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Unions “Using Political Leverage to Punish Those Exercising Rights” in California Constitution

On October 13, 2013, California Governor Jerry Brown signed Senate Bill 7, which cuts off state funds designated for construction to any California city that exercises its right under the California Constitution to establish its own policies concerning government-mandated wage rates (so-called “prevailing wages”) on contracts. This was a major victory for the State Building and Construction Trades Council of California, the construction union umbrella lobbying organization that sponsored the bill.

There are 121 California cities that govern their own municipal affairs through a charter, a mini-constitution authorized in Article XI of the California Constitution. In its letter unsuccessfully requesting for a gubernatorial veto, the League of California Cities declared that “using political leverage to punish those exercising rights provided by the Constitution is unjust” and a veto was needed to “protect the integrity of our Constitution and the communities operating in lawful compliance with it.” (Coming from the professional association of California city officials, these statements cannot be easily brushed off by California Democrats and their union allies as irrelevant “Tea Party” rhetoric.)

In California, the “Progressive” movement is determined not to let the structural protections of constitutional government impede the quest for democratic socialism and societal justice. Passing Senate Bill 7 through the state legislature and getting it signed is the type of government activism that earns praise from the national news media, as it compares the State of California favorably against the “gridlock” in Washington, D.C.

Senate Bill 7 has a practical fiscal impact as well as a constitutional significance. Out of California’s 121 cities governed under a charter, 43 do not require construction companies to pay state-mandated prevailing wages on any city contracts, and 10 do not require construction companies to pay state-mandated prevailing wages on some kinds of city contracts. The cities of El Cajon, Bakersfield, and Newport Beach are the most recent cities to establish their own prevailing wage policies. Meanwhile, unions have successfully lobbied the city councils in San Diego and Mountain View in recent months to abandon their own wage rate policies and submit to state prevailing wage law.

A couple dozen “general law” cities have recently proposed charters to voters or plan to propose charters to voters. Evading the costly state prevailing wage mandate for construction contracts has been a primary motivation for these cities, and construction unions have been aggressive in lobbying and campaigning to undermine these local efforts. In 2012, voters in the cities of Auburn, Costa Mesa, Escondido, and Grover Beach rejected proposed charters.

It’s likely that a charter city or group of charter cities will file a lawsuit in 2014 to strike down Senate Bill 7, along with two similar laws implemented by Senate Bill 922 in 2011 and Senate Bill 829 in 2012. These two laws, also sponsored by the State Building and Construction Trades Council of California, cut off state construction funds to charter cities that adopt Fair and Open Competition policies prohibiting the cities from entering into contracts requiring construction companies to sign a Project Labor Agreement with unions.


Sources

Article XI of the California Constitution

Senate Bill 7 (2013) – to be California Labor Code Section 1782

League of California Cities – SB 7 (Steinberg) Undermining Constitutional Exercise of Municipal Affairs – Request for Veto

Information on Charters from League of California Cities (includes list of 121 charter cities)

State Building and Construction Trades Council of California, AFL-CIO v. City of Vista et al. – California Supreme Court decision of July 2, 2012 upholding constitutional right of charter cities to establish their own policies concerning government-mandated wage rates for municipal construction contracts.

Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? (3rd edition – Summer 2012) – the most comprehensive report ever published on California prevailing wage and charter city policies and an inspiration for advocates of fiscal responsibility and local control. (A 4th edition is in the works.)

Senate Bill 922 (2011) and Senate Bill 829 (2012) – punishing charter cities with prohibitions on city contracts that mandate Project Labor Agreements.

State-mandated prevailing wages for construction trades in all geographic regions of California

State Building & Construction Trades Council of California

News and Opinion Leading Up to and Following Gov. Brown Signing Senate Bill 7

SB 7: Cities Stand to Lose Home Rule over Municipal Affairs – www.PublicCEO.com – September 9, 2013

Three Bad Bills that Gov. Jerry Brown Should Veto – editorial – Sacramento Bee – September 9, 2013

Legislative Sampler: 2 to Sign, 2 to Veto – editorial – Riverside Press-Enterprise – September 18, 2013

Has Labor Leader Overreached? – columnist Dan Morain – Sacramento Bee – October 9, 2013 (The answer is “no.”)

