When Public Sector Unions Win in California

When Public Sector Unions Win in California

Editor’s note:  Earlier this month, Manhattan Institute senior fellow Daniel DiSalvo released a study entitled “The Nays Have It: When Public Sector Unions Win in California.” DiSalvo has agreed to allow UnionWatch to republish two key sections of that report here, concerning California’s public sector union influence over the outcome of citizen initiatives and over the state legislature. Readers are encouraged to read the entire study, as well as DiSalvo’s other recent studies on public sector union power, “Dues and Deep Pockets: Public-Sector Unions’ Money Machine” (March 2012), and “Storm Clouds Ahead: Why Conflict with Public Unions Will Continue” (November 2011).

California’s Public Employee Unions & Citizen Initiatives

We isolated the 15 propositions that stand out as particularly important to public-employee unions (Table 2). Of course, another analyst might choose a few different propositions to be included in the list of the most important,

but there is likely to be broad agreement on most of those included here. These were major battles on which the unions spent huge sums of money in efforts to convince the electorate and mobilize their members. This more qualitative analysis reveals that when unions pull out all the stops for a ballot-initiative campaign, they almost always win. Of these major initiatives, the unions supported six and opposed nine, and voters enacted only one of those that they fought (ending bilingual education in 1998). On the other hand, voters ratified four of the six measures that the unions supported. And the two that failed went down by quite narrow margins. (One of these proposals would have allowed school districts to issue their own bonds, if approved by a simple majority of voters rather than the existing two-thirds requirement; the other would have put limits on lobbying and established limits on campaign contributions and spending.) In sum, out of the 15 ballots most dear to them over the last 30 years, the unions have lost only three times. It is an impressive record.

What issues motivated the unions to pull out all the stops? Education, clearly central to the teach ers’ unions in California, tops the list: ten of the 15 measures touched on education issues. On “defense,” six of the nine initiatives that the unions opposed were education-related. These political triumphs had huge policy consequences. Led by the CTA, public sector unions managed to block proposals for school vouchers (twice), teacher evaluation and testing, new requirements for teacher tenure, and a relaxation of education spending requirements. On “offense,” four of the six measures that unions supported were designed to funnel more money into the schools. On all these propositions, the unions spent substantial sums (Chart 2). Indeed, on some of them, they almost entirely underwrote their side of the campaign. In most of these campaigns, the teachers’ unions and their allies significantly outspent their rivals. A few of the votes were close; but in most cases, the union position won an overwhelming majority. No wonder former Governor Pete Wilson described the CTA as a “relentless political machine” (Quoted in Richard Lee Colvin, “Wilson Is Lampooned at Teachers Union ‘Boot Camp,’” Los Angeles Times, August 26, 1998).

The most important of all these education-related measures was Proposition 98 in 1988. It required that 40 percent of the state’s general fund be spent annually on K–12 education and community colleges. That year, the CTA spent $4.5 million, a very large sum in those days, to promote it. The CTA’s victory, by a slim margin, was one of the most significant pieces of legislation in the last 30 years of California history. It also demonstrated the power of the teachers’ unions. As political scientist Terry Moe asked: “How often is a special interest group able to commandeer 40 percent of a state’s entire budget for its own realm of policy?” (Terry M. Moe, Special Interest: Teachers Unions and America’s Public Schools, Washington, D.C.: Brookings Institution, 2010, 299). The consequence was a severe constriction of the state’s fiscal flexibility. By guaranteeing such lavish funding, Proposition 98 also reduced accountability, as school districts have had to worry less about the most efficient allocation of resources. By using its influence on local school boards, the CTA channeled much of the new monies—about $450 million a year—into increasing teacher pay (Troy Senik, “The Worst Union in America,” City Journal 22, no. 2, spring 2012). California now boasts the highest average teacher salaries in the country.

In opposition, the teachers’ unions have vehemently opposed voucher plans, which they see as a threat to their survival. School vouchers have made it onto the ballot twice in California: Proposition 174 in 1993 and Proposition 38 in 2000. In both instances, the teachers’ unions single-handedly bankrolled the opposition campaign (Moe, Special Interest, 298). In the 1993 campaign on this issue, the CTA spent $12.5 million, outspending supporters 8 to 1. In addition, it persuaded March Fong Eu, the secretary of state, to significantly change the proposition’s title from “Parental Choice” to “Education Vouchers” (Senik, “Worst Union in America.” The state attorney general’s authority over ballot titles stems from a 1974 measure, Proposition 9, which mandated the creation of a Fair Political Practices Commission). According to education scholar and former teacher Myron Lieberman, the more controversial title dropped Proposition 174 ten points in the polls, where it had initially been well received by voters (Myron Lieberman, The Teacher Unions: How the NEA and AFT Sabotage Reform and Hold Students, Parents, and Teachers Hostage to Bureaucracy: New York: The Free Press, 1997). In the 2000 ballot fight, the teachers’ unions spent some $21 million. In both cases, many other interest groups in California—such as the NAACP, the PTA, and the ACLU—publicly opposed school vouchers. Yet they spent almost nothing to defeat the proposals at the ballot box.

