tirelessly to eliminate work rules that force agencies to hire more people than are actually necessary. Someone who will insist that incompetent public employees are fired. Someone who will finally do something about compensation and benefit packages that are threatening to bankrupt the city.

What do you say to them, when their response to your suggested reforms is this: “That’s all great, and I’d like to do it all, but who’s going to give me the million dollars for my campaign that I’m not going to get from the public employee unions if I actually try to do any of it?”

That is the sort of conversation that takes place, or would take place if anyone bothered to ask, multiplied by thousands, every election cycle in California.

Public employee unions run California. They exercise nearly absolute power in the state legislature, and in nearly every city, county, school district and special district. Can public sector union power ever be stopped?

Earlier this year, a California Public Policy Center analysis estimated that for 2016, total membership in California’s public sector unions was 1.15 million, and total revenue was $812 million. This equates to a stupefying $1.6 billion that these unions collect and spend every election cycle.

 

California’s Public Sector Unions (including local affiliates)
Estimated Total Membership and Revenues

While the figure of $1.6 billion per election cycle is a credible estimate, attempts to come up with precise information on California’s public sector union dues is nearly impossible. In California there are many hundreds, if not thousands, of individual local public sector union affiliates. All of them file separate 990 forms, often including financial transfers between entities that have to be offset in any thorough analysis.

Determining how much of California’s public sector union revenue is spent on politics is also a nearly impossible task, despite several online “transparency” portals, including OpenSecrets, FollowTheMoney, VoteSmart, and the California Secretary of State’s Campaign Finance “Power Search.” These portals are primarily focused on national races, and in some cases, statewide races, but none of them descend to the thousands of California’s local races, where hundreds of millions of dollars are spent every election.

Moreover, the portals can only display the information they’re given. California’s government unions, like most sophisticated political players, mask their total spending through multiple committees and transfers.

An excellent analysis of how much of teachers union dues end up being spent on political campaigns was written in 2015 by RiShawn Biddle, editor and publisher of Dropout Nation – a leading commentary website on education reform. He writes: “The pro bono consultants who went through the unions’ published national, state, and local tax returns estimated based on their research, interviews, and sampling that roughly one third of the unions’ efforts went toward political advocacy.”

One-third. In California, that is equal to approximately $540 million per election cycle. That is, California’s public sector unions likely spend over a half-billion per election cycle. And this spending does not include other “non-political” spending. For example, not reportable as political spending can include massive public education campaigns that are designed to influence voters but aren’t engaging in explicit advocacy.

Also not considered political spending, but having immense political impact, is litigation. There are countless examples of how government union power is exercised in California’s courts. Pension reforms in San Jose and San Diego, approved by voters, were eviscerated through relentless court challenges. Statewide pension reform pushed by Gov. Brown and partially realized in the PEPRA legislation of 2012 was undermined, and continues to be undermined, beneath an ongoing avalanche of lawsuits. Charter schools are the targets of continuous litigation designed to wear them out. You can do this, when you have hundreds of millions of dollars pouring in every quarter, year after year.

California’s political landscape over the past 20-30 years has been defined by public sector unions. While the recent Janus v AFSCME decision by the U.S. Supreme Court has taken away the ability of government unions to compel payment of fees, the unions are resorting to clever contractual gyrations to make it extremely difficult in practice for anyone to stop paying. That too, will have to sort itself out in court, where union money guarantees tenacious defense and endless appeals.

Even if public employees can easily withdraw from paying government unions, in many cases, why would they? These unions have made California’s public employees some of the highest paid public servants on earth. A California Policy Center study in 2017 concluded “The composite average total compensation (pay and benefits) for a full-time city, county or state worker in California during 2015 was $121,843; for the average full-time private sector worker in California, including benefits, it was 62,475, which is 51% of what the public sector worker earned.” As a result, it is no coincidence that California’s state and local governments confront over $1.0 trillion in debt and unfunded pension liabilities.

The political and financial power of public sector unions has transformed California politics. Their influence is felt everywhere; education, environmental policy, the business climate, important cultural issues. In every area, their primary agenda is to grow their membership and influence. The effect of this agenda is pernicious. If schools fail, spend more public money on schools. If crime increases, hire more police and build more prisons. Wherever society fails, grow unionized government.

Perhaps the next major U.S. Supreme Court case concerning government unions will abolish them due to this inherent conflict between their agenda and the public interest. Perhaps someday they will be outlawed entirely. That would be a happy, happy Thanksgiving indeed.

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San Ramon Fire Protection District Pay and Governance Exemplifies Union Power

In a democracy, the assumption is that civilians exercise the ultimate authority over their government. The citizens elect representatives who will act in the public interest. But what happens when government agencies are disbursed over thousands of jurisdictions, and the people who run these local agencies are virtually unknown?

