Unions & Labor Policy

News Release: Paycheck Protection Passes State Senate

Legislation Would End Use of Taxpayer Resources to Aid Political Activity

February 8, 2017, HARRISBURG, Pa.—The State Senate today passed paycheck protection legislation, SB 166, which would end the use of taxpayer resources to collect money earmarked for politics.

“For decades, Pennsylvania taxpayers have been forced to help government union leaders gather millions of dollars earmarked for political activity,” commented Nathan Benefield, vice president for the Commonwealth Foundation. “It’s a crime for elected officials to use public resources for politics, yet government union leaders have enjoyed a perk that lets them bypass this commonsense principle. Today, the Senate took a stand to protect the integrity of public dollars, give union members a greater voice in how their money is spent, and restore fairness to the political process.”

In 2015 alone, Pennsylvania’s largest government unions collected and spent more than $7 million in campaign contributions. They also spent an additional $5.3 million from mandatory union dues on politics and lobbying.

Since 2007, government unions have spent nearly $100 million on politics. Almost all of these funds were deducted directly from workers’ paychecks and sent to union leaders using public payroll systems—making taxpayers the bagmen for union leaders’ political agenda.

Paycheck protection simply requires government unions to collect their own political money, just like everyone else. Sixty-seven percent of Pennsylvania voters support correcting the unfair system that lets unions leaders use taxpayers as unwilling third parties to their political fundraising.

See the chart below for a detailed breakdown of government union political spending.

SB 166, sponsored by Sen. John Eichelberger, allows government unions to collect and spend political money but prevents them from using government resources to do so. The bill also allows the continued collection of all union dues and fees used for collective bargaining and other representational activities. The bill does not affect collective bargaining rights for government unions.

“No Pennsylvanian should be forced to fund someone else’s politics,” Benefield continued. “This legislation protects union members and all taxpayers from having their money hijacked for partisan political activity in which they have little to no say. We urge the House to follow the Senate’s lead and pass paycheck protection quickly.”

Paycheck protection constitutional amendment SB 167, sponsored by Sen. Scott Wagner, advanced out of committee last week but has not yet been scheduled for a full Senate vote.

For more information on paycheck protection and government union political spending, visit CommonwealthFoundation.org/PaycheckProtection.

Nathan Benefield and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or gld@commonwealthfoundation.org to schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish. 

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posted by Commonwealth Foundation | 03:36 PM

Paycheck Protection Solves $96 Million Problem

Yesterday, the Senate State Government Committee passed paycheck protection legislation, which would prevent taxpayer resources from being used to collect money earmarked for political activity. SB 166 and constitutional amendment SB 167 now move to the full Senate for consideration.   

Government union leaders regularly use publicly-funded payroll systems to collect both political union dues and Political Action Committee (PAC) contributions. How much political money? $96 million since 2007, according to our detailed look at campaign finance reports and government union financial disclosures.

See the chart below for a detailed breakdown.

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posted by Jessica Barnett | 06:50 PM

Paycheck Protection Passes Senate Committee

The Senate State Government Committee today passed paycheck protection, which ends the special privilege that lets government union leaders use public resources to collect money earmarked for politics. 

Since 2007, government union leaders in Pennsylvania have spent more than $95 million on politics—both from members’ mandatory union dues and voluntary campaign contributions—and taxpayers have been forced to help them do it.

SB 166, sponsored by Sen. John Eichelberger, allows government unions to collect and spend political money, but prevents them from using government resources to do so. The Senate committee also passed SB 167, sponsored by Sen. Scott Wagner, which amends the state constitution to include paycheck protection.

By making paycheck protection a priority, lawmakers are showing they are serious about reimagining how Harrisburg works. 

Send a note of thanks to the senators on the State Government Committee that voted 'yes' on this important legislation:

We anticipate the full Senate will act quickly on this critical reform, and we urge the House to do the same. Let your state representative and state senator know that paycheck protection is important to you and should advance to the governor's desk. <<Click here to send a message now>>

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posted by Nathan Benefield | 09:54 AM

Government Unions' Election Impact

One can't understate the scope of government unions' financial involvement in some of the key Pennsylvania races this fall. While final campaign finance numbers are still a few weeks away, total spending through the beginning of November shows government unions invested heavily in contentious races.

With the help of taxpayer funded-resources, government unions were able to direct $7.5 million to US senate candidate Katie McGinty and $253,465 to Attorney General-elect Josh Shapiro. In contrast, government unions spent zero dollars in favor of US Senator Toomey and $72,750 in favor of State Senator John Rafferty.

 

In fact, about $7,000 to support Katie McGinty came directly from union dues, not voluntary contributions from union members.