Prevailing Wage Bill Deserves a Veto – editorial – UT San Diego – October 4, 2013

Governor Should Veto Wage Bill – editorial – Modesto Bee – October 11, 2013

If Gov. Brown Doesn’t Like Intrusion, He Should Veto SB 7 – editorial – Sacramento Bee – October 12, 2013

Jerry Brown Signs Prevailing Wage Bill for Charter Cities – Sacramento Bee – October 13, 2013

Governor Brown Signs Union-Backed Senate Bill 7 and Continues Erosion of Constitutional Checks and Balances – www.FlashReport.org – October 13, 2013

Brown Signs Prevailing Wage Bill – Capitol Weekly – October 14, 2013

Brown Signs Prevailing Wage Bill for Cities – Central Valley Business Journal – October 14, 2013

Governor Signs Prevailing wage Bill for Charter Cities – Sacramento Business Journal – October 14, 2013

Gov. Brown Signs SB 7 to Neuter Charter Cities – www.CalWatchdog.com – October 14, 2013

Prevailing Wage Law Could Raise Costs – UT San Diego – October 14, 2013

Unions Smile, Cities Frown at Prevailing Wage Law – Bakersfield Californian – October 14, 2013

Modesto Fears Harm from New Prevailing Wage Law – Modesto Bee – October 14, 2013

California Construction Unions Get Two Big Wins – columnist Dan Walters – Sacramento Bee – October 15, 2013

Charter Could Cost City Funding – Newport Beach/Costa Mesa Daily Pilot – October 16, 2013

Wage Law Costs Cities More Than Money – op-ed by El Cajon Acting Mayor Bill Wells – UT San Diego – October 25, 2013


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.

 

With Senate Bill 7, California Unions Advance Plot to Neuter City Charters

More than 30 California cities are likely to defy top union officials by asking their citizens in 2014 to vote on enacting a “home rule” charter for local control.

Cities want to free their purely municipal affairs from costly union-backed state mandates, for reasons revealed in these recent articles:

Unions Rise to Defense of “Prevailing Wage” Rates Jeopardizing Hotel Project in Redding – www.LaborIssuesSolutions.com – February 15, 2013 and Redding Needs a Charter to End Nonsense Definition of Private Hotel as a “Public Works” Project – www.LaborIssuesSolutions.com – January 31, 2013.

Stanford Professor Warns Costa Mesa about Pension DebtOrange County Register – February 27, 2013 and City’s Pension Outlook Called ‘Stark’ – Newport Beach/Costa Mesa Daily Pilot – February 27, 2013. (With the failure of the Measure V charter in November 2012, Costa Mesa is now in the union paradigm with a proposed solution to raise taxes.)

A Former Mayor of a Southern California City Provides an Intellectual Argument for City Charters and Local Government Authority – www.LaborIssuesSolutions.com – February 19, 2013 (a commentary on Reasons to Consider Becoming a Charter City – San Diego Union-Tribune – February 19, 2013).

For a powerful example of how charter cities are saving money and being more cost-effective in their city operations and services, see Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? Cities recognize that exercising the power of a charter can free their municipal affairs from the grip of the state legislature and the special interest groups entrenched at the capitol. A staff report about city charters to the Murrieta City Council for its October 2, 2012 meeting was blunt about the need for cities to enact charters:

…a knowledgeable, involved electorate should both propel and constrain the direction of its own city. Local control has always been a paramount matter of residents, businesses and the Murrieta City Council. Yet state legislators and previous gubernatorial administrations continue to impose far greater mandates, while at the same time hindering the ability of local governments to operate successfully. With little ability to protest, local governments have watched as the state government continues to balance its budget deficits on the backs of fiscally responsible local jurisdictions…The voice of cities in Sacramento has become mute due to a combination of special interest groups, influential political campaign contributions and tone-deaf lawmakers passing unfunded mandates. This process has left cities with little ability to petition the state government…