The teachers’ unions have also blocked efforts to impose greater accountability measures on California’s public schools. In 1998, the CTA spent nearly $7 million to defeat Proposition 8. The measure would have allowed the use of student performance as a criterion for teacher evaluation and required teachers to take credentialing tests in their fields. In 2005, Governor Arnold Schwarzenegger, in his supposed “Year of Reform,” proposed a measure aimed at teacher tenure in K–12 education that would have extended the apprentice period for teachers from two years to five. Another measure would have set limits on state spending and relaxed the education spending requirements imposed by Proposition 98. The CTA alone spent $57 million, mortgaging its Sacramento headquarters, to fight these and other measures.

Given their record, it is understandable that many consider public-employee unions in California quite simply the most effective interest group in state politics. Our analysis finds that the unions often outspent their opponents handily on many issues. In 2005, for example, the unions and their allies spent $54 million to defeat Proposition 75 (another version of paycheck protection). The measure’s supporters mustered a measly $5.8 million. Governor Schwarzenegger’s state-spending cap elicited zero support while its opponents, led by the unions, shelled out $28 million. Including the paycheck-protection measure of that year, in 2005 all public-sector unions combined spent a whopping $90 million in opposition to initiatives they deemed against their interests, according to the National Institute on Money in State Politics. Supporters of these measures didn’t even come close.

What about the other side of the coin—measures favored by business? A look at these campaigns finds that they typically involve less spending and that opponents and proponents tend to be evenly matched. This suggests that other groups that spend in initiative campaigns are spread across many different issues. In contrast, the role of the unions is concentrated on a few priorities and is thus outsize. This finding comports with reporting by The Wall Street Journal, which found that organized labor, led by the SEIU, spends far more on political activity than is generally thought (Tom McGinty and Brody Mullins, “Political Spending by Unions Far Exceeds Direct Donations,” The Wall Street Journal, July 10, 2012).  Some have claimed that public-sector unions are regularly outspent by business interests (however defined). Our analysis finds that, at least in the California’s direct-democracy process, this is a myth.

Public Sector Union Power in the California State Legislature

The Democratic Party dominates California’s legislature. In the past half-century, the Republican Party has had majorities on only one occasion in each of the two houses of the state legislature. The GOP’s state senate majority lasted for two years, while the one in the assembly lasted less than a year. California’s Democrats are closely allied with public employee unions in the state. As Sacramento Bee columnist Dan Walter has remarked, the Golden State’s “public employee unions wield immense — even hegemonic — influence” over the Democratic majorities in the state legislature (Dan Walters, “Democrats strengthen unions noose,” Orange County Register, July 10, 2009.

http://www.ocregister.com/opinion/unions-19986-bankruptcy-public.html). The control exercised by public employee unions was brought home to many when a 2010 video went viral. It showed an official of the Service Employees International Union (SEIU) in a legislative chamber telling elected officials: “We helped to get you into office, and we got a good memory… Come November, if you don’t back our program, we’ll get you out of office” (http://unionwatch.org/seiu-spokesperson-threatening-california-lawmakers-with-union-retaliation/). While Walters and other commentators have often remarked on the power wielded by public sector unions in the state legislature, it is worth taking a closer look at their role helping California’s representatives get elected.

Electoral rules help reinforce connections between Democrats and the unions. California’s gerrymandered legislative districts foster little meaningful competition between the political parties. What electoral competition there is in California takes place within the parties at the nomination stage. Whoever wins the primary contest in a so-called “safe district” usually walks away with the general election. Without party labels to guide voters, candidates turn to endorsements. Within the Democratic Party, the endorsement of the public sector unions looms above all others in importance. The unions offer both money and manpower to candidates they support. According to the Los Angeles Times, the California Teachers Association, the state affiliate of the National Education Association, “has deep pockets, a militia of more than 300,000 members to call on and a track record of making or breaking political careers” (Eric Bailey, “Proposition 98, which guards funding for state’s schools, is tested again, Los Angeles Times, July 17, 2009”).