In the Attorney General race, government unions were responsible for $253,465 of the $6,401,746 spent in favor of Josh Shapiro. That's about three and half times the $72,750 government unions contributed to support John Rafferty. In total, $1,834,902 was raised to support Rafferty's bid.

Unlike any other private group in Harrisburg, government unions enjoy the special privilege of funneling PAC and election education spending through the taxpayer-funded payroll systems. In other words, they use taxpayer resources to collect purely political funds. That's a double standard that must end with the passage of paycheck protection.

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posted by Elizabeth Stelle | 10:35 AM

The Rust Belt's Labor Reform Wave

Lagging job growth, rising taxes and coercive union tactics created an appetite for labor reform throughout Rust Belt states.

Transforming Labor, our latest policy report, ranks states on their progress towards reforms that can produce budget savings, shield taxpayers from overspending, and guarantee greater protections of individual workers’ freedom of association.

The report also recounts recent reforms. Nowhere did labor reform make a bigger impact than Wisconsin.

Wisconsin’s Act 10 of 2011 made sweeping changes by limiting collective bargaining for public sector workers to base wages and requiring employees to contribute more toward their health and pension benefits. According to the MacIver Institute, state retirement savings alone amounted to $3.36 billion from 2011 to 2016, and Milwaukee Public Schools alone saved $1.3 billion in long-term pension liabilities. That’s a big win for taxpayers.

In 2012, Michigan, the historical home of unionization, passed a right-to-work law.

The Michigan Education Association (MEA) quickly moved to enforce its “maintenance of membership” or opt-out clause for public school teachers who wanted to leave the union: The teachers could do so only in August. Many teachers were unaware of the obscure union resignation window and missed the opening. With the help of the Mackinac Center Legal Foundation, frustrated educators filed an unfair labor practice charge asserting that the MEA’s opt-out window violated the state’s right-to-work protections against forced union association.

In September 2015, the Michigan Employment Relations Commission ruled in favor of the teachers (a decision later upheld by the Michigan Court of Appeals), forcing the MEA to change its rules and bylaws. Michigan teachers may now leave the union whenever they please, a major victory for educator freedom across the state.

This week the Detroit Free Press wrote:

Workers must be willing — even in the face of intimidation and fear — to withdraw their union membership and stop funding their union’s political prejudices. It is the only tool they have to protect themselves from the political bias of the people who claim to have their best interest at heart

The same discontent is now creating momentum for labor reform in Pennsylvania. This session, Governor Wolf signed contract transparency legislation, Pennsylvania finally outlawed stalking and harassment during labor disputes and paycheck protection cleared the state Senate.

Pennsylvania still has a long way to go. Transforming Labor gives Pennsylvania’s public sector labor laws a D. In comparison, Wisconsin earned an A, and Michigan a B.

Labor reform isn't just critical for economic resurgence, it has election consequences too.

Michigan, Wisconsin, and Pennsylvania all turned out to be a critical factor in the presidential election. Politico noted organized labor’s historically low support for the Democrat nominee. The Fairness Center's Right on Labor blog documents the historic shift in voting patterns.

However, the gap between union leaders and their members shouldn't come as a surprise. Pennsylvania union households overwhelmingly favor reforms, like paycheck protection, that their leaders vehemently oppose.

The wave of union reform moving through the states shows taxpayers, union members and non-union members alike, understand worker freedom is a key ingredient to restoring prosperity.

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posted by Elizabeth Stelle | 00:20 PM

A Dramatic Shift in Pennsylvania

From celebration to soul-searching, post-election analysis is everywhere.

While top-of-the-ballot results dominate headlines and your news feed, don’t miss the dramatic shift that occurred last night in Pennsylvania.

Republicans achieved historic majorities in both chambers. In the state House, Republicans will control 60 percent of the seats for the first time in 70 years. In the Senate, Republicans will field the largest majority of any party in 68 years. But that's only part of story.

For years, we’ve talked about the Taxpayer Party vs. the Big Government Party in Harrisburg. Partisan labels aside, the real question is whether a lawmaker represents taxpayers’ interests or toes the government union leaders’ line.

While the Taxpayer Party has grown over the years, it couldn’t always overcome the strength of the Big Government Party. We saw this last month. Pension reform legislation fell three votes short in the House.

Last night in Pennsylvania and around the nation, the Taxpayer Party saw significant gains in state legislatures. Election results in states like Wisconsin, Pennsylvania, and Michigan showed the political benefit of taking on powerful government union interests to protect taxpayers from tax hikes and special political privileges.

It is no coincidence that over the past five years, Wisconsin and Michigan took bold steps to strengthen the Taxpayer Party, including limiting collective bargaining and passing right-to-reelect and right-to-work legislation.