A city charter is a unique document that acts like a constitution for a city adopting it. Overall, this puts more control into the hands of the residents instead of state legislators and gives a community greater independence to determine its own destiny. Cities typically enter the process to become a charter city to become more autonomous. A charter city has more flexibility and has ultimate authority over municipal affairs. The charter city provision of the state Constitution, commonly referred to as the “home-rule” provision, is based on the principle that a city, rather than the state, is in the best position to know what it needs and how to satisfy those needs. The home-rule provision allows charter cities to conduct their own business and control their own affairs. Therefore, a charter maximizes local control. Such benefits of a charter city are greater flexibility on public works contracts and other changes in the procurement process, more control over economic development practices, and less reliance on the state.

Right now there are 121 charter cities in California, up from 107 in 2007. But there are aggressive opponents who regard cities’ exercise of their charter authority (as cited above from the Murrieta staff report) to be an attack on their hegemony. In 2011 and 2012, unions spent jaw-dropping amounts per voter on campaigns to convince voters to reject reasonable proposed charters.

Charters were defeated in Rancho Palos Verdes, Auburn, Costa Mesa, Escondido, and Grover Beach, to the dismay of civic leaders whose local grassroots efforts were rolled over by well-funded union-backed professional campaign operations. Unions are now ready to crush California’s federalist rebellion once and for all in 2013 and 2014.

As one strategy, they are infiltrating and trying to neutralize the League of California Cities as an organization that provides information to cities looking at charters. A union-affiliated group called www.SmartCitiesPrevail.org is trying to influence the League of California Cities through sponsorship, partnership, and participation in the League’s Transportation, Communication & Public Works Committee.

Unions are aggressively opposing charters when proposed on the local level and are trying to derail proposals through charter review commissions (a strategy that worked for unions in Elk Grove, Redding, and other cities). See the newspaper articles listed below for evidence.

Union lobbyists also have a bill now in the California State Legislature (Senate Bill 7) introduced by Senate leader Darrell Steinberg and a Republican State Senator, Anthony Cannella. It will cut off state funding for cities that use their constitutional charter authority to establish their own policies concerning state-mandated construction wage rates. (See Bill Introduced in State Senate to Suppress Authority of California’s Charter Cities to Establish Their Own Policies on Government-Mandated Construction Wage Rates – www.LaborIssuesSolutions.com – February 20, 2013.)

This bill adopts the same concept of crushing charter city authority as did the union-backed Senate Bill 922 in 2011 and Senate Bill 829 in 2012 (two bills pushed by Senator Michael Rubio, who just resigned to take a lobbying position with Chevron). These two laws cut off state money to charter cities that adopt policies prohibiting those cities from requiring construction contractors to sign a Project Labor Agreement with unions as a condition of work.

Threatening to withhold money as a tactic to force a government to submit to centralized authority may remind you of warnings in the dissent in the U.S. Supreme Court decision in June 2012 concerning the constitutionality of Obamacare:

Structural protections – notably, the restraints imposed by federalism and separation of powers – are less romantic and have less obvious a connection to personal freedom…The fragmentation of power produced by the structure of our Government is central to liberty, and when we destroy it, we place liberty at peril…[The] practice of attaching conditions to federal funds greatly increases federal power…This formidable power, if not checked in any way, would present a grave threat to the system of federalism created by our Constitution…Coercing States to accept conditions risks the destruction of the “unique role of the States in our system.”

While the same principles would seemingly apply to the relationship of state and local governments, forces at the state capitol seem to prefer an overbearing centralized government that can solve problems with broad strokes of alleged social justice.

With bills such as SB 922, SB 829, and SB 7 deemed as acceptable modes of governance by the legislative supermajority and the governor, I anticipate a union-backed effort in the future to repeal outright the section of the California Constitution (Article XI, Section 3) that allows cities to govern their own municipal affairs under a charter. It would be an effective way to eliminate another one of the diminishing number of checks and balances that interfere with utopian schemes planned under the benevolent and enlightened one-party state.

