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The Taxpayer as Bagman

In California, the citizenry pays for the collection of dues for public employee unions.

As just about every teacher in California will tell you, union dues are deducted by the local school district from their monthly paycheck just as federal and state withholding taxes are. Then the school district turns the money over to the local teachers union. And we all get to pay for this service. Yup, the teachers union, a private organization, doesn’t pay a penny for the transactions. In fact, payroll deduction is de rigeur for all public employee unions. But not all states suck up to organized labor like California.

Other states like North Carolina and Alabama have already passed legislation prohibiting paycheck deductions. Most notably, new right-to-work states Wisconsin and Michigan have followed suit. Most recently, Oklahoma just passed a law that makes the unions responsible for collecting their own dues. HB 1749 stipulates that it “shall be unlawful for any state agency to make payroll deductions on behalf of a state employee for membership dues in any public employee association or organization or professional organization that on or after November 1, 2015, collectively bargains on behalf of its membership pursuant to any provision of federal law.”

Last week, the Pennsylvania State Senate passed a partial measure. This bill, should it become law, would prohibit public sector unions from using employee paycheck deductions to fund certain political activities. In fact, a similar tack has been tried several times in California. In 2005, Prop 75 would have allowed automatic deductions for the political portion of public employees’ union dues only if the worker gave their permission to do so. And in 2012 Prop 32, among other things, would have banned “automatic deductions by corporations, unions, and government of employees’ wages to be used for politics.” Both measures failed.

While union bosses love the taxpayer-as-bagman set-up (why wouldn’t they!), not all workers do. Years ago when I was teaching, I asked then UTLA president A.J. Duffy at a union meeting why teachers weren’t responsible for paying their own dues. He responded, “They might forget.” I didn’t respond, but knew that some of my colleagues were thinking what I was thinking. Forget? No. Not choose to pay? Yes. A 2014 poll in Pennsylvania also showed that the rank-and-file and the bosses are not of the same mind. The survey of union households across the state found that “80 percent of union households said taxpayer resources should not be used to collect campaign contributions.” Union leaders, as usual, refuse to deal directly with the issue, but instead set up straw men to attack: “It’s really about keeping control in the hands of corporations,” said Rick Bloomingdale, president of the Pennsylvania AFL-CIO, the state’s largest labor federation with about 900,000 members. Huh? He then went on to explain, “[Legislators] only want to hear from the corporations and billionaires.”

Let’s look at this another way. Say you buy a gun. After the purchase, the government starts deducting money from your paycheck whether you want it to or not and turning the cash over to the National Rifle Association. The NRA claims it is justified in doing so because it says it will advocate for you and provide legal assistance should you need it. The NRA doesn’t pay for the service, and moreover, doesn’t pay a penny in income tax. Reasonable? Hardly.

One glimmer of hope for the Golden State is the Friedrichs v California Teachers Association case. It’s possible that if the U.S. Supreme Court rules for the plaintiffs, one of the by-products could be a legislature more responsive to its constituents instead of CTA, which is by far the most powerful special interest in the state.

But by whatever means, we need to release the taxpayers from their forced bagman status. To paraphrase the late William F. Buckley, it’s time for the unions to collect their own damn dues.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Why Public Sector Unions are “Special” Special Interests

California’s November 2012 statewide ballot included Prop. 32, the “Stop Special Interest Money Now” initiative. Among the provisions included in this campaign finance reform measure was the requirement that public sector unions obtain permission from each member prior to using a portion of their dues to support political campaigns.

It’s hard to precisely determine just how much public sector unions spent to immolate Prop. 32, since their campaign material often combined “Yes on 30” (new taxes), with “No on 32,” meaning resources were being directed at both initiative campaigns. Also, hard dollar campaign spending was only part of the effort; an army of union operatives were activated to defeat Prop. 32 – from public school teachers influencing students and parents to precinct walkers to labor friendly slate mailings. Overall, the unions probably spent about $100 million to defeat Prop. 32.

And their message was consistent: Prop. 32 targets “working families,” it attempts to “silence our voices,” it is “deceptive,” it provides “special exemptions” to the real special interests, “corporations and billionaires.”