Similarly, as the Taxpayer Party has grown in Pennsylvania, we’ve begun to see results. For example, Governor Wolf signed contract transparency legislation, and paycheck protection cleared the state Senate. These steps are critical to address rising government spending that's consistently driven by the Big Government party.

Yet, despite the gains of the Taxpayer Party in the General Assembly, divided government will continue in Harrisburg. That's an opportunity.

With an extremely tough budget on the horizon in 2017, the newly minted Legislature must work quickly to address the underlying problems that drive budget debates: surging pensions costs and a broken and expensive welfare system.

What’s more, the strengthened Taxpayer Party has an unprecedented chance to seize opportunities like expanding access to quality education choices and finally removing the state from the booze business.

This will require immense effort and continued vigilance. We’re excited to work towards implementing these ideas to build a stronger, more prosperous Pennsylvania

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posted by Elizabeth Stelle, Dawn Toguchi | 02:16 PM

Can a Dwight Schrute Save Scranton?

Dwight K. Schrute is an employee at Dunder Mifflin—a fictional Scranton paper company featured in NBC’s The Office. And he just may be the key to overcoming the city’s very real economic decline.

But before offering a way forward for Scranton, it’s important to understand why the city is struggling. A new paper from the Mercatus Center does an excellent job detailing the source of Scranton’s troubles.

The authors—Adam Millsap and Eileen Norcross—identify Scranton’s inability to adapt to changing economic conditions as one of the main reasons for the city’s economic and fiscal problems.

They specifically cite economist Ed Glaeser who wrote, “In the coal towns of central Pennsylvania, exodus, not innovation, was a more common response.” Glaeser's rhetoric matches reality. In 1930, the city’s population was 143,433. In 2014, it was just 75,281.

Regrettably, government policies only made things worse. Spending and taxes rose—forcing fewer taxpayers to pay for bloated budgets driven by public sector benefits. Millsap and Norcross cite the inflexibility of Pennsylvania’s collective bargaining process as the main culprit:

Act 111 is intended to give police and firefighters’ unions binding arbitration in exchange for a prohibition against striking. [26] However, the law evolved to “give uniformed employees the upper hand when it comes to collective bargaining.” [27] When negotiations between the city and unions break down, an arbitration panel of three people is selected. Municipalities are required to pay the full cost of arbitration, regardless of ability to pay. Arbitration sessions are not open to the public. The municipality has limited ability to appeal the panel’s decisions.

The chart below illustrates spending growth for police and fire services—a product of the state’s broken collective bargaining process.

Officials have tried to improve Scranton’s finances with a combination of tax increases, cost cutting, and asset sales but costs, thanks to pensions, continue to soar. They’ve also utilized government-subsidized development projects to boost economic growth but to no avail. Government-centric solutions simply aren't working.

To truly turn Scranton around, dramatic changes to state and local policies are necessary. At the local level, Millsap and Norcross recommend improving the city’s business climate by reducing the overall tax burden. Controlling spending is critical too. Officials can do this by privatizing government functionsthe city's parking authority is one possible option, according to the report.

At the state level, officials must reform the collective bargaining process to help distressed cities get control of their budgets. As it stands now, collective bargaining law imposes costs on cities without taking into account their ability to pay. By giving local officials more autonomy to negotiate with unions, they can better protect local taxpayers.

Back to Dwight Schrute. If you know the character, he has a reputation for being entrepreneurial and hardworking (also, a little quirky). If distressed places like Scranton and Uniontown are going to experience a revitalization, that's exactly the kind of people they'll need to attract. 

Ultimately, government can only lay the foundation for an economic turnaround. But if that foundation is strong, innovative, educated, and hardworking people can and will build upon it.

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posted by Bob Dick | 09:45 AM

Missed Opportunities: Fall Legislative Session

Three critical bills stalled last week amidst a flurry of last minute legislative activity. Failure to reform pensions, repeal the e-cigarette tax, and prohibit ghost teaching were missed opportunities that will compound challenges facing lawmakers in 2017.

Pension Reform

A compromise proposal to place newly-hired state workers into a hybrid pension plan fell three votes short of passage in the House. The bill provided a 401(k) component paired with a smaller defined benefit component. Employees could also choose to opt-in to an entirely 401(k)-style plan, providing ultimate portability and retirement control. Although the legislation provided little in immediate cost savings, it shifted future financial risk away from taxpayers and provided a predictable system for measuring costs. 

Union leaders and lobbyists campaigned hard against the bill, and it was narrowly defeated without seeing a vote. 

Reducing the E-Cigarette Tax

Revising the punitive e-cigarette / vape tax from a 40% retroactive wholesale tax to a 5 cents per milliliter tax failed to advance in the House. Meanwhile, the Senate was reluctant to add any session days to send the bill to Gov. Wolf. This inaction will eliminate thousands of jobs and bring in far less revenue than the $13 million originally projected.