Then there is the strange case of Republican Senator Anthony Cannella, who is so proud of undermining local control and raising costs for taxpayers that he used the Senate Republican Caucus communications operation to proclaim his legislative achievement to a gullible press. Here’s a Tweet:

It didn’t go unanswered. I responded with this Tweet:

Senator Cannella may not realize (or may not care) that he represents two cities – Modesto and Merced – that use their charter authority to set their own policies concerning government-mandated construction wage rates (so-called “prevailing wages”). Here is the Modesto policy, set by a 1995 resolution: Modesto Prevailing Wage Policy and Staff Report. Here is the Merced practice: Merced Exempts Rental Housing Preparation from State-Mandated Government Wage Rates (Prevailing Wage). Oh well, sometimes the union lobbyists in Sacramento are a more important constituency than the people back home in the Central Valley.

With the help of Senators Steinberg and Cannella, union lobbyists intend to direct their legislative puppets from Los Angeles and San Francisco to suppress the small and medium-sized cities trying to determine their own financial destinies. To protect union power, these cities must submit to centralized power exercised by the state legislature and Governor Jerry Brown.

In the meantime, the local federalist rebellion continues. In addition to the cities of Temecula and Murrieta, the following California cities are now publicly moving forward on asking their citizens to approve a charter in 2014 (with several more soon to begin public discussion):

Costa Mesa

Outsourcing Back in for Costa MesaOrange County Register (editorial) – February 6, 2013

…passage of Measure V would have made the privatization task easier. But the union outspent Measure V proponents by more than seven-to-one. However, Mr. [Councilman Jim] Righeimer said he hopes a new charter measure will be put on the June 2014 ballot…Within 60 days the council will hold a study session on how to set up the independent committee for the new charter measure.

Escondido

Escondido Mayor Touts Urban Renewal, Embracing DiversitySan Diego Union-Tribune – February 20, 2013

Delivering his annual State of the City address to nearly 300 residents and business leaders gathered at the city’s arts center… [Mayor Sam] Abed said he also wants the city to take another shot at becoming a charter city, which would increase Escondido’s independence from Sacramento and reduce the cost of some city construction projects.

Moreno Valley

Moreno Valley: City to Explore Becoming Charter City – Riverside Press-Enterprise – February 26, 2013

The Moreno Valley City Council on Tuesday, Feb. 26, unanimously approved establishing a subcommittee that would explore becoming a charter city and appointing two council members to it.

Moreno Valley: Charter City Committee Could Be Created  – Riverside Press-Enterprise – February 25, 2013

The Moreno Valley City Council on Tuesday, Feb. 26, is to follow through on plans to determine whether to become a charter city. The council is set to vote on whether to establish a charter exploratory subcommittee and appoint two council members to it.

Buellton

Buellton Continues “Home Rule’ Talk – Santa Ynez Valley News – February 7, 2013

The idea of changing Buellton to a “home-rule” city is on hold again after City Council members decided to set up a workshop for more discussion about a draft plan…City Manager John Kunkel said the committee wants voters to be comfortable with the measure and, if the council wants to have a dialogue with unions, there is no rush.

Charting Best Path to Buellton’s Future – Santa Ynez Valley News (editorial) – February 7, 2013

…being a charter city does mean that local elected officials and voters can make more of their own decisions, and are therefore better able to tailor policy to fit specific local needs…Being a charter city also lets local government off the hook for paying a prevailing wage. Labor unions don’t like that possibility…

Arroyo Grande
Arroyo Grande Considering City Charter – www.CalCoastNews.com – January 28, 2013

The Arroyo Grande City Council has created a committee to explore the idea of becoming a charter city in order to cut costs…Many union members oppose city charters because they allow exemptions from state-mandated prevailing wage agreements. City staff says adopting a charter could save Arroyo Grande $50,000 to $300,000 annually.

Study Under Way to Find Out if Arroyo Grande Should Try to Become a Charter CitySan Luis Obispo Tribune – January 27, 2013

A committee has been convened to study whether Arroyo Grande should try to become a charter city, a move that officials say could save money and give it more local control. The idea, however, faces stiff opposition from local union members…

California cities have two choices about their financial futures: enact a charter as an way to become more cost-efficient, or raise taxes. Guess which choice the unions want?

Kevin Dayton is the President and 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.