California’s Public-Sector Unions Rake in $921 Million in Annual Revenue
There is no special interest in California that wields more influence over state and local politics than public sector unions. 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. With rare exceptions, to defy their agenda is certain political suicide.
The reason for this power is money. Lots of money. Every two-year election cycle, not millions, but hundreds of millions of dollars are spent by California’s public-sector unions to support or oppose candidates, campaign for ballot measures, lobby the legislature, and pay for public relations campaigns.
While wealthy individuals or powerful corporations may at times challenge these unions, their concerns are narrow in focus. Nothing matches the perennial torrent of public sector union money; the opposition may stir up a flash flood, but these unions are the Amazon.
Twice in the past five years the California Policy Center has attempted to estimate just how much money public sector unions collect and spend each year. In 2015, a rough top-down estimate that used US Census Bureau data on union membership and general assumptions on the average union dues payment came up with $1.0 billion per year. In 2018, exercising an abundance of caution, referring to the 990 forms that unions file with the IRS, as well as researching membership information that is often provided by the unions on their websites, the total public sector union spending estimate was $800 million per year.
This time, using the same methods as 2018, but going into somewhat more detail, the new estimate is $921 million. It should be noted that available information online is usually about 18-24 months behind. For example, our 2018 report referenced Form 990s that were filed for 2015. This 2020 report used Form 990 data for the year 2018, the most recent currently available.
The fact that data presented here represents 2018 numbers raises an important question: Has the Janus decision, which found that the application of public sector union fees to non-members is a violation of the First Amendment, had any effect on public-sector union revenue and membership? Because Janus took effect in mid-2018, the results shown here may only serve as a baseline. Form 990s for 2019 will not be available to the public for another year.
Moreover, unless the trends in total revenue estimates show truly dramatic changes, which is unlikely, there are too many variables at work to know what may be generating the variance.
If the numbers are up, would they have been up higher without the Janus decision? Will any downward results in 2019 merely be the impact of unions losing non-members who still had to pay agency fees, or would some of the downturn be the result of losing members? How will the bureaucratic obstacles put up by the unions delay individuals from exercising their new rights under Janus? And how would one account for new bargaining units, such as the 45,000 child care providers who in July 2020 voted to become new AFSCME members?
Much of this in-depth discussion will be covered in Union Madness and Pension Madness and falls outside the scope of this analysis.
Billions and Billions Spent of Political Donations
California’s public-sector unions collect and spend well over $900 million per year, or $1.8 billion per two-year election cycle.
While only about one-third of this money is spent on explicitly political purposes such as campaign contributions and lobbying, this is still a staggering amount of money. What other special interest in California is willing and able to spend $600 million every two years on political advocacy, year after year, for decades on end?
And where the spending is not declared as political, it may still have a political impact. As the plaintiffs argued in the Janus case before the U.S. Supreme Court, and in the deadlocked Friedrichs case before that, all public sector union spending is inherently political. Public education campaigns, for example, are not considered “political,” but unions rarely embark on these efforts, often at levels where they saturate California’s expensive media markets, without at least an indirectly political motivation. And what about negotiations for compensation and work rules? Aren’t these political decisions?
To get another glimpse of just how Sisyphean the task of identifying and tracking all of California’s public-sector unions is, have a look at the California Policy Center’s website at https://californiapolicycenter.org/californias-public-sector-unions-rake-in-921-billion-in-annual-revenue/ for the details.
Scroll down this page and consider the following: Were all of these various Locals included in this analysis? Here’s your answer: No. They weren’t. There’s simply too many of them. Some years ago, a professor at Pepperdine University who was considered an expert on public-sector unions in California was asked if there was an accurate compilation, anywhere, ever, showing how much, collectively, these unions rake in every year. His answer, emphatically to the negative, was too obscene to be repeated here. California’s public-sector unions are not only the most powerful political special interest in the state, but most of them are nakedly partisan.
To have all this power, and merely use it to push for more staff, more restrictive work rules (which equates to more staff), more pay, and more benefits, that would be bad enough. Not because workers shouldn’t want to optimize their opportunities to work and live with security and dignity, but because public-sector unions simply do not have to deal with the natural checks on their demands that create more balance between management and private-sector unions.
But with only a few exceptions–primarily among the law enforcement unions–the websites of these public sector unions read like a pamphlet describing the agenda of the Democratic party. Is this appropriate? Does this represent the membership? And even if so, shouldn’t public sector unions, with all the power they wield, be politically neutral?
A long-overdue reckoning with public sector unions faces California’s electorate. It might start with the public schools, which labor under a public-sector union monopoly that has nearly destroyed accountability. The CTA, for example, has endorsed the absurd goal to “defund the police.” Perhaps defunding the CTA itself might be a more appropriate way to rescue California’s disadvantaged.
But between the political reality of public sector union power, and the necessary reforms that Californians desperately deserve, are nearly one billion dollars per year of cold hard cash.
Article content from the August 2020 article “California’s Public-Sector Unions Rake in $921 Million in Annual Revenue” by the California Policy Center’s Edward Ring.