Vape businesses are already beginning to close

Expelling Ghost Teachers

Lawmakers were unable to prohibit release time provisions that enable unions to pluck teachers from the classroom to perform union work on school time. These ghost teachers continue earn salaries, rack up pension benefits, and accrue seniority while working for the union. Worse, the union may not be formally required to reimburse school districts for these costs. In other words, resources are being diverted from the classroom to line the pockets of a private organization. Strictly limiting the practice of ghost teaching, as would HB 2125, would have saved taxpayers millions and corrected an obvious injustice. 

HB 2125 will be reintroduced next session.

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posted by Elizabeth Stelle, James Paul | 11:35 AM

Unions Profit by Restricting Workers' Choices

The gold standard for labor reform is right-to-work, according to the conventional wisdom. However, our latest policy reportTransforming Laborshows why right-to-work laws aren't enough to protect public employees. 

Of the 50 states we surveyed, 18 were right-to-work states that allow collective bargaining for public employees. That means government unions can negotiate limits on workers' choices, such as demanding exclusive representation of all employees, even if some would rather negotiate their own salary without the union's help.

Clear limits on collective bargaining can go a long way in protecting workers from a host of special privileges public sector unions negotiate to maintain power and reduce accountability to members.

In Pennsylvania, there are few restrictions on a government union's ability to collectively bargain. So it's no surprise that less than 1% of public school teachers in large cities have ever voted for their union. It also shouldn't come as a shock when union executives demand public resources and staff to run their private operations, resulting in ghost teachers haunting public schools.

Whether it be protecting public employees from threats or ensuring their dues aren't used for politics, Transforming Labor shows we still have a lot of work to do.

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posted by Elizabeth Stelle | 01:10 PM

APSCUF Threatens Faculty

This morning, APSCUF, the union representing 5,000 faculty at the State System of Higher Education schools, went on strike.

As we pointed out a few weeks ago, one of the sticking points in contact negotiations is APSCUF’s health care demands. Despite being offered a 12 percent pay increase, the union refuses to accept modest cost-sharing for health insurance. Nevermind that the proposed cost-sharing is far more generous than what most workers in the private sector receive from their employers.

To enforce discipline, APSCUF leadership has threatened faculty who don’t agree with the strike.

As reported by Fox43, here is an email sent from an APSCUF chapter president—using his university email address—to faculty, implying anyone choosing to work during the strike would be “forever” labeled a “scab” (emphasis added):

This is probably the last EMAIL you will receive from me using the SRU addresses.  We begin using off-campus address today.

Dear Colleagues but especially to those who are unsure if they will work during the strike,

Personally I hate being told what to do by anyone – be they presidents of universities or unions.  But at the risk of being too direct, I want to help you in your decision-making if you are thinking about working during the strike, also known as “crossing the picket lines.”

IF YOU CROSS THE PICKET LINE you will be effectively saying to your colleagues on the line that you disrespect the sacrifice they are making in terms of making a stand and going without pay and benefits.  You would be effectively prolonging the strike by continuing to work so the administration can maintain a fig leaf of “business as usual.”  By your actions you are saying that you choose to continue to enjoy pay and benefits hard-fought by colleagues over the decades, but will not do your part NOW to take a stand to defend those benefits.   You are effectively saying to the SSHE that their proposals are OK with you to:

 *   Cut pay of our adjunct faculty (25% of our colleagues)
 *   Give up the concept of shared governance
 *   Be reassigned any time as needed by administration
 *   Have reduced say in tenure, sabbatical and promotion decisions
 *   Work for little or no net pay increase

If you decide to work during the strike, i.e., cross the picket line, you will be faced with:

 *   Colleagues who will try to convince you not to cross the line
 *   Peer rejection
 *   Being publicly identified as a “Scab” (strikebreaker) forever


What makes this university a great place to work is our colleagues.  We look out for each other, we respect each other, we defer to each other, we support each other, and we value each other.  This collegial atmosphere is a two-edged sword.  If one betrays his or her colleagues, the reaction could be negative.  Strikes are unpleasant – relationships can be harmed long-term.  If we have a brief strike, do you want to be branded by your colleagues forever as one of the few who crossed the picket line?  I don’t recommend it.

Sorry for the negative tone of this message, but I want it to be clear to faculty who are considering working during the strike that they will potentially face negative judgement by colleagues.  If we are solid and unified, a strike will be brief.  Plan to honor the picket lines and stand with us.

In solidarity,

Ben

bshaevitz@apscuf.org

 

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posted by Nathan Benefield | 02:49 PM

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