Let’s review the veracity of these claims one at a time:

–  The average unionized government worker in California earns total compensation that averages well over $100,000 per year, about twice what the average private sector taxpayer earns per year. These are not typical “working families.”

–  Prop. 32 merely attempted to require public sector unions to do what every other political participant must do; use money that donors contribute voluntarily. Yet the public sector unions alleged that merely requiring political contributions to be made on an opt-in basis would “silence our voices.”

–  Prop. 32’s opponents tagged it the “special exemptions act,” because they felt it was unbalanced – they claimed it targeted public sector unions but didn’t include sufficient campaign finance restrictions on billionaires and corporations. Notwithstanding the fact that Prop. 32 did pretty much everything constitutionally allowable to restrict the campaign spending of all special interests, there is a rank hypocrisy in this statement that deserves further exploration. Because public sector unions are an integral part of America’s special interest elite.

Characteristics of the Special Interest Elite:

(1)  Their political agenda differs from – and is often in conflict with – the public interest.

(2)  Their top priorities are not informed by ideology, but rather by whatever means achieves their ends.

(3)  They will work to influence whatever political party and politicians are amenable to their agenda.

(4)  They hold inordinate influence over elections and policymaking.

(5)  They have an identity of interest with other elite special interests.

If you review these five characteristics it is certainly arguable that public sector unions belong among the special interest elite. One can suggest that public sector unions are overwhelmingly democratic, and informed by leftist ideology (item 2), but to do so is confusing cause for effect. The priority of government worker unions is money and power, and the ideology of the left supports these ends.

What is often still overlooked by critics of public sector unions, and dismissed by their supporters, is item five: There is an identity of interests between public sector unions and other elite special interests. In fact, public sector unions are the critical, primary broker among elite special interests. Without them, the power and influence of America’s overbuilt financial sector and anti-competitive corporations would be diminished, not enhanced. This is counter-intuitive, but is an utterly crucial point that reformers need to impress upon idealistic, left-leaning voters.

Why Public Sector Unions Are the Most Elite of All Special Interests:

(1)  All other powerful special interests have narrowly focused agendas that pertain to their specific industries. This means their participation in politics is generally sporadic; they emerge when there is a threat or opportunity affecting their business, then they withdraw. Often their agendas are in conflict with each other, which tends to attenuate if not cancel out their power.

(2)  Public sector unions have one broad agenda – more pay and benefits for public sector workers, and more public sector workers. This agenda supersedes whatever other redeeming programs and rhetoric they may adopt. Ultimately, this agenda is corrupting, because it is utterly apolitical and intrinsically disconnected from any qualitative analysis of what programs and policies are in the public interest.

(3)  Unlike all other special interests, public sector unions are inside the government. As term-limited elected officials come and go, the ranking employees of public sector unions know that the union leadership delivers the true continuity. And if other special interests want favorable legislation, or special treatment by the bureaucracy, they know where to go first – not to the politicians, but to the unions.

(4)  There is no source of money pouring into politics at nearly the scale and consistency of public sector union dues – in California these dues total well over $1.0 billion per year. Public sector unions deploy these massive sums in order to be actively involved in every political contest, no matter how big or small.

This reality, that public sector unions operate at the heart of the corporate and financial elite, that they broker, enable and corrupt corporate and financial power, is the tragic irony that is lost on California’s electorate. Public sector unions are the foot soldiers of corporatism, because without their blessing and support, crony capitalists would not as successfully lobby for anti-competitive laws, pension bankers would not have a taxpayer-guaranteed virtually unlimited source of funds to invest, and bond underwriters would not be collecting commissions on hundreds of billions in bond issues necessitated by spending deficits. Public sector unions are also the facilitators of authoritarianism, because every new law and every new intrusion on civil liberties is accompanied by a need for more unionized government workers.

The bargain public sector unions have made with the relentlessly consolidating corporate and financial elite is completely at odds with their supposedly egalitarian, supposed ideology. Using their virtually unrestricted, awesomely potent ability to control our politicians, they have carved out for themselves the biggest special exemption of all – they have negotiated an immunity to the economic challenges facing every private sector taxpayer who must compete in the global economy.

Put that into a 30 second television commercial.

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UnionWatch is edited by Ed Ring, who can be reached at editor@unionwatch.org.

