The Real Cost of Paycheck Protection - Commonwealth Foundation

Critics of paycheck protection claim that the practice of our government deducting union dues and campaign contributions from workers’ paychecks “only costs $100.” That’s based on a letter from Treasurer Rob McCord to Rep. Markosek and Sen. Hughes that was circulated among Democrats in the legislature. Here are four reasons why that claim is wrong and irrelevant.

#1) Paycheck protection isn’t about the added costs, but the privilege of using taxpayer resources for politics

Supporters of paycheck protection have never argued that the cost of collection isn’t small. Rather, that collection of political money using public resources is improper and conveys a unique benefit to certain political organizations.

Previous open records requests have revealed that the Pennsylvania Treasury dispersed:

$41 million in union dues and fair share fees and $707,399 in union PAC contributions in 2010-11,
$41.4 million in union dues and fair share fees and $736,301 in union PAC contributions in 2011-12, and
$40.7 million in union dues and fair share fees and $775,259 in union PAC contributions in calendar year 2013.

It is this unique benefit that allowed government union PACs to contribute more than $339,000 to McCord for Governor in 2013 and 2014, without having to collect those contributions themselves, but rely on state government, municipalities, and school districts to collect these campaign contributions.

#2) No other group receives this sort of taxpayer subsidy for collecting political funds

No other entity has the power to force taxpayers to collect its funding by binding contract. Nor do public employers collect the political money for other entities. In fact, the Treasurer’s Office was unable to identify other Political Action Committees that receive transfers from the treasury other than union PACs.

While Treasurer McCord may argue that such costs are “nominal” in light of total government spending, it doesn’t change the fact that taxpayer resources are being used for political action right in our own capitol.

Such activities—even with “nominal costs”—are illegal under other circumstances. State and legislative offices cannot be used to make phone calls or send emails for campaign fundraising, no matter how little, if anything, such activities add to the cost of government. One phone call, one email, one staff person making copies of a campaign mailer are all illegal activities.

#3 )The $100 claim ignores numerous costs

Further, while we don’t challenge the idea that the costs of payroll collection are a small part of the state budget, Treasurer McCord omits numerous costs when claiming the total cost is “less than $100” per year. In fact, this claim only counts the actual charges for electronic transfers. His claims ignores the cost of staff inputting deduction forms for union dues into the state payroll system and the cost of the computers and software used to process payroll deductions.

The Commonwealth Foundation was charged $64.24 for copies of these payments for one year, which itself undermines the claim that the total cost is less than $100.

#4) Local governments would also benefit from paycheck protection

In addition, Treasurer McCord’s letter only talks about state costs. But SB 1034 and HB 1507 would impact all levels of government, including 66 counties, 1,015 municipalities, 1,564 townships, 499 school districts, and 1,756 special district governments. All of these face real costs. For example, officials in Blair County report that one payroll employee devotes a full day’s work every two weeks to calculating deductions for union dues.