Wolf Negotiates Billions with Unions Who Gave Him Millions

Note: This commentary was first published in the Philadelphia Inquirer.

Imagine you’re buying a home. But, instead of choosing your new house, your real estate agent picks it out for you, offers an amount you can’t afford, and hands you a contract signed in your name before you even take a tour. What if you then discovered that your agent was close friends with the seller and stood to profit handsomely from the sale? You’d probably call a lawyer.

That’s the situation taxpayers face as their agent, Gov. Wolf, negotiates government union contracts worth nearly $3.4 billion behind closed doors. Worse, those same unions were some of his largest campaign donors.

How can this happen under a governor who has criticized “backroom deals that erode the public’s trust”?

Indeed, Wolf’s own executive order banning gifts for executive branch employees is intended to eliminate conflicts of interest between anyone who is “seeking to obtain business from or has financial relations with the commonwealth” and those in power. He also said, “It’s time to restore the public’s trust in our government by pushing for reforms and initiatives that increase openness and transparency.”

These noble pronouncements will be tested over the next several months.

By the end of June, Wolf is expected to settle collective-bargaining agreements with 16 state government unions. Those contracts – which cover more than 44,000 state employees and cost nearly $3.4 billion in 2014 – will shape the state’s budget for years. How he handles the process will reveal just how closely he will stick to his word on openness and transparency.

For taxpayers, the stakes are high: Unless Wolf freezes wages, salaries, and health-care benefits for these public employees, billions of additional dollars will be added to the budget. Gov. Tom Corbett negotiated the same contracts in 2011 – implementing no transparency measures in the negotiation process – and granted the unions an 11 percent increase over four years.

A similar increase over the next four years would boost state spending by about $380 million annually.

Given Wolf’s commitment to being “a different kind of governor,” will he make these negotiations open and transparent?

Unlike other state spending decisions, contract negotiations for state employees on pay increases, health-insurance benefits, work rules, and the taxpayer-funded collection of union political money are negotiated in secret and at the sole discretion of the governor.

At the end of the process, taxpayers are presented with a bill for billions of dollars – before they’ve ever seen what they’re buying.

Complicating matters, Wolf received more than $2.6 million in campaign contributions from six of the government unions with whom he will be negotiating. Those unions are likely expecting a return on their political investment at the bargaining table.

How does Wolf square these contributions to his campaign while elsewhere touting his ban on gifts from anyone who is “seeking to obtain business from or has financial relations with the commonwealth”?

While his cabinet members must refuse a bottle of water or cup of coffee at a speaking engagement, Wolf hypocritically accepts millions from those who will gain billions of tax dollars through his influence.

In fact, provisions in these contracts enable government unions to collect campaign contributions from their members using state payroll systems. Continuing to allow political money to be collected by the state and, almost certainly, donated to his reelection campaign would contradict any standard of ethics – especially the standards the governor claims to have publicly set for himself.

Wolf does have options. During these negotiations, he could post collective-bargaining proposals online, provide contract cost estimates before they’re signed, and even open up the talks to public scrutiny. This would help restore public confidence in the process and would prove that Wolf’s “gift ban” isn’t all bark and no bite.

No one should be able to rent the apparatus of the state for their political purposes, and Wolf now has a chance to demonstrate his commitment to that principle. He has the opportunity to show true independence from his largest campaign contributors and Harrisburg’s biggest special interests.

By making negotiations transparent and ending the state collection of union dues and campaign contributions, the governor can live up to his promises of openness, transparency, and accountability. That would truly be a “fresh start” in creating “a government that works.”

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Matthew J. Brouillette is president and CEO of the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.