Related Editorials:

Reforming Public Sector Unions and Public Sector Pensions is NOT “Anti-Worker”

What If Every Worker Made What City of Irvine Workers Make?

Will Silicon Valley’s Elite Take On Public Sector Unions?

Should Police and Firefighters be Exempted from Union Reforms?

Would ANY Public Sector Union Reform Appeal to California’s Democrats?

Calling for Public Sector Union Reform is Not Anti-Union

The Special Privileges And Exemptions of Public Sector Unions

The Preexisting Political Advantage of Government Workers

The Ideology of Public Sector Unions vs. Private Sector Unions

Wall Street & Public Sector Unions

Tracking California’s November 2012 Elections Related to Labor Issues

California’s Proposition 32 is the country’s most high-profile election in November 2012 directly related to labor unions and labor policy issues. There are also several California local elections – particularly Measure V to enact a charter in the City of Costa Mesa – that will potentially strengthen or weaken union control of government. Here’s a summary of the elections to watch in California.

Proposition 32 – “Stop Special Interest Money” – Requires Union Leaders to Get Permission Before Taking Workers’ Money for Political Purposes

The statewide ballot measure Proposition 32 includes a requirement for union officials to get annual permission from a union member (or represented non-member) before extracting money from that worker’s paycheck for political purposes. Under current law, unions can simply take money from employee paychecks when desired in order to influence legislation or elections. For more information on how this coercive power is implemented in practice, see My Outline of the June 21, 2012 U.S. Supreme Court Decision on a California Union’s Mandatory Fee Assessment on Non-Members to Fight Governor Schwarzenegger’s 2005 Ballot Measures.

A common description of Proposition 32 is “game changer” and the $70 million spent against it by union leaders proves this moniker is not political exaggeration. Jon Coupal, president of the Howard Jarvis Taxpayers Association, asserts that Proposition 32 is “the most important political reform measure to be placed before California voters in decades. If passed, it would surpass Governor Scott Walker’s successful ballot measure in Wisconsin last year. Moreover, it would be the ‘shot heard ‘round the political world’ as it would fundamentally change the way special interests are required to operate in the realm of California politics.”

Proposed Charters Would Allow Three California Cities to Set Their Own Policies for Municipal Affairs and Circumvent Costly Union-Backed State Mandates

Union leaders are clearly concerned that many of the state’s medium-sized suburban cities and smaller towns are exercising their right under the California Constitution to use charters to escape the tight grip of the state legislature, where union lobbyists basically set the agenda.

A 4-1 majority of the city council of Costa Mesa (in Orange County) is asking city voters to approve Measure V, which would enact a charter so the city can control its own municipal affairs, such as contracting-out of government services and government-mandated construction wage rates. Measure V would give the city authority to free itself from costly and inflexible union-backed mandates from the state legislature.

A professor of public administration at Chapman University (in Orange County) describes Costa Mesa as the ideological “ground zero for virtually everything taking place in the country” and the proposed Measure V charter as “a political manifesto of how government should be organized in the 21st century.” The $500,000 spent against Measure V by union leaders proves this assessment is not political hyperbole.

For more information, see my www.UnionWatch.org article Mysterious Union Slush Fund Spends $100,000 Against Costa Mesa Charter and Gee , Do You Think a Charter Is a Meaningful Way for California Cities to Pursue Fiscal Responsibility? $500,000 of Union Opposition Confirms It.

A second city proposing a charter to voters is Escondido (in San Diego County), with Proposition P. This charter essentially provides the City of Escondido with the same power and authority as the proposed charter in Costa Mesa, but union opposition has been minimal. Perhaps San Diego County union leaders concluded it was a waste of limited campaign resources to try to undermine Proposition P: since 2007, voters in the San Diego County cities of Vista, Santee, Carlsbad, Oceanside, and El Cajon have all approved robust, aggressive charters.

Meanwhile, in the San Luis Obispo County coastal town of Grover Beach, construction trade unions spent a few thousand dollars to send slick, professional mailers from Sacramento to residents urging them to vote against Measure I-12, a proposed charter with similar powers to the ones proposed in Costa Mesa and Escondido. See my articles Campaign Mailer Opposing the Proposed Grover Beach Charter: Definitely NOT Photocopied at Dave’s Copies & Fax and Who Paid the Bills for the Mailers Opposing the Proposed Charter (Measure I-12) in Grover Beach? No One.