Public employee unions have distinct advantages over other interest groups in pressuring legislators. First, they have regular access to them through the collective bargaining process. Other interest groups must fight for such access. Second, they have a cadre of experienced activists that can be quickly mobilized for get-out-the-vote operations and protests on the steps of the state capitol. Third, the regular revenue streams provided by dues check-off and government collection of union dues allow the unions to finance extensive lobbying operations. Other groups must constantly struggle for resources and have greater difficulty maintaining a vigilant presence in Sacramento. Fourth, a number of California legislators are themselves former public employee union members. Other interest groups can only look upon with envy upon this network.

Finally, public employee unions are among the most active groups in California’s electoral process. They are among the leaders in direct donations to candidates and make significant independent expenditures on behalf of their favorite sons and daughters. As Table 3 indicates, public sector unions are regularly among the top three donors to legislative candidates. In many of the years when the unions were the number two donor, they were only outpaced by general trade unions. In combination, public and private labor unions outspent the next largest contributor to candidates by two to one. (See Charts 3 and 4).

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Furthermore, while other groups move up and down the donor rankings, depending presumably on the issues at stake in a given election year, public sector unions remain consistently at the top of the heap. Bear in mind that these figures only reflect the direct donation of public employee unions to candidates’ campaign coffers. They do not include the independent expenditures the unions also make on behalf of candidates.

Public sector unions donate overwhelmingly to Democratic candidates (Table 5). Compare the year 2002 in tables 4 and 5. That year the unions gave 90 percent of their donations to Democrat and 5 percent to Republicans. On the other hand, the finance, insurance, and real estate industries combined split their contributions nearly evenly between the parties, giving 53 percent of their contributions to Democrats and 45 percent to Republicans.

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Beyond these aggregate figures, it is instructive to consider a few examples. Take the saga of the state’s charter school cap in 1998. California had a legal cap of 100 charter schools for the entire state. The teachers’ unions were adamantly opposed to raising the cap and allowing more charter schools. Democrats in the state legislature, following the teachers’ union line, refused to raise the cap. Reed Hastings, a Silicon Valley entrepreneur who later founded Netflix, financed a ballot measure to lift the charter cap with $15 million of his own money.

The CTA was opposed to Hastings’ move, as it would have to spend far more than $15 million to defeat the measure, which would severely cut into the funds it had to spend on candidates in the general election. In a series of private meetings, the CTA got Hastings to back off. It agreed to raise the cap by 100 schools the following year. Of course, neither Hastings nor the CTA alone had the legal authority to change California law. Only voters or the legislature could do that. Yet the union and businessman brokered the deal nonetheless. Democrats were happy to raise the cap once the CTA blessed the idea. The legislature dutifully produced a bill conforming to the CTA’s private agreement with Hastings and passed it into law.

Take another extraordinary example: the major expansion of public employee benefits in 1999 and 2001. The Service Employees International Union, California Correctional Peace Officers Association, and the California Teachers Association all strongly backed the election of Democrat Gray Davis in 1998. Davis came into office with solid Democratic majorities in both the state senate and assembly. Davis then signed Senate Bill 400, which increased state workers’ retirement benefits by lowering the retirement age, re-jiggering the benefit formula, or both. The bill also granted a 6 percent boost in benefits to those who had already retired and increased survivor benefits. The state’s retirement fund, CalPERS, where the unions exercise some influence, claimed that: “o increase over current employer contributions is needed for these benefit improvements” (David Crane, “Taxpayers covering Legislature’s bad bet,” San Francisco Chronicle, June 19, 2012). In the wake of this change, however, the pension fund earned far lower returns than were projected, forcing the state (i.e. taxpayers) to contribute some $27 billion to make up the difference.

In sum, the Democratic Party handily controls all of California’s electoral institutions. And the biggest contributors to that party in terms of direct donations, independent expenditures, and campaign foot-soldiers are public employee unions. The unions’ influence in the legislature combined with their record of success in the Golden State’s direct democracy process makes for a powerful one-two punch. The results have pushed the state’s finances to the edge of a cliff.

About the Author: Daniel DiSalvo is a senior fellow at the Manhattan Institute’s Center for State and Local Leadership and an assistant professor of political science at The City College of New York. He received his doctorate in politics from the University of Virginia, and is the author of Engines of Change: Party Faction in American politics, 1868-2010 (Oxford). His work focuses on American political parties, elections, labor unions, state government, and public policy. He has written on these topics for both scholarly and popular publications, including National Affairs, The Public Interest, The Weekly Standard, Commentary, the New York Daily News, the New York Post, The Forum: A Journal of Applied Research in Contemporary Politics, The Tocqueville Review, Congress & the Presidency, and The Journal of Policy History. These excerpts are republished with permission from the author, and the full report can be downloaded here “THE NAYS HAVE IT: When Public Sector Unions Win in California.”

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