Report Shows Missouri Taxpayers Subsidize Public-Sector Unions

Unions, even those representing government employees, are private organizations. Yet a new report from the Competitive Enterprise Institute (CEI) reveals that taxpayers in one state effectively are being forced to cover some of the costs of public-sector union official business. The study, authored by CEI labor policy analyst Trey Kovacs and titled, “A Remedy for Taxpayer Giveaway to Unions” (March 25, 2015), in the face of considerable resistance, dug up clear evidence that state and local government agencies in Missouri are subsidizing public-sector unions during working hours without loss of member pay. These “release time” clauses, whether or not built into collective bargaining agreements, are at odds with the public interest, deceptively costly, and almost certainly illegal.

It is little secret that public-sector unions have eclipsed their private-sector counterparts in terms of membership density and political influence. According to the Bureau of Labor Statistics, only 6.6 percent of the nationwide private-sector labor force was unionized in 2014, whereas the figure was 35.7 percent for the public-sector labor force. These statistics alone speak volumes about why government worker unions have been able to insert release time agreements into their contracts. Back in December 2012, Union Corruption Update described how a sizable portion of federal workforce compensation goes toward employee union activity. The Office of Personnel Management (OPM) at the time had conducted a study, leaked to the media, estimating that during Fiscal Year 2011, federal workers spent a combined 3.4 million hours on the job conducting union business at a public cost of about $155 million. Those figures represented respective increases of 11 percent and 13 percent over the previous fiscal year. Reps. Phil Gingrey, R-Ga., and Dennis Ross, R-Fla., understandably concerned, wrote a letter to OPM Director John Berry insisting on greater agency transparency.

Taxpayer funding for public employee unionism isn’t limited to the federal work force. In numerous states, union members use work time for organizing, bargaining and contract administration. Missouri is all too typical. The new report by the Washington, D.C.-based Competitive Enterprise Institute found a recurring pattern of government union members in that state receiving official release time at public expense – and with the aggressive cooperation of their respective employers. The findings are troubling for any number of reasons.

First, the practice is, or at least ought to be, illegal. Several provisions of the Missouri constitution, known as “gift clauses,” ban government subsidies in which the intent is to benefit private entities. The constitution reads: “The General Assembly shall have no power to grant public money to any private person, association or corporation,” aside from limited exceptions in the cases of public calamity and old-age assistance. It also bars government agencies from granting “public money or things of value to or in aid of any corporation, association or individual.” Yet government employee unions in that state have won extremely generous release time clauses, and without offering anything in return.

Second, in any state, this practice is odds with any reasonable definition of the public interest. Public employees represented by a union, by definition, negotiate with a public agency in order to advance a private interest. It follows from this that when such employees use release time for collective bargaining, they are enlisting taxpayers to subsidize them as both employees and union members. Even more problematic is that public-sector unions tend to be more political than private-sector unions. As such, they are conscripting the general public to pay for union lobbying and election campaigning whose overriding goal is the expansion of government. The process is self-perpetuating. Kovacs explains: “Public employee unions generally support more government spending, which leads to more government hiring and more potential union members.”

Third, the practice is costly to taxpayers. In this case, one cannot readily tell how costly given the lack of cooperation among surveyed agencies. But it is fair to say that public officials, including those in Missouri, are hiding something, and with good reason. “Overall,” noted Kovacs, “only a small minority of Missouri government employers could provide satisfactory responses to CEI’s public records requests.” Kansas City’s Office of the City Manager, for example, told him that records related to specific employee activities were off-limits under Missouri’s Open Records Act, and in any event, could not reveal the number of hours granted for union release time. In nearby suburban Grandview, the school district’s Custodian of Records also invoked the Open Records Act, adding, “The District does not maintain or possess any records responsive to this request.” That’s a strange interpretation of openness.