The union strategy in Grover Beach emulates successful union-funded mail campaigns to defeat proposed charters in Rancho Palos Verdes in March 2011 and Auburn in June 2012. Unions have learned they can successfully overrun local grassroots activism for charters in smaller towns by stuffing voters’ mailboxes with deceptive, paranoid propaganda. (For more information about how unions defeated the Rancho Palos Verdes and Auburn charters, see my article Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? (Answer: Three Union Entities, by Spending $56.40 Per NO Vote).

I expect more than a dozen California cities will ask voters to enact charters in the June 2014 election. Currently there are 121 California cities with charters. Many of these cities take advantage of their charters to establish their own policies concerning government-mandated construction wage rates (so-called “prevailing wages”). See Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

Unions Help K-12 School and Community College Districts to Borrow Money for Union-Only Construction by Selling Bonds

Voters throughout California are being asked to approve 106 ballot measures to authorize school districts and community college districts to borrow money for construction by selling bonds. But for the first time since California voters narrowly approved Proposition 39 in 2000 (lowering the voter approval threshold from 66.67% to 55% for educational bond measures), there is a semi-coordinated statewide effort (“Operation Close the Spigot”) to oppose some of the most egregious bond measures by moving beyond the message “it’s for the kids” and providing some real accountability for performance. There is even an aggressive, well-funded locally-based opposition campaign (led by the San Diego County Taxpayers Association) to defeat an exceptionally foolish bond measure in San Diego.

Sacramento City Unified School District wants voter approval through Measures Q and R to sell another $414 million in bonds to add to its existing $522 million bond debt. West Contra Costa Unified School District (based in Richmond) wants voter approval through Measure E to sell another $360 million in bonds to add to its existing $1.77 billion bond debt. Solano Community College District wants voter approval through Measure Q to sell another $348 million in bonds to add to its existing $180 million bond debt. And San Diego Unified School District wants voter approval through Proposition Z to sell another $2.8 billion in bonds to add to its existing $4.7 billion bond debt.

Why are construction unions and their unionized contractor allies providing significant funding to the campaigns in support of these four ballot measures? It’s not because they love the kids; it’s because the elected boards of these fiscally irresponsible, mismanaged educational districts require their construction contractors to sign Project Labor Agreements with unions as a condition of working on projects funded by bond sales previously authorized by district voters.

In July 2011, the National University System’s Institute for Policy Research in San Diego published a comprehensive study showing that California school construction projects cost 13% to 15% higher when the district requires contractors to sign a Project Labor Agreement with unions. (The study is titled Measuring the Cost of Project Labor Agreements on School Construction in California.)

I’ve written extensively about these four union-backed bond measures – here are the most recent articles about each one:

  • Who’s Paying to Convince Sacramento Voters to Take On $414 Million of Additional Debt – Plus Interest – with Measures Q and R?
  • $652,650 Contributed to Measure E Campaign: West Contra Costa Unified School District Seeks to Borrow Another $360 Million “For the Children of West County”
  • Updated Chart! Who’s Paying to Convince Solano County Voters to Take On $348 Million of Additional Debt – Plus Interest – with Measure Q?
  • ONE San Francisco Investment Banker Is Funding About 20% of the Yes on Proposition Z Campaign for San Diego Unified School District to Borrow $2.8 Billion Through Bond Sales

As I reported in my www.UnionWatch.org article Construction Unions Could Grab Billions Through Education Bonds, Oakland Unified School District and East Side Union High School District will surely require their contractors to sign Project Labor Agreements with unions for projects funded by bond measures on the November 2012 ballot. Other districts such as the Rancho Santiago Community College District may also attempt to cut bid competition and increase costs for the benefit of union special interests.

Keep in mind that every California taxpayer pays for the union-controlled construction in these educational districts. The State Allocation Board regularly provides matching grants for construction projects with proceeds from bond sales authorized by three past statewide propositions (Kindergarten-University Public Education Facilities Bond Acts) totaling $35.8 billion. Union officials believe in “trickle-down economics” when your taxes “trickle down” to their operational and political funds.

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.

