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Wall Street Journal

 

The Showdown Over Public Union Power

February 22, 2011

By Steven Malanga

At last, politicians and voters are fighting back against the most potent lobby for government spending and ever-higher taxes.

Government workers have taken to the streets in Madison, Wis., to battle a series of reforms proposed by Gov. Scott Walker that include allowing workers to opt out of paying dues to unions. Everywhere that this “opt out” idea has been proposed, unions have battled it vigorously because the money they collect from dues is at the heart of their power.

Unions use that money not only to run their daily operations but to wage political campaigns in state capitals and city halls. Indeed, public-sector unions especially have become the nation’s most aggressive advocates for higher taxes and spending. They sponsor tax-raising ballot initiatives and pay for advertising and lobbying campaigns to pressure politicians into voting for them. And they mount multimillion dollar campaigns to defeat efforts by governors and taxpayer groups to roll back taxes.

Early last year, for example, Oregon’s unions spearheaded a successful battle to pass ballot measures 66 and 67, which collectively raised business and income taxes in the state by an estimated $727 million annually. Led by $2 million from the Oregon Education Association and $1.8 million from the Service Employees International Union (SEIU), unions contributed an estimated 75% of the nearly $7 million raised to promote the tax increases, according to the National Institute on Money in State Politics.

Also in 2010, teachers unions and public-safety unions in Arizona were influential players in the successful ballot campaign to increase the state’s sales tax to 6.6% from 5.6% to raise an additional $1 billion. Some state business groups also supported the tax increase in the vain hope that the legislature would roll back business and investment taxes. The public unions, by contrast, wanted the tax hike precisely to avoid government spending cuts.

In Washington state there was a ballot measure last November that would have raised $2 billion by imposing an income tax on those earning more than $200,000. The media portrayed the political fight as a battle among the rich. That’s because William H. Gates Sr, father of Microsoft founder Bill Gates, supported the tax, while Microsoft’s current chief executive, Steve Ballmer and Amazon.com founder Jeff Bezos opposed it.

But unions were the real power behind the scenes. According to Ballotpedia.com, state and national SEIU locals gave $2.5 million, while the National Education Association and Washington teachers union locals contributed $900,000 to the $6 million campaign for the new income tax. In the end, Washingtonians voted down the tax, in part because they feared it would eventually be expanded to everyone.

This was not the first time that government unions targeted upper-income earners. In 2004, California labor groups—including the California Teachers Association, the SEIU, and health interests such as the California Council of Community Health Agencies—led a successful $4.7 million campaign to raise the state income tax on those making more than $1 million and devote the money to health-care funding. In all, public unions gave $1 million to the Proposition 63 effort, while public health groups donated another $1.3 million, according to HealthVote.org.

In New York in 2008-09, then-Gov. David Paterson balked at tax increases and proposed budget cuts in an attempt to come to grips with the state’s growing fiscal crisis. In response, unions launched a barrage of attack ads. The New York State United Teachers union spent $750,000 advocating against a cap on property taxes. The state’s health-care unions (and hospitals) mounted a $1 million radio campaign against Medicaid cuts. In the end, the legislature raised a host of taxes, including higher levies on the incomes of those earning more than $200,000.

Across the Hudson, New Jersey’s powerful teachers union has led the fight against Gov. Chris Christie’s efforts to cut spending. The New Jersey Education Association collects about $100 million a year in dues from its 203,000 members; last spring the union spent $300,000 a week, according to the head of the union, for radio ads urging tax increases on the rich instead of budget cuts. But Mr. Christie held firm and his budget was passed largely as he proposed it.

Public unions are also among the biggest players in national politics. According to the Center for Responsive Politics, the American Federation of State, County and Municipal Employees (Afscme) has been the third-biggest contributor to federal campaigns over the past 20 years, having given $43 million. The National Education Association is number eight with $31 million in contributions, while the SEIU—half of whose 2.2 million members are government workers—is No. 10, with $29 million in campaign donations.

Unlike businesses and industry groups that are also big givers but tend to split their donations between the parties, some 95% of government workers’ donations has gone to the Democratic Party, whose members are far more likely to favor raising taxes and boosting spending than are members of the Republican Party.

The union strategy is finally beginning to encounter pushback. Last year, supporters of Gov. Christie, anticipating a union onslaught, set up a group called Reform Jersey Now to back the newly elected governor with a public relations campaign in his first budget battle. The group spent about $624,000, with contributions from business PACs, including those representing the state’s construction industry, and from money donated by the Republican Governors Association.

And in New York, Democratic Gov. Andrew Cuomo has urged business groups to counter union efforts to defeat his budget, which cuts spending by $3.7 billion. In response, a group that calls itself the Committee to Save New York, financed by business groups and executives, has launched a $10 million advertising campaign in support of Gov. Cuomo’s planned spending cuts for Medicaid and education, as well as his efforts to cut the cost of state workers’ pensions.

If Gov. Walker succeeds in Wisconsin, it’s likely that other reformers will follow his lead and explore ways to restrict public-sector unions’ use of members’ dues. Tax advocates in California, for instance, have proposed an initiative that would require a government union to gain the approval of individual members in order to divert dues into political campaigns. Such measures would give opponents around the country a new playbook to follow in countering the rich resources and deep influence of public unions over taxes and spending.

Original Source: http://online.wsj.com/article/SB10001424052748703293204576105760131773034.html

 

 
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