(The Center Square) – California's public sector unions pulled in $921 million in revenue in 2018, the latest year in which data is available, according to a new analysis by the California Policy Center.
“There is no special interest in California that wields more influence over state and local politics than public sector unions,” says Edward Ring, the first president and co-founder and now senior fellow at the California Policy Center.
“At every level of government, from the office of the governor to a school board managing a district with only a few hundred students, public sector unions are omnipresent,” Ring adds. “With rare exceptions, to defy their agenda is certain political suicide.”
Every two-year election cycle, hundreds of millions of dollars are spent by California public-sector unions to support or oppose candidates, on campaigns for ballot measures, to lobby the legislature, and pay for public relations campaigns, the center argues.
In the past five years, the center has attempted to estimate how much money public sector unions collect and spend every year. Based on U.S. Census Bureau data, in 2015, a rough top-down estimate on union membership and assumptions about average union dues payments led to a conservative estimate of $1 billion annually.
In 2018, the center tallied 2015 Form 990 data from union filings with the IRS and union dues information publicly available on their websites to estimate that total public sector union spending was about $800 million annually.
This year, it used the same method as it did in 2018 but with more detail to assess the total to be closer to $921 million based on 2018 data.
Information made publicly available on union websites is usually outdated by between 18 and 24 months, the center notes.
Of the public sector unions in the state, the California Teachers Association is the largest, with 325,000 members and $356,366,000 in annual revenue. The next largest by annual revenue is the American Federation of State, County and Municipal Employees, with 220,000 members and $132 million in revenue.
The second largest by number of employees is the California School Employees Association, with 250,000 members and $81,679,000 in annual revenue.
“Like the CTA, the CFT is comprised of separate local and regional affiliates, making the challenge of estimating their consolidated revenue best approached by multiplying their average dues by their stated membership,” the report states.
Other major California public unions include the California Federation of Teachers (120,000 teachers/$107.6 million revenue); California State Employees Association incl. SEIU 1000 (96,000 employees/$67.8 million revenue), California Police Unions (78,500 members/$105.1 million revenue), California Professional Firefighters (30,000 members/$40.1 million revenue), and California Correctional Peace Officers Association (31,000 members/$30.4 million revenue).
The center notes that in most cases, the total estimates it reached “understate the ultimate total.” In every case, the average dues collected were lower than total dues revenue in all anecdotal evidence it researched.
Using 2018 as a baseline is important to evaluate union finances and how they are spent in light of the 2018 U.S. Supreme Court ruling, which was reached in mid-2018 in Janus v. AFSCME, the center argues.
In Janus, the Supreme Court ruled that the First Amendment protects public sector workers from being required to make payments to a union as a condition of employment, and that workers cannot be required to opt out of such payments. It ruled, “neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”
Baseline union data is also important to understand in light of the fact that a new state law was signed on Sept. 14, 2018 by Democratic Gov. Jerry Brown in an attempt to thwart Janus. The bill attempts to prevent any legal claims from being filed against public employers involving agency fees paid to unions prior to June 27, 2018, the date the court released its ruling on Janus. The bill also denied standing to current or former employees pursuing claims and applies to any pending litigation in state-level courts.
Five days after the Janus ruling, on July 2, 2018, seven non-union California teachers who were required to pay agency fees filed a class-action lawsuit in U.S. District Court seeking repayment of fees previously paid to their union.
On the same day as the Janus ruling, June 27, 2018, the National Right to Work Foundation (NRWF) attached a new court filing to the existing class-action lawsuit on behalf of 40,000 non union members in Hamidi et al. v. SEIU Local 1000, which challenges the union’s opt-out policy.
NRWF requested the court to order California’s SEIU Local 1000 to refund approximately $100 million it received in fees and dues from non union employees who were required to pay dues as a condition of employment.
Anne Giese, SEIU 1000’s chief counsel, argued at the time, "This lawsuit and similar lawsuits around the country are the next phase of a coordinated and malicious effort to cripple unions and the rights of American working people,” according to the Sacramento Bee.
But Mark Mix, president of the NRWF, argued that the effect of the Janus decision was just starting to be realized in mid-2018. As a result, tens of thousands of California government employees were “closer to finally receiving recompense for years of being forced to hand over their hard-earned money to an SEIU union they choose not to join."
The Supreme Court held that since at least 2012, when it ruled in favor of a similar class of tens of thousands of nonmember employees forced to pay money to SEIU Local 1000 in the NRWF-won Knox v. SEIU Local 1000, unions “have been on notice” for requiring workers to pay any union fees.
Because SEIU Local 1000 did not adjust its policy of forcing workers to opt-out of non-chargeable fees after the Knox decision, NRWF argues that Janus could mean that the union would be required to refund all non-chargeable fees seized since June 2013 from over 40,000 class members, or roughly more than $100 million.