Combating Union Misinformation

Getting the facts to people who have been lied to for decades is essential for change.

In my latest City Journal post, I argue in favor of an initiative that will be on the ballot in California in November.

Proposition 32, which will appear on the November general-election ballot, would ban unions and most corporations from making direct contributions to state and local candidates. The measure would also bar government contractors from contributing to political campaigns. The most significant provision, though – the one giving public-employee unions, especially the California Teachers Association, fits – would prohibit corporations, unions, and government employers from deducting money from workers’ paychecks to use for political purposes.

Chris, a commenter to my article, dismissed my argument, claiming that,

It is very easy to opt-out of the payroll deductions, which amount to about 6 dollars a year per teacher.

When I read such comments, I have to wonder where Chris gets his misinformation. Assuming he isn’t pulling it out of a hat, he is getting it from someone he trusts, very probably his local teachers union. And, sad to say, there are many thousands of Chris’s who form opinions and vote on erroneous data. It brought back bad memories from 2005 when Prop. 75, the last paycheck protection initiative on the ballot, sought to ban “the use by public employee labor organizations of public employee dues or fees for political contributions except with the prior consent of individual public employees each year on a specified written form.” The prop was popular early in the campaign, but after CTA blasted ads over the summer in which they spouted lie after lie and managed to scare teachers (and the general public), it was voted down. Infuriated that CTA’s deceitfulness and demagoguery were so readily believed, I cofounded the California Teachers Empowerment Network in 2006.

Anyway, back to Chris and his $6 figure. The truth is quite different. Throughout California, almost all teachers belong to three unions – their local, a state affiliate (usually CTA) and a national union (usually NEA). Dues vary from year to year and in 2011-2012, teachers’ union dues broke down this way:
NEA – $178
CTA – $647
Local – varies (typically $200-$300)

What many California teachers don’t know is that they don’t have to belong to a union. By resigning from the union (and losing voting privileges and liability insurance) a teacher becomes what’s called an agency fee payer. As such, the teacher still has to pay the union the full dues amount, but can get a yearly rebate for monies that the unions “claim” they spend on politics. (I say “claim” because it is generally understood that the unions spend much more on politics than they admit to. In addition, there are many gray-area expenditures, like if a teachers union sends members a letter telling them to vote for a certain state assemblyman, the cost of the mailer and the postage don’t get counted as political spending, but rather as communication costs.)

What can someone who resigns from the union expect in the way of a rebate? As an example, the following rebate percentages were furnished by Sacramento-area teacher-blogger Darren Miller.
NEA – 56%
CTA – 28.6%
Local – 28.6%

This means, for example, that Miller, an agency fee payer, got back 28.6% of his CTA dues which amounted to $185 (28.6% of $647.) Same principle holds for NEA and his local. Hence, he received a rebate check last year for $358.20.

But there is an even bigger question here. Even if Prop. 32 flies and unions can’t deduct the political part of their dues from a member’s paycheck, I have to wonder why the government (i.e. the taxpayer) is involved at all in the collection of monies for a union – a private, non-tax paying, multimillion dollar corporation. In short, why can’t the union collect its own dues?

The answer, of course, is that if the union had to do it, it would lose millions because many teachers wouldn’t bother paying up. This is just what happened in Wisconsin after Act 10 became law.

In the nearly 15 months since Mr. Walker signed the law, 6,000 of the AFT’s Wisconsin 17,000 members quit, the union said. It blamed the drop on the law.

WEAC, the other teachers union in Wisconsin, has lost almost a quarter of its membership (20,000 teachers) since the advent of Act 10, with more sure to follow when their contracts end in June 2013.

And just how do the unions justify payroll deduction of dues?

Bob Chanin, then-general counsel of the National Education Association, explained it in 1978: “It is well-recognized that if you take away the mechanism of payroll deduction you won’t collect a penny from these people, and it has nothing to do with voluntary or involuntary. I think it has a lot to do with the nature of the beast, and the beasts who are our teachers. . . [They] simply don’t come up with the money regardless of the purpose.”

Seems to me that it’s time that “the beasts who are our teachers” and the general public, who get taken to the cleaners on a regular basis, rise up against their abusers. A Yes vote on Prop. 32 in California would be a good place to start.

About the author: Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.