Another tactic of non-cooperation was to make the cost of obtaining data prohibitive. Under the state’s Sunshine Law, the “public governmental body determines that waiver or reduction of the fee is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the public governmental body.” The Missouri Department of Corrections, St. Louis Public Schools, and the City of Independence each used this discretion to their advantage in rejecting Kovacs’ request for a waiver. Moreover, they inflated the estimated time and cost to fulfill the request. St. Louis Public Schools calculated the cost of fulfilling the request at 40 hours and 200 paper copies, necessitating a prepayment of $820. The Missouri Corrections Department estimated the cost at an absurd $22,030, reflecting 1,941 man-hours of work to complete.

That said, some agencies did release information. Often, the information was partial, yet it was enough to reveal a marked tendency for unionized employees to put their own interests above those of the public. In the City of St. Charles Fire Department, during Fiscal Years 2012 and 2013, respectively, employees enjoyed 121.5 and 191.5 hours of release time, which translated into a taxpayer cost of $2,957.61 and $4,870.45. In the Parkway (suburban St. Louis) School District for the 2012-13 academic year, the Communications Workers of America (CWA) and the local affiliate of the National Education Association (NEA) were granted a combined 20 days of release time at a cost of $4,260.66, figures that rose to 23.5 days and $6,115.50 during the 2013-14 year. In that latter year, moreover, the school district paid $28,026 of the union president’s salary, a function presumably covered entirely by member dues.

When the purposes of union release time as well as the amount of time were made available, the coziness of management and labor became even more obvious. In the Parkway school district, CWA and NEA members spent most of their time attending union conferences or (especially) engaging in political activity. Of its 39 days of allotted aggregate release time, the CWA used 31 of those days to participate in “Lobby Day, Jefferson City.” The NEA local used seven days for the NEA’s Capitol Action Day. In the Lindbergh School District (also in suburban St. Louis), the NEA affiliate also spent much of its allotted release time on lobbying events such as Capitol Action Day-Jefferson City, Missouri State Teachers Association Legislation Day and the Regional Assembly for the Missouri chapter of NEA. In the City of Springfield, employees were eligible to use release time to attend union meetings, while union officials, in addition to that, were allowed to attend grievance procedures and contract negotiations. At International Association of Fire Fighters Local 152, the president and secretary-treasurer were eligible to engage in such activities even if manpower is not available on a given shift. In such instances, “the officer in charge shall either call back someone of equal rank off duty to fill in during the absence, take the vehicle out of service, or make what arrangements are best for the conditions at the time to maintain fire protection coverage and allow the Union Officers to attend their meeting.”

These tendencies are highly disturbing. Yet unions have managed to intimidate public agencies into ignoring the legal implications. As mentioned earlier, the Missouri constitution bans the use of public expenditures for private organizations. True, it makes exceptions in cases that serve a public purpose. Yet it is almost inconceivable that union release time could pass the “primary effect” test adopted by Missouri courts. Under this test, any public spending must explicitly promote a public purpose even if one or more private entities may benefit incidentally.

A recent case in Arizona, which has a similar test, hopefully will serve as a reality check for all states. Back in 2011, the Goldwater Institute filed a lawsuit on behalf of several taxpayer-plaintiffs against the City of Phoenix and the Phoenix Law Enforcement Association, an arrangement that was costing the public an estimated $900,000 a year. Applying the reasoning used by the Arizona State Supreme Court in a real estate development case, Turken v. Gordon, the Maricopa County Court, in imposing a temporary injunction against the arrangement, concluded that the local police union had used its release time to advance the interests of members only, and worse, had diverted resources away from actual law enforcement. The court, concluding that the collective bargaining agreement was unconstitutional, called for applying injunctions to other public unions in Phoenix.

The Competitive Enterprise Institute study may be more significant for the information it couldn’t acquire than for the information it could. But this should not diminish its importance. Public-sector unions, contrary to their moniker, are not public-spirited. They are accountable, first and foremost, to their members. And more so than private-sector unions, their bargaining power depends directly upon an expansion of government. This is why government employee unions and the employers for whom their members work so often behave in tandem. They may face off at the negotiating table, but each benefits from enlarged government. For that reason, transparency is not a high priority for either. Constitutionally-minded legislators and judges, augmented by taxpayer activism, should make it a high priority.


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