Even citizens who follow politics and vote diligently are challenged to make an informed selection when considering the many candidates vying for obscure boards and commissions and special district elected positions. In some cases they will know about a particular obscure race, but in most cases they will not. So they either don’t select a candidate, or select a candidate almost randomly based on the brief ballot description, “small business owner,” “retired teacher,” whatever.

Only one group of voters consistently makes informed choices in these elections to supposedly minor elected positions. The people who these elected officials are going to manage and negotiate with over pay, benefits, and work rules.

The problem with dismissing these bottom-of-the-ballot elections as inconsequential, of course, is that these “minor elected positions,” in aggregate, represent thousands of agencies in California, managed by multiple thousands of elected officials, spending hundreds of billions of taxpayer dollars. And the problem is compounded because that small minority of voters who really care about the outcome of these elections, the public employees these politicians are going to manage, are represented by powerful, taxpayer funded, politically sophisticated labor unions.

Government unions have little in common with private sector unions, who cannot elect their own bosses and who have to negotiate in good faith with business owners who will go out of business if they are too generous with pay and benefits. Government unions, on the other hand, promote carefully selected candidates to their members, and relentlessly fight to elect them. Against this machine is virtually nothing comparable. Local activists and reformers, along with their donors, are volunteers who come and go, their efforts rising and falling with the urgency of the issues. That is how it should be in a democracy. But not the government unions. They are perennial powerhouses, employing full time professionals, using taxpayer funds, always active, playing the long game.

In California, an example of government employees receiving pay and benefits exceeding any reasonable market norm would be urban firefighters. Unlike police departments which sometimes struggle to find qualified recruits, California’s fire departments typically have hundreds, if not thousands, of applicants every time there is an open position. Yet firefighters consistently are the highest paid among public safety employees in California. This would be inexplicable, except for the power of the firefighters’ unions.

The San Ramon Fire Protection District is managed by a five member elected board. Last November two board seats were up for election. And as reported in the San Jose Mercury on November 4, 2015, “Union-supported candidates Donald Parker and Chris Campbell cruised to victory against fiscal reformer Dale Price and incumbent Glenn Umont in the San Ramon Valley Fire Protection District race.”

If you view the current members of the San Ramon Fire Protection District Board, you will see that these two union backed candidates join another union backed director, Gordon Dakin, to create a 3-2 majority on the board. When Dakin won his election in 2012, the Contra Costa Times reported “Dakin, an Alameda County fire captain, is the vote leader capturing 51 percent of the vote. His campaign had the backing of the San Ramon Valley Firefighters Association International Association of Firefighters Local 3546.”

This may be democracy, but it isn’t representative. Government unions elect the people they negotiate with. What could possibly go wrong?

For starters, pay and benefits rise well beyond what is necessary to attract and retain qualified people. The average full time firefighter working for the San Ramon Fire Protection District in 2013 – the most recent year for which data is available – made $283,457 per year. Including overtime, and taking into account vacation benefits but not sick time, veteran full-time firefighters worked 2.7 days per week (24 hour shifts) to make this much money. [Download compiled SCO data on spreadsheet, view individual complensation incl. part-time.]

Donald Parker, one of the recently elected directors, is a retired firefighter who in 2013 collected two pensions, $110,587 from the Oakland Fire and Police Retirement System, and another $74,069 from CalPERS for his service as a firefighter with Vallejo (these figures do not include other retirement benefits, which the pensions systems did not disclose). Chris Campbell, according to the Contra Costa Times, is a firefighter for the City of San Francisco.

According to their website, the San Ramon Fire Protection District had revenue in FY 2012 of $52.9 million. According to Wikipedia, their budget in 2013 was $53.0 million. According to the State Controller, they spent $40.7 million on pay and benefits in 2013, 77% of their total budget. They spent $12.5 million on employer payments for pensions, that is, 24% of their entire budget went to pay for pensions. And without additional reforms, that percentage will rise in the coming years.

Those of us who look at these statistics over and over again get sensitized to the figures. Step back. Think about this:

44 of these full-time firefighters, 37 percent of them, made over $300,000 in total compensation in 2013.

75 of these full-time firefighters, 63 percent of them, made over $200,000 in total compensation in 2013 (but less than $300K).

1 of these full-time firefighters, ONE OF THEM, made less than $200,000 in total compensation in 2013 – that person made $179,025.

This cannot be financially sustained. Rates of pay and benefits this high have a real cost in terms of higher taxes and reduced services. And there is currently no viable political coalition, anywhere, capable of standing up to these unions. Businesses and wealthy people get out of the way. They’d rather stay on the good side of the local governments, who approve their permits and inspect their projects, and these local governments are run by unions.

To summarize – because of the power of local government unions, barring fundamental legislative or judicial reforms, the political battle is lost. With rare and fleeting exceptions, California’s cities and counties and special districts will continue to be run by union backed elected officials, and they will continue to allocate every budget dollar they possibly can to pay unionized public employees. The San Ramon Fire Protection District is a case in point. And it is the norm.

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Ed Ring is the executive director of the California Policy Center.